CREDIT, CAPITALIZATION AND FINANCING AGREEMENT
October 30, 1998
THIS CREDIT, CAPITALIZATION AND FINANCING AGREEMENT ("Agreement") is
made, consummated and executed effectively this 30th day of October, 1998
("Effective Date"), by and among Compost America Holding Company, Inc.
("Compost"), Miami Recycling and Composting Company, Inc. ("Miami"), Bedminster
Seacor Services Miami Corporation ("Bedminster"), Lionhart Global Appreciation
Fund, Ltd. ("Lionhart"), Lionhart Investments, Ltd. ("LHI") and Global EarthFund
Partners, L.L.C. ("GEP").
Recitals:
1. Compost is a New Jersey corporation. The principal office of Compost
is located at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
2. Miami is a Delaware corporation. The principal office of Miami is
located at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000. Bedminster is a
Florida corporation. The principal office of Bedminster is located at 000 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000. Compost is the direct parent of Miami, owns
and controls 80.1% of all issued and outstanding capital stock of Miami, and
controls Miami. Miami is the direct parent of Bedminster, Bedminster is a direct
wholly-owned subsidiary of Miami, and Compost controls Bedminster (which is an
indirect controlled subsidiary of Compost).
3. Lionhart is a British Virgin Islands international business company.
The principal office of Lionhart, in the British Virgin Islands, is located at
c/o Citco B.V.I. Limited, Post Office Box 662, Road Town, Tortola, British
Virgin Islands.
4. LHI is a United Kingdom limited liability company. The principal
office of LHI, in the United Kingdom, is located at 00 Xxxx Xxxx, Xxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxx XX00 4 RH, England. As of the Effective Date of this
Agreement, LHI is engaged by Lionhart as its investment advisor.
5. GEP is an Indiana limited liability company. The principal office of
GEP in the United States is c/o Xxxx Xxxxxx Drics, Esq., 000 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000. As of the Effective Date of this
Agreement, Lionhart is the direct parent of GEP, and GEP is a direct
wholly-owned subsidiary of Lionhart.
6. Pursuant to the terms and subject to the conditions that are set
forth in a "Regulation D Convertible Debenture Purchase Agreement," by and
between Compost and Lionhart, dated and executed on or about November 27, 1996,
a copy of which is set forth in Appendix I-Item 1 to this Agreement, and a
"First Amendment to Regulation D Convertible Debenture Agreement," by and
between Compost and Lionhart, dated and executed in or about February 1997, a
copy of which is set forth in Appendix I-Item 2 to this Agreement (both such
documents of which are sometimes referred to collectively in this Agreement as
the"Debenture Purchase Agreement"), Compost sold, delivered and issued to
Lionhart, and Lionhart purchased from Compost, ten (10) debentures, Series 1-10
("Debenture(s)"), a copy of such Debentures of which are set forth in Appendix
IItem 3 to this Agreement, in the face amount per Debenture of US $100,000, and
for the total purchase price of US $1,030,000.
7. Pursuant to the terms and subject to the conditions that are set
forth in a "Subscription Agreement," by and between Compost and Lionhart, dated
on or about June 16, 1997, a copy of which is set forth in Appendix I-Item 4 to
this Agreement ("Series B Preferred Shares Subscription Agreement"), Lionhart
purchased from Compost, for the total purchase price of US $1,000,000, and
Compost issued to LHI (and not to Lionhart), 400,000 shares of Series B
Preferred Stock of Compost ("Series B Preferred Stock"), and, pursuant to which,
Compost registered (on or about July 3, 1998), in the name of "Lionhart
Investments Limited," Certificate No. B-1 ("Certificate No. B-1"). The
designations, and relative rights and privileges of, and restrictions and other
attributes attributable to the Series B Preferred Stock, are set forth in 1) the
"Designation of Rights of Series B Preferred Stock," dated and delivered in or
about June 1997, a copy of which is set forth in Appendix I-Item 5 to this
Agreement, and 2) the "Amendment to Designation of Rights of Series B Preferred
Stock," dated and delivered on or about September 17, 1997, a copy of which is
set forth in Appendix I-Item 6 (both such documents of which are sometimes
referred to collectively in this Agreement as the"Designation of Rights of
Series B Preferred Stock").
8. On or about , or effective on and as of, September 17, 1997, and at
the written request of Compost, LHI executed
Page 1 of 107 Pages
and delivered to Compost, a document entitled "Consent to Series A and Series C
Preferred Stock" ("LHI Consent"), a copy of which is set forth in Appendix
I-Item 7.
9. On or about, or effective on and as of, June 11, 1997, LHI and
Select Acquisitions, Inc. ("SAI"), consummated and executed a written letter
agreement ("LHI-Select Agreement"), a copy of which is set forth in Appendix
I-Item 8. Pursuant to the LHI-Select Agreement, Select sold to LHI, and LHI
purchased from Select, 700,000 unregistered shares of Common Stock of Compost,
of which 1) Select transferred or caused Compost to transfer, reissue and
deliver to LHI, 665,000 restricted and unregistered shares of Common Stock of
Compost ("LHI-Select Agreement Shares"), and 2) Select transferred or caused
Compost to transfer, reissue and deliver to Xxxxxx Gottbetter & Xxxxxxxx, LLP
("KGL"), 35,000 restricted and unregistered shares of Common Stock of Compost.
10. Pursuant to the terms and subject to the conditions that are set
forth in the Debenture Purchase Agreement (including, Section 2, Section 4.1,
Section 6.3, Section 6.7 and Section 14 thereof) and the Debentures (including
Section 3(a) thereof), 1) the Debentures are secured or are required to be
secured by the "Common Stock" and "Securities" (as those terms are defined under
the Debenture Purchase Agreement), 2) Compost has the duty and obligation to
deliver any and all such "Common Stock" and "Securities" to the Escrow Agent (as
contemplated under Section 14 of the Debenture Purchase Agreement), and 3) KGL
is the Escrow Agent. As of the Effective Date of this Agreement, KGL, as Escrow
Agent under the Debenture Purchase Agreement, is holding the following "Common
Stock" and "Securities" as security for the Debentures: 1) Certificate No.
CA0860, representing 404,858 shares of Common Stock of Compost, that are
registered in the name of VRH Construction Corporation, including therewith (i)
a stock power for such Certificate No. CA0860, that is executed by VRH
Construction Corporation with a signature that is medallion guaranteed, and (ii)
a corporate resolution authorizing the execution and delivery of such stock
power (of which, copies of such Certificate No. CA0860, and the accompanying
stock power and resolution, are set forth in Appendix I-Item 9); and 2)
Certificate No. CA1370, representing 600,000 registered (freely tradable) shares
of Common Stock of Compost, and registered in the name of Lionhart (of which, a
copy of such Certificate No. CA1370 is set forth in Appendix I-Item 10).
11. On or about June 16, 0000, Xxxx X. Xxxxxxxxxx, Xxx. (for and on
behalf of KGL) and Compost, entered into a written letter agreement, dated June
16, 1997 ("KGL-Compost Agreement"), a copy of which is set forth in Appendix
I-11, that purports to amend the duties and responsibilities of KGL, as Escrow
Agent, under the Debenture Purchase Agreement and the Debentures.
12. Pursuant to the terms and subject to the conditions set forth in
the Debenture Purchase Agreement and the Debentures, 1) on or about May 20, 1997
("First Debenture Conversion"), Lionhart delivered to Compost a "Notice of
Conversion," dated May 20, 1997, a copy of which is set forth in Appendix I-Item
12, and, pursuant thereto, Lionhart properly converted US $200,000 of the
Debentures, and Compost thereafter issued and delivered to Lionhart, in exchange
for the surrender, delivery and tender by Lionhart to Compost of two (2)
Debentures (i.e., Series 0-00 xx 00), Xxxxxxxxxxx Xx. XX0000, representing
178,253 registered (freely tradable) shares of Common Stock of Compost, and
registered in the name of Lionhart ( a copy of such Certificate No. CA1103 set
forth in Appendix I-Item 13). On or about September 8, 1997 ("Second Debenture
Conversion"), Lionhart delivered to Compost a "Notice of Conversion," dated
September 8, 1997, a copy of which is set forth in Appendix I-Item 14, and,
pursuant thereto, Lionhart properly converted or otherwise elected to convert US
$200,000 of the Debentures; and, based on the Second Debenture Conversion,
Compost, on or about March 13, 1998, issued and delivered to KGL, in exchange
for the surrender, delivery and tender by Lionhart to Compost of two (2)
Debentures (i.e., Series 7-8 of 10), Certificate No. CA1369, representing
159,670 registered (freely tradable) shares of Common Stock of Compost, and
registered in the name of Lionhart ( a copy of such Certificate No. 1369 is set
forth in Appendix I-Item 15).
13. Compost, Lionhart and LHI have been engaged or are engaged in
various disputes, disagreements, uncertainties and/or ambiguities ("Disputes")
that relate to or arise from the Debenture Purchase Agreement, the Debentures,
the Series B Preferred Shares Subscription Agreement, the Designation of Rights
of Series B Preferred Stock, the LHI Consent, the LHI-Select Agreement, the
terms of KGL's escrow arrangement and its performance as the Escrow Agent, the
KGL-Compost Agreement, the First Debenture Conversion and/or the Second
Debenture Conversion.
14. On or about March 29, 1996, Miami executed and delivered a
Promissory Note ("Miami-Xxxxxx Note"), to Xxxxxx Materials Corporation
("Xxxxxx"), in the original principal amount of US $3,730,870.75, a copy of
which is set forth in Appendix I-Item 16. On or about March 29, 1996, and to
secure payment of the Miami-Xxxxxx Note, Miami delivered to Xxxxxx a "Mortgage
Deed" ("Xxxxxx Mortgage"), dated March 29, 1996, which is recorded in the
Official Records Book 17182, at Page
Page 2 of 107 Pages
0528 of the Public Records of Dade County, Florida, and re-recorded in
Official Records Book 17815, Page 2603, on October 6, 1997, of the Public
Records of Miami-Dade County, Florida, a copy of which is set forth in Appendix
I, Item 17. On or about April 24, 1998, Miami and Xxxxxx executed a"Mortgage
Modification and Extension Agreement" ("Mortgage Modification Agreement"), a
copy of which is set forth in Appendix I, Item 18. Miami defaulted under, and is
default under, the Miami-Xxxxxx Note and the Xxxxxx Mortgage, and, on or about
July 20, 1998, Xxxxxx commenced a lawsuit, including a foreclosure action, for
and with respect to the Miami-Xxxxxx Note, the Xxxxxx Mortgage and the Mortgage
Modification Agreement, against Miami, in the Circuit Court of the Eleventh
Judicial Circuit of Florida, in and for Miami-Dade County ("Court"), Case No.
98-16437-CA-01 (Sec. 20), that is pending as of the Effective Date of this
Agreement, and a copy of the operative Complaint of which is set forth in
Appendix I-Item 19.
15. On or about August 4, 1998, Compost and Lionhart each agreed to,
and executed, a Proposal and Term Sheet ("Term Sheet"), a copy of which is set
forth in Appendix I-Item 20. Pursuant to the Term Sheet, this Agreement and the
"Definitive Supplemental Documents" (as that term is defined under Section
1.1.42 of this Agreement), 1) Compost, Lionhart and LHI intend to resolve and
settle any and all current Disputes, and, 2) Compost, Lionhart, Miami, LHI and
GEP intend to capitalize Compost and Miami, vis-a-vis GEP, in the principal
amount of US $10,500,000, pursuant to the terms and subject to the conditions,
and for the purposes, that are set forth in this Agreement and the Definitive
Supplemental Documents.
Agreement:
ARTICLE I
DEFINITIONS, ACRONYMS AND MEANINGS
Section 1.1. Definitions. The following terms, which are not exclusive
of other terms that are defined in this Agreement, the Definitive Supplemental
Documents and/or the Credit Documents but which are not otherwise set forth in
this Section 1.1., shall have the following definitions and meanings in this
Agreement, the Definitive Supplemental Documents and Credit Documents:
1.1.01. Action. "Action" shall mean any claim, action, suit,
arbitration, inquiry, preceding or investigation by or before any
Governmental Authority.
1.1.02. Affiliate. "Affiliate" shall mean, in reference to a
Person, a person that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under, control with,
the first mentioned person.
1.1.03. Agreement. "Agreement" shall mean this "Credit,
Capitalization and Financing Agreement," dated on or about, and
effective as of, October 30, 1998, by and among Compost, Miami,
Bedminster, Lionhart, LHI and GEP.
1.1.04. Ancillary Transactions Closing. "Ancillary
Transactions Closing" shall mean the closing, execution and delivery
of, and the consummation of the transactions contemplated under, the
Definitive Supplemental Documents, as contemplated under Section
13.01.03 of this Agreement.
1.1.05.01. AW Compost Partners Stock Purchase Agreement. "AW
Compost Partners Stock Purchase Agreement" shall mean that certain
Stock Purchase Agreement, dated April 27, 1998, by and between AW
Compost Partners, L.L.C., a Delaware limited liability company, and
Compost.
1.1.05.02. Bankruptcy Proceeding. "Bankruptcy Proceeding"
shall have the definition and description as is otherwise set forth in
Section 15.01.10. of this agreement.
1.1.06. Bedminster. "Bedminster" shall mean Bedminster Seacor
Services Miami Corporation, a Florida corporation, which is a direct
wholly-owned subsidiary of Miami and is an indirect controlled
subsidiary of Compost, the principal office of which is located at 000
Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
1.1.07. Bedminster Common Stock. "Bedminster Common Stock," or
"Common Stock of Bedminster," or other similar references, shall mean
the common stock of Bedminster.
Page 3 of 107 Pages
1.1.08. Bedminster Current Permits. "Bedminster Current
Permits" shall have the definition and description as is otherwise
ascribed to such term in Section 11.26.01(b) of this Agreement.
1.1.09. Bedminster Resolutions. "Bedminster Resolutions" shall
mean the resolutions of the Bedminster Board, as is set forth in
Exhibit QQQ of this Agreement.
1.1.10. Bedminster Balance Sheet. "Bedminster Balance Sheet"
shall have the definition, meaning and description as is otherwise
ascribed to such term in Section 11.26.07 of this Agreement.
1.1.11. "Bring-Down" Certificate of Bedminster. "'Bring-Down'
Certificate of Bedminster" shall mean the certificate of the President
and Chief Executive Officer of Bedminster, in the form and substance as
is set forth in Exhibit SSS of this Agreement, as contemplated under
Section 15.01.01 of this Agreement.
1.1.12. "Bring-Down" Certificate of Compost. "'Bring-Down'
Certificate of Compost" shall mean the certificate of the President and
Chief Executive Officer of Compost, in the form and substance as is set
forth in Exhibit JJJ of this Agreement, as contemplated under Section
15.01.01 of this Agreement.
1.1.13. "Bring-Down" Certificate of Miami. "'Bring-Down'
Certificate of Miami" shall mean the certificate of the President and
Chief Executive Officer of Miami, in the form and substance as is set
forth in Exhibit KKK of this Agreement, as contemplated under Section
15.01.01 of this Agreement.
1.1.14. Business. "Business" shall mean the construction,
management and or operation of enclosed organic material recycling
compost manufacturing plant(s).
1.1.15. Business Day. "Business Day" shall mean any day other
than a Saturday, Sunday or federal holiday in the United States of
America, and consist of the time period from 12:01 a.m. through 12
o'clock midnight, Eastern Standard Time.
1.1.16. CERCLA. "CERCLA" shall mean the definition of that
term as specified in the definition as "Environmental Laws."
1.1.17 . CERCLIS. "CERCLIS" shall mean the comprehensive
environmental responsive, compensation and liability information
system, 42 USC ss. 9619(a).
1.1.18. Certificate of Bedminster Resolutions. "Certificate of
Bedminster Resolutions" shall mean the Certificate, of the Secretary of
Bedminster, as is set forth in Exhibit RRR of this Agreement.
1.1.19. Certificate of Compost Resolutions. "Certificate of
Compost Resolutions" shall mean the Certificate, of the Secretary of
Compost, as is set forth in Exhibit O of this Agreement.
1.1.20. Certificate of Miami Resolutions. "Certificate of
Miami Resolutions" shall mean the Certificate, of the Secretary of
Miami, as is set forth in Exhibit Q of this Agreement.
1.1.21. Closing Date. "Closing Date" is and shall mean October
30, 1998, commencing at or about 9:00 a.m., E.S.T., as contemplated
under Section 13.01.01 of this Agreement.
1.1.22. Closing Location. "Closing Location" is and shall mean
the offices of Xxxxxxxxx Xxxxxxx, at 0000 Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, as contemplated under Section
13.01.01 of this Agreement.
1.1.23. Code. "Code" shall mean the Internal Revenue Code of
1986, as amended, including all rules and regulations promulgated
thereunder.
1.1.24. Collective Bargaining Agreements. "Collective
Bargaining Agreements" is and shall have the meaning as is specified in
the definition of that term in Section 11.24 of this Agreement.
Page 4 of 107 Pages
1.1.25. Compost. "Compost" shall mean Compost America Holding
Company, Inc., a New Jersey corporation, a principal office of which is
located at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
1.1.26. Compost Board. "Compost Board," or other similar
references in this Agreement, shall mean the Board of Directors of
Compost.
1.1.27. Compost Common Stock. "Compost Common Stock," or
"Common Stock of Compost," or other similar references, shall mean the
common stock of Compost.
1.1.28. Compost Disclosures. "Compost Disclosures" shall mean
all documents and disclosures that are enumerated under Section
11.26.01(m)(1)-(18) of this Agreement.
1.1.29. Compost-Lionhart Warrant (#1-#6). "Compost-Lionhart
Warrant # 1" shall mean the warrant, in the form and substance as is
set forth in Exhibit WW.1, which is and shall be issued by Compost to
Lionhart at the Ancillary Transactions Closing, as otherwise provided
under Article VIII of this Agreement. "Compost-Lionhart Warrant # 2"
shall mean the warrant, in the form and substance as is set forth in
Exhibit WW.2, which is and shall be issued by Compost to Lionhart at
the Ancillary Transactions Closing, as otherwise provided under Article
VIII of this Agreement. "Compost-Lionhart Warrant # 3" shall mean the
warrant, in the form and substance as is set forth in Exhibit WW.3,
which is and shall be issued by Compost to Lionhart at the Ancillary
Transactions Closing, as otherwise provided under Article VIII of this
Agreement. "Compost-Lionhart Warrant # 4" shall mean the warrant, in
the form and substance as is set forth in Exhibit WW.4, which is and
shall be issued by Compost to Lionhart at the Ancillary Transactions
Closing, as otherwise provided under Article VIII of this Agreement.
"Compost-Lionhart Warrant # 5" shall mean the warrant, in the form and
substance as is set forth in Exhibit WW.5, which is and shall be issued
by Compost to Lionhart at the Ancillary Transactions Closing, as
otherwise provided under Article VIII of this Agreement.
"Compost-Lionhart Warrant # 6" shall mean the warrant, in the form and
substance as is set forth in Exhibit WW.6, which is and shall be issued
by Compost to Lionhart at the Ancillary Transactions Closing, as
otherwise provided under Article VIII of this Agreement.
1.1.30. Compost-Miami Guaranty. "Compost-Miami Guaranty" shall
mean the continuing and unconditional guaranty, in substantially the
form as is set forth in Exhibit UUU of this Agreement (and which is
required to be executed and delivered by Compost and Miami to Lionhart,
LHI and GEP under this Agreement, the Credit Documents and/or
Definitive Supplemental Documents, and which is and shall be secured by
and under the terms of and collateral specified in, and pursuant to the
terms and subject to the conditions set forth in, the Mortgage, the
Security Agreement, the Compost Stock Pledge Agreement (Compost Common
Stock), the Compost Stock Pledge Agreement (Miami Common Stock) and the
Compost Stock Pledge Agreement (Bedminster Common Stock)), 1) by
Compost, for the benefit of Lionhart, LHI and GEP, of the duties,
obligations and undertakings of Miami and Bedminster under this
Agreement, the Credit Documents and the Definitive Supplemental
Documents, and 2) by Miami, for the benefit of Lionhart, LHI and GEP,
of the duties, obligations and undertakings of Compost and Bedminster
under this Agreement, the Credit Documents and the Definitive
Supplemental Documents.
1.1.31. Compost Resolutions. "Compost Resolutions" shall mean
the resolutions of the Compost Board, as is set forth in Exhibit N of
this Agreement.
1.1.32. Compost Stock Pledge Agreement (Bedminster Common
Stock). "Compost Stock Pledge Agreement (Bedminster Common Stock)"
shall mean the agreement, denominated as the "Compost Stock Pledge
Agreement (Bedminster Common Stock)," a copy of which is set forth in
Exhibit MMM of this Agreement, that is required to be executed and
delivered by Miami to Lionhart, LHI and GEP, on and at the Term Loan
Closing, and pursuant to which Miami shall deliver to Lionhart, LHI and
GEP, the Pledged Bedminster Shares (including, and accompanied by, all
applicable stock certificates and appropriate stock powers duly
endorsed), in the form and substance as is set forth in Exhibit NNN of
this Agreement, and which thereupon and thereafter, Lionhart, LHI and
GEP shall have a first, senior and unsubordinated lien, pledge and
encumbrance on and against the Pledged Bedminster Shares, for purposes
of securing the timely and complete performance and discharge by
Compost, Miami and Bedminster, for the benefit of Lionhart, LHI and
GEP, of the duties, obligations and undertakings of Compost, Miami
and/or Bedminster under 1) the Mortgage Note, 2) the other Credit
Documents and 3) this Agreement and the Definitive Supplemental
Documents.
Page 5 of 107 Pages
1.1.33. Compost Stock Pledge Agreement (Compost Common Stock).
"Compost Stock Pledge Agreement (Compost Common Stock)" shall mean the
agreement, denominated as the "Compost Stock Pledge Agreement (Compost
Common Stock)," a copy of which is set forth in Exhibit G of this
Agreement, that is required to be executed and delivered by Compost to
Lionhart, LHI and GEP, on and at the Term Loan Closing, and pursuant to
which Compost shall deliver to Lionhart, LHI and GEP, the Pledged
Compost Shares (including, and accompanied by, all applicable stock
certificates and appropriate stock powers duly endorsed), in the form
and substance as is set forth in Exhibit I of this Agreement, and which
thereupon and thereafter, Lionhart, LHI and GEP shall have a first,
senior and unsubordinated lien, pledge and encumbrance on and against
the Pledged Compost Shares, for purposes of securing the timely and
complete performance and discharge by Compost, Miami and Bedminster,
for the benefit of Lionhart, LHI and GEP, of the duties, obligations
and undertakings of Compost, Miami and/or Bedminster under 1) the
Mortgage Note, 2) the other Credit Documents and 3) this Agreement and
the Definitive Supplemental Documents.
1.1.34. Compost Stock Pledge Agreement (Miami Common Stock).
"Compost Stock Pledge Agreement (Miami Common Stock)" shall mean the
agreement, denominated as the "Compost Stock Pledge Agreement (Miami
Common Stock)," a copy of which is set forth in Exhibit H of this
Agreement, that is required to be executed and delivered by Compost and
Xxxxx Xxxxxx Xxxxxx ("Xxxxxx") to Lionhart, LHI and GEP, on and at the
Term Loan Closing, and pursuant to which Compost and Mestre shall
deliver to Lionhart, LHI and GEP, the Pledged Miami Shares (including,
and accompanied by, all applicable stock certificates and appropriate
stock powers duly endorsed), in the form and substance as is set forth
in Exhibit J of this Agreement, and which thereupon and thereafter,
Lionhart, LHI and GEP shall have a first, senior and unsubordinated
lien, pledge and encumbrance on and against the Pledged Miami Shares,
for purposes of securing the timely and complete performance and
discharge by Compost, Miami and Bedminster, for the benefit of
Lionhart, LHI and GEP, of the duties, obligations and undertakings of
Compost, Miami and/or Bedminster under 1) the Mortgage Note, 2) the
other Credit Documents and 3) this Agreement and the Definitive
Supplemental Documents.
1.1.35. Control. "Control," including the terms "controlled
by" and "under, control with", shall mean the possession, directly or
indirectly, or as trustee or executor, of the power to direct or cause
the direction of the management and or policies of a Person, whether
through the ownership of stock, as trustee or executor, by contract or
credit arrangement or otherwise.
1.1.36. Conversion Common Shares. "Conversion Common Shares"
shall have the definition or description as is otherwise ascribed to
such term in Section 9.2.1 of this Agreement.
1.1.37. Conversion Shares. "Conversion Shares" shall have the
definition or description as is otherwise ascribed to such term in
Section 4.3.2 of this Agreement.
1.1.38. Credit. "Credit" shall mean US $10,500,000, as is
defined under Section 2.1 of this Agreement, and which, pursuant to the
terms and subject to the conditions set forth in this Agreement, the
Definitive Supplemental Documents and the Credit Documents, shall be
delivered to or applied for the benefit of Compost and Miami by GEP.
1.1.39. Credit Documents. "Credit Document(s)" shall mean this
Agreement and all Definitive Supplemental Documents that relate to or
arise from or which are executed and/or delivered in connection with
(and as an inducement to Lionhart, LHI and GEP to execute and deliver,
and as an inducement to GEP, in whole or in part, to extend and deliver
the Credit to Compost, Miami and Bedminster under), this Agreement, the
Credit and the Supplemental Definitive Documents, including, without
limitation, 1) the Mortgage Note, 2) the Mortgage, 3) the Security
Agreement, 4) the Compost Stock Pledge Agreement (Compost Common
Stock), 5) the Compost Stock Pledge Agreement (Miami Common Stock), 6)
the Compost-Miami Stock Pledge Agreement (Bedminster Common Stock), 7)
the Pledged Compost Certificate, 8) the Pledged Miami Certificate, 9)
the Pledged Bedminster Certificate, 10) the UCC-1 Financing Statement,
11) the Compost-Miami Guaranty, 12) the Legal Opinion of Compost's
Counsel, 13) Legal Opinion of Miami's Counsel, 14) the Legal Opinion of
Bedminster's Counsel, 15) the Compost Resolutions and the Compost
Certificate of Resolutions, 16) the Miami Resolutions and the Miami
Certificate of Resolutions, 17) the Bedminster Resolutions and the
Bedminster Certificate of Resolutions, 18) the Term Loan Closing
Statement, 19) the Mortgagee's Title Insurance Commitment, 20) the
Compost/Miami Mortgagor Affidavit, 21) the Compost/Miami Owner's
Affidavit, 22) the Mortgagor's Certificate and Indemnification
Regarding Hazardous Substances, 23) the
Page 6 of 107 Pages
Release and Satisfaction of Xxxxxx Mortgage, 24) the Miami-Xxxxxx Note,
25) the Stipulated Motion to Dismiss Complaint with Prejudice, 26) the
Order of Dismissal with Prejudice, 27) the Global Closing Statement,
28) the Incumbency Certificate of Compost, 29) the Incumbency
Certificate of Miami, 30) the Incumbency Certificate of Bedminster, 31)
the "Bring-Down" Certificate of Compost, 32) the "Bring-Down"
Certificate of Miami, and, 33) the "Bring-Down" Certificate of
Bedminster.
1.1.40. Debenture(s). "Debenture(s)" shall mean the
Debentures, Series 1-10, shall mean that were sold by Compost to
Lionhart, and that were purchased and were or are presently held by
Lionhart, pursuant to the terms and subject to the conditions of the
"Debenture Purchase Agreement," in or about November 27, 1996, copies
of which are set forth in Appendix I-Item 3, and that is or are
described and otherwise defined under Paragraph 6 of the Recitals of
this Agreement.
1.1.41. Debenture Purchase Agreement. "Debenture Purchase
Agreement" shall mean the "Regulation D Convertible Debenture Purchase
Agreement," by and between Compost and Lionhart, dated on or about
November 27, 1996, a copy of which is set forth in Appendix I-Item 1,
and the "First Amendment to Regulation D Convertible Debenture
Agreement," by and between Compost and Lionhart, dated in or about
February 1997, a copy of which is set forth in Appendix I-Item 2, all
of which is described in Recital Paragraph No. 6 of this Agreement.
1.1.42. Definitive Supplemental Documents. "Definitive
Supplemental Documents" shall mean the Credit Documents, and all other
agreements, certificates, resolutions, statements, considerations,
schedules, exhibits, disclosures and all other documents 1) that are
required to be executed, signed, consummated and/or delivered by
Compost and/or Miami and/or Bedminster to Lionhart and/or LHI and/or
GEP, as contemplated under this Agreement (including, without
limitation, the Registration Rights Agreement, the Director Appointment
Agreement, the Miami-Compost Guaranty, the Compost-Lionhart Warrant #
1, the Compost-Lionhart Warrant # 2, the Compost-Lionhart Warrant # 3,
the Compost-Lionhart Warrant # 4, the Compost-Lionhart Warrant # 5 and
the Compost-Lionhart Warrant # 6, and the Lock-Up Letter, and all other
considerations that are required to be executed and/or delivered under
Article XIII and/or Article XV of this Agreement), or 2) that are
required to be executed, signed, consummated and/or delivered by
Lionhart and/or LHI and/or GEP to Compost and/or Miami and/or
Bedminster (including, without limitation, all considerations that are
required to be executed and/or delivered under Article XIII and/or
Article XV of this Agreement).
1.1.43. Designation of Rights of Series B Preferred Stock.
"Designation of Rights of Series B Preferred Stock shall mean, with
respect to the Series B Preferred Stock, the "Designation of Rights of
Series B Preferred Stock," dated in or about June 1997, a copy of which
is set forth in Appendix I-Item 5, and the "Amendment to Designation of
Rights of Series B Preferred Stock," dated on or about September 17,
1997, a copy of which is set forth in Appendix I-Item 6, all of which
is described in Recital Paragraph No. 7 of this Agreement.
1.1.44. Director Appointment Agreement. "Director Appointment
Agreement" shall mean the Director Appointment Agreement, dated October
30, 1998, by and between Compost and Lionhart, which is hereby
incorporated by reference, and as is otherwise set forth in Exhibit EEE
of this Agreement.
1.1.45. Disclosure Documents. "Disclosure Documents" shall
mean 1) the documents, certificates, schedules, resolutions and all
other documents (including, without limitation, all Disclosure
Schedules), and compilations of such documents, certificates,
schedules, resolutions and all other documents (including, without
limitation, all Disclosure Schedules), that are set forth and listed or
otherwise described or referred to in Appendix III of this Agreement,
and all of which are hereby incorporated by reference in this
Agreement, and 2) the "Miami Project Disclosures," as that term is
defined under Section 11.26.01(m) of this Agreement.
1.1.46. Disclosure Schedule. "Disclosure Schedule" shall mean
each and every disclosure schedules attached hereto and forming a part
of this Agreement.
1.1.47. EBITDA. "EBITDA" shall mean earnings before interest,
income taxes, depreciation and amortization, as determined in
accordance with GAAP in the United States.
1.1.48. Effective Date. "Effective Date" shall mean the
Closing Date of this Agreement, which is October
Page 7 of 107 Pages
30, 1998.
1.1.49. Encumbrance. "Encumbrance" shall mean any security
interest, pledge, mortgage, lien (including environmental lines),
charge or (as determined, to the best of Compost's and Miami's and
Bedminster's knowledge, after due inquiry) adverse claim, including
without limitation, any restriction on the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership, but
excluding such encumbrances which, individually or in the aggregate,
would not have a material adverse effect.
1.1.50. Environmental Laws. "Environmental Laws" shall mean
any law, now or hereafter in effect and as amended, and any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to pollution
or protection of the environment, health, safety or natural resources,
including without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Substances.
1.1.51. Environmental Permit. "Environmental Permit" shall
mean any permit, approval, identification number, license or other
authorization required to operate the business on the real property
under any applicable Environmental Law, including, without limitation,
the Miami Project Permits.
1.1.52. ERISA. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, including the rules and regulations
promulgated thereunder.
1.1.53. Escrow Agent. "Escrow Agent" shall mean KGL, which is
the Escrow Agent under the Debenture Purchase Agreement, as is
described in Recital Paragraph No. 10 of this Agreement.
1.1.54. Excess Common Shares. "Excess Common Shares" shall
mean, with respect to the shares of Compost Common Stock that are owned
and held by Lionhart immediately subsequent to the Ancillary
Transactions Closing on the Closing Date, as is otherwise ascribed to
such term in Section 10.1 of this Agreement.
1.1.55. Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, including the rules and regulations
promulgated thereunder.
1.1.56. Financial Statements. "Financial Statements" shall
have the meaning as is described such term in Section 11.11 and Section
11.12 of this Agreement.
1.1.57. First Debenture Conversion. "First Debenture
Conversion" shall mean the Notice of Conversion, dated on or about May
20, 1997, that was delivered by Lionhart to Compost on or about May 20,
1997, a copy of which is set forth in Appendix I-Item 12, and, pursuant
to which Lionhart properly converted US $200,000 of the Debentures, and
Compost thereafter issued and delivered to Lionhart, in exchange for
such the surrender, delivery and tender by Lionhart to Compost of two
(2) Debentures (i.e., Series 0-00 xx 00), Xxxxxxxxxxx Xx. XX0000,
representing 178,253 registered (freely tradable) shares of Common
Stock of Compost, and registered in the name of Lionhart ( a copy of
such Certificate No. CA1103 is set forth in Appendix I-Item 13), all as
is described in Recital Paragraph No.
12 of this Agreement.
1.1.58. GAAP. "GAAP" shall mean the generally excepted
accounting principles and practices, in the United States, in effect
from time to time applied consistently throughout the periods involved.
1.1.59. GEP. "GEP" shall mean Global EarthFund Partners, Ltd.,
an Indiana limited liability company, the principal office of which is
c/o Xxxx Xxxxxx Drics, Esq., 000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxxxx, Xxxxxxx 00000.
1.1.60. GEP Board. "GEP Board" or other similar references in
this Agreement, shall mean the Board of Directors of GEP.
1.1.61. Governmental Authority. "Governmental Authority" means
any United States Federal, State or local or any foreign governmental,
regulatory or administrative authority, agency or commission or any
court, tribunal
Page 8 of 107 Pages
judicial or arbitral body.
1.1.62. Hazardous Substances. "Hazardous Substances" shall
mean (a petroleum and petroleum products, by products or break down
products, radioactive materials, asbestos-containing materials and
polychlorinated biphenyls, and (b) any other chemicals, materials or
substances regulated as toxic or hazardous or as a pollutant,
contaminate or waste under any applicable Environmental Law in such
levels beyond those permitted by applicable Environmental Laws.
1.1.63. Indebtedness. "Indebtedness" shall mean, with respect
to any Person, (a) all indebtedness of such Person, absolute or
contingent, for borrowed money, (b) all obligations of such Person for
the deferred purchase price of property or services, other than trade
obligations incurred in the ordinary course of business, (c) all
obligations of such Person evidence by notes, bonds, debentures or
other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under any such agreement in the event
of default are limited to repossession or sale of such property), (e)
all obligations of such Person as lessee under leases that have been or
should be, in accordance with GAAP and, recorded as capital leases, (f)
all obligations, contingent or otherwise, of such Person under
acceptances, letters of credit or similar facilities, (g) all
obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of any such Person or any
warrants, rights or options to acquire such capital stock, value, in
the case of redeemable preferred stock, at the greater of its voluntary
or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all indebtedness of others referred to in clauses (a
through f above guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed to directly or indirectly by such
Person through an agreement (1) to pay or purchase such indebtedness or
to advance or supply funds for the payment or purchase of such
indebtedness, (2) to purchase, sale or lease (as lessee or lessor)
property, or to purchase or sale services, primarily for the purpose of
enabling the debtor to make payment of such indebtedness or to assure
the holder of such indebtedness against loss, (3) to supply funds to or
any other manner invest in the debtor (including any agreement to pay
for property or services irrespective of whether such property is
received or such services are rendered), or (4) otherwise to assure a
creditor against loss, and (i) all indebtedness referred to in clauses
(a) through (f) hereinabove secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be
secured by) any Encumbrance on property (including, without limitation,
accounts and contract rights) owned by any such Person, even thought
any such Person has not assumed or become liable for the payment of
such Indebtedness.
1.1.64. Intellectual Property. "Intellectual Property" shall
mean patents, patent registrations and patent applications, trade
marks, service marks, trade xxxx rights, trade names, trade name
rights, registered copy rights and trade secrets owned or used by
Compost, or any of its Subsidiaries, and/or Miami and/or Bedminster, in
the conduct of its or its respective businesses.
1.1.65 . Interim Financial Statements. "Interim Financial
Statements" shall have the meaning ascribed to such term as set forth
in Section 11.12 of this Agreement.
1.1.66. IRS. "IRS" shall mean the Internal Revenue Service of
the United States, or any successor Governmental Authority.
1.1.67. KGL. "KGL" shall mean Xxxxxx Xxxxxxxxxx & Xxxxxxxx,
LLP, which is current Escrow Agent under the Debenture Purchase
Agreement, as described in Recital Paragraph No. 10 of this Agreement.
1.1.68. KGL-Compost Agreement. "KGL-Compost Agreement" shall
mean the written letter agreement, by and between Compost and KGL, as
Escrow Agent under the Debenture Purchase Agreement, dated on or about
June 16, 1997, a copy of which is set forth in Appendix I-Item 11, and
as is described in Recital Paragraph No. 11 of this Agreement.
1.1.69. Leased Real Property. "Leased Real Property" shall
mean the Real Property leased by Compost or any of its Subsidiaries
(and/or Miami and/or Bedminster) together with to the extent leased by
Compost or its Subsidiaries (and/or Miami and/or Bedminster), all
buildings and other structures, facilities or improvements presently or
hereafter located thereon, all fixtures, systems, equipment and items
of personal property owned by Compost or
Page 9 of 107 Pages
any of its Subsidiaries (and/or Miami and/or Bedminster) attached or
pertinent thereto, all easements, licenses, rights and appurtenances
relating to the foregoing.
1.1.70. Legal Opinion of GEP's Counsel. "Legal Opinion of
GEP's Counsel" shall mean the opinion of GEP's counsel, as is set forth
in Exhibit PPP of this Agreement.
1.1.71. Legal Opinion of LHI's Counsel. "Legal Opinion of
LHI's Counsel" shall mean the opinion of LHI's counsel, as is set forth
in Exhibit AA of this Agreement.
1.1.72. Legal Opinion of Bedminster's Counsel. "Legal Opinion
of Bedminster's Counsel" shall mean the opinion of Bedminster's
counsel, as is set forth in Exhibit OOO of this Agreement.
1.1.73. Legal Opinion of Compost's Counsel. "Legal Opinion of
Compost's Counsel" shall mean the opinion of Compost's counsel, as is
set forth in Exhibit L of this Agreement.
1.1.74. Legal Opinion of Lionhart's Counsel. "Legal Opinion of
Lionhart's Counsel" shall mean the opinion of Lionhart's counsel, as is
set forth in Exhibit FF of this Agreement.
1.1.75. Legal Opinion of Miami's Counsel. "Legal Opinion of
Miami's Counsel" shall mean the opinion of Miami's counsel, as is set
forth in Exhibit M of this Agreement.
1.1.76.01. Lenders. "Lenders" shall mean collectively,
Lionhart, LHI and GEP, for purposes of the Term Loan under Article II
of this Agreement.
1.1.76.02. LHI. "LHI" shall mean Lionhart Investments, Ltd., a
United Kingdom limited liability company, the principal office of which
is located at 00 Xxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx XX00 4 RH,
England.
1.1.77. LHI Board. "LHI Board" or other similar references in
this Agreement to the Board of Directors of LHI, shall mean the Board
of Directors of LHI.
1.1.78. LHI Consent. "LHI Consent" is and shall mean the
"Consent to Series A and Series C Preferred Stock," dated on or about
September 17, 1997, a copy of which is set forth in Appendix I-Item 7,
and as is described in Recital Paragraph No. 8 of this Agreement.
1.1.79. LHI-Select Agreement. "LHI-Select Agreement" shall
mean the written letter agreement, dated on or about June 11, 1997, by
and between LHI and SAI, a copy of which is set forth in Appendix
I-Item 8, and as is described in Recital Paragraph No. 9 of this
Agreement.
1.1.80. LHI-Select Agreement Shares. "LHI-Select Agreement
Shares" shall mean the definition or description as is otherwise
ascribed to such term in Recital Paragraph No. 9 of this Agreement.
1.1.81. Liabilities. "Liabilities" shall mean any and all
debts, liabilities and obligations, whether accrued or fixed, absolute
or contingent, matured or unmatured or determined or determinable,
including, without limitation, those arising under any law, rule,
regulation or order by a Governmental Authority and those arising under
any contract, agreement, commitment, arrangement or undertaking.
1.1.82. Licensed Intellectual Property. "Licensed Intellectual
Property" shall mean all intellectual property licensed or sublicensed
to Compost and or any Subsidiary (and/or Miami and/or Bedminster) from
a third party.
1.1.83. Lionhart. "Lionhart" shall mean Lionhart Global
Appreciation Fund, Ltd., a British Virgin Islands limited liability
company, the principal office of which is located at c/o Citco B.V.I.
Limited, Post Xxxxxx Xxx 000, Xxxx Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx
Xxxxxxx.
1.1.84.1. Lionhart Board. "Lionhart Board" or other similar
references in this Agreement, shall mean the Board of Directors of
Lionhart.
Page 10 of 107 Pages
1.1.84.2. Lock-up Letter. "Lock-up Letter" shall mean that
certain letter agreement, dated on and as of October 30, 1998, by and
among Compost, Lionhart, LHI and GEP, a copy of which is set forth in
Exhibit WWW of this Agreement.
1.1.85. Loss. "Loss," and other similar references with
respect to any indemnification in this Agreement, shall have the
meaning, definition and description as is otherwise ascribed to such
term in Article XVI of this Agreement.
1.1.86. Material Adverse Effect. "Material Adverse Effect"
shall mean any circumstance, change, event, transaction, loss, failure,
effect or other occurrence that is, or is reasonably likely to be,
materially adverse to the business (or Business), operations,
properties (including intangible properties), condition (financial or
otherwise), assets, liabilities (Liabilities), results of operations or
financial or business prospects of Compost and or its Subsidiaries,
and/or of Miami and/or Bedminster, taken as a whole.
1.1.87. Miami. "Miami" shall mean Miami Recycling and
Composting Co., Inc., a Delaware corporation, which is a direct
controlled subsidiary of Compost, and of which 80.1% of the issued and
outstanding capital stock of Miami is owned and controlled by Compost
and 19.9% of the issued and outstanding capital stock of Miami is owned
and controlled by Mestre. The principal office of Miami is located at
000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
1.1.88. Miami Balance Sheet. "Miami Balance Sheet" shall have
the definition, meaning and description as is otherwise ascribed to
such term in Section 11.26.07 of this Agreement.
1.1.89. Miami Board. "Miami Board" or other similar references
in this Agreement, shall mean the Board of Directors of Miami.
1.1.90. Miami Common Stock. "Miami Common Stock," or "Common
Stock of Miami," or other similar references, shall mean the common
stock of Miami.
1.1.91. Miami Project. "Miami Project" shall have the
definition and description as is otherwise ascribed to such term in
Section 11.26.01(a) of this Agreement.
1.1.92. Miami Project Collateral. "Miami Project Collateral"
is and shall mean collateral, that is identified, described and
otherwise specified under the Security Agreement, including 1) the
Miami Project Permits, 2) the Miami Claim, 3) the Put or Pay Contract
and 4) the Miami Project Financing (as those terms are defined under
Section 11.26.01 of this Agreement).
1.1.93. Miami Project Disclosures. "Miami Project Disclosures"
shall have the definition and description as is otherwise ascribed to
such term in Section 11.26.01(m) of this Agreement.
1.1.94. Miami Project Permits. "Miami Project Permits" shall
have the definition and description as is otherwise ascribed to such
term in Section 11.26.01(b) of this Agreement.
1.1.95. Miami Resolutions. "Miami Resolutions" shall mean the
resolutions of the Miami Board, as is set forth in Exhibit P of this
Agreement.
1.1.96. Miami-Xxxxxx Note. "Miami-Xxxxxx Note" shall mean the
Promissory Note, that is secured by the Xxxxxx Mortgage, in the
principal amount of US $3,730,870.75, that was delivered by Miami to
Xxxxxx on or about March 29, 1996, a copy of which is set forth in
Appendix I-Item 16, as is described in Recital Paragraph No. 14 of this
Agreement.
1.1.97. Miami Site. "Miami Site" shall have the definition and
description as is otherwise ascribed to such term in Section
11.26.01(d) of this Agreement.
1.1.98. Mortgage. "Mortgage" shall mean the "Mortgage," dated
on or about October 30, 1998, a copy of
Page 11 of 107 Pages
which is set forth in Exhibit E of this Agreement, that is required to
be executed and delivered by Miami to Lionhart, LHI and GEP, on and at
the Term Loan Closing, and which thereupon and thereafter shall
constitute a first, senior and unsubordinated lien, mortgage and
encumbrance on the Miami Site, for purposes of securing the timely and
complete performance and discharge by Compost, Miami and Bedminster,
for the benefit of Lionhart, LHI and GEP, of the duties, obligations
and undertakings of Compost, Miami and/or Bedminster under 1) the
Credit Documents, including (without limitation) the Mortgage Note, and
2) this Agreement and the Definitive Supplemental Documents (including,
without limitation, the Miami-Compost Guaranty).
1.1.99. Mortgage Note. "Mortgage Note" shall mean the note,
denominated as the "Mortgage Note," in the principal amount of US
$10,500,000, and dated on or about October 30, 1998, a copy of which is
set forth in Exhibit D of this Agreement, that is or is required to be
executed and delivered by Compost, Miami and Bedminster, to Lionhart,
LHI and GEP, on the Term Loan Closing Date.
1.1.100. Mortgage Modification Agreement. "Mortgage
Modification Agreement" shall mean the document, entitled "Mortgage
Modification Agreement," that was executed by and between Miami and
Xxxxxx on or about April 24, 1998, which purports to amend the terms of
the Xxxxxx Mortgage and/or the Miami-Xxxxxx Note, a copy of which is
set forth in Appendix I, Item 18, as is described in Recital Paragraph
No. 14 of this Agreement.
1.1.101. Mortgagee's Title Insurance Commitment. "Mortgagee's
Title Insurance Commitment" shall mean the commitment for a mortgagee's
policy of title insurance, the effective date of which is or shall be
on or about the Closing Date, for a mortgagee's policy of title
insurance, from Lawyers Title Insurance Corporation, Case No. 9801958,
in substantially the form as is set forth in Exhibit R of this
Agreement.
1.1.102. Multiemployer Plan. "Multiemployer Plan" shall have
the meaning ascribed to such term as is set forth in Section 11.15 of
this Agreement.
1.1.103. Owned Intellectual Property. "Owned Intellectual
Property" means all intellectual property in and into which Compost or
any subsidiary holds, or has the right to hold, any right, title or
interest.
1.1.104. Owned Real Property. "Owned Real Property" shall mean
the real property owned by Compost or its Subsidiaries (and/or Miami
and/or Bedminster), together with all buildings and other structures,
facilities or improvements presently or hereafter located thereon, all
fixtures, systems, equipment and items of personal property of Compost
or its Subsidiaries (and/or Miami and/or Bedminster) attached or
appurtenant thereto, and all easements, licenses, rights and
appurtenances relating to the foregoing.
1.1.105. Person. "Person" shall mean an individual,
corporation, partnership, limited liability company, association,
trust, joint venture, unincorporated organization, other entity or
group (as defined in Section 13(d)(3) of the Exchange Act).
1.1.106. Plans. "Plans" shall have the definition and meaning
ascribed to such term as set forth in Section 11.15 of this Agreement.
1.1.107. Pledged Bedminster Shares. "Pledged Bedminster
Shares" shall mean all issued and outstanding capital stock and equity
rights of Bedminster, and all of which is pledged, or is required to be
pledged, by Miami, pursuant to the terms and subject to the conditions
set forth in the Compost Stock Pledge Agreement (Bedminster Common
Stock). The term "Pledged Bedminster Shares" includes all such capital
stock represented by and on Certificate No. 1, which indicates thereon
that Miami is the registered owner of 1000 shares of Bedminster Common
Stock ("Bedminster Certificate"). Miami, pursuant to the terms and
subject to the conditions set forth in the Compost Stock Pledge
Agreement (Bedminster Common Stock), shall deliver to Lionhart, LHI and
GEP, on and at the Term Loan Closing, the Bedminster Certificate,
including appropriate stock powers duly endorsed, in the form and
substance as is set forth in Exhibit NNN of this Agreement.
1.1.108. Pledged Compost Shares. "Pledged Compost Shares"
shall mean all shares of Compost Common Stock that are set forth on and
represented by Certificate No. CA1370, representing thereon that
Lionhart is the registered owner of 600,000 registered (freely
tradable) shares of Compost Common Stock, as is described in Recital
Page 12 of 107 Pages
Paragraph No. 10 of this Agreement ("Compost Certificate"). Compost,
pursuant to the terms and subject to the conditions set forth in the
Compost Stock Pledge Agreement (Compost Common Stock), shall deliver to
Lionhart, LHI and GEP, on and at the Term Loan Closing, the Compost
Certificate, including appropriate stock powers duly endorsed, in the
form and substance as is set forth in Exhibit I of this Agreement.
1.1.109. Pledged Miami Shares. "Pledged Miami Shares" shall
mean all issued and outstanding capital stock and equity rights of
Miami, and all of which is pledged, or is required to be pledged, by
Compost and Mestre, pursuant to the terms and subject to the conditions
set forth in the Compost Stock Pledge Agreement (Miami Common Stock).
The term "Pledged Miami Shares" includes all such capital stock
represented by and on Certificate No. 1, which indicates thereon that
Compost is the registered owner of 801 shares of Miami Common Stock,
and all such capital stock represented by and on Certificate No. 2,
which indicates thereon that Mestre is the registered owner of 199
shares of Miami Common Stock ("Miami Certificates"). Compost and
Mestre, pursuant to the terms and subject to the conditions set forth
in the Compost Stock Pledge Agreement (Miami Common Stock), shall
deliver to Lionhart, LHI and GEP, on and at the Term Loan Closing, the
Miami Certificates, including appropriate stock powers duly endorsed,
in the form and substance as is set forth in Exhibit J of this
Agreement.
1.1.110. Preferred Stock Series A. "Preferred Stock Series A"
shall mean the authorized, and/or issued and outstanding shares of
Series A Preferred Stock of Compost.
1.1.111. Preferred Stock Series B. "Preferred Stock Series B"
shall mean the authorized, and/or issued and outstanding shares of
Series B Preferred Stock of Compost (except as may be limited or
amplified by the definition of "Series B Preferred Stock" in this
Agreement).
1.1.112. Preferred Stock Series C. "Preferred Stock Series C"
shall mean the authorized, and/or issued and outstanding shares of
Series C Preferred Stock of Compost.
1.1.113. Preferred Stock Series D. "Preferred Stock Series D"
shall mean the authorized, and/or issued and outstanding shares of
Series D Preferred Stock of Compost.
1.1.114. Purchase Price. "Purchase Price" shall have the
meaning ascribed to such term as is set forth in Section 6.1 and
Section 6.2 of this Agreement.
1.1.115. Put Option # 1. "Put Option # 1" shall mean the
definition or description as is otherwise ascribed to such term in
Section 9.2.2 of this Agreement.
1.1.116. Put Option # 2. "Put Option # 2" shall mean the
definition or description as is otherwise ascribed to such term in
Section 10.2.1 of this Agreement.
1.1.117. Put Purchase Price. "Put Purchase Price," 1) for and
with respect to Put Option # 1, shall have the definition or
description as is otherwise ascribed to such term in Section 9.2.3(b)
of this Agreement, and 2) for and with respect to Put Option # 2, shall
have the meaning as is otherwise ascribed to such term in Section
10.2.2(b) of this Agreement.
1.1.118. Put or Pay Contract. "Put or Pay Contract" shall have
the definition and description as is otherwise ascribed to such term in
Section 11.26.01(e) of this Agreement.
1.1.119. Real Property. "Real Property" shall mean the leased
real property and owned real property of Compost or any of its
Subsidiaries (and/or Miami and/or Bedminster).
1.1.120. Registration Rights Agreement. "Registration Rights
Agreement" shall mean the registration rights agreement, dated October
30, 1998, by and between Compost and Lionhart, which is hereby
incorporated by reference, and as is otherwise set forth in Exhibit DDD
of this Agreement.
1.1.121. Release. "Release" shall mean disposing, discharging,
injecting, spilling, leaking, leeching, dumping, emitting, escaping,
emptying, seeping, placing and alike into or upon any land or water or
air or otherwise
Page 13 of 107 Pages
entering into the environment.
1.1.122. Remedial Action. "Remedial Action" shall mean all
action to(i) cleanup, remove, treat or handle in any other way
hazardous substances in the environment; (ii) prevent the release of
hazardous substances so that they do not migrate, endanger or threaten
to endanger public health or the environment; or (iii) perform remedial
investigations, feasibility studies, corrective actions, closures and
post remedial or post closure studies, investigations, operations,
maintenance and monitoring on, about or in any real property with
respect to any release of hazardous substances.
1.1.123. Xxxxxx Mortgage. "Xxxxxx Mortgage" shall mean the
"Mortgage Deed," dated on or about March 29, 1996, that was executed
and delivered by Miami to Xxxxxx, for purposes of securing the
Miami-Xxxxxx Note, which is and constitutes a first, senior and
unsubordinated lien, mortgage and encumbrance on the Miami Site, and
which is recorded in the Official Records Book 17182, at Page 0528 of
the Public Records of Dade County, Florida, and rerecorded in Official
Records Book 17815, Page 2603, on October 6, 1997, of the Public
Records of Miami-Dade County, Florida, a copy of which is set forth in
Appendix I, Item 17, as is described in Recital Paragraph No. 14 of
this Agreement.
1.1.124. SAI. "SAI" is and shall mean Select Acquisitions,
Inc., which is a party to the LHI-Select Agreement, as described in
Recital Paragraph No. 9 of this Agreement.
1.1.125. Schedule of Uses and Applications of Credit.
"Schedule of Uses and Applications of Credit" shall mean the document,
as so denominated, as is set forth in Exhibit B of this Agreement.
1.1.126. SEC. "SEC" shall mean the Securities and Exchange
Commission of the United States, including any political or
governmental subdivision under the jurisdiction of the SEC.
1.1.127. Second Debenture Conversion. "Second Debenture
Conversion" shall mean the Notice of Conversion, dated on or about
September 8, 1997, that was delivered by Lionhart to Compost on or
about September 8, 1997, a copy of which is set forth in Appendix
I-Item 14, and, pursuant to which Lionhart properly converted or
otherwise elected to convert US $200,000 of the Debentures; and, based
on the Second Debenture Conversion, Compost, on or about March 13,
1998, issued and delivered to KGL, in exchange for the surrender,
delivery and tender by Lionhart to Compost of two (2) Debentures (i.e.,
Series 7-8 of 10), Certificate No. CA1369, representing 159,670
registered (freely tradable) shares of Common Stock of Compost, and
registered in the name of Lionhart ( a copy of such Certificate No.
1369 is set forth in Appendix I-Item 15).
1.1.128. Section 6.1 Shares. "Section 6.1 Shares" shall mean
the definition or description as is otherwise ascribed to such term in
Section 6.1.1 of this Agreement.
1.1.129. Securities Act. "Securities Act" shall mean the
Securities Act of 1933, as amended, including the rules and regulations
promulgated thereunder.
1.1.130. Security Agreement. "Security Agreement" shall mean
the agreement, denominated as the "Pledge and Security Agreement,"
dated on or about October 30, 1998, a copy of which is set forth in
Exhibit F of this Agreement, that is required to be executed and
delivered by Compost, Miami and Bedminster to Lionhart, LHI and GEP, on
and at the Term Loan Closing, and which, pursuant to the terms and
subject to the conditions therein, imposes and establishes a first,
senior and unsubordinated lien, mortgage and encumbrance on and against
the collateral described therein (including, the Miami Project
Collateral, the Put or Pay Contract, the Miami Project Permits, the
Miami Project Financing and the Miami Claim as those terms are defined
under Section 11.26.01 of this Agreement), for purposes of securing the
timely and complete performance and discharge by Compost, Miami and
Bedminster, for the benefit of Lionhart, LHI and GEP, of the duties,
obligations and undertakings of Compost, Miami and/or Bedminster under
1) the Mortgage Note, 2) the other Credit Documents and 3) this
Agreement and the Definitive Supplemental Documents (including, without
limitation, the Miami-Compost Guaranty).
1.1.131. Series B Preferred Stock. "Series B Preferred Stock"
shall mean the 400,000 shares of Series B Preferred Stock of Compost,
that were purchased by Lionhart from Compost, pursuant to the Series B
Preferred Shares
Page 14 of 107 Pages
Subscription Agreement, dated on or about June 16, 1997, for the
purchase price of US $1,000,000, and that were issued by Compost to
LHI, as otherwise described under Recital Paragraph No. 7 of this
Agreement.
1.1.132. Series B Preferred Shares Subscription Agreement.
"Series B Preferred Shares Subscription Agreement" shall mean the
"Subscription Agreement," that is identified in Recital Paragraph No. 7
of this Agreement, and a copy of which is set forth in Appendix
I-Item 4.
1.1.133. Settlement Agreement. "Settlement Agreement" shall
mean the "Settlement Agreement," a copy of which is set forth in
Exhibit ZZ of this Agreement, and, pursuant to which, inter alia, and
on the Effective Date, 1) Compost and Lionhart mutually rescind the
Second Debenture Conversion, 2) Lionhart has the duty to return and
deliver to Compost, on the Effective Date, 159,670 registered (freely
tradable) shares of Common Stock of Compost, that are registered in the
name of Lionhart and that are represented by Certificate No. CA1369,
and 3) Compost has the duty to return and deliver to Lionhart, on the
Effective Date, and otherwise reinstates and makes effective on the
Effective Date of this Agreement, Series 7-8 of 10 Debentures.
1.1.134. Subsidiary or Subsidiaries. "Subsidiary or
Subsidiaries" means any corporation, partnership, limited liability
company, joint venture, unincorporated organization or other legal
entity of which Compost or any Person, as the case may be (either alone
or through or together with any subsidiary), owns, directly or
indirectly, fifty percent or more of the stock or other equity
interest, the holders of which is generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
1.1.135. Tangible Personal Property. "Tangible Personal
Property" shall mean machinery, equipment, tools, supplies, furniture,
fixtures, vehicles, rail cars and other tangible personal property.
1.1.136. Tax or Taxes. "Tax or Taxes" shall mean all income,
gross receipts, sales, use, transfer, employment, franchise, profits,
property, excise or other similar taxes, estimated import duties, fees,
stamp taxes and duties, value added taxes, assessments or charges of
any kind whatsoever, (whether payable directly or by withholding),
together with any interest any penalties, additions to tax or
additional amounts imposed by any taxing authority with respect thereto
1.1.137. Term Loan Closing. "Term Loan Closing" shall mean the
closing, execution and delivery of, and the consummation of the
transactions contemplated under, the Credit Documents, as contemplated
under Section 13.01.02 of this Agreement, and which is and shall occur
on October 30, 1998, commencing at 9:00 a.m., E.S.T., at the offices of
Xxxxxxxxx Xxxxxxx, at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000.
1.1.138. Term Loan Closing Statement. "Term Loan Closing
Statement" shall mean the document, as so denominated, as is set forth
in Exhibit A of this Agreement.
1.1.139. Term Sheet. "Term Sheet" shall mean the Proposal and
Term Sheet, a copy of which is set forth in Appendix 1-Item 20, which
was approved by Lionhart, Compost and Miami on or about August 4, 1998,
and as is described in Recital Paragraph No. 15 of this Agreement.
1.1.140. Wasteco Stock Purchase Agreement. "Wasteco Stock
Purchase Agreement" shall mean that certain Stock Purchase Agreement,
dated November 3, 1997, by and among Wasteco Ventures Limited and
Compost.
Section 1.2. Other Definitions. Any other terms that are defined in
this Agreement, the Definitive Supplemental Documents and/or the Credit
Documents, but which are not otherwise set forth and enumerated specifically in
Section 1.1 of this Agreement, shall have the definitions and meanings that are
otherwise set forth in this Agreement, the Definitive Supplemental Documents and
Credit Documents.
ARTICLE II
CREDIT AGREEMENT, DOCUMENTS AND TERMS
Section 2.1. Credit-Term Loan. At the Term Loan Closing, and on the
Closing Date at the Closing Location, Lionhart, LHI and GEP (collectively and
sometimes referred to in Article II and Article XVIII of this Agreement as the
"Lenders"), shall
Page 15 of 107 Pages
loan, deliver and otherwise extend credit to or for the benefit of Compost and
Miami and Bedminster, in the principal amount of US $10,500,000 ("Credit"), on a
fixed-term loan basis, upon and pursuant to the terms and subject to the
conditions that are set forth in 1) this Agreement, 2) the Credit Documents
(including, without limitation, the Mortgage and the Mortgage Note) and 3) any
other applicable Definitive Supplemental Documents. The Credit shall be
delivered by the Lenders to Compost, Miami and Bedminster, and/or shall be
applied by the Lenders to or for the benefit of Compost, Miami and Bedminster,
at the Term Loan Closing (on the Closing Date at the Closing Location), in US
Dollars, in cash and/or cash-equivalent good and immediately available funds,
pursuant to and as otherwise prescribed under the "Term Loan Closing Statement,"
as is set forth in Exhibit A to this Agreement, and shall be used by Compost,
Miami and/or Bedminster as otherwise prescribed under, and pursuant to the terms
and subject to the conditions set forth in, 1) this Agreement, 2) the Credit
Documents, 3) any other applicable Definitive Supplemental Documents, and 4) the
"Schedule of Uses and Applications of Credit," as is set forth in Exhibit B of
this Agreement.
Section 2.2. Credit Conditions. Notwithstanding Section 2.1 of this
Agreement, the Lenders each shall not have any duty or obligation to loan, make
or otherwise extend the Credit to Compost, Miami and/or Bedminster, and Compost,
Miami and Bedminster shall not have any right (under this Agreement, the Credit
Documents or any applicable Definitive Supplemental Documents, or otherwise) to
compel the Lenders to loan, make or otherwise extend the Credit to Compost
and/or Miami and/or Bedminster, unless and until all conditions, that are
otherwise set forth in 1) this Agreement, 2) the Credit Documents and 3) any
other applicable Definitive Supplemental Documents, are satisfied by Compost and
Miami and Bedminster, to the reasonable satisfaction of the Lenders, and their
respective counsel, on or before the Term Loan Closing on the Closing Date at
the Closing Location.
Section 2.3. Term Loan Closing. At the Term Loan Closing, and on the
Closing Date at the Closing Location, and upon such terms and subject to such
conditions as set forth in 1) this Agreement (including, without limitation,
Article XIII), 2) the Credit Documents and 3) any applicable Definitive
Supplemental Documents:
2.3.1. Lender Undertakings to Compost, Miami and Bedminster.
The Lenders shall execute and/or deliver or cause to be executed and/or
delivered to Compost, Miami and Bedminster:
(A) Credit. The Credit, as otherwise provided under
Section 2.1 of this Agreement, and as otherwise provided under
the Term Loan Closing Statement; and,
(B) Term Loan Closing Statement. The Term Loan
Closing Statement, as is set forth in Exhibit A of this
Agreement; and,
(C) Lender Receipt #1. A receipt for the execution
and/or delivery by Compost and/or Miami and/or Bedminster to
the Lenders, in substantially the form as is set forth in
Exhibit C.1 of this Agreement, of 1) the Mortgage Note, in
substantially the form as is set forth in Exhibit D of this
Agreement; 2) the Mortgage, in substantially the form as is
set forth in Exhibit E of this Agreement; 3) the Security
Agreement, in substantially the form as is set forth in
Exhibit F of this Agreement; 4) the Compost Stock Pledge
Agreement (Compost Common Stock), in substantially the form as
is set forth in Exhibit G of this Agreement; 5) the Compost
Stock Pledge Agreement (Miami Common Stock), in substantially
the form as is set forth in Exhibit H of this Agreement; 6)
the Compost Stock Pledge Agreement (Bedminster Common Stock),
in substantially the form as is set forth in Exhibit MMM of
this Agreement; 7) the Pledged Compost Shares, including the
Compost Certificate in substantially the form as is set forth
in Exhibit I of this Agreement; 8) the Pledged Miami Shares,
including the Miami Certificates in substantially the form as
is set forth in Exhibit J of this Agreement; 9) the Pledged
Bedminster Shares, including the Bedminster Certificate in
substantially the form as is set forth in Exhibit NNN of this
Agreement; 10) the UCC-1 Financing Statement, in substantially
the form as is set forth in Exhibit K of this Agreement; 11)
the Compost-Miami Guaranty, in substantially the form as is
set forth in Exhibit UUU of this Agreement; 12) the Legal
Opinion of Compost's Counsel, in substantially the form as is
set forth in Exhibit L of this Agreement; 13) the Legal
Opinion of Miami's Counsel, in substantially the form as is
set forth in Exhibit M of this Agreement; 14) the Legal
Opinion of Bedminster's Counsel, in substantially the form as
is set forth in Exhibit OOO of this Agreement; 15) the Compost
Resolutions, in substantially the form as is set forth in
Exhibit N of this Agreement; 16) the Compost Certificate of
Resolutions, in substantially the form as is set forth in
Exhibit O of this Agreement; 17) the Miami Resolutions, in
substantially the form as is set forth in Exhibit P of this
Agreement; 18) the
Page 16 of 107 Pages
Miami Certificate of Resolutions, in substantially the form as
is set forth in Exhibit Q of this Agreement; 19) the
Bedminster Resolutions, in substantially the form as is set
forth in Exhibit QQQ of this Agreement; 20) the Bedminster
Certificate of Resolutions, in substantially the form as is
set forth in Exhibit RRR of this Agreement; 21) the
Mortgagee's Title Insurance Commitment, the effective date of
which is or shall be on or about the Closing Date, issued to
the Lenders by Lawyers Title Insurance Corporation, Case No.
9801958, in substantially the form as is set forth in Exhibit
R of this Agreement; 22) the Compost/Miami Mortgagor
Affidavit, in substantially the form as is set forth in
Exhibit S of this Agreement; 23) the Compost/Miami Owner's
Affidavit, in substantially the form as is set forth in
Exhibit T of this Agreement; 24) the Mortgagor's Certificate
and Indemnification Regarding Hazardous Substances, in
substantially the form as is set forth in Exhibit VVV of this
Agreement; 25) the Global Closing Statement, in substantially
the form as is set forth in Exhibit YY of this Agreement; 26)
the Incumbency Certificate of Compost, in substantially the
form as is set forth in Exhibit GGG of this Agreement; 27) the
Incumbency Certificate of Miami, in substantially the form as
is set forth in Exhibit HHH of this Agreement; 28) the
Incumbency Certificate of Bedminster, in substantially the
form as is set forth in Exhibit TTT of this Agreement; 29) the
"Bring-Down" Certificate of Compost, in substantially the form
as is set forth in Exhibit JJJ of this Agreement; 30) the
"Bring-Down" Certificate of Miami, in substantially the form
as is set forth in Exhibit KKK of this Agreement; and, 31) the
"Bring-Down" Certificate of Bedminster, in substantially the
form as is set forth in Exhibit SSS of this Agreement; and,
(D) Lender Receipt # 2. A receipt for the execution
and/or delivery by Compost and/or Miami to the Lenders, in
substantially the form as is set forth in Exhibit C.2 of this
Agreement, of 1) the "Release and Satisfaction of Xxxxxx
Mortgage," in substantially the form as is set forth in
Exhibit U of this Agreement, duly executed by Xxxxxx; 2) the
Miami-Xxxxxx Note, in substantially the form as is set forth
in Exhibit V of this Agreement, duly canceled and returned by
Xxxxxx to Miami; 3) a "Stipulated Motion to Dismiss Complaint
with Prejudice," in substantially the form as is set forth in
Exhibit W of this Agreement, duly executed by Xxxxxx and
Miami; and, 4) an "Order of Dismissal with Prejudice," in
substantially the form as is set forth in Exhibit X of this
Agreement, duly executed and ordered by the Court; and,
(E) Credit Documents. Any Credit Documents that
require the signature of and execution by the Lenders,
including, if applicable, 1) the Security Agreement, 2) the
Compost Stock Pledge Agreement (Compost Common Stock), 3) the
Compost Stock Pledge Agreement (Miami Common Stock) and 4) the
Compost Stock Pledge Agreement (Bedminster Common Stock); and,
(F) Legal Opinion of Counsel. The Opinion of the
Lender's Counsel, in substantially the form as is set forth in
Exhibit PPP of this Agreement; and,
(G) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.01 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
2.3.2. Miami/Compost/Bedminster Undertakings to Lenders.
Compost, Miami and/or Bedminster, as appropriate, shall execute and/or
deliver, or cause to be executed and/or delivered, to the Lenders:
(A) Credit Receipt. A receipt, in substantially the
form as is set forth in Exhibit Y of this Agreement, for the
execution and/or delivery by the Lenders to Compost, Miami and
Bedminster of 1) the Credit, as otherwise provided under
Section 2.1 of this Agreement and as otherwise provided under
the Term Loan Closing Statement, 2) the Term Loan Closing
Statement, 3) the Credit Documents that require the signature
of or execution by any Lender (including, if applicable, the
Security Agreement, the Guaranty, the Mortgage, the Compost
Stock Pledge Agreement (Compost Common Stock), the Compost
Stock Pledge Agreement (Miami Common Stock) and the Compost
Stock Pledge Agreement (Bedminster Common Stock)), and 4) the
Opinion of the Lender's Counsel; and,
(B) Term Loan Closing Statement. The Term Loan
Closing Statement, as is set forth in Exhibit A to this
Agreement; and,
Page 17 of 107 Pages
(C) Credit Documents. 1) The Mortgage Note, in
substantially the form as is set forth in Exhibit D of this
Agreement; 2) the Mortgage, in substantially the form as is
set forth in Exhibit E of this Agreement; 3) the Security
Agreement, in substantially the form as is set forth in
Exhibit F of this Agreement; 4) the Compost Stock Pledge
Agreement (Compost Common Stock), in substantially the form as
is set forth in Exhibit G of this Agreement; 5) the Compost
Stock Pledge Agreement (Miami Common Stock), in substantially
the form as is set forth in Exhibit H of this Agreement; 6)
the Compost Stock Pledge Agreement (Bedminster Common Stock),
in substantially the form as is set forth in Exhibit MMM of
this Agreement; 7) the Pledged Compost Shares, including the
Compost Certificate in substantially the form as is set forth
in Exhibit I of this Agreement; 8) the Pledged Miami Shares,
including the Miami Certificates in substantially the form as
is set forth in Exhibit J of this Agreement; 9) the Pledged
Bedminster Shares, including the Bedminster Certificate in
substantially the form as is set forth in Exhibit NNN of this
Agreement; 10) the UCC-1 Financing Statement, in substantially
the form as is set forth in Exhibit K of this Agreement; 11)
the Compost-Miami Guaranty, in substantially the form as is
set forth in Exhibit UUU of this Agreement; 12) the Legal
Opinion of Compost's Counsel, in substantially the form as is
set forth in Exhibit L of this Agreement; 13) the Legal
Opinion of Miami's Counsel, in substantially the form as is
set forth in Exhibit M of this Agreement; 14) the Legal
Opinion of Bedminster's Counsel, in substantially the form as
is set forth in Exhibit OOO of this Agreement; 15) the Compost
Resolutions, in substantially the form as is set forth in
Exhibit N of this Agreement; 16) the Compost Certificate of
Resolutions, in substantially the form as is set forth in
Exhibit O of this Agreement; 17) the Miami Resolutions, in
substantially the form as is set forth in Exhibit P of this
Agreement; 18) the Miami Certificate of Resolutions, in
substantially the form as is set forth in Exhibit Q of this
Agreement; 19) the Bedminster Resolutions, in substantially
the form as is set forth in Exhibit QQQ of this Agreement; 20)
the Bedminster Certificate of Resolutions, in substantially
the form as is set forth in Exhibit RRR of this Agreement; 21)
the Mortgagee's Title Insurance Commitment, the effective date
of which is or shall be on or about the Closing Date, issued
to the Lenders by Lawyers Title Insurance Corporation, Case
No. 9801958, in substantially the form as is set forth in
Exhibit R of this Agreement; 22) the Compost/Miami Mortgagor
Affidavit, in substantially the form as is set forth in
Exhibit S of this Agreement; 23) the Compost/Miami Owner's
Affidavit, in substantially the form as is set forth in
Exhibit T of this Agreement; 24) the Mortgagor's Certificate
and Indemnification Regarding Hazardous Substances, in
substantially the form as is set forth in Exhibit VVV of this
Agreement; 25) the Global Closing Statement, in substantially
the form as is set forth in Exhibit YY of this Agreement; 26)
the Incumbency Certificate of Compost, in substantially the
form as is set forth in Exhibit GGG of this Agreement; 27) the
Incumbency Certificate of Miami, in substantially the form as
is set forth in Exhibit HHH of this Agreement; 28) the
Incumbency Certificate of Bedminster, in substantially the
form as is set forth in Exhibit TTT of this Agreement; 29) the
"Bring-Down" Certificate of Compost, in substantially the form
as is set forth in Exhibit JJJ of this Agreement; 30) the
"Bring-Down" Certificate of Miami, in substantially the form
as is set forth in Exhibit KKK of this Agreement; and, 31) the
"Bring-Down" Certificate of Bedminster, in substantially the
form as is set forth in Exhibit SSS of this Agreement; and,
32) the documents, that otherwise constitute "Credit
Documents," and that are set forth under Section 2.3.2(D) of
this Agreement; and,
(D) Xxxxxx Mortgage/Release Documents. 1) The
"Release and Satisfaction of Xxxxxx Mortgage," in
substantially the form as is set forth in Exhibit U of this
Agreement, duly executed by Xxxxxx, 2) the Miami-Xxxxxx Note,
in substantially the form as is set forth in Exhibit V of this
Agreement, duly canceled and returned by Xxxxxx to Miami, 3) a
"Stipulated Motion to Dismiss Complaint with Prejudice," in
substantially the form as is set forth in Exhibit W of this
Agreement, duly executed by Xxxxxx and Miami, and, 4) an
"Order of Dismissal with Prejudice," in substantially the form
as is set forth in Exhibit X of this Agreement, duly executed
and ordered by the Court; and,
(E) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are described,
identified or otherwise prescribed under Section 13.03.01 of
this Agreement, including, all applicable Definitive
Supplemental Documents, and/or 2) that may be requested
reasonably by the Lenders and/or their respective counsel.
ARTICLE III
SERIES B PREFERRED STOCK
Page 18 of 107 Pages
Section 3.1. Recapitulation-Series B Preferred Stock. Compost, Lionhart
and LHI each hereby agree that, pursuant to the Series B Preferred Shares
Subscription Agreement, 1) on or about June 16, 1997, Lionhart purchased from
Compost, and Compost issued incorrectly and inadvertently to LHI, for the total
purchase price of US $1,000,000, 400,000 fully paid and non-assessable shares of
the Series B Preferred Stock, 2) the relative rights, privileges, restrictions
and other attributes of those 400,000 fully paid and non-assessable shares of
the Series B Preferred Stock, are set forth in the Designation of Rights of
Series B Preferred Stock, and, 3) Compost issued incorrectly and inadvertently
to LHI, and LHI received from Compost, Certificate No. B-1, registered in the
name of "Lionhart Investments Limited," and dated July 3, 1997, that evidences
incorrectly thereon that LHI (and not Lionhart) is the owner of 400,000 fully
paid and non-assessable shares of the Series B Preferred Stock.
Section 3.2. Tender/Reissue-Series B Preferred Stock. At the Ancillary
Transactions Closing, and on the Closing Date at the Closing Location, and upon
such terms and subject to such conditions as set forth in 1) this Agreement and
2) any applicable Definitive Supplemental Documents:
3.2.1. LHI Undertakings to Compost. LHI shall execute and/or
deliver or cause to be executed and/or delivered to Compost:
(A) Certificate, Power and Resolutions. 1)
Certificate No. B-1; 2) a stock power for such Certificate No.
B-1, that is duly executed by LHI; 3) the joint resolutions of
the Lionhart Board and the LHI Board, in substantially the
form as is set forth in Exhibit Z of this Agreement, thereby
affirming and declaring that, inter alia, Lionhart (and not
LHI) was intended as, is and should be the actual purchaser,
owner and holder of the 400,000 fully paid and non-assessable
shares of Series B Preferred Stock, as otherwise evidenced by
Certificate B-1, and authorizing LHI to surrender, tender and
deliver Certificate No. B-1 to Compost, and instructing
Compost to transfer and register such Series B Preferred Stock
in the name of Lionhart, and to reissue and redeliver a
corrected Certificate No. B-1, registered in the name of
Lionhart (and not LHI), to Lionhart; and,
(B) Legal Opinion of Counsel. The Legal Opinion of
LHI's Counsel, in substantially the form as is set forth in
Exhibit AA of this Agreement; and,
(C) Receipt. A receipt, in substantially the form as
is set forth in Exhibit BB of this Agreement, for the
execution and/or delivery by Compost to LHI of 1) the Compost
Resolutions and the Compost Certificate of Resolutions, as
provided under Section 3.2.2(B) of this Agreement, and 2) the
Legal Opinion of Compost's Counsel, as provided under Section
3.2.2(C) of this Agreement; and,
(D) Estoppel Certificate. An estoppel certificate,
duly executed by LHI and Lionhart, in substantially the form
as is set forth in Exhibit CC of this Agreement, and, pursuant
to which, and subject to the performance and discharge by
Compost to Lionhart of its duties and obligations under
Section 3.3 of this Agreement, 1) LHI waives and releases any
right or claim to the 1998 Dividend Shares, that are or will
be issued on the Ancillary Transactions Closing (on the
Closing Date at the Closing Location) by Compost to Lionhart,
as provided under Section 3.3.1(A) of this Agreement, and, 2)
LHI releases Compost from any duty or obligation to issue, or
for any claim relating to or arising from the failure to
issue, the 1998 Dividend Shares to LHI; and,
(E) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.03 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
3.2.2. Compost Undertakings to LHI. Compost shall execute
and/or deliver, or cause to be executed and/or delivered, to LHI:
(A) Receipt. A receipt, in substantially the form as
is set forth in Exhibit DD, for the execution and/or delivery
by LHI to Compost of 1) Certificate No. B-1, as provided under
Section 3.2.1(A)(1) of this Agreement; 2) a stock power for
such Certificate No. B-1, that is duly executed by LHI, as
provided under Section 3.2.1(A)(2) of this Agreement; 3) the
joint resolutions of the Lionhart Board and the LHI Board, as
Page 19 of 107 Pages
provided under Section 3.2.1(A)(3) of this Agreement; 4) the
Legal Opinion of LHI's Counsel, as provided under Section
3.2.1(B) of this Agreement; and 5) the Estoppel Certificate,
as provided under Section 3.2.1(D) of this Agreement; and,
(B) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(C) Legal Opinion of Counsel. The Legal Opinion of
Compost's Counsel, in substantially the form as is set forth
in Exhibit L of this Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are described,
identified or otherwise prescribed under Section 13.03.02 of
this Agreement, including, all applicable Definitive
Supplemental Documents, and/or 2) that may be requested
reasonably by LHI and/or its counsel.
3.2.3. Compost Undertakings to Lionhart. Compost shall execute
and/or deliver, or cause to be executed and/or delivered, to Lionhart:
(A) Receipt. A receipt, in substantially the form as
is set forth in Exhibit EE, for the execution and/or delivery
by LHI and/or Lionhart to Compost of 1) Certificate No. B-1,
as provided under Section 3.2.1(A)(1) of this Agreement; 2) a
stock power for such Certificate No. B-1, that is duly
executed by LHI, as provided under Section 3.2.1(A)(2) of this
Agreement; 3) the joint resolutions of the Lionhart Board and
the LHI Board, as provided under Section 3.2.1(A)(3) of this
Agreement; 4) the Estoppel Certificate, as provided under
Section 3.2.4(D) of this Agreement; and, 5) the Legal Opinion
of Lionhart's Counsel, as provided under Section 3.2.4(B) of
this Agreement; and,
(B) Replacement Certificate No. B-1. A new or
replacement Certificate No. B-1, duly executed and issued by
Compost, and in a form that is reasonably acceptable to and
approved by Lionhart's counsel, evidencing thereon that
Lionhart, and not LHI, is the registered owner and holder of
the 400,000 fully paid and non-assessable shares of the Series
B Preferred Stock; and,
(C) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.03.03 of this
Agreement, including, all applicable Definitive Supplemental
Documents, and/or 2) that may be requested reasonably by
Lionhart and/or its counsel.
3.2.4. Lionhart's Undertakings to Compost. Lionhart shall
execute and/or deliver, or cause to be executed and/or delivered, to
Compost:
(A) Resolutions. The joint resolutions of the
Lionhart Board and the LHI Board, as provided under Section
3.2.1(A)(3) of this Agreement; and,
(B) Legal Opinion of Counsel. The Legal Opinion of
Lionhart's Counsel, in substantially the form as is set forth
in Exhibit FF of this Agreement; and,
(C) Estoppel Certificate. An estoppel certificate,
duly executed by LHI and Lionhart, in substantially the form
as is set forth in Exhibit CC of this Agreement, and, pursuant
to which, Lionhart releases Compost, and any of its officers,
directors, employees, professionals and other agents or
representatives, from any claim (by Lionhart) relating to or
arising from the failure (by and on the part of, or for or on
behalf of, Compost) to issue to Lionhart, prior to the
Ancillary Transactions Closing on the
Page 20 of 107 Pages
Closing Date, 1) the above-referenced 400,000 fully paid and
non-assessable shares of Series B Preferred Stock, and/or 2)
the above-referenced 1998 Dividend Shares; and,
(D) Receipt. A receipt, in substantially the form as
is set forth in Exhibit GG of this Agreement, for the
execution and/or delivery by Compost to Lionhart of 1) the
Compost Resolutions and the Compost Certificate of
Resolutions, as provided under Section 3.2.2(B) of this
Agreement, 2) the Legal Opinion of Compost's Counsel, as
provided under Section 3.2.2(C) of this Agreement; and, 3) the
new or replacement Certificate No. B-1, duly executed and
issued by Compost, evidencing thereon that Lionhart, and not
LHI, is the registered owner and holder of the 400,000 fully
paid and non-assessable shares of the Series B Preferred
Stock, as provided under Section 3.2.3(B) of this Agreement;
and,
(E) Estoppel Certificate. An estoppel certificate,
duly executed by Lionhart, in substantially the form as is set
forth in Exhibit HH of this Agreement, and duly authorized
under the joint resolutions of the Lionhart Board and the LHI
Board, as provided under Section 3.2.1(A)(3) of this
Agreement, and, pursuant to which, Lionhart agrees, promises
and covenants to be bound by, and to waive any claims against
or defenses to, and to not assert any challenge to or
contentions against, the LHI Consent and the LHI-Select
Agreement, except for and excluding any claims or actions that
are expressly reserved and permitted under Section 7.1.2 of
this Agreement, and to accept all 400,000 shares of Series B
Preferred Stock, as otherwise evidenced under the replacement
Certificate No. B-1 (as provided under Section 3.2.3(B) of
this Agreement, subject to 1) the Series B Preferred Shares
Subscription Agreement, 2) the Designation of Rights of Series
B Preferred Stock, 3) the LHI Consent and 4) the LHI-Select
Agreement; and,
(F) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.02 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
Section 3.3. 1998 Dividend Shares. At the Ancillary Transactions
Closing, and on the Closing Date at the Closing Location, and upon such terms
and subject to such conditions as are set forth in 1) this Agreement and 2) the
Definitive Supplemental Documents:
3.3.1. Compost Undertakings to Lionhart. Pursuant to the terms
and subject to the conditions set forth in Section 6 of the
"Designation of Rights of Series B Preferred Stock," Compost shall
issue, execute and/or deliver to Lionhart deliver to Lionhart, and
shall register in the name of Lionhart, 35,178 shares of Common Stock
of Compost, as a common stock dividend ("1998 Dividend Shares"), and
shall concurrently deliver to Lionhart:
(A) Certificate. A stock certificate, duly
authorized, executed and issued by Compost to Lionhart, and in
a form that is reasonably acceptable to and approved by
Lionhart's counsel, indicating thereon that Lionhart is the
registered owner and holder of the 1998 Dividend Shares; and,
(B) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(C) Legal Opinion of Counsel. The Legal Opinion of
Compost's Counsel, in substantially the form as is set forth
in Exhibit L of this Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are described,
identified or otherwise prescribed under Section 13.03.03 of
this Agreement, including, all applicable Definitive
Supplemental Documents, and/or 2) that may be requested
reasonably by Lionhart and/or its counsel.
3.3.2. Lionhart Undertakings to Compost. Lionhart shall
execute and/or deliver or cause to be executed and/or delivered, to
Compost :
(A) Receipt. A receipt, in substantially the form as
is set forth in Exhibit II, for the execution and/or
Page 21 of 107 Pages
delivery by Compost to Lionhart of 1) the stock certificate,
for and with respect to the 1998 Dividend Shares, as provided
under Section 3.3.1(A) of this Agreement; 2) the Compost
Resolutions and Compost Certificate of Resolutions, as
provided under Section 3.3.1(B) of this Agreement; and, 3) the
Legal Opinion of Compost's Counsel, as provided under Section
3.3.1(C) of this Agreement; and,
(B) Legal Opinion of Counsel. The Legal Opinion of
Lionhart's Counsel, in substantially the form as is set forth
in Exhibit FF of this Agreement; and,
(C) Estoppel Certificate. An estoppel certificate,
duly executed by Lionhart, in substantially the form as is set
forth in Exhibit HH of this Agreement, and duly authorized
under the joint resolutions of the Lionhart Board and the LHI
Board, as provided under Section 3.2.1(A)(3) of this
Agreement, and, pursuant to which, Lionhart agrees, promises
and covenants to be bound by, and to waive any claims against
or defenses to, and to not assert any challenge to or
contentions against, the LHI Consent and the LHI-Select
Agreement, except for and excluding any claims or actions that
are expressly reserved and permitted under Section 7.1.2 of
this Agreement, and to accept all 400,000 shares of Series B
Preferred Stock, as otherwise evidenced under the replacement
Certificate No. B-1 (as provided under Section 3.2.3(B) of
this Agreement, subject to 1) the Series B Preferred Shares
Subscription Agreement, 2) the Designation of Rights of Series
B Preferred Stock, 3) the LHI Consent and 4) the LHI-Select
Agreement; and,
(D) Estoppel Certificate. An estoppel certificate,
duly executed by LHI and Lionhart, in substantially the form
as is set forth in Exhibit CC of this Agreement, and, pursuant
to which, Lionhart releases Compost (and its officers,
directors, employees and agents) from any claim (by Lionhart)
relating to or arising from the failure (by and on the part of
the Compost) to issue to Lionhart, prior to the Ancillary
Transactions Closing on the Closing Date, 1) the
above-referenced 400,000 fully paid and non-assessable shares
of Series B Preferred Stock, and/or 2) the above-referenced
1998 Dividend Shares; and
(E) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.02 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
ARTICLE IV
DEBENTURE CONVERSION UNDER DEBENTURE PURCHASE AGREEMENT
Section 4.1. Recapitulation-Debentures. Compost and Lionhart hereby
agree that, pursuant to the Debenture Purchase Agreement and the Debentures:
1) On or about November 27, 1996, Compost sold, issued and
delivered to Lionhart, and Lionhart purchased from Compost, ten (10)
Debentures, Series 1-10, in the face amount per Debenture of US
$100,000, and for the total purchase price of US $1,300,000;
2) Pursuant to the First Debenture Conversion, on or about May
20, 1997, Lionhart surrendered, delivered and tendered to Compost, a
"Notice of Conversion" (a copy of which is set forth under Appendix
I-Item 12) and two (2) Debentures, each in the face amount of US
$100,000 (i.e., Series 9-10 of 10 Debentures), and, in exchange
therefor, Compost issued and delivered to Compost, and registered in
the name of Lionhart, Certificate No. CA1103, representing 178,253
registered (freely tradable) shares of Common Stock of Compost;
3) Pursuant to the Second Debenture Conversion, on or about
September 8, 1997, Lionhart surrendered, delivered and tendered to
Compost, a "Notice of Conversion" (a copy of which is set forth under
Appendix I-Item 14) and two (2) Debentures, each in the face amount of
US $100,000 (i.e., Series 7-8 of 10 Debentures), and, pursuant thereto,
Lionhart properly converted or otherwise elected to convert US $200,000
of the Debentures; and, based on the Second Debenture Conversion,
Compost, on or about March 13, 1998, issued and delivered to KGL, in
exchange for the surrender, delivery and tender by Lionhart to Compost
of two (2) Debentures (i.e., Series 7-8 of 10), Certificate No. CA1369,
representing 159,670 registered (freely tradable) shares of Common
Stock of Compost, and registered in the name of Lionhart ( a copy of
such Certificate No. 1369 is set forth in Appendix I-Item 15);
Page 22 of 107 Pages
4) Pursuant to the terms and subject to the conditions of the
Settlement Agreement, 1) Compost and Lionhart have mutually rescinded
the Second Debenture Conversion, 2) Lionhart has returned and delivered
to Compost, on the Effective Date, 159,670 registered (freely tradable)
shares of Common Stock of Compost, that are registered in the name of
Lionhart and that are represented by Certificate No. CA1369, and 3)
Compost has returned and delivered to Lionhart, on the Effective Date,
and otherwise reinstates and makes effective on the Effective Date of
this Agreement, Series 7-8 of 10 Debentures; and,
5) As of and on the Effective Date, and immediately prior to the
Ancillary Transactions Closing under this Agreement, and by giving
effect to the Settlement Agreement, Lionhart owns and holds, and there
are presently outstanding, eight (8) Debentures (Series 1-8)
("Outstanding Debentures"), each in the face amount of US $100,000, with
accrued and unpaid cumulative interest attributable to the Outstanding
Debentures, as of the Effective Date of this Agreement, of US $12,611.33
("Accrued Cumulative Interest").
Section 4.2. Outstanding Debenture Conversion. At the Ancillary
Transactions Closing, on the Closing Date at the Closing Location, and upon such
terms and subject to such conditions as are set forth in 1) this Agreement and
2) the Definitive Supplemental Documents:
4.2.1. Conversion. Pursuant to Section 5 of the Debenture
Purchase Agreement and Section 3 of the Outstanding Debentures, Lionhart
then and thereby converts all Outstanding Debentures, and shall be
deemed conclusively to have then and thereby converted all such
Outstanding Debentures.
4.2.2. Notice of Conversion. This Agreement shall constitute a
"Notice of Conversion," as otherwise required under Section 3(b) of the
Outstanding Debentures, for and with respect to all Outstanding
Debentures, and 1) Lionhart shall not have any duty or obligation, under
the Debenture Purchase Agreement and/or the Outstanding Debentures, or
otherwise, notwithstanding Section 3(b) of the Debenture Purchase
Agreement, to fax or otherwise deliver any additional "Notice of
Conversion" to Compost, and 2) Compost hereby accepts and approves the
"Notice of Conversion," as provided under this Section 4.2.2, and hereby
waives any objection to the "Notice of Conversion," as provided under
this Section 4.2.2.
4.2.3. Surrender. Notwithstanding Section 3(b) of the
Outstanding Debentures, Lionhart shall have the duty to surrender and
deliver the original Outstanding Debentures to Compost, and Compost
shall only have the right to receive or otherwise demand delivery of the
original Outstanding Debentures from Lionhart, at the Ancillary
Transactions Closing, on the Closing Date and at the Closing Location,
as otherwise provided under Section 4.3 of this Agreement.
4.2.4. Date of Conversion. The Date of Conversion, for purposes
of Section 3(f) of the Outstanding Debentures, is and shall be the
Closing Date.
4.2.5. Confirmation. This Agreement shall constitute a
confirmation of receipt by Compost of the "Notice of Conversion," as
otherwise provided under Section 4.2.2 of this Agreement, and 1) Compost
shall not have any duty or obligation, under the Debenture Purchase
Agreement and/or the Outstanding Debentures, or otherwise,
notwithstanding Section 3(b) of the Debenture Purchase Agreement, to fax
or otherwise deliver any additional confirmation of receipt of the
"Notice of Conversion" to Lionhart, and 2) Lionhart hereby accepts and
approves the confirmation of receipt of the "Notice of Conversion," as
provided under this Section 4.2.5, and hereby waives any objection to
the receipt of confirmation of the "Notice of Conversion," as provided
under this Section 4.2.5.
4.2.6. Conversion Shares. Notwithstanding Section 3(a) of the
Outstanding Debentures, the number of shares of "Common Stock" of
Compost, as that term is defined under the Outstanding Debentures, that
are and shall be deemed to be converted from the conversion of the
Outstanding Debentures as contemplated under Article IV of this
Agreement, is 1,406,593 shares of Common Stock of Compost.
Section 4.3. Debenture Conversion-Share Issuance. At the Ancillary
Transactions Closing, on the Closing Date at the Closing Location, and upon such
terms and subject to such conditions as are set forth in 1) this Agreement and
2) the Definitive Supplemental Documents:
Page 23 of 107 Pages
4.3.1. Lionhart Undertakings to Compost. Lionhart shall execute
and/or deliver (or surrender) or cause to be executed and/or delivered
(or surrendered) to Compost:
(A) Outstanding Debentures. The original Outstanding
Debentures, as that term is defined under Section 4.1 of this
Agreement; and,
(B) Legal Opinion of Counsel. The Legal Opinion of
Lionhart's Counsel, in substantially the form as is set forth in
Exhibit FF of this Agreement; and,
(C) Resolutions. The resolutions of the Lionhart Board,
in substantially the form as is set forth in Exhibit JJ of this
Agreement, thereby approving the conversion by Lionhart of all
Outstanding Debentures, as provided under Section 4.2 of this
Agreement; and,
(D) Receipt. A receipt, in substantially the form as is
set forth in Exhibit KK of this Agreement, for the execution
and/or delivery by Compost to Lionhart of 1) the stock
certificate for the Conversion Shares, as provided under Section
4.3.2(A) of this Agreement; 2) the payment of the Accrued
Cumulative Interest, as provided under Section 4.3.2(B) of this
Agreement; 3) the Compost Resolutions and Compost Certificate of
Resolutions, as provided under Section 4.3.2(C) of this
Agreement; and, 4) the Legal Opinion of Compost's Counsel, as
provided under Section 4.3.2(D) of this Agreement; and,
(E) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.02 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
4.3.2. Compost Undertakings to Lionhart. Compost shall execute
and/or deliver (or issue) or cause to be executed and/or delivered (or
issued) to Lionhart:
(A) Conversion Shares. Based on the conversion by
Lionhart of all Outstanding Debentures, as provided under
Section 4.2 of this Agreement, 1) 1,406,593 shares of
fully-paid, non-assessable shares of Compost Common Stock, par
value $.001 per share, all of which shall then be issued
pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission ("Conversion
Shares"), and 2) a stock certificate, duly executed and
delivered by Compost, and in a form that is reasonably
acceptable to and approved by Lionhart's counsel, which
evidences thereon the ownership by Lionhart of all such
Conversion Shares; and,
(B) Accrued Cumulative Interest. A check, in the amount
of the Accrued Cumulative Interest, if any, attributable to the
Outstanding Debentures, as of and on the Closing Date, issued by
Compost to Lionhart, and drawn on good and certified US funds;
and,
(C) Legal Opinion of Counsel. The Legal Opinion of
Compost's Counsel, in substantially the form as is set forth in
Exhibit L of this Agreement; and,
(D) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(E) Receipt. A receipt, in substantially the form as is
set forth in Exhibit LL of this Agreement, for the execution
and/or delivery by Lionhart to Compost of 1) the Outstanding
Debentures, as provided under Section 4.3.1(A) of this
Agreement; 2) the Legal Opinion of Lionhart's Counsel, as
provided under Section 4.3.1(B) of this Agreement; and, 3) the
resolutions of Lionhart's Board, as provided under Section
4.3.1(C) of this Agreement; and,
(F) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are described,
identified or otherwise prescribed under Section 13.03.03 of
this Agreement, including, all applicable Definitive
Supplemental Documents, and/or 2) that may be requested
reasonably by
Page 24 of 107 Pages
Lionhart and/or its counsel.
ARTICLE V
LHI-SELECT AGREEMENT SHARES
Section 5.1. Recapitulation-LHI-Select Shares. Pursuant to the terms
and subject to the conditions of the LHI-Select Agreement, Select transferred to
LHI, and Compost registered in the name of LHI, and LHI is presently the
registered owner and holder of, the LHI-Select Agreement Shares.
Section 5.2. LHI-Lionhart Transfer. At the Ancillary Transactions
Closing, and on the Closing Date at the Closing Location:
5.2.1. LHI Undertakings to Compost. LHI shall execute and/or
deliver or cause to be executed and/or delivered to Compost:
(A) Certificate, Power and Resolutions. 1) The stock
certificate, if any, that was issued by Compost to LHI, and that
represents or evidences the ownership thereof by LHI of the
LHI-Select Agreement Shares; 2) a stock power for any such stock
certificate, as provided under Section 5.2.1(A)(1), that is duly
executed by LHI; and, 3) the joint resolutions of the Lionhart
Board and the LHI Board, in substantially the form as is set
forth in Exhibit Z of this Agreement, thereby approving the
transfer by LHI to Lionhart of the LHI-Select Agreement Shares;
and,
(B) Legal Opinion of Counsel. The Legal Opinion of LHI's
Counsel, in substantially the form as is set forth in Exhibit AA
of this Agreement, and the Legal Opinion of Lionhart's Counsel,
in substantially the form as is set forth in Exhibit FF of this
Agreement; and,
(C) Receipt. A receipt, in substantially the form as is
set forth in Exhibit MM of this Agreement, for the execution
and/or delivery by Compost to LHI of 1) the Compost Resolutions
and the Compost Certificate of Resolutions, as provided under
Section 5.2.2(B) of this Agreement, and 2) the Legal Opinion of
Compost's Counsel, as provided under Section 5.2.2(C) of this
Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.03 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
5.2.2. Compost Undertakings to LHI. Compost shall execute and/or
deliver, or cause to be executed and/or delivered, to LHI:
(A) Receipt. A receipt, in substantially the form as is
set forth in Exhibit NN, for the execution and/or delivery by
LHI to Compost of 1) any stock certificate, if any, as provided
under Section 5.2.1(A)(1) of this Agreement; 2) a stock power
for any such certificate, that is duly executed by LHI, as
provided under Section 5.2.1(A)(2) of this Agreement; 3) the
joint resolutions of the Lionhart Board and the LHI Board, as
provided under Section 5.2.1(A)(3) of this Agreement; 4) the
Legal Opinion of LHI's Counsel, as provided under Section
5.2.1(B) of this Agreement; and, 5) the Legal Opinion of
Lionhart's Counsel, as provided under Section 5.2.1(B) of this
Agreement; and,
(B) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(C) Legal Opinion of Counsel. The Legal Opinion of
Compost's Counsel, in substantially the form as is set forth in
Exhibit L of this Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are
Page 25 of 107 Pages
described, identified or otherwise prescribed under Section
13.03.02 of this Agreement, including, all applicable Definitive
Supplemental Documents, and/or 2) that may be requested
reasonably by LHI and/or its counsel.
5.2.3. Compost Undertakings to Lionhart. Compost shall execute
and/or deliver, or cause to be executed and/or delivered, to Lionhart:
(A) Receipt. A receipt, in substantially the form as is
set forth in Exhibit OO, for the execution and/or delivery by
LHI and/or Lionhart to Compost of 1) any stock certificate, if
any, as provided under Section 5.2.1(A)(1) of this Agreement; 2)
a stock power for any such certificate, that is duly executed by
LHI, as provided under Section 5.2.1(A)(2) of this Agreement; 3)
the joint resolutions of the Lionhart Board and the LHI Board,
as provided under Section 5.2.1(A)(3) of this Agreement; 4) the
Legal Opinion of LHI's Counsel, as provided under Section
5.2.1(B) of this Agreement; and, 5) the Legal Opinion of
Lionhart's Counsel, as provided under Section 5.2.1(B) of this
Agreement; and,
(B) Stock Certificate/LHI-Select Agreement Shares. A new
stock certificate, duly executed and issued by Compost, and in a
form that is reasonably acceptable to and approved by Lionhart's
counsel, evidencing thereon that Lionhart, and not LHI, is the
registered owner and holder of the LHI-Select Agreement Shares;
and,
(C) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.03.03 of this
Agreement, including, all applicable Definitive Supplemental
Documents, and/or 2) that may be requested reasonably by
Lionhart and/or its counsel.
5.2.4. Lionhart's Undertakings to Compost. Lionhart shall
execute and/or deliver, or cause to be executed and/or delivered, to
Compost:
(A) Resolutions. The joint resolutions of the Lionhart
Board and the LHI Board, as provided under Section 5.2.1(A)(3)
of this Agreement; and,
(B) Legal Opinion of Counsel. The Legal Opinion of
Lionhart's Counsel, in substantially the form as is set forth in
Exhibit FF of this Agreement; and,
(C) Receipt. A receipt, in substantially the form as is
set forth in Exhibit PP of this Agreement, for the execution
and/or delivery by Compost to Lionhart of 1) the Compost
Resolutions and the Compost Certificate of Resolutions, as
provided under Section 5.2.2(B) of this Agreement, 2) the Legal
Opinion of Compost's Counsel, as provided under Section 5.2.2(C)
of this Agreement; and, 3) the stock certificate, duly executed
and issued by Compost, and in a form that is reasonably
acceptable to and approved by Lionhart's counsel, evidencing
thereon that Lionhart, and not LHI, is the registered owner and
holder of the LHI-Select Agreement Shares, as provided under
Section 3.2.3(B) of this Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.02 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
ARTICLE VI
PURCHASE AND REDEMPTION BY COMPOST OF COMPOST SHARES OWNED BY LIONHART
Section 6.1. Compost-Lionhart Share Purchase Transaction. At the
Ancillary Transactions Closing, and on the Closing Date at the Closing Location,
and upon such terms and subject to such conditions as set forth in 1) this
Agreement and
Page 26 of 107 Pages
2) any applicable Definitive Supplemental Documents:
6.1.1. Section 6.1 Shares. Compost shall be authorized, and
shall purchase and redeem from Lionhart, 1,000,000 shares of Compost
Common Stock that are owned or held by Lionhart (or will, pursuant to
this Agreement and the Definitive Supplemental Documents, be owned and
held by Lionhart on and as of the Closing Date ("Section 6.1 Shares"),
for and in consideration of the payment and delivery by Compost to
Lionhart of the Purchase Price, as set forth and prescribed under
Section 6.1.2 of this Agreement. The Section 6.1 Shares shall consist
and be comprised of the following: (i) the LHI-Select Agreement Shares
(i.e., 665,000 shares); (ii) the 1998 Dividend Shares (i.e., 35,178
shares); and, (iii) 299,822 shares of Compost Common Stock (which shall
be derived from, and transferred by Lionhart to Compost from, the
Conversion Shares).
6.1.2. Purchase Price. The Purchase Price, for the Section 6.1
Shares, is and shall be US $3,000,000, in cash, or equivalent good US
funds, which shall be payable by Compost to Lionhart from the proceeds
of the Credit.
Section 6.2. Closing Undertakings. At the Ancillary Transactions
Closing, and on the Closing Date at the Closing Location, and upon such terms
and subject to such conditions as set forth in 1) this Agreement and 2) any
applicable Definitive Supplemental Documents:
6.2.1. Lionhart Undertakings to Compost. Lionhart shall execute
and/or deliver or cause to be executed and/or delivered, to Compost:
(A) Certificate, Power and Resolutions. 1) The stock
certificate or certificates, which represent and evidence
thereon that Lionhart is the registered owner and holder of the
Section 6.1 Shares; 2) a stock power for any such stock
certificates, as provided under Section 6.2.1(A)(1), that is
duly executed by Lionhart; and, 3) the joint resolutions of the
Lionhart Board and the LHI Board, in substantially the form as
is set forth in Exhibit Z of this Agreement, thereby approving
the sale and transfer by Lionhart to Compost of, and the
redemption and purchase by Compost from Lionhart of, the
LHI-Select Agreement Shares, for the Purchase Price, as provided
under Section 6.1.1 and Section 6.1.2 of this Agreement; and,
(B) Legal Opinion of Counsel. The Legal Opinion of
Lionhart's Counsel, in substantially the form as is set forth in
Exhibit FF of this Agreement; and,
(C) Receipt. A receipt, in substantially the form as is
set forth in Exhibit QQ of this Agreement, for the execution
and/or delivery by Compost to Lionhart of 1) the Purchase Price,
as provided under Section 6.1.2 and Section 6.2.2(A) of this
Agreement; 2) the Compost Resolutions and the Compost
Certificate of Resolutions, as provided under Section 6.2.2(B)
of this Agreement, and 3) the Legal Opinion of Compost's
Counsel, as provided under Section 6.2.2(C) of this Agreement;
and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.02 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
6.2.2. Compost Undertakings to Lionhart. Compost shall execute
and/or deliver, or cause to be executed and/or delivered, to Lionhart:
(A) Receipt. A receipt, in substantially the form as is
set forth in Exhibit RR, for the execution and/or delivery by
Lionhart to Compost of 1) the stock certificate or certificates,
as provided under Section 6.2.1(A)(1) of this Agreement; 2) a
stock power for any such certificate(s), that is duly executed
by Lionhart, as provided under Section 6.2.1(A)(2) of this
Agreement; 3) the joint resolutions of the Lionhart Board and
the LHI Board, as provided under Section 6.2.1(A)(3) of this
Agreement; and, 4) the Legal Opinion of Lionhart's Counsel, as
provided under Section 6.2.1(B) of this Agreement; and,
(B) Purchase Price. The Purchase Price, consisting of US
$3,000,000, in US cash and currency, or equivalent good US
funds, by certified funds or by wire transfer, to an account or
accounts designated by Lionhart's counsel, or pursuant to other
commercially reasonable written instructions provided by
Lionhart
Page 27 of 107 Pages
to Compost at (or prior to) the Ancillary Transactions Closing;
and,
(C) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(D) Legal Opinion of Counsel. The Legal Opinion of
Compost's Counsel, in substantially the form as is set forth in
Exhibit L of this Agreement; and,
(E) New Stock Certificate. If necessary, a new stock
certificate, duly authorized and executed by Compost, and in a
form that is reasonably acceptable to and approved by Lionhart's
counsel, which indicates and evidences thereon, that after the
sale and transfer by Lionhart to Compost of 299,822 shares of
the Conversion Shares, as part of the Section 6.1 Shares, as
well as all other shares of Compost Common Stock that otherwise
comprise and constitute the Section 6.1 Shares, and pursuant to
the terms and subject to the provisions of this Agreement,
Lionhart is and remains (as of and immediately after the Closing
Date) the registered owner and holder of 1,106,771 shares of the
Conversion Shares (i.e., Compost Common Stock); and,
(F) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are described,
identified or otherwise prescribed under Section 13.03.03 of
this Agreement, including, all applicable Definitive
Supplemental Documents, and/or 2) that may be requested
reasonably by Lionhart and/or its counsel.
ARTICLE VII
DEBENTURE PURCHASE AGREEMENT-ESCROW AGREEMENT AND COLLATERAL UNDERTAKINGS
Section 7.1. Escrow Agreement. At the Ancillary Transactions Closing,
and on the Closing Date at the Closing Location, and upon such terms and subject
to such conditions as set forth in 1) this Agreement and 2) any applicable
Definitive Supplemental Documents:
7.1.1. Escrow-Disposition of Certificates. Subject to Section
7.1.2 of this Agreement, the "Escrow" as prescribed under the Debenture
Purchase Agreement and the Debenture Purchase Agreement, is and shall be
terminated, whereupon: 1) KGL, or any successor Escrow Agent under the
Debenture Purchase Agreement and the Debentures, is and shall be
authorized to release from that "Escrow," and to return and deliver to
VRH Construction Corporation, Certificate No. CA0860, representing
thereof 404,858 shares of Common Stock of Compost, that are registered
in the name of VRH Construction Corporation (including therewith the
stock power for such Certificate No. CA0860, that is duly executed by
VRH Construction Corporation with a signature that is medallion
guaranteed), free of and without claim by KGL (or any successor Escrow
Agent under the Debenture Purchase Agreement and the Debenture), Compost
or Lionhart, under the Debenture Purchase Agreement, the Debentures or
otherwise; and, 2) KGL, or any successor Escrow Agent under the
Debenture Purchase Agreement and the Debentures, is and shall be
authorized to release from that "Escrow," and to deliver to Lionhart,
Certificate No. CA1370, representing 600,000 registered (freely
tradable) shares of Common Stock of Compost, and registered in the name
of Lionhart, which shall be held thereafter by Lionhart, as the Pledged
Compost Shares, pursuant to the terms and subject to the conditions set
forth in 1) this Agreement, 2) the Credit Documents (including the
Security Agreement and the Compost Stock Pledge Agreement (Compost
Common Stock)), and 3) the applicable Definitive Supplemental Documents,
as part of "Collateral" as that term is defined under the Security
Agreement and the Compost Stock Pledge Agreement (Compost Common Stock).
7.1.2. Reservation. Notwithstanding Section 7.1.1 of this
Agreement, and any other term or provision of this Agreement, the
Definitive Supplemental Documents and/or the Credit Documents, Lionhart
hereby reserves the right to assert any claims and/or to commence any
lawsuits or other actions, against KGL (including, without limitation,
Xxxx X. Xxxxxxxxxx), and does not (by this Agreement, the Definitive
Supplemental Documents and/or the Credit Documents, or otherwise)
release or waive any right to assert any claims and/or to commence any
lawsuits or other actions against, KGL (including Xxxx X. Xxxxxxxxxx),
that relate to or arise from the Debenture Purchase Agreement and/or the
Debentures, the Series B Preferred Shares Subscription Agreement, the
Series B Preferred
Page 28 of 107 Pages
Stock, the Designation of Rights of Series B Preferred Stock, the LHI
Consent, the LHI-Select Agreement, the LHI-Select Agreement Shares, the
First Debenture Conversion, the Second Debenture Conversion, the KGL
Compost Agreement, the Escrow Agent, or otherwise.
Section 7.2. Closing Undertakings. At the Ancillary Transactions
Closing, and on the Closing Date at the Closing Location, and upon such terms
and subject to such conditions as set forth in 1) this Agreement and 2) any
applicable Definitive Supplemental Documents:
7.2.1. Lionhart Undertakings to Compost. Lionhart shall execute
and/or deliver or cause to be executed and/or delivered, to Compost:
(A) Mutual Escrow Agent Instruction # 1. The "Mutual
Escrow Agent Instruction # 1," in substantially the form as is
set forth under Exhibit SS of this Agreement, by and between
Compost and Lionhart, and, pursuant to which, Compost and
Lionhart shall thereby consent, approve and instruct KGL, as the
Escrow Agent under the Debenture Purchase Agreement and the
Debentures, to release from that "Escrow," and to return and
deliver to VRH Construction Corporation, Certificate No. CA0860,
representing thereof 404,858 shares of Common Stock of Compost,
that are registered in the name of VRH Construction Corporation
(including therewith the stock power for such Certificate No.
CA0860, that is duly executed by VRH Construction Corporation
with a signature that is medallion guaranteed), free of and
without claim by KGL (or any successor Escrow Agent under the
Debenture Purchase Agreement and the Debenture), Compost or
Lionhart, under the Debenture Purchase Agreement, the Debentures
or otherwise; and,
(B) Mutual Escrow Agent Instruction # 2. The "Mutual
Escrow Agent Instruction # 2," in substantially the form as is
set forth under Exhibit TT of this Agreement, by and between
Compost and Lionhart, and, pursuant to which, Compost and
Lionhart shall thereby consent, approve and instruct KGL, as the
Escrow Agent under the Debenture Purchase Agreement and the
Debentures, to release from that "Escrow," and to deliver to
Lionhart, Certificate No. CA1370, representing 600,000
registered (freely tradable) shares of Common Stock of Compost,
and registered in the name of Lionhart, which shall be held
thereafter by Lionhart, as the Pledged Compost Certificate,
pursuant to the terms and subject to the conditions set forth in
1) this Agreement, 2) the Credit Documents (including the
Security Agreement and the Compost Stock Pledge Agreement
(Compost Common Stock)), and 3) the applicable Definitive
Supplemental Documents, as part of "Collateral" as that term is
defined under the Security Agreement and the Compost Stock
Pledge Agreement (Compost Common Stock); and,
(C) Joint Resolutions. The joint resolutions of the
Lionhart Board and the LHI Board, in substantially the form as
is set forth in Exhibit Z of this Agreement; and,
(D) Legal Opinion of Counsel. The Legal Opinion of
Lionhart's Counsel, in substantially the form as is set forth in
Exhibit FF of this Agreement; and,
(E) Receipt. A receipt, in substantially the form as is
set forth in Exhibit UU of this Agreement, for the execution
and/or delivery by Compost to Lionhart of 1) the Mutual Escrow
Agent Instruction # 1, as provided under Section 7.2.1(A) and
Section 7.2.2(B) of this Agreement; 2) the Mutual Escrow Agent
Instruction # 2, as provided under Section 7.2.1(B) and Section
7.2.2(C) of this Agreement; 3) Certificate No. CA1370,
representing 600,000 registered (freely tradable) shares of
Common Stock of Compost, and registered in the name of Lionhart,
as provided and contemplated under Section 7.1.1 and Section
7.2.1(B) of this Agreement; 4) the Compost Resolutions and the
Compost Certificate of Resolutions, as provided under Section
7.2.2(D) of this Agreement, and 5) the Legal Opinion of
Compost's Counsel, as provided under Section 7.2.2(E) of this
Agreement; and,
(F) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.02 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
7.2.2. Compost Undertakings to Lionhart. Compost shall execute
and/or deliver, or cause to be executed
Page 29 of 107 Pages
and/or delivered, to Lionhart:
(A) Receipt. A receipt, in substantially the form as is
set forth in Exhibit VV, for the execution and/or delivery by
Lionhart to Compost of 1) the Mutual Escrow Agent Instruction #
1, as provided under Section 7.2.1(A) of this Agreement; 2) the
Mutual Escrow Agent Instruction # 2, as provided under Section
7.2.1(B) of this Agreement; 3) the joint resolutions of the
Lionhart Board and the LHI Board, as provided under Section
7.2.1(C) of this Agreement; and, 4) the Legal Opinion of
Lionhart's Counsel, as provided under Section 7.2.1(D) of this
Agreement; and,
(B) Mutual Escrow Agent Instruction # 1. The "Mutual
Escrow Agent Instruction # 1," in substantially the form as is
set forth under Exhibit SS of this Agreement, by and between
Compost and Lionhart, and, pursuant to which, Compost and
Lionhart shall thereby consent, approve and instruct KGL, as the
Escrow Agent under the Debenture Purchase Agreement and the
Debentures, to release from that "Escrow," and to return and
deliver to VRH Construction Corporation, Certificate No. CA0860,
representing thereof 404,858 shares of Common Stock of Compost,
that are registered in the name of VRH Construction Corporation
(including therewith the stock power for such Certificate No.
CA0860, that is duly executed by VRH Construction Corporation
with a signature that is medallion guaranteed), free of and
without claim by KGL (or any successor Escrow Agent under the
Debenture Purchase Agreement and the Debenture), Compost or
Lionhart, under the Debenture Purchase Agreement, the Debentures
or otherwise; and,
(C) Mutual Escrow Agent Instruction # 2. The "Mutual
Escrow Agent Instruction # 2," in substantially the form as is
set forth under Exhibit TT of this Agreement, by and between
Compost and Lionhart, and, pursuant to which, Compost and
Lionhart shall thereby consent, approve and instruct KGL, as the
Escrow Agent under the Debenture Purchase Agreement and the
Debentures, to release from that "Escrow," and to deliver to
Lionhart, Certificate No. CA1370, representing 600,000
registered (freely tradable) shares of Common Stock of Compost,
and registered in the name of Lionhart, which shall be held
thereafter by Lionhart, as the Pledged Compost Certificate,
pursuant to the terms and subject to the conditions set forth in
1) this Agreement, 2) the Credit Documents (including the
Security Agreement and the Compost Stock Pledge Agreement
(Compost Common Stock)), and 3) the applicable Definitive
Supplemental Documents, as part of "Collateral" as that term is
defined under the Security Agreement and the Compost Stock
Pledge Agreement (Compost Common Stock); and,
(D) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(E) Legal Opinion of Counsel. The Legal Opinion of
Compost's Counsel, in substantially the form as is set forth in
Exhibit L of this Agreement; and,
(F) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are described,
identified or otherwise prescribed under Section 13.03.03 of
this Agreement, including, all applicable Definitive
Supplemental Documents, and/or 2) that may be requested
reasonably by Lionhart and/or its counsel.
Section 7.3. General Closing Undertakings. At the Ancillary
Transactions Closing, on the Closing Date at the Closing Location, and
thereafter, 1) Compost and Lionhart shall use commercially reasonable
efforts, in good faith, to mutually cooperate, with respect to the
implementation of Section 7.1 of this Agreement.
ARTICLE VIII
COMPOST WARRANTS
Section 8.1. Warrants. At the Ancillary Transactions Closing, on the
Closing Date at the Closing Location, Compost shall issue warrants to Lionhart
(or the registered holder thereof) to purchase from Compost: 1) 500,000 shares
of registered (freely tradable) shares of Common Stock of Compost, for the
purchase price per share of US $1.00, pursuant to the terms and subject to the
conditions that are set forth in the Compost-Lionhart Warrant #1 (a copy of
which is set forth in Exhibit WW.1
Page 30 of 107 Pages
of this Agreement), and which shall be exercisable at any time thereafter, by
the registered holder thereof, before January 1, 2005; 2) 200,000 shares of
registered (freely tradable) shares of Common Stock of Compost, for the purchase
price per share of US $1.25, pursuant to the terms and subject to the conditions
that are set forth in the Compost-Lionhart Warrant #2 (a copy of which is set
forth in Exhibit WW.2 of this Agreement), and which shall be exercisable at any
time thereafter, by the registered holder thereof, before January 1, 2005; 3)
200,000 shares of registered (freely tradable) shares of Common Stock of
Compost, for the purchase price per share of US $1.50, pursuant to the terms and
subject to the conditions that are set forth in the Compost-Lionhart Warrant #3
(a copy of which is set forth in Exhibit WW.3 of this Agreement), and which
shall be exercisable at any time thereafter, by the registered holder thereof,
before January 1, 2005; 4) 200,000 shares of registered (freely tradable) shares
of Common Stock of Compost, for the purchase price per share of US $1.75,
pursuant to the terms and subject to the conditions that are set forth in the
Compost-Lionhart Warrant #4 (a copy of which is set forth in Exhibit WW.4 of
this Agreement), and which shall be exercisable at any time thereafter, by the
registered holder thereof, before January 1, 2005; 5) 200,000 shares of
registered (freely tradable) shares of Common Stock of Compost, for the purchase
price per share of US $2.00, pursuant to the terms and subject to the conditions
that are set forth in the Compost-Lionhart Warrant #5 (a copy of which is set
forth in Exhibit WW.5 of this Agreement), and which shall be exercisable at any
time thereafter, by the registered holder thereof, before January 1, 2005; and,
6) 200,000 shares of registered (freely tradable) shares of Common Stock of
Compost, for the purchase price per share of US $2.25, pursuant to the terms and
subject to the conditions that are set forth in the Compost-Lionhart Warrant #6
(a copy of which is set forth in Exhibit WW.6 of this Agreement), and which
shall be exercisable at any time thereafter, by the registered holder thereof,
before January 1, 2005.
Section 8.2. Closing Undertakings. At the Ancillary Transactions
Closing, and on the Closing Date at the Closing Location, and upon such terms
and subject to such conditions as set forth in 1) this Agreement and 2) any
applicable Definitive Supplemental Documents:
8.2.1. Lionhart Undertakings to Compost. Lionhart shall execute
and/or deliver or cause to be executed and/or delivered, to Compost:
(A) Warrant Receipt. A receipt, in substantially the
form that is set forth in Exhibit XX of this Agreement, for the
execution and/or delivery by Compost to Lionhart of 1) the duly
authorized, executed and issued Xxxxxxx-Xxxxxxxx Xxxxxxx # 0,
Xxxxxxx-Xxxxxxxx Xxxxxxx # 2, Compost-Lionhart Warrant # 3,
Compost-Lionhart Warrant # 4, Compost-Lionhart Warrant # 5 and
Compost-Lionhart Warrant # 6; 2) the Compost Resolutions and the
Compost Certificate of Resolutions, as provided under Section
8.2.2(D) of this Agreement, and 3) the Legal Opinion of
Compost's Counsel, as provided under Section 8.2.2(E) of this
Agreement; and,
(B) Miscellaneous. All other agreements, instruments,
certificates or other documents that are described, identified
or otherwise prescribed under Section 13.02.02 of this
Agreement, including, all applicable Definitive Supplemental
Documents.
8.2.2. Compost Undertakings to Lionhart. Compost shall execute
and/or deliver, or cause to be executed and/or delivered, to Lionhart:
(A) Warrants. Compost-Lionhart Warrant # 1,
Compost-Lionhart Warrant # 2, Compost-Lionhart Warrant # 3,
Compost-Lionhart Warrant # 4, Compost-Lionhart Warrant # 5 and
Compost-Lionhart Warrant # 6, each of which shall be duly
authorized, executed and delivered by Compost to Lionhart, and
in a form that is reasonably acceptable to and approved by
Lionhart's counsel; and,
(B) Resolutions. The Compost Resolutions, in
substantially the form as is set forth in Exhibit N of this
Agreement, and the Compost Certificate of Resolutions, in
substantially the form as is set forth in Exhibit O of this
Agreement; and,
(C) Legal Opinion of Counsel. The Legal Opinion of
Compost's Counsel, in substantially the form as is set forth in
Exhibit L of this Agreement; and,
(D) Miscellaneous. All other agreements, instruments,
certificates or other documents 1) that are described,
identified or otherwise prescribed under Section 13.03.03 of
this Agreement, including,
Page 31 of 107 Pages
all applicable Definitive Supplemental Documents, and/or 2) that
may be requested reasonably by Lionhart and/or its counsel.
ARTICLE IX
PUT AGREEMENT (SERIES B PREFERRED STOCK)
Section 9.1. Recapitulation-Series B Preferred Stock. Compost and
Lionhart hereby confirm, and hereby agree, 1) that, as of and immediately
subsequent to the Ancillary Transactions Closing, on the Closing Date at the
Closing Location, and pursuant to the Series B Preferred Shares Subscription
Agreement and Section 3.1 and Section 3.2 of this Agreement, Lionhart is the
registered owner and holder of 400,000 shares of the Series B Preferred Stock
("Series B Preferred Stock"), and 2) that, pursuant to the terms and subject to
the conditions of the Series B Preferred Shares Subscription Agreement and the
Designation of Rights of Series B Preferred Stock, each such share of Series B
Preferred Stock is convertible into one (1) share of Common Stock of Compost, at
any time after September 15, 1997, upon notice and demand by the registered
holder thereof, subject to the adjustments set forth under Section 2(b) of the
Designation of Rights of Series B Preferred Stock.
Section 9.2. Put-Series B Preferred Stock. With respect to all such
400,000 shares of Series B Preferred Stock, that are or shall be owned and held
by Lionhart as of the Ancillary Transactions Closing, on the Closing Date at the
Closing Location, Compost and Lionhart each hereby agree, promise and covenant,
as follows:
9.2.1. Conversion. This Section 9.2 shall apply to each share of
Common Stock of Compost, that is converted from one (1) or more shares
of the 400,000 shares of Series B Preferred Stock, as identified and
described under Section 9.1 of this Agreement, by Lionhart (or any
successor registered owner thereof), pursuant to the terms and subject
to the conditions set forth in the Designation of Rights of Series B
Preferred Stock ("Conversion Common Share(s")").
9.2.2. Put. Commencing on and as of the Ancillary Transactions
Closing, on the Closing Date at the Closing Location, and thereafter
(subject to Section 9.2.3 of this Agreement), Compost hereby grants,
conveys, transfers and delivers to Lionhart, a put option for and with
respect to each and every Conversion Common Share ("Put Option #1"),
that is and shall be exercisable at any time(s) in the sole discretion
and election of Lionhart as provided under (and pursuant to the terms
and subject to the conditions set forth in) this Section 9.2, and
pursuant to which, upon any exercise(s) thereof by Lionhart, Lionhart
shall have the right to demand and compel Compost to purchase from
Lionhart, and Compost shall then and thereupon have the unconditional
duty and obligation to purchase from Lionhart, any and all such
Conversion Common Share(s) that are otherwise the subject of any such
exercise(s) of a Put Option # 1.
9.2.3. Put Conditions. Any exercise(s) of any Put Option # 1, as
provided under Section 9.2.1 and Section 9.2.2 of this Agreement, is and
shall be subject to the following procedures and conditions:
(a) Put Option Election. Lionhart, when and if Lionhart
elects at any time(s) to exercise a Put Option # 1 with respect
to any such Conversion Common Shares, shall deliver to Compost,
via fax or e-mail (followed promptly by a hard copy) or hard
copy, a written notice of an election at any such time(s) to
exercise the Put Option # 1 ("Put Election"), not more than
twenty (20) business days before and not less than ten (10)
business days prior to the "Maturity Date of the Mortgage Note"
(as that term is defined under Section 9.4 of this Agreement).
(b) Put Purchase Price. Upon the receipt by Compost of
any such Put Election at any time(s), Lionhart shall have the
duty to sell to Compost, and Compost shall have the duty to
purchase from Lionhart, on the Maturity Date of such Mortgage
Note, all such Conversion Common Shares for which, pursuant to
such Put Election, Lionhart has exercised a Put Option # 1, for
the purchase price ("Put Purchase Price") of US $3.10 per share
of each such Conversion Common Share, which shall be paid by
Compost to Lionhart in US cash or currency, or equivalent good
US funds, on the "Maturity Date of such Mortgage Note" (as that
term is defined under Section 9.4 of this Agreement).
(c) Lapse. Any Put Option # 1, that is not exercised as
provided under Section 9.2.3 of this Agreement, shall then and
thereafter terminate and lapse, and shall not thereafter have
any legal force or
Page 32 of 107 Pages
effect.
(d) Successors and Assigns. The term "Lionhart," for
purposes of Article IX of this Agreement, shall mean Lionhart,
and each and every successor registered owner of any Conversion
Common Share(s) thereafter, and the rights and duties, as
provided and set forth in Section 9.1 and Section 9.2 of this
Agreement, shall inure to the benefit of, and shall be binding
upon, Compost and Lionhart, and their respective successors and
assigns.
9.2.4. Stock Certificate-Put Option # 1 Legends. Compost and
Lionhart hereby agree, promise and covenant as follows:
(a) Certificates-Series B Preferred Stock. On and as of
the Ancillary Transactions Closing on the Closing Date, Compost
shall place or cause to be placed on each stock certificate,
that represents any one (1) or more of the above-referenced
400,000 shares of Series B Preferred Stock to which the Put
Option # 1 is applicable, and each such stock certificate shall
bear, the following legend:
"The securities represented hereby are subject to a Put,
that is or may by exercised by the registered holder
hereof, at any time after October 30, 1998, and on or
before the earlier of (i) October 1, 2000, or (ii) the
date corresponding to the "Financial Closing of the
Miami Project Financing" (as that term is defined under
Section 8 of a Mortgage Note, in the principal amount of
US $10,500,000.00, dated and delivered on October 30,
1998, a maker of which is Compost America Holding
Company, Inc., Miami Recycling and Composting Company,
Inc., and Bedminster Seacor Services Miami Corporation,
and the original holder of which is Lionhart Global
Appreciation Fund, Ltd., Lionhart Investments, Ltd., and
Global EarthFund Partners, L.L.C.), pursuant to the
terms and subject to the conditions set forth in Article
IX of an agreement, entitled "Credit, Capitalization and
Financing Agreement," dated on and as of October 30,
1998, a signatory party of which is Compost America
Holding Company, Inc."
(b) Certificates-Conversion Common Shares. On and as of,
and subsequent to, the Ancillary Transactions Closing on the
Closing Date, Compost shall place or cause to be placed on each
stock certificate, that represents any one (1) or more of the
above-referenced Conversion Common Shares to which the Put
Option # 1 is applicable, and each such stock certificate shall
bear, the following legend:
"The securities represented hereby are subject to a Put,
that is or may by exercised by the registered holder
hereof, at any time after October 30, 1998, and on or
before the earlier of (i) October 1, 2000, or (ii) the
date corresponding to the "Financial Closing of the
Miami Project Financing" (as that term is defined under
Section 8 of a Mortgage Note, in the principal amount of
US $10,500,000.00, dated and delivered on October 30,
1998, a maker of which is Compost America Holding
Company, Inc., Miami Recycling and Composting Company,
Inc., and Bedminster Seacor Services Miami Corporation,
and the original holder of which is Lionhart Global
Appreciation Fund, Ltd., Lionhart Investments, Ltd., and
Global EarthFund Partners, L.L.C.), pursuant to the
terms and subject to the conditions set forth in Article
IX of an agreement, entitled "Credit, Capitalization and
Financing Agreement," dated on and as of October 30,
1998, a signatory party of which is Compost America
Holding Company, Inc."
Section 9.3. Ancillary Transactions Closing. At the Ancillary
Transactions Closing (on the Closing Date and at the Closing Location), 1)
Lionhart shall present to Compost all stock certificates, that are presently
held by Lionhart, and that represent any one (1) or more of the above-referenced
400,000 shares of Series B Preferred Stock to which the Put Option # 1 is
applicable, and, 2) Compost shall place the legend, as otherwise provided under
Section 9.2.4(a) of this Agreement, on the stock certificates as presented under
this Section 9.3(1), and shall then return to Lionhart all such stock
certificates (as otherwise presented to Compost and which then bear the legend,
as otherwise provided under this Section 9.3).
Section 9.4. Definition-Maturity Date of the Mortgage Note. The term
"Maturity Date of the Mortgage Note," for
Page 33 of 107 Pages
purposes of Article IX of this Agreement, shall be defined as, and shall mean,
the same date as the "Maturity Date" of the Mortgage Note, as the term "Maturity
Date" is otherwise defined and determined under Section 8 of the Mortgage Note.
ARTICLE X
PUT AGREEMENT (EXCESS COMMON SHARES)
Section 10.1. Recapitulation-Excess Common Shares. Compost and Lionhart
hereby confirm, and hereby agree, that, as of and immediately subsequent to the
consummation of the Ancillary Transactions Closing, on the Closing Date at the
Closing Location, and exclusive of the 178,253 shares of Common Stock of Compost
that were issued by Compost to Lionhart pursuant to the First Debenture
Conversion, Lionhart is the registered holder of 1,106,771 shares of Common
Stock of Compost ("Post-Closing Common Shares"), exclusive of any shares of
Compost Common Stock to which Lionhart (or any successor registered owner
thereof) is entitled to purchase under and pursuant to the Compost-Lionhart
Warrant # 1, and/or the Compost-Lionhart Warrant # 2, and/or the
Compost-Lionhart Warrant # 3, and/or the Compost-Lionhart Warrant # 4, and/or
the Compost-Lionhart Warrant # 5 and/or the Compost-Lionhart Warrant # 6, which
is calculated as follows:
Shares of
Derivative Transaction Compost Common Stock
LHI-Select Agreement Shares (10/23/98) 665,000
1998 Dividend Shares (10/23/98) 35,178
Conversion Shares-Debenture Conversion (10/30/98) 1,406,593
Sub-Total (10/30/98) 2,106,771
Less: Section 6.1 Shares (10/30/98) (1,000,000)
Post-Closing Compost Common Stock (10/30/98) 1,106,771
The term "Excess Common Shares," for purposes of this Article X, shall mean 50%
of the "Post-Closing Compost Common Stock (10/30/98)," as and of the Ancillary
Transactions Closing on the Closing Date, as set forth in the last row of the
table set forth in this Section 10.1, or 553,386 shares of Common Stock of
Compost ("Excess Common Shares").
Section 10.2. Put-Excess Common Shares. With respect to each and every
of those Excess Common Shares, Compost and Lionhart each hereby agree, promise
and covenant as follows:
10.2.1. Put. Commencing on and as of the Ancillary Transactions
Closing, on the Closing Date at the Closing Location, and thereafter
(subject to Section 10.2.2 of this Agreement), Compost hereby grants,
conveys, transfers and delivers to Lionhart, a put option for and with
respect to each and every Excess Common Share ("Put Option #2"), that is
and shall be exercisable at any time(s) in the sole discretion and
election of Lionhart as provided under (and pursuant to the terms and
subject to the conditions set forth in) this Section 10.2, and pursuant
to which, upon any exercise(s) thereof by Lionhart, Lionhart shall have
the right to demand and compel Compost to purchase from Lionhart, and
Compost shall then and thereupon have the unconditional duty to purchase
from Lionhart, any and all such Excess Common Share(s) that are
otherwise the subject of any such exercise(s) of a Put Option #2.
10.2.2. Put Conditions. Any exercise(s) of any Put Option #2, as
provided under Section 10.2.1 of this Agreement, is and shall be subject
to the following procedures and conditions:
(a) Put Option Election. Lionhart, when and if Lionhart
elects at any time(s) to exercise a Put Option # 2 with respect
to any such Excess Common Shares, shall deliver to Compost, via
fax, e-mail or hard copy, a written notice of an election at any
such time(s) to exercise the Put Option # 2 ("Put Election"),
not more than twenty (20) business days before and not less than
ten (10) business days prior to the "First Anniversary Date of
the Maturity Date of the Mortgage Note" (as that term is defined
under Section 10.4 of this Agreement).
(b) Put Purchase Price. Upon the receipt by Compost of
any such Put Election at any time(s), Lionhart shall have the
duty to sell to Compost, and Compost shall have the duty to
purchase from Lionhart,
Page 34 of 107 Pages
on the First Anniversary Date of the Maturity Date of such
Mortgage Note, all such Excess Common Shares for which, pursuant
to such Put Election, Lionhart has exercised a Put Option #2,
for the purchase price ("Put Purchase Price") of US $3.20 per
share of each such Excess Common Share, which shall be paid by
Compost to Lionhart in US cash or currency, or equivalent good
US funds, on the "First Anniversary Date of the Maturity Date of
such Mortgage Note" (as that term is defined under Section 10.4
of this Agreement).
(c) Lapse. Any Put Option #2, that is not exercised as
provided under Section 10.2.2(b) of this Agreement, shall then
and thereafter terminate and lapse, and shall not thereafter
have any legal force or effect.
(d) Successors and Assigns. The term "Lionhart," for
purposes of Article X of this Agreement, shall mean Lionhart,
and each and every successor registered owner of any Conversion
Common Share(s) thereafter, and the rights and duties, as
provided and set forth in Section 10.1 and Section 10.2 of this
Agreement, shall inure to the benefit of, and shall be binding
upon, Compost and Lionhart, and their respective successors and
assigns.
10.2.3. Stock Certificate-Put Option # 2 Legends. Compost and
Lionhart hereby agree, promise and covenant that, on and as of the
Ancillary Transactions Closing on the Closing Date, Compost shall place
or cause to be placed on each stock certificate, that represents any one
(1) or more of the above-referenced Conversion Common Shares to which
the Put Option # 2 is applicable, and each such stock certificate shall
bear, the following legend:
"The securities represented hereby are subject to a Put, that is
or may by exercised by the registered holder hereof, at any time
after October 30, 1998, and on or before the earlier of (i)
October 1, 2001, or (ii) the date corresponding to the "First
Anniversary Date of the Maturity Date of the Mortgage Note" (as
that term is defined under Section 10.4 of an agreement,
entitled "Credit, Capitalization and Financing Agreement," dated
on and as of October 30, 1998, a signatory party of which is
Compost America Holding Company, Inc.), pursuant to the terms
and subject to the conditions set forth in Article X of that
"Credit, Capitalization and Financing Agreement."
Section 10.3. Ancillary Transactions Closing. At the Ancillary
Transactions Closing (on the Closing Date and at the Closing Location), 1)
Lionhart shall present to Compost all stock certificates, that are presently
held by Lionhart, and that represent any one (1) or more of the above-referenced
Conversion Common Shares to which the Put Option # 2 is applicable, and, 2)
Compost shall place the legend, as otherwise provided under Section 10.2. 3 of
this Agreement, on the stock certificates as presented under this Section
10.3(1), and shall then return to Lionhart all such stock certificates (as
otherwise presented to Compost and which then bear the legend, as otherwise
provided under this Section 10.3).
Section 10.4. Definition-First Anniversary Date of the Maturity Date of
the Mortgage Note. The term "First Anniversary Date of the Maturity Date of the
Mortgage Note," for purposes of Article X of this Agreement, shall be defined
as, and shall mean, the date and time corresponding to twelve (12) months after
the first day of the first calendar month that is inclusive of the "Maturity
Date" of the Mortgage Note, as the term "Maturity Date" is otherwise defined and
determined under Section 8 of the Mortgage Note.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES RELATING TO COMPOST AND SUBSIDIARIES
Compost, Miami and Bedminster, on a joint and several basis, each
hereby represent and warrant to Lionhart, LHI and GEP, as is set forth in
Section 11.01-Section 11.27, that:
Section 11.01. Organization and Qualification: Compost/Subsidiaries.
Compost is a New Jersey corporation, that is duly organized, validly existing
and in good standing under the laws of the State of New Jersey. Miami is a
Delaware corporation, that is duly organized, validly existing and in good
standing under the laws of the State of Delaware. Bedminster is a Florida
corporation, that is duly organized, validly existing and in good standing under
the laws of the State of Florida. Miami is a direct controlled subsidiary of
Compost, and Compost owns and controls 80.1% of all issued and outstanding
capital stock of Miami and Mestre owns and controls 19.9% of all issued and
outstanding capital stock of Miami. Bedminster is 1) a direct wholly-owned
subsidiary of Miami and 2) an indirect controlled subsidiary of Compost.
Compost, and each of its Subsidiaries (including, without limitation, Miami and
Bedminster), is a corporation duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of incorporation or
formation, and has the requisite power and authority to own, lease and operate
their respective properties and carry on their respective business in all
material respects as presently owned or conducted. Compost and each of its
Page 35 of 107 Pages
Subsidiaries (including, without limitation, Miami and Bedminster) is each duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities make such qualification
or licensing necessary, except those jurisdictions, if any, in which the failure
to be do duly qualified or licensed and in good standing would not, taken as a
whole, have a Material Adverse Effect. The Disclosure Documents set forth a
complete and correct list of each of the Subsidiaries of Compost and each
Affiliate of Compost. Miami is a direct controlled subsidiary of Compost, and
every other Subsidiary (including, Bedminster) is directly or indirectly
wholly-owned or controlled by Compost, unless otherwise indicated in the
Disclosure Documents, which Disclosure Documents set forth all other owners of
each such Subsidiary not directly or indirectly-wholly owned by Compost,
including their percentage of ownership in such entity and further explaining
any differences between the percentage of such ownership and any rights of such
owner with respect to the cash flow of such entities and further including all
Persons who have any rights to become such owner in the future. Other than the
Subsidiaries, there are no other corporations, partnerships, limited liability
companies, joint ventures, associations or other entities in which Compost owns,
of record or beneficially any direct or indirect equity or other interest or any
right (contingent or otherwise) to acquire the same. Other than the
Subsidiaries, Compost is not a member of (nor is any part of its business
conducted through) any partnership, nor is Compost a participant in any joint
venture or other similar arrangement.
Section 11.02. Organization and Qualification:
Miami/Bedminster/Subsidiaries. (a) Miami is a Delaware corporation, that is duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has the requisite power and authority to own, lease and operate
its properties and carry on its business in all material respects as presently
owned or conducted. Miami is a direct controlled subsidiary of Compost. Compost
controls Miami. Bedminster is a direct wholly-owned subsidiary of Miami. Except
for Bedminster, Miami does not own or control any other Subsidiary, directly or
indirectly. Miami is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, leased or operated by it or the nature of its activities
make such qualification or licensing necessary, including the State of Florida,
except those jurisdictions, if any, in which the failure to be do duly qualified
or licensed and in good standing would not, taken as a whole, have a Material
Adverse Effect. The Disclosure Documents set forth a complete and correct list
of each Affiliate of Miami. Compost owns and controls 80.1% of all issued and
outstanding capital stock of Miami, and Mestre owns and controls 19.9% of all
issued and outstanding capital stock of Miami. Other than Compost and Mestre,
there are no other corporations, partnerships, limited liability companies,
joint ventures, associations or other entities or Persons that own(s), of record
or beneficially any direct or indirect equity or other interest or any right
(contingent or otherwise) to acquire the same in and to Miami. Miami is not a
member of (nor is any part of its business conducted through) any partnership,
nor is Miami a participant in any joint venture or other similar arrangement.
(b) Bedminster is a Florida corporation, that is duly organized,
validly existing and in good standing under the laws of the State of Florida,
and has the requisite power and authority to own, lease and operate its
properties and carry on its business in all material respects as presently owned
or conducted. Bedminster is a direct wholly-owned subsidiary of Miami, and is an
indirect controlled subsidiary of Compost. Compost controls Bedminster.
Bedminster does not own or control any Subsidiary, directly or indirectly.
Bedminster is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, leased or operated by it or the nature of its activities
make such qualification or licensing necessary, including the State of Florida,
except those jurisdictions, if any, in which the failure to be do duly qualified
or licensed and in good standing would not, taken as a whole, have a Material
Adverse Effect. The Disclosure Documents set forth a complete and correct list
of each Affiliate of Bedminster. Other than Compost and Miami, there are no
other corporations, partnerships, limited liability companies, joint ventures,
associations or other entities or Persons that own(s), of record or beneficially
any direct or indirect equity or other interest or any right (contingent or
otherwise) to acquire the same in and to Bedminster. Bedminster is not a member
of (nor is any part of its business conducted through) any partnership, nor is
Bedminster a participant in any joint venture or other similar arrangement.
Section 11.03. Certificate of Incorporation and By-Laws. Compost, Miami
and Bedminster have heretofore furnished to Lionhart, LHI and GEP, as to Compost
and each Subsidiary of Compost (including, without limitation, Miami and
Bedminster), a complete and correct copy of the Certificate of Incorporation and
the By-Laws, each as amended through the date hereof, each of which is in full
force and effect as of the date hereof. Neither Compost nor any Subsidiary
(including, without limitation, Miami and Bedminster) is in violation of any of
the provisions of their respective Certificates of Incorporation or By-Laws, and
to Compost's and Miami's and Bedminster's knowledge, none of the Subsidiaries of
Compost
Page 36 of 107 Pages
(including, without limitation, Miami and Bedminster) are in violation of any of
the provisions of their respective charters of incorporation, by-laws or
equivalent organizational documents, with respect to any matter, transaction,
event or occurrence whatsoever, including, without limitation, the execution,
consummation and performance by Compost and/or Miami and/or Bedminster of this
Agreement and/or the Definitive Supplemental Documents.
Section 11.04. Compost Capitalization. (a) As of the close of business
on the Effective Date of this Agreement, the authorized capital stock of Compost
consisted of (1) 25,000,000 shares of preferred stock, of which (i) 169,000
shares of Preferred Stock Series A are issued and outstanding, (ii) 401,000
shares of Preferred Stock Series B are issued and outstanding, (iii) 91,000
shares of Preferred Stock Series C are issued and outstanding, and (iv) 17,500
shares of Preferred Stock Series D are issued and outstanding, and (2)
100,000,000 shares of Common Stock, of which (i) 43,736,581 shares of Common
Stock are issued and outstanding, (ii) no shares of Common Stock are held in the
treasury of Compost, (iii) an aggregate of 401,000 shares of Common Stock are
reserved for issuance upon conversion of the Preferred Stock Series B, (iv) no
shares of Common Stock are reserved for issuance upon conversion of the
Preferred Stock Series C, (v) no shares of Common Stock are reserved for
issuance upon conversion of the Preferred Stock Series D, and (v) 9,060,528
shares of Common Stock are reserved for options, warrants or other similar
rights pursuant to those agreements listed on Schedule 11.04(b)(1) (for a total
of 53,198,109 shares of Common Stock issued and reserved for issuance).
(b) Except as set forth in this Section 11.04 or in Schedule
11.04(b)(1) of the Disclosure Schedule as to Compost, and/or Schedule
11.04(b)(2) of the Disclosure Schedule as to the other Subsidiaries (including,
without limitation, Miami and Bedminster) or Affiliates of Compost, there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character to which Compost or any of its Subsidiaries (including, without
limitation, Miami and Bedminster) or Affiliates is a party or obligating Compost
or any of its Subsidiaries (including, without limitation, Miami and Bedminster)
or Affiliates to issue or sell any shares of capital stock of, or other equity
interests in Compost or any of its Subsidiaries (including, without limitation,
Miami and Bedminster) or Affiliates. Except as set forth in Schedule 11.04(b)(1)
or Schedule 11.04(b)(2) of the Disclosure Documents, there are no outstanding
contractual obligations of Compost or any of its Subsidiaries (including,
without limitation, Miami and Bedminster) or Affiliates to repurchase, redeem or
otherwise acquire any of the capital stock of Compost or any Subsidiary
(including, without limitation, Miami and Bedminster) or Affiliate or to provide
funds to or make any investment (in the form of a loan, capital contribution or
otherwise) in any Subsidiary (including, without limitation, Miami and
Bedminster) or Affiliate or any other entity. Each of the outstanding shares of
capital stock of each of Compost's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and is owned by Compost, directly or
indirectly, free and clear of all Encumbrances, except as provided or otherwise
specified under Schedule 11.04(b)(3) of the Disclosure Schedule.
(c) Except as set forth herein and on Schedule 11.04(c) of the
Disclosure Schedule, neither Compost nor any of its Subsidiaries (including,
without limitation, Miami and Bedminster) and Affiliates is a party to any
agreement granting registration rights to any Person with respect to any equity
or debt securities of Compost.
(d) Schedule 11.04(d)-Part II of the Disclosure Schedule
contains a complete and accurate list, as of the Effective Date of this
Agreement, of the names and the addresses of each Person owning shares of
capital stock of Compost and each Subsidiary (including, without limitation,
Miami and Bedminster) representing 5% or more of the outstanding shares of
Common or Preferred Stock of such company, as the case may be, and the
corresponding number of shares and the certificate number evidencing such shares
owned by such Person as of the Effective Date of this Agreement. Schedule
11.04(d)-Part II of the Disclosure Schedule further contains a complete and
accurate list, as of the Effective Date of this Agreement, of each shareholder
of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
and Series D Preferred Stock of Compost, and the corresponding quantity of such
all shares of stock (common and preferred) that are be owned by such
shareholders of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock of Compost.
(e) Except as otherwise disclosed in the Disclosure Documents,
none of the Persons listed on Schedule 11.04(d)-Part I and/or Part II of the
Disclosure Schedule, and no officer or director of Compost, or any Subsidiary
and no relative or spouse who resided with, or is a dependent of any such
Person, has any interest in any business enterprise (other than Compost or any
Subsidiary) which engages in any of the businesses in which Compost or any of
its Subsidiaries engage or which are suppliers to, or purchasers from, Compost
or its Subsidiaries.
(f) Schedule 11.04(f) of the Disclosure Schedule contains a
complete and accurate copy, as of the Effective
Page 37 of 107 Pages
Date of this Agreement, of 1) the current Designation of Rights of Series A
Preferred Stock, as amended, 2) the current Designation of Rights of Series B
Preferred Stock, as amended, 3) the current Designation of Rights of Series C
Preferred Stock, as amended, and 4) the current Designation of Rights of Series
D Preferred Stock, as amended, each such "Designation of Rights" of which sets
forth the complete and accurate terms and conditions (including, without
limitation, any and all rights, preferences and privileges) of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and
the Series D Preferred Stock.
Section 11.05. Miami/Bedminster Capitalization. (a) As of the close of
business on the Effective Date of this Agreement, the authorized capital stock
of Miami consisted exclusively of 1,000 shares of Common Stock ("Miami Common
Stock"), of which ) (i) 801 shares of Miami Common Stock are issued by Miami to
Compost, are presently outstanding and are held and owned exclusively by
Compost, (ii) 199 shares of Miami Common Stock are issued by Miami to Mestre,
are presently outstanding and are held and owned exclusively by Mestre, and (ii)
all such issued and outstanding shares of Miami Common Stock are owned and held
respectively by Compost and Mestre, free and clear of all Encumbrances. As of
the close of business on the Effective Date of this Agreement, the authorized
capital stock of Bedminster consisted exclusively of 1,000 shares of Common
Stock ("Bedminster Common Stock"), of which ) (i) 1,000 shares of Bedminster
Common Stock are issued by Bedminster and are presently outstanding, and (ii)
all such issued and outstanding shares of Bedminster Common Stock are owned and
held exclusively by Miami, free and clear of all Encumbrances.
(b) There are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which Compost, Miami, Bedminster
or any of Compost's Subsidiaries or Compost's Affiliates is a party or
obligating Miami, Bedminster or any of Compost's Subsidiaries or Compost's
Affiliates to issue or sell any shares of capital stock of, or other equity
interests in Miami or Bedminster.
(c) Each of the outstanding shares of capital stock of Miami is duly
authorized, validly issued, fully paid and nonassessable and is owned directly
by Compost, free and clear of all Encumbrances. Miami is not a party to any
agreement granting registration rights to any Person with respect to any equity
or debt securities of Miami. Schedule 11.05(c)-1 of the Disclosure Schedule
contains a complete and accurate list of the names and the addresses of each
Person owning shares of capital stock of Miami representing 5% or more of the
outstanding shares of Miami Common Stock, and the corresponding number of shares
and the certificate number evidencing such shares owned by such Person as of the
Effective Date of this Agreement. Each of the outstanding shares of capital
stock of Bedminster is duly authorized, validly issued, fully paid and
nonassessable and is owned directly by Miami, free and clear of all
Encumbrances. Bedminster is not a party to any agreement granting registration
rights to any Person with respect to any equity or debt securities of
Bedminster. Schedule 11.05(c)-2 of the Disclosure Schedule contains a complete
and accurate list of the names and the addresses of each Person owning shares of
capital stock of Bedminster representing 5% or more of the outstanding shares of
Bedminster Common Stock, and the corresponding number of shares and the
certificate number evidencing such shares owned by such Person as of the
Effective Date of this Agreement.
(d) Except as otherwise disclosed in the Disclosure Documents, none of
the Persons listed on Schedule 11.04(d)-Part I and/or Part II and/or Schedule
11.05(c)-1 or Schedule 11.05(c)-2 of the Disclosure Schedule, and no officer or
director of Compost, Miami or Bedminster or any other Subsidiary or Affiliate,
and no relative or spouse who resided with, or is a dependent of any such
Person, has any interest in any business enterprise (other than Compost, Miami
or Bedminster or any other Subsidiary) which engages in any of the businesses in
which Compost, Miami or Bedminster or any of the Subsidiaries engage or which
are suppliers to, or purchasers from, Compost or its Subsidiaries (including,
without limitation, Miami and Bedminster).
Section 11.06. Compost/Miami/Bedminster Authority. Compost, Miami and
Bedminster each has all necessary corporate power and authority to execute and
deliver this Agreement, the Credit Documents and all other Supplemental
Definitive Document, and to perform its obligations and to consummate the
transactions contemplated under this Agreement and all Definitive Supplemental
Documents (including, without limitation, the Credit Documents), including
(without limitation): 1) the borrowing of the Credit, the execution and delivery
of the Credit Documents and the performance and discharge of their respective
obligations and duties under the Credit Documents, pursuant to the terms and
subject to the conditions as are set forth in Article II of this Agreement, the
Credit Documents, and any other applicable Definitive Supplemental Documents; 2)
the issuance of the Series B Preferred Stock to Lionhart, pursuant to the terms
and subject to the conditions as are set forth in Article III of this Agreement,
and any applicable Definitive Supplemental Documents; 3) the acceptance by
Compost of the conversion of the Outstanding Debentures, and the issuance by
Compost to Lionhart of the
Page 38 of 107 Pages
Conversion Shares, pursuant to the terms and subject to the conditions as are
set forth in Article IV of this Agreement, and any applicable Definitive
Supplemental Documents; 4) the acceptance of the transfer by LHI to Lionhart of
the LHI-Select Shares, pursuant to the terms and subject to the conditions as
are set forth in Article V of this Agreement, and any applicable Definitive
Supplemental Documents; 5) the purchase and redemption by Compost, from
Lionhart, of 1,000,000 shares of common stock of Compost that are or will be
held and owned by Lionhart, for the purchase price of US $3,000,000, pursuant to
the terms and subject to the conditions as are set forth in Article VI of this
Agreement, and any applicable Definitive Supplemental Documents; 6) the
transactions that relate to or arise from the Escrow, pursuant to the terms and
subject to the conditions as are set forth in Article VII of this Agreement, and
any applicable Definitive Supplemental Documents; 7) the issuance by Compost to
Lionhart of the Compost-Lionhart Warrant # 1, the Compost-Lionhart Warrant # 2,
the Compost-Lionhart Warrant # 3, the Compost-Lionhart Warrant # 4, the
Compost-Lionhart Warrant # 5 and the Compost-Lionhart Warrant # 6, pursuant to
the terms and subject to the conditions as are set forth in Article VIII of this
Agreement, and any applicable Definitive Supplemental Documents; 8) the granting
by Compost to Lionhart of the Put Option # 1, for and with respect to the Series
B Preferred Stock and the Conversion Common Shares, pursuant to the terms and
subject to the conditions as are set forth in Article IX of this Agreement, and
any applicable Definitive Supplemental Documents; 9) the granting by Compost to
Lionhart of the Put Option # 2, for and with respect to the Excess Common
Shares, pursuant to the terms and subject to the conditions as are set forth in
Article X of this Agreement, and any applicable Definitive Supplemental
Documents; and, 10) the execution and delivery of all documents and
considerations that are contemplated and/or prescribed under Section 13.03
and/or Section 15.02 of this Agreement. The execution and delivery of this
Agreement, the Credit Documents and the Definitive Supplemental Documents, by
Compost and/or Miami and/or Bedminster, and the consummation by Compost and/or
Miami and/or Bedminster of the transactions contemplated under this Agreement,
the Credit Documents and the Definitive Supplemental Documents, have been duly
and validly authorized by all necessary corporate action by Compost, Miami and
Bedminster, and no other corporate proceedings on the part of Compost and/or
Miami and/or Bedminster are necessary to authorize, execute or deliver this
Agreement, the Credit Documents or the Definitive Supplemental Documents, or to
consummate the transactions contemplated by this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents. This Agreement, and each of the
Credit Documents and the Definitive Supplemental Documents, has been duly and
validly authorized, executed and delivered by Compost, Miami and Bedminster, and
constitutes 1) the legal, valid and binding obligations of Compost enforceable
against Compost in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles, and 2) the legal, valid and binding obligations of Miami enforceable
against Miami in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles, and 3) the legal, valid and binding obligations of Bedminster
enforceable against Bedminster in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
Section 11.07. No Conflict: Required Filings and Consents-Compost.
Assuming the satisfaction of the conditions set forth in Article XIII and
Article XV of this Agreement, the execution and delivery of this Agreement, the
Credit Documents and the Definitive Supplemental Documents by Compost do not,
and the performance of this Agreement, the Credit Documents and the Definitive
Supplemental Documents (including, without limitation, the consummation of the
transactions and performance and discharge of the duties and undertakings
provided or contemplated under this Agreement, the Credit Documents and the
Definitive Supplemental Documents) will not (i) conflict with or violate the
Certificate of Incorporation or By-Laws of Compost, (ii) conflict with or
violate the certificates of incorporation or by-laws or equivalent
organizational documents of any of the Subsidiaries of Compost, (iii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Compost or any of its Subsidiaries or by which its or any of their respective
properties are bound or affected, or (iv) result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Compost or any of its
Subsidiaries pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, insurance policy or other instrument or
obligation to which Compost or any of its Subsidiaries is a party, or by which
Compost or any of its Subsidiaries or its or any of their respective properties
are bound or affected, except in the case of clauses (ii), (iii) and (iv) above
for such conflicts which would not, taken as a whole, have a Material Adverse
Effect. This execution and delivery of this Agreement, the Credit Documents and
the Definitive Supplemental Documents by Compost do not, and the performance of
this Agreement, the Credit Documents and the Definitive Supplemental Documents
by Compost (including, without limitation, the consummation of the transactions
contemplated hereunder) will not, require any consent, approval, authorization
or permit which has not been obtained as of or prior to the Closing Date.
Page 39 of 107 Pages
Section 11.08. No Conflict: Required Filings and
Consents-Miami/Bedminster. (a) Assuming the satisfaction of the conditions set
forth in Article XIII and Article XV of this Agreement, the execution and
delivery of this Agreement, the Credit Documents and the Definitive Supplemental
Documents by Miami do not, and the performance of this Agreement, the Credit
Documents and the Definitive Supplemental Documents (including, without
limitation, the consummation of the transactions and performance and discharge
of the duties and undertakings provided or contemplated under this Agreement,
the Credit Documents and the Definitive Supplemental Documents) will not (i)
conflict with or violate the Certificate of Incorporation or By-Laws of Miami,
(ii) conflict with or violate the certificates of incorporation or by-laws or
equivalent organizational documents of any of the Subsidiaries of Miami, (iii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Miami or any of its Subsidiaries or by which its or any of their
respective properties are bound or affected, or (iv) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of Miami or any of its
Subsidiaries pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, insurance policy or other instrument or
obligation to which Miami or any of its Subsidiaries is a party, or by which
Miami or any of its Subsidiaries or its or any of their respective properties
are bound or affected, except in the case of clauses (ii), (iii) and (iv) above
for such conflicts which would not, taken as a whole, have a Material Adverse
Effect. This execution and delivery of this Agreement, the Credit Documents and
the Definitive Supplemental Documents by Miami do not, and the performance of
this Agreement, the Credit Documents and the Definitive Supplemental Documents
by Miami (including, without limitation, the consummation of the transactions
contemplated hereunder) will not, require any consent, approval, authorization
or permit which has not been obtained as of or prior to the Closing Date.
(b) Assuming the satisfaction of the conditions set forth in Article
XIII and Article XV of this Agreement, the execution and delivery of this
Agreement, the Credit Documents and the Definitive Supplemental Documents by
Bedminster do not, and the performance of this Agreement, the Credit Documents
and the Definitive Supplemental Documents (including, without limitation, the
consummation of the transactions and performance and discharge of the duties and
undertakings provided or contemplated under this Agreement, the Credit Documents
and the Definitive Supplemental Documents) will not (i) conflict with or violate
the Certificate of Incorporation or By-Laws of Bedminster, (ii) conflict with or
violate the certificates of incorporation or by-laws or equivalent
organizational documents of any of the Subsidiaries of Bedminster, (iii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Bedminster or any of its Subsidiaries or by which its or any of
their respective properties are bound or affected, or (iv) result in any breach
of or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of Bedminster or any of its
Subsidiaries pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, insurance policy or other instrument or
obligation to which Bedminster or any of its Subsidiaries is a party, or by
which Bedminster or any of its Subsidiaries or its or any of their respective
properties are bound or affected, except in the case of clauses (ii), (iii) and
(iv) above for such conflicts which would not, taken as a whole, have a Material
Adverse Effect. This execution and delivery of this Agreement, the Credit
Documents and the Definitive Supplemental Documents by Bedminster do not, and
the performance of this Agreement, the Credit Documents and the Definitive
Supplemental Documents by Bedminster (including, without limitation, the
consummation of the transactions contemplated hereunder) will not, require any
consent, approval, authorization or permit which has not been obtained as of or
prior to the Closing Date.
Section 11.09. Deal Attributes. Assuming that all conditions that are
set forth in Article XIII and Article XV of this Agreement are satisfied, and
that, on the Closing Date at the Closing Location, this Agreement and all
Definitive Supplemental Documents (including, without limitation, the Credit
Documents) are executed, consummated and delivered, as provided and contemplated
under this Agreement and/or the Definitive Supplemental Documents (including,
without limitation, the Credit Documents), then:
(a) (i) This Agreement, (ii) the Credit Documents (including, without
limitation, 1) the Mortgage Note, 2) the Mortgage, 3) the Security Agreement, 4)
the Compost Stock Pledge Agreement (Compost Common Stock), 5) the Compost Stock
Pledge Agreement (Miami Common Stock), 6) the Compost Stock Pledge Agreement
(Bedminster Common Stock), 7) the Pledged Compost Shares, 8) the Pledged Miami
Shares, 9) the Pledged Bedminster Shares, 10) the UCC-1 Financing Statement, 11)
the Compost-Miami Guaranty, 11) the Compost Resolutions and the Compost
Certificate of Resolutions, 12) the Miami Resolutions and the Miami Certificate
of Resolutions, 13) the Bedminster Resolutions and the Bedminster Certificate of
Resolutions, 14) the Term Loan Closing Statement, 15) the Mortgagee's Title
Insurance Commitment, 16) the Compost/Miami Mortgagor Affidavit, 17) the
Compost/Miami Owner's Affidavit, 18) the Certificate and Indemnification
Page 40 of 107 Pages
Regarding Hazardous Substances, 19) the Release and Satisfaction of Xxxxxx
Mortgage, 20) the Miami-Xxxxxx Note, 21) the Stipulated Motion to Dismiss
Complaint with Prejudice, 22) the Order of Dismissal with Prejudice, 23) the
Global Closing Statement, 24) the Incumbency Certificate of Compost, 25) the
Incumbency Certificate of Miami, 26) the Incumbency Certificate of Bedminster,
27) the "Bring-Down" Certificate of Compost, 28) the "Bring-Down" Certificate of
Miami, and, 29) the "Bring-Down" Certificate of Bedminster) and (iii) the
Definitive Supplemental Documents, are and shall be binding and enforceable
against Compost, Miami and Bedminster, pursuant to their respective terms
thereof.
(b) Lionhart, LHI and GEP, pursuant to the terms of this Agreement and
the Definitive Supplemental Documents (including, without limitation, the Credit
Documents (including the Mortgage)), shall hold and possess, jointly and
severally, a first, senior, unsubordinated and exclusive lien, mortgage and
encumbrance against the Miami Site, to ensure the prompt, timely and complete
performance and discharge by Compost and/or Miami and/or Bedminster of all of
their respective duties and obligations under this Agreement and the Definitive
Supplemental Documents (including, without limitation, the Credit Documents).
(c) Lionhart, LHI and GEP, pursuant to the terms of this Agreement and
the Definitive Supplemental Documents (including, without limitation, the Credit
Documents (including the Security Agreement, the Compost Stock Pledge Agreement
(Compost Common Stock), the Compost Stock Pledge Agreement (Miami Common Stock)
and the Compost Stock Pledge Agreement (Bedminster Common Stock)), shall hold
and possess, jointly and severally, a first, senior, unsubordinated and
exclusive security interest, lien, pledge and encumbrance against the Miami
Project Collateral (as that term is defined under Section 11.26.01 of this
Agreement), the Pledged Compost Shares, the Pledged Miami Shares and the Pledged
Bedminster Shares, to ensure the prompt, timely and complete performance and
discharge by Compost, Miami and Bedminster of all of their respective duties and
obligations under this Agreement and the Definitive Supplemental Documents
(including, without limitation, the Credit Documents).
(d) The mortgage lien of Lionhart, LHI and GEP, in and to the Miami
Site, as granted and conveyed by Miami to Lionhart, LHI and GEP under and
pursuant to this Agreement and the Definitive Supplemental Documents (including,
without limitation, the Credit Documents (including, the Mortgage)), is duly
granted, conveyed and delivered by Miami to Lionhart, LHI and GEP.
(e) The security interests, liens, pledges and encumbrances, against
the Miami Project Collateral, the Pledged Compost Shares, the Pledged Miami
Shares and the Pledged Bedminster Shares, as granted, conveyed and delivered by
Compost, Miami and/or Bedminster to Lionhart, LHI and/or GEP, under and pursuant
to the terms of this Agreement and the Definitive Supplemental Documents
(including, without limitation, the Credit Documents), are duly granted,
conveyed and delivered by Compost, Miami and/or Bedminster to Lionhart, LHI and
GEP, and each such security interest, lien, pledge and encumbrance is duly
attached and perfected under applicable laws.
(f) The 400,000 shares of Series B Preferred Stock, that are (or will
be, as of the Ancillary Transactions Closing, on the Closing Date at the Closing
Location) owned by and registered in the name of Lionhart, as provided and
contemplated under Article III of this Agreement, and pursuant to the terms and
subject to the conditions set forth in the Series B Preferred Shares
Subscription Agreement and the Designation of Rights of Series B Preferred
Stock, 1) are and shall duly authorized, validly issued, fully paid and
non-assessable, 2) shall not be subject to any Encumbrances and 3) are and shall
be subject to the Designation of Rights of Series B Preferred Stock.
(g) The 1998 Dividend Shares, consisting of 35,178 shares of common
stock of Compost, that are (or will be, as of the Ancillary Transactions
Closing, on the Closing Date at the Closing Location) owned by and registered in
the name of Lionhart, as provided and contemplated under Section 3.3 of this
agreement, and pursuant to the Designation of Rights of Series B Preferred
Stock, 1) are and shall duly authorized, validly issued, fully paid and
non-assessable, 2) shall not be subject to any Encumbrances and 3) shall have
accorded to each such share of the 1998 Dividend Shares, full voting rights in
accordance with the Articles of Incorporation of Compost and New Jersey law.
(h) The Outstanding Debentures, as provided and contemplated under
Article IV of this Agreement, and pursuant to the terms of the Debenture
Purchase Agreement and the Outstanding Debentures, are and/or shall be, as of
the Ancillary Transactions Closing, on the Closing Date at the Closing Location,
1) duly converted into the Conversion Shares (consisting of 1,406,593 shares of
Compost Common Stock), and 2) redeemed by Compost. The Conversion Shares,
consisting of such 1,406,593 shares of Compost Common Stock, that are (or will
be, as of the Ancillary Transactions Closing, on the Closing Date
Page 41 of 107 Pages
at the Closing Location) owned and registered in the name of Lionhart, as
provided and contemplated under Article IV of this Agreement, 1) are and shall
be duly registered with the Securities and Exchange Commission, pursuant to a
registration statement filed with and declared effective by the Securities and
Exchange Commission, 2) are and shall duly authorized, validly issued, fully
paid and non-assessable, 3) shall not be subject to any Encumbrances and 4)
shall have accorded to each and every such Conversion Share, full voting rights
in accordance with the Articles of Incorporation of Compost and New Jersey law.
(i) The LHI-Select Agreement Shares (consisting of 665,00 shares of
common stock of Compost), that are (or will be, as of the Ancillary Transactions
Closing, on the Closing Date at the Closing Location) owned by and registered in
the name of Lionhart, as provided and contemplated under Article V of this
Agreement, 1) are and shall be duly authorized, validly issued, fully paid and
non-assessable, 2) shall not be subject to any Encumbrances and 3) shall have
accorded to each such share of the LHI-Select Agreement Shares, full voting
rights in accordance with the Articles of Incorporation of Compost and New
Jersey law.
(j) The purchase by Compost, from Lionhart, of the Section 6.1 Shares,
consisting of 1,000,000 shares of common stock of Compost that are owned and
held by Lionhart (and being further comprised of the LHI-Select Agreement Shares
(665,000), the 1998 Dividend Shares (35,178) and 299,822 of the Conversion
Shares), for the Purchase Price of US $3,000,000, as provided under Article VI
of this Agreement, 1) is fair to Compost, 2) is duly authorized, and 3) will not
(i) conflict with or violate the Certificate of Incorporation or By-Laws of
Compost, (ii) conflict with or violate the certificates of incorporation or
by-laws or equivalent organizational documents of any of the Subsidiaries of
Compost, (iii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Compost or any of its Subsidiaries or by which
its or any of their respective properties are bound or affected, or (iv) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Compost
or any of its Subsidiaries pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, insurance policy or other
instrument or obligation to which Compost or any of its Subsidiaries is a party,
or by which Compost or any of its Subsidiaries or its or any of their respective
properties are bound or affected.
(k) The transactions that relate to or arise from the Escrow, under the
Debenture Purchase Agreement and the Debentures, and as provided and
contemplated under Article VII of this Agreement, 1) are duly authorized, and 2)
will not (i) conflict with or violate the Certificate of Incorporation or
By-Laws of Compost, (ii) conflict with or violate the certificates of
incorporation or by-laws or equivalent organizational documents of any of the
Subsidiaries of Compost, (iii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Compost or any of its
Subsidiaries or by which its or any of their respective properties are bound or
affected, or (iv) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of Compost or any of its Subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
insurance policy or other instrument or obligation to which Compost or any of
its Subsidiaries is a party, or by which Compost or any of its Subsidiaries or
its or any of their respective properties are bound or affected.
(l) The Compost Lionhart Warrant #1, the Compost Lionhart Warrant #2,
the Compost Lionhart Warrant #3, the Compost Lionhart Warrant #4, the Compost
Lionhart Warrant #5 and the Compost Lionhart Warrant #6, that are (or will be,
as of the Ancillary Transactions Closing, on the Closing Date at the Closing
Location) issued by Compost to Lionhart and that are (or will be, as of the
Ancillary Transactions Closing, on the Closing Date at the Closing Location)
owned and held by Lionhart, as provided and contemplated under Article VIII of
this Agreement, 1) are and shall be duly authorized and validly issued and
delivered by Compost, 2) shall not be subject to any Encumbrances, 3) all such
shares of common stock of Compost that are purchased by Lionhart, or any
registered holder thereof, pursuant to the exercise of the Compost Lionhart
Warrant #1, the Compost Lionhart Warrant #2, the Compost Lionhart Warrant #3,
the Compost Lionhart Warrant #4, the Compost Lionhart Warrant #5 and the Compost
Lionhart Warrant #6, are and shall be duly authorized, validly issued, fully
paid and non-assessable, shall not be subject to any Encumbrances, 4) shall have
accorded to each share of Common Stock of Compost, that is attributable to the
exercise by Lionhart (or any registered owner thereof) of the Compost Lionhart
Warrant #1, the Compost Lionhart Warrant #2, the Compost Lionhart Warrant #3,
the Compost Lionhart Warrant #4, the Compost Lionhart Warrant #5 and/or the
Compost Lionhart Warrant #6, full voting rights in accordance with the Articles
of Incorporation of Compost and New Jersey law, and 5) will not (i) conflict
with or violate the Certificate of Incorporation or By-Laws of Compost, (ii)
conflict with or violate the certificates of incorporation or by-laws or
equivalent organizational documents of any of the Subsidiaries
Page 42 of 107 Pages
of Compost, (iii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Compost or any of its Subsidiaries or by which
its or any of their respective properties are bound or affected, or (iv) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of Compost
or any of its Subsidiaries pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, insurance policy or other
instrument or obligation to which Compost or any of its Subsidiaries is a party,
or by which Compost or any of its Subsidiaries or its or any of their respective
properties are bound or affected.
(m) The 400,000 shares of Series B Preferred Stock, that are owned and
held by Lionhart, shall be convertible into shares of common stock of Compost,
pursuant to the terms and subject to the conditions set forth in the Debenture
Purchase Agreement and the Designation of Rights of Series B Preferred Stock,
and all such shares of common stock of Compost, that are so converted from those
400,000 shares of Series B Preferred Stock, 1) are and shall duly authorized,
validly issued, fully paid and non-assessable, 2) shall not be subject to any
Encumbrances and 3) shall have accorded to each such share of Common Stock of
Compost, full voting rights in accordance with the Articles of Incorporation of
Compost and New Jersey law.
(n) The Put Option # 1, that is granted, transferred and conveyed by
Compost to Lionhart, for and with respect to the Series B Preferred Stock and
the Conversion Common Shares, as provided and contemplated under Article IX of
this Agreement, 1) are and shall be duly authorized and validly issued and
delivered by Compost, 2) shall not be subject to any Encumbrances, 3) will not
(upon the issuance thereof by Compost and/or the exercise thereof by Lionhart or
any successor or assign thereto) (i) conflict with or violate the Certificate of
Incorporation or By-Laws of Compost, (ii) conflict with or violate the
certificates of incorporation or by-laws or equivalent organizational documents
of any of the Subsidiaries of Compost, (iii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Compost or any of its
Subsidiaries or by which its or any of their respective properties are bound or
affected, or (iv) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of Compost or any of its Subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
insurance policy or other instrument or obligation to which Compost or any of
its Subsidiaries is a party, or by which Compost or any of its Subsidiaries or
its or any of their respective properties are bound or affected.
(o) The Put Option # 2, that is granted, transferred and conveyed by
Compost to Lionhart, for and with respect to the Excess Common Shares, as
provided and contemplated under Article X of this Agreement, 1) are and shall be
duly authorized and validly issued and delivered by Compost, 2) shall not be
subject to any Encumbrances, 3) will not (upon the issuance thereof by Compost
and/or the exercise thereof by Lionhart or any successor or assign thereto) (i)
conflict with or violate the Certificate of Incorporation or By-Laws of Compost,
(ii) conflict with or violate the certificates of incorporation or by-laws or
equivalent organizational documents of any of the Subsidiaries of Compost, (iii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Compost or any of its Subsidiaries or by which its or any of their
respective properties are bound or affected, or (iv) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of Compost or any of its
Subsidiaries pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, insurance policy or other instrument or
obligation to which Compost or any of its Subsidiaries is a party, or by which
Compost or any of its Subsidiaries or its or any of their respective properties
are bound or affected.
Section 11.10. Compliance with Laws. Neither Compost nor any of its
Subsidiaries (including, without limitation, Miami and Bedminster) is in
conflict with, or in violation of, any law, rule, regulation, order, judgment or
decree applicable to Compost or any of its Subsidiaries (including, without
limitation, Miami and Bedminster) or by which Compost or any of its Subsidiaries
(including, without limitation, Miami and Bedminster) or any of its or their
respective properties are bound or affected, except for any such conflicts or
violations which would not, individually or in the aggregate, have a Material
Adverse Effect.
Section 11.11. SEC Filings: Financial Statements. Compost has filed all
forms, reports, statements and documents required to be filed with the SEC since
April 30, 1995 ("SEC Reports"). The SEC Reports (i) were each prepared in
accordance with, and at the time of filing complied in all material respects
with the requirements of the Securities Act or the Securities Exchange Act of
1934, as amended, together with the rules and regulations promulgated thereunder
(the "Exchange Act"), as the case may be, and (ii) except as disclosed in
Section 11.11 of the Disclosure Schedule, did not at the time they were filed
Page 43 of 107 Pages
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. None of the Compost's Subsidiaries is required to file any forms,
reports or other documents with the SEC. Each of the consolidated financial
statements (including in each case, any related notes thereto) contained in the
SEC Reports has been prepared in accordance with GAAP (except as may be
indicated in the notes thereto), and each presents fairly the consolidated
financial position of Compost and its consolidated Subsidiaries at the
respective dates thereof and the consolidated results of its operations and
changes in cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments. Except as would not have a Material Adverse Effect, and
except for (i) liabilities reflected in the Disclosure Documents and (ii)
liabilities incurred in the ordinary course of business of Compost and its
Subsidiaries subsequent to April 30, 1998, Compost and its Subsidiaries
(including, without limitation, Miami and Bedminster) have no liabilities that
are material to Compost and its Subsidiaries (including, without limitation,
Miami and Bedminster), taken as a whole, and there is no existing condition or
set of circumstances that could reasonably be expected to result in any such
liability.
Section 11.12. Financial Statements. True and complete copies of (i)
the audited consolidated balance sheets of Compost and its Subsidiaries
(including, without limitation, Miami and Bedminster) for each of the fiscal
years ended as of April 30, 1996, April 30, 1997, and April 30, 1998, and the
related audited consolidated statements of income, cash flows and changes in
financial position of Compost and its Subsidiaries, together with all related
notes and schedules thereto, accompanied by the reports thereon or management
letters from the Compost's accountants (collectively, the "Financial
Statements"), (ii) the unaudited balance sheets of Compost and its Subsidiaries
for the fiscal quarter ended July 31, 1998, and the related unaudited statements
of income, cash flows, and changes in financial positions of Compost and its
Subsidiaries for each, together with all related notes and schedules thereto,
which statements include all material known adjustments as of the date of such
statements, subject to ordinary year-end adjustments which in the aggregate
would not be material (collectively referred to herein as the "Interim Financial
Statement") and (iii) the schedule of Indebtedness of Compost (the "Debt
Schedule") as set forth in Schedule 11.12 of the Disclosure Schedule, as well as
an aging of accounts payable, have been delivered by Compost to Lionhart, LHI
and GEP (including, without limitation, with respect to each debt, (i) the
amount, (ii) the scheduled principal payments and (iii) the date of maturity of
such instrument) and Compost and its Subsidiaries are current in all their
Indebtedness as set forth in the Debt Schedule. The Financial Statements and the
Interim Financial Statements (i) were prepared in accordance with the books of
account and other financial records of Compost and its Subsidiaries, (ii)
present fairly the financial condition, results of operations and cash flows of
Compost and its Subsidiaries as of the dates thereof or for the periods covered
thereby, (iii) have been prepared in accordance with GAAP applied on a basis
consistent with the past practices of Compost and throughout the periods
involved and (iv) include all adjustments that are necessary for a fair
presentation of the consolidated financial condition of Compost and the
Subsidiaries, and the results of the operations and cash flows of Compost and
the Subsidiaries as of the dates thereof or for the periods covered thereby
(subject, in the case of Interim Financial Statements, to normal and recurring
year-end adjustments).
Section 11.13. Absence of Undisclosed Liabilities. There are no
liabilities or obligations of Compost or its Subsidiaries (whether absolute,
accrued, contingent or otherwise) that would be required to be reflected on a
balance sheet or in the footnotes thereto prepared in accordance with GAAP,
other than liabilities (a) reflected in or reserved against on the Financial
Statements or Interim Financial Statements or the notes thereto, (b) described
in Schedule 11.13 or Schedule 11.14 of the Disclosure Schedule or otherwise
disclosed in the Disclosure Documents or (c) incurred by Compost or any of its
Subsidiaries in the ordinary course of business subsequent to April 30, 1998.
Section 11.14. Absence of Certain Changes, Events and Conditions:
Conduct in the Ordinary Course. (a) Since April 30, 1998, except as disclosed in
Schedule 11.14 of the Disclosure Schedule, there has not been any change having
a Material Adverse Effect, with respect to Compost or any of its Subsidiaries
(including, without limitation, Miami and Bedminster). Except as disclosed in
Schedule 11.14 of the Disclosure Schedule, there are no conditions known to
Compost existing, with respect to the markets, proposed marketing plans,
facilities, capabilities or personnel of Compost or any of its Subsidiaries
(including, without limitation, Miami and Bedminster), that reasonably could be
expected to have a Material Adverse Effect on Compost or any of its Subsidiaries
(including, without limitation, Miami and Bedminster).
(b) Since April 30, 1998, Compost and the Subsidiaries have
been operated, consistent with funds made available to them under their
financing facilities, if any, only in the ordinary course and consistent with
past practice. As amplification and not in limitation of the foregoing, except
as disclosed in Schedule 11.14(b) of the Disclosure Schedule, neither Compost
nor any of its Subsidiaries (including, without limitation, Miami and
Bedminster) has, since April 30, 1998:
Page 44 of 107 Pages
(i) made any change in any method of accounting or accounting
practice or policy used by Compost or any Subsidiary, other than such
changes required by GAAP that are separately identified by Compost to
Lionhart, LHI and GEP in writing;
(ii) consistent with funds made available to it under its
financing facilities, if any, made any material changes in the
customary methods of operations of Compost or any Subsidiary, including
practices and policies relating to purchasing, inventory, marketing,
selling or pricing;
(iii) failed to maintain Compost's or any Subsidiary's
Tangible Personal Property in good repair, ordinary wear and tear
excepted;
(iv) redeemed any of Compost's or any Subsidiary's capital
stock or declared, made or paid any dividends or distributions (whether
in cash, securities or other property) to the holders of Compost's or
any Subsidiary's capital stock or otherwise other than regular
dividends paid by any Subsidiary in the ordinary course of business and
consistent with past practice;
(v) issued or sold any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same,
of, or any other interest in, Compost or any Subsidiary;
(vi) amended or restated Compost's or any Subsidiary's
Certificate of Incorporation or By-Laws;
(vii) been merged with, entered into a consolidation with or
acquired an interest of 5% or more in any Person, or acquired (by
purchase, merger, consolidation, stock acquisition or otherwise) a
substantial portion of the assets of any Person or any division or line
of business thereof, or otherwise acquired assets other than in the
ordinary course and in accordance with past practice;
(viii) permitted or allowed any of the assets or properties
(whether tangible or intangible) of Compost or any Subsidiary to the
subjected to any Encumbrance;
(ix) made any loan to, guaranteed any indebtedness of or
otherwise incurred any indebtedness on behalf of any Person;
(x) made any capital expenditure or commitment for any capital
expenditure in excess of $100,000 individually or $250,000 in the
aggregate;
(xi) entered into any agreement, arrangement or transaction
with any of its directors, officers, employees or shareholders (or with
any relative, beneficiary, spouse or Affiliate of such Person);
(xii) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 11.14(b), except for those
contemplated by this Agreement and/or the Definitive Supplemental
Documents;
(xiii) allowed any permit or Environmental Permit that was
issued or related to Compost or any Subsidiary, or that otherwise
relates to any Asset, to lapse or terminate, or failed to renew any
such Permit or Environmental Permit or any insurance policy that is
scheduled to terminate or expire within 45 calendar days of the Term
Loan Closing Date attributable to the Closing and the Ancillary
Transactions Closing.
(xiv) incurred any Indebtedness, or any other financial
obligations, liabilities or undertakings, in excess of $100,000
individually or $250,000 in the aggregate;
(xv) amended, modified or consented to the termination of any
Material Contract, or of any of Compost's or any Subsidiary's rights
thereunder;
(xvi) disclosed any secret or confidential Intellectual
Property (except by way of issuance of a patent) or permitted to lapse
or go abandoned any Intellectual Property (or any registration or grant
thereof or any application
Page 45 of 107 Pages
relating thereto) to which, or under which, Compost or any Subsidiary
has any right, title, interest or license;
(xvii) failed to pay any creditor any material amount owned to
any holder of any debenture, note or other financial obligation of
Compost (and/or any Subsidiary), or any other creditor, when lawfully
due;
(xviii) sold, transferred, leased, subleased, licensed or
otherwise disposed of any properties or assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible
assets), other than a sale in the ordinary course of business
consistent with past practice;
(xix) (A) granted any increase, or announced any increase, in
the wages, salaries, compensation, bonuses, incentives, pension or
other benefits payable by Compost or any Subsidiary to any of its
employees, including, without limitation, any increase or change
pursuant to any Plan or (B) established or increased or promised to
increase any benefits under any Plan, in either case except as required
by law or any collective bargaining agreement and involving ordinary
increases consistent with the past practices of Compost or such
Subsidiary;
(xx) written down or written up (or failed to write down or
write up in accordance with GAAP consistent with past practice) the
value of any inventories or receivables or revalued any assets of
Compost or any Subsidiary other than in the ordinary course of business
consistent with past practice and in accordance with GAAP;
(xxi) amended, terminated, canceled or compromised any
material claims of Compost or any Subsidiary or waived any other rights
of substantial value to Compost or and Subsidiary; or
(xxii) suffered any Material Adverse Effect.
Section 11.15. Employee Benefit Matters. (a) Plans and Material
Documents. Schedule 11.15(a) of the Disclosure Schedule lists all employee
benefit plans (as defined under Section 3(3) or ERISA) and all bonus, stock
option, stock purchase, restricted stock, incentive, deferred compensation,
retiree medical or life insurance, supplemental retirement, severance or other
benefit plans, programs, or arrangements, and all employment, termination,
severance or other contracts or agreements, whether legally enforceable or not,
to which Compost or any Subsidiary is a party, with respect to which Compost or
any Subsidiary has any obligation or which are maintained, contributed to or
sponsored by Compost or any Subsidiary for the benefit of any current or former
employee, officer or director of Compost or any Subsidiary (collectively, the
"Plan"). Compost has furnished the Purchaser with a complete and accurate copy
of each Plan and a complete and accurate copy of the following: (i) each trust
or other funding arrangement, (ii) each summary plan description and summary of
material modifications, (iii) the moist recently filed IRS form 5500, (iv) the
most recently received IRS determination letter for each such Plan, and (v) the
most recently prepared actuarial report and financial statement in connection
with each such Plan, if applicable. Except as set forth in Schedule 11.15(a) of
the Disclosure Schedule, Compost or any Subsidiary does not have any express or
implied commitment, (i) to create, incur liability with respect to or cause to
exist any other employee benefit plan, program or arrangement, (ii) to enter
into any contract or agreement to provide compensation or benefits to any
individual or (iii) to modify, change or terminate any Plan (other than with
respect to a modification, change or termination required by ERISA or the Code),
that would impose any material additional cost on Compost or any Subsidiary.
(b) Absence of Certain Types of Plans. None of the Plan is a
multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA)
(a "Multiemployer Plan"), a single employer pension plan (within the meaning of
Section 4001(a)(15) of ERISA) or a plan intended to be qualified under Section
401(a) or 401(k) of the Code. None of the Plans provides for the payment of
separation, severance, termination or similar-type benefits to any Person or
obligates Compost or any Subsidiary to pay separation, severance, termination or
similar-type benefits solely as a result of any transaction contemplated by this
Agreement or as a result of a "change in control" of Compost, within the meaning
of such term under Section 280G of the Code. None of the Plans provides for or
promises retiree medical, disability or life insurance benefits to any current
or former employee, officer or director of Compost or any Subsidiary except to
the extent required by law. Each of the Plans is subject only to the laws of the
United States or a political subdivision thereof.
(c) Compliance with Applicable Law. Each Plan is now and always has
been operated in all material respects in accordance with the requirements of
all applicable law, including, without limitation, ERISA and the Code, and
Compost and any Subsidiary and each of their officers, employees and agents who
are "fiduciaries" (within the meaning of Section 3(21) of ERISA) with respect to
the Plans have always acted in accordance with the provisions of all applicable
law, including, without
Page 46 of 107 Pages
limitation, ERISA and the Code; and Compost or any other Subsidiary has
performed all material obligations required to be performed by it under, is not
any respect in material default under or in material violation of, and has no
knowledge of any material default with regard to or material violation by any
party to any Plan. No material legal action, suit or claim is pending or
threatened with respect to any Plan (other than claims for benefits in the
ordinary course) and, to the knowledge of Compost, no fact or event exists that
could reasonably be expected to give rise to any such action, suit or claim.
(d) Absence of Certain Liabilities and Events. There has been no
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Plan that could give rise to any material
liability being imposed on Compost or any Subsidiary. Compost or any Subsidiary
has not incurred any material liability for any penalty or tax arising under
Section 4971, 4972, 4980B or 6652 of the Code or any material liability under
Section 502 or ERISA, and no fact or event exists which could give rise to any
such material liability. Except as set forth in Schedule 3.12(d) of the
Disclosure Schedule, Compost or any Subsidiary has not incurred any material
liability under, arising out of or by operation of Title IV or ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation arising in
the ordinary course), including, without limitation, any material liability in
connection with (i) the termination or reorganization of any employee benefit
plan subject to Title IV of ERISA or (ii) the withdrawal from any Multiemployer
Plan or any single employer plan and, to the best knowledge of Compost after due
inquiry, no fact or event exists which could reasonably be expected to give rise
to any such liability. No complete or partial termination has occurred within
the five years preceding the date hereof with respect to any Plan.
(e) Plan Contributions and Funding. All Contributions, premiums or
payments required to be made with respect to any Plan on or before the date of
this Agreement have been made on or before their due dates. All such
contributions have been fully deducted for income tax purposes (to the extend,
deductible) and no such deduction has been challenged or disallowed by any
government entity and no fact or event exists which could reasonably be expected
to give rise to any such challenge or disallowance.
Section 11.16. Real Property. (a) Schedule 11.16(a) of the Disclosure
Schedule contains a list of all of the Owned Real Property as of the date of
such Schedule. Compost or any Subsidiary, as the cause may be, has valid fee
interests in all of its Owned Real Property and good and marketable title
thereto, and such Owned Real Property is owned by Compost or such Subsidiary
free and clear of all Encumbrances except (i) as disclosed in writing (under
Schedule 11.16(a) of the Disclosure Schedule) to Lionhart, LHI and GEP, and (ii)
Encumbrances for current taxes not yet due and payable or being contested in
good faith by Compost and/or any Subsidiary in appropriate governmental,
regulatory or administrative proceedings.
(b) Schedule 11.16(b) of the Disclosure Schedule contains a list of all
of the Leased Real Property as of the date of such Schedule and a list of all
leases and subleases pertaining to such Leased Property including all agreements
in which Compost or any Subsidiary has an option to purchase or Lease any real
property. Except as described in Schedule 11.16(b) of the Disclosure Schedule
(i) there is no material violation of any law, rule or regulation by Compost or
any Subsidiary, as the case may be, or known to Compost or any Subsidiary, as
the case may be, relating to any of the Leased Real Property, (ii) Compost or
any Subsidiary, as the case may be, is in peaceful and undisturbed possession of
the Leased Real Property, and so long as the lease remains in effect, there are
no contractual or legal restrictions that preclude or restrict the ability to
use the premises for the purposes for which they are currently being used and
(iii) Compost or any Subsidiary, as the case may be, has not leased or subleased
any parcel or any portion of any parcel of Leased Real Property to any other
Person, nor has Compost or any Subsidiary assigned its interest under any lease
or sublease to any third party.
(c) Each of the leases and subleases referred to in Section 11.16(b) is
in full force and effect and constitutes a legal, valid and binding obligation
of the respective parties thereto, and Compost or any Subsidiary, as the case
may be, is not in material default or breach of (with or without the giving of
notice or the passage of time) any such leases or subleases. To the knowledge of
Compost, no third party is in material breach of any of such leases or
subleases.
Section 11.17. Tangible Personal Property. (a) Schedule 11.17(a) of the
Disclosure Schedule contains a list of all Tangible Personal Property valued at
$5,000 or more used in the Business or owned or leased by Compost and its
Subsidiaries as of the date of the Disclosure Schedule. Except for changes made
in the ordinary course of business since April 30, 1998, Compost or any such
Subsidiary owns such Tangible Personal Property reflected on the Financial
Statements, free and clear of all Encumbrances.
(b) Schedule 11.17(b) of the Disclosure Schedule contains a list, as of
the date of such Schedule, of all leased
Page 47 of 107 Pages
Tangible Personal Property requiring lease payments of $25,000 or more per year
leased by Compost and its Subsidiaries. Except for changes made in the ordinary
course of business since April 30, 1998, as would not materially adversely
affect the present use of such leased Tangible Personal Property or as would not
have a Material Adverse Effect, with respect to each such lease: (i) such lease
is in full force and effect and is a legal, valid and binding obligation of
Compost or the Subsidiary party thereto, and is enforceable by Compost or such
Subsidiary in accordance with its terms; (ii) Compost or such Subsidiary is in
peaceful and undisturbed possession of the Tangible Personal Property subject to
such lease; and, (iii) there has been no notice of default under any lease
received by Compost or such Subsidiary that is still in effect, none of Compost
or any Subsidiary is in material breach or default of any such lease, and no
event has occurred that, with a notice or lapse or time or both, would
constitute such a material default or permit the termination, modification or
acceleration of such lease.
Section 11.18. Intellectual Property. (a) Schedule 11.18(a)(i) of the
Disclosure Schedule sets forth a true and complete list and a brief description,
including a complete identification of each patent and patent application and
each trademark registration or application for trademark registration thereof,
of all Owned Intellectual Property (except unregistered copyrights), and
Schedule 11.18(a)(ii) of the Disclosure Schedule sets forth, a true and complete
list and a brief description, including a description of any license or
sublicense thereof, of all Licensed Intellectual Property. Except as otherwise
described in Schedule 11.18(a)(i) of the Disclosure Schedule, in each case where
a trademark registration or patent or application for trademark, registration or
patent listed is held by assignment, the assignment has been dully recorded with
the state or national Trademark Office from which the original trademark
registration issued or before which the application for trademark registration
is pending, or the assignment has been duly recorded in the national or
international Patent Office from which the original patent issued or before
which the application for patent is pending. To the best knowledge of Compost
after due inquiry, the rights of Compost or any Subsidiary, as the case may be,
in or to such Intellectual Property do not conflict with or infringe on the
rights of any other Person, and none of Compost or any Subsidiary has received
any claim or written notice from any Person to such effect.
(b) (i) All the Owned Intellectual Property is owned by Compost or a
Subsidiary, as the case may be, free and clear of any Encumbrance and Compost or
such Subsidiary, as the case may be holds the entire right, title, and interest
in and to same, and (ii) no claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before a Governmental Authority has been made
or asserted or is pending (or, to the best knowledge of Compost after due
inquiry, threatened) against Compost or any Subsidiary either (A) based upon, or
challenging or seeking to deny or restrict the use by Compost or any Subsidiary
of, any of the Owned Intellectual Property or (B) alleging that any services
provided, or products manufactured or sold by Compost or any Subsidiary are
being provided, manufactured or sold in violation of any rights of any Person.
To the best knowledge of Compost, Miami and Bedminster, and after due inquiry,
no Person is using any trademarks, service marks, trade names or similar
property that is confusingly similar to the Owned Intellectual Property, and no
Person is making, using, selling, publishing or copying anything that infringes
upon the Owned Intellectual Property or upon the rights of Compost or any
Subsidiary therein. None of Compost or any Subsidiary has granted any license or
other right to any other Person with respect to the Owned Intellectual Property.
The consummation of the transactions contemplated by this Agreement will not
result in the termination or impairment of any of the Owned Intellectual
Property or Licensed Intellectual Property.
(c) Neither Compost nor any Subsidiary, nor any operation of the
business of Compost or any Subsidiary, infringes or has infringed upon any
patent, trademark, service xxxx, copyright or similar right of any Person, nor
has Compost or any Subsidiary misappropriated or wrongfully disclosed any trade
secret, proprietary right or similar right of any Person.
(d) To the best knowledge of Compost, Miami and Bedminster, after due
inquiry, no Person has made any claim or allegation that any of Compost or any
Subsidiary infringes any patent, trademark, service work, copyright or similar
right of any Person or has misappropriated or wrongfully disclosed any trade
secret, proprietary right or similar right of any Person.
(e) With respect to all Licensed Intellectual Property and Owned
Intellectual Property, to the best knowledge of Compost, Miami and Bedminster,
and after due inquiry, the registered user provisions of all nations requiring
such registrations have been complied with in all material respects. With
respect to all owned Intellectual Property and Licensed Property, all required
maintenance fees or annuities have been paid in a timely manner.
(f) Compost, Miami and Bedminster have, or have caused to be, delivered
to Lionhart, LHI and GEP, correct and complete copies of all the material
licenses and sublicenses for all Licensed Intellectual Property referred to in
Section 11.18(a) hereof and any and all ancillary documents pertaining thereto
(including but not limited to, all amendments, consents and evidence of
commencement dates and expiration dates). With respect to each of such license
and sublicenses: (i) such license
Page 48 of 107 Pages
or sublicense, together with all ancillary documents delivered pursuant to the
first sentence of this Section 11.18(f), is valid and binding and in full force
and effect and represents the entire agreement between the respective licensor
and licensee with respect to the subject matter of such license or sublicense;
(ii) except as otherwise set forth in Schedule 11.18(a)(ii) of the Disclosure
Schedule, such license or sublicense will not cease to be valid and binding and
in full force and effect on terms identical to those currently in effect as a
result of the consummation of the transactions contemplated by this Agreement,
nor will the consummation of the transactions contemplated by this Agreement
constitute a breach or default under such license or sublicense or otherwise
give the licensor or sublicensor a right to terminate such license or
sublicense; (iii) except as otherwise disclosed in Schedule 11.18(a)(ii) of the
Disclosure Schedule, with respect to each such license or sublicense: (A) none
of Compost or any Subsidiary has received any notice or threat of termination or
cancellation under such license or sublicense and no licensor or sublicensor has
any right of termination or cancellation under such license or sublicense except
in connection with the default of Compost or any such Subsidiary thereunder, (B)
none of Compost or any Subsidiary has received any notice of a breach of or
default under such license or sublicense, which breach or default has not been
cured, and (C) none of Compost or any such Subsidiary has granted to any other
Person any rights, adverse or otherwise, under such license or sublicense; (iv)
none of Compost, any Subsidiary or (to the best knowledge of Compost, Miami and
Bedminster, and after due inquiry) any other party to such license or sublicense
is in breach or default in any material respect, and to the best knowledge of
Compost, Miami and Bedminster, after due inquiry, no event has occurred that,
with notice or lapse of time would constitute such a breach or default or permit
termination, modification or acceleration under such license or sublicense; (v)
no claim, action, suit, arbitration, inquiry, proceeding or investigation by or
before any Governmental Authority has been made or asserted or is pending (or,
to the best knowledge of Compost, Miami and Bedminster, after due inquiry,
threatened) against Compost or any Subsidiary either (A) based upon or
challenging or seeking to deny or restrict the use by Compost or any such
Subsidiary of any of the Licensed Intellectual Property or (B) alleging that any
Licensed Intellectual Property is being licensed, sublicensed or used in
violation of any patents or trademarks or in violation of any other rights of
any Person; and, (vi) to the best knowledge of Compost, Miami and Bedminster,
after due inquiry, no Person is using any trademarks, service marks, trade names
or similar property that is confusingly similar to the Licensed Intellectual
Property, and no Person is making, using selling, publishing or copying anything
that infringes upon the Licensed intellectual Property or upon the rights of
Compost or any Subsidiary thereto.
(g) Compost, Miami and Bedminster are not aware of anything or any
reason that would prevent any pending applications to register trademarks,
service marks or copyrights or any pending patent applications from being
granted.
(h) The Intellectual Property described in Schedules 11.18(a)(i) and
(ii) of the Disclosure Schedule constitutes all the Intellectual Property used
or held or intended to be used by Compost or any Subsidiary and constitutes all
such Intellectual Property necessary for the conduct of the Business, and there
are no other items of Intellectual Property that are material to Compost or any
Subsidiary or the Business.
Section 11.19. Environmental Matters, Risks and Factors. Except as set
forth expressly on Schedule 11.19 of the Disclosure Schedule:
(a) All Owned Real Property, and all other facilities and property
presently owned or leased by Compost or any of its Subsidiaries are, and
continue to be, owned and operated by Compost and its Subsidiaries in material
compliance with all applicable Environmental Laws. All past noncompliance, if
any, with Environmental Laws or Environmental Permits, by or on the part of
Compost, Miami and/or Bedminster, or any other Subsidiaries or Affiliates of
Compost, has been resolved without any material pending, ongoing or future
obligation, cost or liability, and except as to Environmental Permits not yet
obtained for facilities under development or proposed for acquisition, there is
no requirement proposed for adoption or implementation under any Environmental
Law or Environmental Permit that is reasonably expected to be material to
Compost or any Subsidiary or the Business. To the best knowledge and information
of Compost, Miami and Bedminster, and the other Subsidiaries and Affiliates of
Compost, and after due inquiry and investigation, all past noncompliance, if
any, with Environmental Laws or Environmental Permits, by or on the part of any
Person (other than Compost, Miami and/or Bedminster, or any other Subsidiaries
or Affiliates of Compost), has been resolved without any material pending,
ongoing or future obligation, cost or liability, and except as to Environmental
Permits not yet obtained for facilities under development or proposed for
acquisition, there is no requirement proposed for adoption or implementation
under any Environmental Law or Environmental Permit that is reasonably expected
to be material to Compost or any Subsidiary or the Business.
(b) None of Compost or any of its Subsidiaries has received notice of
any pending or threatened claims, complaints or requests for information with
respect to any alleged violation of any Environmental Laws, and there are no
circumstances
Page 49 of 107 Pages
that can reasonably be expected to form the basis of any such environmental
claim, complaint or request.
(c) There have been no material releases, as defined under any
Environmental Laws, of Hazardous Substances that give rise to necessary costs of
response at, on, from or under any property now or previously owned or leased by
Compost or any of its Subsidiaries during the period in which any such property
was owned or leased by Compost or any Subsidiary.
(d) Except as to Environmental Permits not yet obtained for facilities
under development or proposed for acquisition, Compost and its Subsidiaries have
been issued and are in material compliance with all Environmental Permits,
orders, administrative consent orders and any other authorization, approvals or
consents relating to Environmental Laws or Hazardous Substances material to the
operation of their businesses. All such Environmental Permits which are required
for the operation of the Business of Miami, and which have been obtained and
which have not been obtained (but which are necessary to be obtained to conduct
the Business of Miami) are set forth in Schedule 11.19(d) of the Disclosure
Schedule.
(e) None of Compost or any of its Subsidiaries has received notice that
property presently owned or leased, or previously owned or leased, by Compost or
any of its Subsidiaries is listed or proposed for listing in the National
Priorities List created pursuant to CERCLA or on the CERCLIS or any similar
state list of sites requiring investigation or cleanup.
(f) Except for the usual and customary and ordinary course of business,
consistent with past practice, of and by Environmental Protection and
Improvement Company, Inc. ("EPIC"), a New Jersey corporation, which is a
Subsidiary of Compost, none of Compost or any of its Subsidiaries has
transported or arranged for the transportation of an Hazardous Substances to any
location that is listed on the National Priorities List or any similar state
list, nor has any of them received notice of pending or threatened claims as a
result of transporting or arranging to transport Hazardous Substances to any
location except insofar as such transportation or arrangement is not likely to
be material to Compost or any Subsidiary or the Business.
(g) To the best knowledge and information of Compost, Miami and
Bedminster, and all other Subsidiaries and/or Affiliates of Compost, after due
inquiry and investigation, and except as is not likely to be material to Compost
or any Subsidiary or the Business, there are no polychlorinated biphenyls (other
than those that may be contained in lighting ballasts or electrical transformers
that are labeled, operated and maintained in accordance with all Environmental
Laws) or asbestos-containing materials, in quantities prohibited under any
applicable Environmental Laws, present at any property now or previously owned
or leased by Compost or by any Subsidiary during the period in which any such
property was owned or leased by Compost or by a Subsidiary.
(h) To the best knowledge and information of Compost, Miami and
Bedminster, and all other Subsidiaries and/or Affiliates of Compost, after due
inquiry and investigation, none of Compost or any of its Subsidiaries has
received notice of pending or threatened claims against Compost or any of its
Subsidiaries arising out of any operations, action, inaction or status of any
previously divested property, whether or not the subject of any indemnity, under
any Environmental Laws or involving any Hazardous Substances.
(i) Compost, Miami and Bedminster have provided Lionhart, LHI and GEP
with copies of (a) any environmental assessment or audit reports or other
similar studies or analyses with respect to Compost and its Subsidiaries
relating to the Business and the Real Property, and (b) all insurance policies
issued at any time that may provide coverage to Compost or any Subsidiary or the
Business for environmental matters.
(j) Neither the execution of this Agreement and/or the Definitive
Supplemental Documents, nor the consummation of the transactions contemplated
under this Agreement and/or the Definitive Supplemental Documents, will require
any remedial action or notice to (by or on the part of Compost and/or Miami
and/or Bedminster) or consent of Governmental Authorities or third parties
pursuant to any applicable Environmental Law or Environmental Permit, or
otherwise, including, without limitation, the New Jersey Industrial Site
Recovery Act.
Section 11.20. Litigation. Schedule 11.20 of the Disclosure Schedule,
together with the Disclosure Documents, sets forth any pending or to the best
knowledge of Compost or any of its Subsidiaries after due inquiry, threatened
Actions by or against Compost or any Subsidiary or Affiliate before any
Governmental Authority, or to which any of the respective properties of Compost
or any Subsidiary or any Affiliate is or would be subject, except for Actions
known to the best knowledge of Compost after due inquiry by executives of
Compost relating to product warranty or safety claims, involving claims for
damages of not more than $20,000. Schedule 11.20 of the Disclosure Schedule,
together with the Disclosure Documents also
Page 50 of 107 Pages
indicates those Actions that (a) if adversely determined, could reasonably be
expected to have a Material Adverse Effect or (b) relate to, or could affect the
legality or validity of, this Agreement or the transactions contemplated hereby.
Except as set forth in the Disclosure Schedule and Disclosure Documents, there
are no material citations, fines or penalties heretofore asserted against
Compost or its Subsidiaries under any federal, state or local law that remain
unpaid or that otherwise bind the assets of Compost or its Subsidiaries.
Section 11.21. Insurance. (a) Schedule 11.21(a) of the Disclosure
Schedule sets forth the following information with respect to each insurance
policy (including policies providing property, casualty, liability, workers'
compensation, and bond and surety arrangements) under which Compost or any
Subsidiary has been an insured, a named insured or otherwise the principal
beneficiary of coverage at any time within the past three (3) years: (i) the
name, address and telephone number of the agent or broker; (ii) the name of the
insurer and the names of t he principal insured and each named insured; (iii)
the policy number and the period of coverage; (iv) the type, scope (including an
indication of whether the coverage was on a claims-made, occurrence or other
basis) and amount of coverage (including a description of how deductibles,
retentions and aggregates are calculated and operate); and, (v) the premium
charged for the policy, including, without limitation, a description of any
retroactive premium adjustments or other loss-sharing arrangements.
(b) With respect to each such insurance policy: (i) except for policies
that have expired under their terms in the ordinary course, it is in full force
and effect; (ii) neither Compost nor any Subsidiary is in breach or default
(including any breach or default with respect to the payment of premiums or the
giving of notice), and no event had occurred that, with notice or the lapse of
time, would constitute such a breach or default or permit termination or
modification, under the policy; (iii) no party to the policy has repudiated, or
given notice of an intent to repudiate, any provision thereof and (iv) to the
best knowledge of Compost after due inquiry, no insurer on the policy has been
declared insolvent or placed in receivership, conservatorship or liquidation or
currently has a rating of "B+" or below from A.M. Best & Co. or a claims paying
ability rating of "BBB" or below from Standard & Poor's, Inc.
(c) Schedule 11.21(c) of the Disclosure Schedule sets forth all risks
against which Compost or any Subsidiary is self-insured or that are covered
under any risk-retention program in which Compost or any Subsidiary
participates, together with details for the last five years (preceding the date
of the Disclosure Schedule) of Compost's and each Subsidiary's loss experience
with respect to such risks.
(d) Except as disclosed in Schedule 11.21(d) of the Disclosure Schedule
all material assets, properties and risks of Compost and each Subsidiary are,
and for the past five years have been, covered by valid and, except for policies
that have expired under their terms in the ordinary course, currently effective
insurance policies or binders of insurance (including, without limitation,
general liability insurance, property insurance and workers' compensation
insurance issued in favor of Compost or such Subsidiary, as the case may be, in
each case with responsible insurance companies, in such types and amounts and
covering such risks as are consistent with customary practices and standards of
companies engaged in businesses and operations similar to those of Compost or
such Subsidiary, as the case may be.
(e) At no time subsequent to April 30, 1995 has Compost or any
Subsidiary (i) been denied any insurance or indemnity bond coverage that it has
requested, (ii) made any material reduction in the scope or amount of its
insurance coverage or received notice from any of its insurance carriers that
any insurance premiums will be subject to increase in an amount materially
disproportionate to the amount of the increases with respect thereto (or with
respect to similar insurance) in prior years or that any insurance coverage will
not be available in the future substantially on the same terms as are now in
effect or (iii) suffered any extraordinary increase in premium for renewed
coverage. To the best knowledge of Compost after due inquiry, since April 30,
1995, no insurance carrier has canceled, failed to renew or materially reduced
and insurance coverage for Compost or any Subsidiary or given any notice or
other intention to cancel, not renew or reduce any such coverage.
(f) At the time of the Term Loan Closing and the Ancillary Transactions
Closing, all insurance policies currently in effect will be outstanding and duly
in force.
(g) To the best knowledge of Compost, Miami and Bedminster, after due
inquiry, no current insurance policy of Compost , Miami and/or Bedminster will
cease to be legal, valid, binding and enforceable in accordance with its terms
and in full force and effect on terms identical to those in effect as of the
date hereof as a result of the consummation of the transactions contemplated by
this Agreement.
Page 51 of 107 Pages
Section 11.22. Material Contracts. (a) Schedule 11.22(a) of the
Disclosure Schedule lists each of the following contracts and agreements
(including without limitation, oral agreements, and informal arrangements and/or
undertakings) of Compost and the Subsidiaries (including, without limitation,
Miami and Bedminster) (all such contracts, agreements, arrangements and
undertakings together with all contracts, agreements, leases and subleases
concerning the management or operation of any Real Property (including without
limitation, brokerage contracts) to which Compost or any Subsidiary (including,
without limitation, Miami and Bedminster) is a party and all agreements relating
to Intellectual Property, being "Material Contracts"):
(i) each such contract, agreement, arrangement or undertaking
for the purchase of inventory, spare parts, other materials or personal
property with any supplier or for the furnishing of services to Compost
or any Subsidiary (including, without limitation, Miami and/or
Bedminster) or otherwise related to their respective Business that (A)
is likely to pay or otherwise give consideration of more than $100,000
in the aggregate during the calendar year ended April 30, 1999, April
30, 2000 or April 30, 2001, or (B) is likely to pay or otherwise give
consideration of more than $100,000 in the aggregate over the remaining
term of such contract;
(ii) each such contract, agreement, arrangement or undertaking
for the sale of inventory or other personal property or for the
furnishing of services by Compost or any Subsidiary (including, without
limitation, Miami and/or Bedminster) that (A) is likely to pay or
otherwise give consideration of more than $100,000 in the aggregate
during the calendar year ended April 30, 1999, April 30, 2000 or April
30, 2001, or (B) is likely to pay or otherwise give consideration of
more than $100,000 in the aggregate over the remaining term of each
contract;
(iii) all broker, distributor, dealer, manufacture's
representative, franchise, agency, sales promotion, market research,
marketing, consulting and advertising contracts and other agreements to
which Compost or any Subsidiary (including, without limitation, Miami
and/or Bedminster) is a party;
(iv) all management contracts, agreements, arrangements and/or
undertakings, and contracts, agreements, arrangements or undertakings
with independent contractors or consultants (or similar arrangements)
to which Compost or any Subsidiary (including, without limitation,
Miami and/or Bedminster) is a party and that are not cancelable without
penalty or further payment and without more than 30 days' notice;
(v) all contracts, agreements, arrangements and/or
undertakings relating to Indebtedness of Compost or any Subsidiary
(including, without limitation, Miami and/or Bedminster);
(vi) all contracts, agreements, arrangements and/or
undertakings with any Governmental Authority to which Compost or any
Subsidiary (including, without limitation, Miami and/or Bedminster) is
a party;
(vii) all contracts, agreements, arrangements and/or
undertakings that limit or purport to limit the ability of Compost or
any Subsidiary (including, without limitation, Miami and/or Bedminster)
to compete in any line of business or with any Person or in any
geographic area or during any period of time;
(viii) all contracts, agreements, arrangements and/or
undertakings between or among Compost or any Subsidiary (including,
without limitation, Miami and/or Bedminster) or any Affiliate of
Compost; and
(ix) all other contracts, agreements, arrangements and/or
undertakings whether or not made in the ordinary course of business
that are material to Compost or any Subsidiary (including, without
limitation, Miami and/or Bedminster) or the conduct of their respective
Business, or the loss of which contract or agreement would have a
Material Adverse Effect.
For purposes of this Section 11.22 and Sections 11.16, 11.17 and 11.18
of this Agreement, the term "lease" shall include any and all leases, subleases,
sale/leaseback agreements or similar arrangements.
(b) Each Material Contract (i) is valid and binding on Compost and/or
any Subsidiary (including, without limitation, Miami and/or Bedminster), as
applicable, and, to the best knowledge of Compost, Miami and Bedminster, after
due inquiry, on the other parties thereto and is in full force and effect and
(ii) upon consummation of the transactions contemplated by this Agreement and/or
the Definitive Supplemental Documents (including, without limitation, the Credit
Documents), shall continue
Page 52 of 107 Pages
in full force and effect without penalty or other adverse consequence. Neither
Compost nor any Subsidiary (including, without limitation, Miami and/or
Bedminster) is in breach of, or default under, any Material Contract.
(c) There is no continuing act of nonperformance by any other party to
any Material Contract that constitutes a breach thereof or a default thereunder.
(d) Except as set forth in Schedule 11.22 of the Disclosure Schedule,
there is no contract, agreement, arrangement or other undertaking granting any
Person any preferential right to purchase, other than in the ordinary course of
business consistent with past practice, any of the properties or assets of
Compost or any Subsidiary (including, without limitation, Miami and/or
Bedminster).
Section 11.23. Licenses and Permits. Except as is disclosed and set
forth in Schedule 11.23 of the Disclosure Schedule, and/or except as would not
have a Material Adverse Effect, 1) Compost has all governmental licenses,
permits and other governmental authorizations and approvals required for the
conduct of its businesses as now conducted, and all such material licenses,
permits authorizations and approvals will remain in full force and effect
immediately following the consummation of the transactions hereunder; and 2)
Miami has all governmental licenses, permits and governmental authorizations and
approvals (i) for the conduct of its businesses as now conducted, and all such
material licenses, permits authorizations and approvals will remain in full
force and effect immediately following the consummation of the transactions
hereunder, and (ii) for the conduct of its businesses as contemplated currently
by Compost and/or Miami to be conducted by Miami at any time during the period
commencing on the Effective Date and continuing through April 30, 2005; and, 3)
Bedminster has all governmental licenses, permits and governmental
authorizations and approvals (i) for the conduct of its businesses as now
conducted, and all such material licenses, permits authorizations and approvals
will remain in full force and effect immediately following the consummation of
the transactions hereunder, and (ii) for the conduct of its businesses as
contemplated currently by Compost and/or Bedminster to be conducted by
Bedminster at any time during the period commencing on the Effective Date and
continuing through April 30, 2005.
Section 11.24. Labor Matters. Except for the agreements listed in
Schedule 11.24 of the Disclosure Schedule (the "Collective Bargaining
Agreements"), none of Compost or any Subsidiary (including, without limitation,
Miami and/or Bedminster) is a party to any currently effective collective
bargaining or other labor union contract. To the best knowledge of Compost after
due inquiry, except as disclosed on Schedule 11.24 of the Disclosure Schedule,
none of Compost or any Subsidiary (including, without limitation, Miami and/or
Bedminster) has materially breached or otherwise materially failed to comply
with any provision of any Collective Bargaining Agreement. To the best knowledge
of Compost, Miami and Bedminster, after due enquiry, and except as set forth in
Schedule 11.24 of the Disclosure Schedule, there are presently no (a) material
violations of any federal, state or local statutes laws, ordinances, rules,
regulations, orders or directives with respect to the employment of individuals
by, or the employment practices or work conditions of, or the terms and
conditions of employment, wages and hours of Compost or any Subsidiary
(including, without limitation, Miami and/or Bedminster); (b) unfair labor
practices or other unlawful employment practices and no charges of unfair labor
practices or other employee-related complaints pending or threatened against
Compost or any other Subsidiary (including, without limitation, Miami and/or
Bedminster) before the National Labor Relations Board, the Equal Employment
Opportunity Commission, the Occupational Safety and Health Review Commission,
the Department of Labor or any other federal, state, local or other governmental
authority; (c) strikes, picketing, slowdowns or work stoppages or organizational
attempts actually pending, threatened against or involving Compost or any
Subsidiary (including, without limitation, Miami and/or Bedminster); or (d)
material issues with respect to union representation pending or threatened with
respect to the employees of Compost or any Subsidiary (including, without
limitation, Miami and/or Bedminster).
Section 11.25. Taxes. (a) Except as set forth in Schedule 11.25 of the
Disclosure Schedule, (i)(A) all returns and reports in respect of Taxes ("Tax
Returns" or "Returns") required to be filed with respect to Compost and each
Subsidiary (including, without limitation, Miami and Bedminster) (including any
consolidated federal income Tax Returns and state and local income or franchise
Tax Returns that include Compost or any such Subsidiary on a consolidated,
combined or unitary ("combined") basis) have been timely filed, (B) all Taxes
shown to be payable on such Returns or otherwise due, and all assessments of Tax
made against Compost and each Subsidiary (including, without limitation, Miami
and Bedminster) with respect to such Returns, have been paid; (C) all such
Returns are true, correct and complete in all material respects; and (D) no
adjustment relating to such Returns has been proposed formally or informally by
any Tax authority and to the best knowledge of Compost or any Subsidiary
(including, without limitation, Miami and Bedminster), after due inquiry, no
basis exists for any such adjustment; (ii) there are no pending or, to the best
knowledge of Compost and/or any Subsidiary (including,
Page 53 of 107 Pages
without limitation, Miami and Bedminster), after due inquiry, threatened actions
or proceedings for the assessment or collection of Taxes against Compost or any
Subsidiary (including, without limitation, Miami and Bedminster); (iii) there
are no Tax liens on any assets of Compost or any Subsidiary (including, without
limitation, Miami and Bedminster); (iv) there are no outstanding waivers or
agreements extending the statute of limitations with respect to any Tax to which
Compost or any Subsidiary (including, without limitation, Miami and Bedminster)
may be subject; (v) there are no outstanding requests for information made by a
Tax authority to Compost or any Subsidiary (including, without limitation, Miami
and Bedminster); (vi) neither Compost nor any Subsidiary (including, without
limitation, Miami and Bedminster) has been advised by any Tax authority of any
proposed reassessments of the value (or other Tax base) of any property owned by
Compost or any Subsidiary (including, without limitation, Miami and Bedminster)
that could materially increase the amount of a property Tax to which Compost or
any Subsidiary (including, without limitation, Miami and Bedminster) would be
subject; (vii) Compost and any Subsidiary (including, without limitation, Miami
and Bedminster) have made all payments of estimated Taxes required to be made
under section 6655 of the Code and any comparable state or local Tax provision;
(viii) all Taxes required to be withheld, collected or deposited by or with
respect to Compost or any Subsidiary (including, without limitation, Miami and
Bedminster) have been timely withheld, collected or deposited, as the case may
be, and, to the extent required, have been paid to the relevant Tax authority;
(ix) neither Compost nor any Subsidiary (including, without limitation, Miami
and Bedminster) is doing business in, or engaged in a trade or business in, any
jurisdiction in which it has not filed all required Tax Returns; (x) Compost is
not, is not likely to be and has not been subject to Tax in any foreign
jurisdiction; and (xi) no Subsidiary organized under the laws of any foreign
jurisdiction is, is likely to be or has been engaged in the conduct of a trade
or business in the United States for purposes of section 964, 875, 882 or 884 of
the Code.
(b) (i) No consent under section 341(f) of the Code has been filed with
respect to Compost or any Subsidiary (including, without limitation, Miami and
Bedminster); (ii) at the Closing Date, Compost will not be a "United States real
property holding corporation" within the meaning of section 897(c)(2) of the
Code; (iii) neither Compost nor any Subsidiary (including, without limitation,
Miami and Bedminster) has income reportable for a taxable period ending after
the Closing Date, but attributable to a transaction (e.g., an installment sale)
occurring in, or a change in accounting method made for, a taxable period ending
on or prior to such date, that resulted in a deferred reporting of income from
such transaction or change; (iv) neither Compost nor any Subsidiary (including,
without limitation, Miami and Bedminster) has been a "passive foreign investment
company" within the meaning of section 1296 of the Code, and (v) neither Compost
nor any Subsidiary (including, without limitation, Miami and Bedminster) has
been, at any time after April 30, 1995, a member of any partnership or joint
venture or the holder of a beneficial interest in any trust for any period for
which the statute of limitations for Tax has not expired.
(c) Schedule 11.25(c) of the Disclosure Schedule (i) lists by type of
income, franchise and other material Tax Returns or extensions thereof (federal,
state, local, and foreign) filed with respect to each of Compost and any
Subsidiary (including, without limitation, Miami and Bedminster) for taxable
periods ended on or after April 30, 1995; (ii) indicates for which jurisdictions
Returns have been filed on a combined basis for the taxable period ended on or
after April 30, 1995, and the companies joining is such Returns; (iii) indicates
the most recent income, franchise, or other material Tax Returns for each
relevant jurisdiction for which an audit has been completed or the statute of
limitations has lapsed, and (iv) indicates all Tax Returns that currently are
the subject of an audit.
(d) Schedule 11.25(d) of the Disclosure Schedule lists the amount and
expiration dates of any net operating loss, net capital loss, unused business
credit, unused foreign tax credit or excess charitable contribution allocable to
Compost and each Subsidiary (including, without limitation, Miami and
Bedminster) as of and after April 30, 1996.
(e) Except as set forth on Schedule 11.25(e) of the Disclosure
Schedule, reserves and allowances have been provided on the Financial Statements
and the Interim Financial Statements that are adequate to satisfy all
Liabilities for Taxes relating to Compost and any Subsidiary (including, without
limitation, Miami and Bedminster) for periods through the date of such financial
statements.
(f) Compost, Miami and Bedminster have delivered or made available to
Lionhart, LHI and GEP correct and complete copies of all federal, state and
local Tax Returns of Compost or extensions thereof and any Subsidiary
(including, without limitation, Miami and Bedminster) for periods ending on or
after April 30, 1995, and correct and complete copies (or summaries) of all
examination reports, correspondence with Tax authorities, statements of
deficiencies assessed against or agreed to by, Compost or any Subsidiary
(including, without limitation, Miami and Bedminster) since April 30, 1995, and
correct and complete copies of any formal or informal tax sharing arrangement to
which Compost or any Subsidiary (including,
Page 54 of 107 Pages
without limitation, Miami and Bedminster) is a party.
Section 11.26. Miami Project-Specific Representations. Without limiting
the generality of any representation and/or warranty that is set forth in
Article XI of this Agreement, Compost and Miami and Bedminster, on a joint and
several basis, each hereby represent and warrant to Lionhart, LHI and GEP, as
follows:
11.26.01. Specific Definitions. The following additional terms
shall have the following meanings, definitions and denotations, for
purposes of this Agreement (including, particularly, this Section
11.26), as follows:
(a) Miami Project. The term "Miami Project" is and
shall mean the "Miami Recycling and Composting Facility"
("MRCF"), a development stage enclosed organic material
recycling compost manufacturing plant, as is described
generally in (i) the "Executive Summary" ("Summary"),
including particularly pages 52-53 of such Summary, dated on
or about or as of July 30, 1998, that was disclosed and
delivered by Compost and Miami to Lionhart, LHI and/or GEP, on
or about August 8, 1998, and which is hereby incorporated by
reference, a copy of which is set forth in Appendix II-Item 1,
(ii) the "Design Report," prepared by Black & Xxxxxx, for
Miami, dated in or about June 1998, that is set forth in
Volume VI-Item 23 of the 8/14/98 Compost/Miami Disclosure (as
that term is defined under, and as part of, the Miami Project
Disclosures, as defined and described under Section
11.26.01(m) of this Agreement), and, (iii) the "Miami Project
Recap" ("Miami Project Recap"), as that term is defined under
Section 11.26.01(c) of this Agreement, pursuant to such
Summary and Miami Project Recap of which: 1) the Miami Project
is being developed by Compost and Miami, through Miami, on the
Miami Site, and upon which Compost is developing, and will
construct, manage, own and operate, through Miami, on the
Miami Site, the MRCF (i.e., an enclosed organic material
recycling compost manufacturing plant).
(b) Miami Project Permits. The term "Miami Project
Permits" is and shall mean the Current Permits (as that term
is defined under Section 11.26.01(b)(1) hereinbelow) and the
Supplemental Prospective Permits (as that term is defined
under Section 11.26.01(b)(2) hereinbelow), for and with
respect to the Miami Project, as follows:
(1) Current Permits. The "Current Permits"
shall mean those permits that are identified or
referenced under Section 11.26.01(b)(1)(A) and
Section 11.26.01(b)(1)(B), as follows:
(A) Miami has applied for and holds,
and the applicable Governmental Authorities
have approved and issued to Miami, the
following permits, approvals, licenses
and/or authorities, for and with respect to
the Miami Project ("Current Permits"): (i) a
Solid Waste Recycling Facility permit from
the Florida Department of Environmental
Protection ("FDEP") that requires only minor
modification; (ii) an approval for the
issuance of a Class VI permit from the Dade
County Department of Environmental Resource
Management ("DERM") for storm water
management; (iii) a determination by the
Dade County Building and Planning Department
that the modified plan is "substantially in
accordance" with the original submission,
which will allow previous permits and
approvals regarding site configuration to
retain validity; and, (iv) all other Current
Permits that are identified, enumerated and
described in Schedule 11.26.01(b)(1)(A) of
the Disclosure Schedule; and,
(B) Bedminster has applied for and
holds, and the applicable Governmental
Authorities have approved and issued to
Bedminster, all permits, approvals, licenses
and/or authorities that are identified,
enumerated and described in Schedule
11.26.01(b)(1)(B) of the Disclosure Schedule
("Bedminster Current Permits").
(2) Supplemental Prospective Permits. The
"Supplemental Prospective Permits" shall mean those
permits that are identified or referenced under
Section 11.26.01(b)(2)(A) and Section
11.26.01(b)(2)(B), as follows:
(A) Miami has applied for and/or
will apply within a commercially reasonable
Page 55 of 107 Pages
period and in the usual and ordinary course
of business, and Compost and Miami
anticipate reasonably that the applicable
Governmental Authorities will approve and
issue to Miami, within a commercially
reasonable period and in the usual and
ordinary course of business, the following
permits, approvals, licenses and/or
authorities, for and with respect to the
Miami Project: (i) a Joint Air Permit from
FDEP and DERM; (ii) an approval for its
Wetlands Mitigation Plan from FDEP, DERM and
the U.S. Army Corps on Engineers; (iii) a
Management and Storage of Storm Water Permit
from FDEP; (iv) an approval for the railroad
crossing leading to the Miami Project site
from the Florida Department of
Transportation; (v) an approval for the
final Miami Project plat from the Dade
County Planning Department and the Dade
County Department of Public Works; and, (vi)
any other such permits, approvals, licenses
and/or authorities, from any such
Governmental Authorities, that are
contemplated or identified by Compost and
Miami in the "Miami Project Recap" (as that
term is defined under Section 11.26.01(c)
hereinbelow, and/or that are reasonably
necessary and legally required by Compost
and/or Miami as a precondition to
developing, constructing, managing, owning
and operating, through Miami, on the Miami
Site, the MRCF, as described generally under
the Summary and Miami Project Recap, as are
identified, enumerated and described in
Schedule 11.26.01(b)(2)(A) of the Disclosure
Schedule.
(B) Bedminster has applied for
and/or will apply within a commercially
reasonable period and in the usual and
ordinary course of business, and Compost,
Miami and Bedminster anticipate reasonably
that the applicable Governmental Authorities
will approve and issue to Bedminster, within
a commercially reasonable period and in the
usual and ordinary course of business, the
permits, approvals, licenses and/or
authorities, for and with respect to the
Miami Project that are identified,
enumerated and described in Schedule
11.26.01(b)(2)(B) of the Disclosure
Schedule.
(c) Miami Project Recap. The "Miami Project Recap" is
and shall mean a document, entitled "Miami Project Recap,"
dated as of June 13, 1998, that was disclosed and delivered by
Compost, Miami and Bedminster to Lionhart, LHI and GEP, on or
about August 8, 1998, which is hereby incorporated by
reference, as amended and updated by a document, entitled
"Miami Recycling and Composting Company, North Miami-Dade
Project Recap," dated on or about October 18, 1998, that was
disclosed and delivered by Compost, Miami and Bedminster, to
Lionhart, LHI and GEP, which is hereby incorporated by
reference, and copies of which are set forth in Appendix
II-Item 2.
(d) Miami Site. The term "Miami Site" is and shall
mean an approximate 40.14 acre parcel of real estate, that is
a that is located in Unincorporated-Miami-Dade County,
Florida, at or about the southeast quadrant of the
intersection of X.X. 000xx Xxxxxx Extension and the Florida
Turnpike Right of Way Line in Unincorporated Miami-Dade
County, Florida, and approximately eight (8) miles northwest
of the Miami Civic Center, in Unincorporated Miami-Dade
County, Florida, the legal description of which is set forth
in Appendix II-Item 3 to this Agreement.
(e) Put or Pay Contract. The term "Put or Pay
Contract" is and shall mean 1) the "Solid Waste Service
Agreement," dated as of October 29, 1993, by and between the
City of Miami, Florida, and Bedminster Seacor Services Miami
Corporation ("Solid Waste Service Agreement"), a copy of which
is set forth in Appendix II-Item 4, and which is hereby
incorporated by reference, 2) "Amendment One to the Solid
Waste Service Agreement," dated October 20, 1994, by and
between the City of Miami, Florida, and Bedminster Seacor
Services Miami Corporation ("First Amendment"), a copy of
which is set forth in Appendix II-Item 5, and which is hereby
incorporated by reference, 3) the "Restated Compost Recycling
Agreement," dated as of November 30, 1995, by and between the
City of Miami, Florida, and Bedminster Seacor Services Miami
Corporation ("Restated Compost Recycling Agreement"), a copy
of which is set forth in Appendix II-Item 6, and which is
hereby incorporated by reference, and, 4) the "Amendment to
the Restated Compost Recycling Agreement," dated and executed
as of April 17, 1998, by and between the City of Miami,
Florida, and Bedminster Seacor Services Miami Corporation
("Second Amendment"), a copy of which is set forth in Appendix
II-Item 7, and which is hereby incorporated by reference.
Page 56 of 107 Pages
(f) Miami Common Stock. The term "Miami Common Stock"
is and shall mean all shares of common stock, in and to Miami,
that are issued by Miami to Compost or Mestre, that are
presently outstanding and that are owned respectively by
Compost and Mestre.
(g) Miami-Xxxxxx Mortgage. The term "Miami-Xxxxxx
Mortgage" is and shall mean the Deed of Mortgage, dated March
29, 1996, which was executed and delivered by Miami to Xxxxxx
Mortgage Corporation ("Xxxxxx"), and which is recorded in the
Official Records Book 17182, at Page 0528, of the Public
Records of Dated County, Florida, and re-recorded in the
Official Records Book 17815, Page 26033, on October 6, 1997,
of the Public Records of Miami-Dade County, Florida. A copy of
the Miami-Xxxxxx Mortgage is set forth in Appendix II-Item 8.
(h) Miami-Xxxxxx Note. The term "Miami-Xxxxxx Note"
is and shall mean the "Promissory Note," dated March 29, 1996,
in the original principal amount of US $3,730,870.75, that was
executed and delivered by Miami to Xxxxxx. A copy of the
Miami-Xxxxxx Note is set forth in Appendix II-Item 9.
(i) Xxxxxx Complaint. The term "Xxxxxx Complaint" is
and shall mean the Complaint, that was filed by Xxxxxx against
Miami, and Miami-Dade County, Florida, in the Circuit Court of
the Eleventh Judicial Circuit of Florida, in and for
Miami-Dade County (General Jurisdiction Division) ("Court"),
Xxxx Xx. 00- 00000-XX-00 Xxx. 20, and a copy of which is set
forth in Appendix II-Item 10, and which is hereby incorporated
by reference.
(j) Miami Complaint/Miami Claim. The term "Miami
Complaint" is and shall mean the Complaint, that was filed by
Bedminster, and against the City of Miami, in the Circuit
Court of the Eleventh Judicial Circuit of Florida, in and for
Miami-Dade County (General Jurisdiction Division) ("Court"),
Case No. 98- 20458 CA32, on or about September 4, 1998, and a
copy of which is set forth in Appendix II-Item 11, and which
is hereby incorporated by reference. The term "Miami Claim" is
and shall mean the claims of Compost, Miami and Bedminster
against the City of Miami, that relate to or arise from the
Put or Pay Contract and/or the Miami Project, whether or not
asserted in the Miami Complaint.
(k) Xxxxxx Mortgage Extension. The term "Xxxxxx
Mortgage Extension" is and shall mean the "Mortgage
Modification and Extension Agreement," dated April 24, 1998,
by and between Miami and Xxxxxx, which is hereby incorporated
by reference, and a copy of which is set forth in Appendix
II-Item 12.
(l) Miami Site Appraisal Report. The term "Miami Site
Appraisal Report" is and shall mean 1) the "Appraisal Report,"
dated on or about May 20, 1998, and prepared by Appraisal and
Real Estate Economics Associates Inc., for Compost, for and
with respect to the Miami Site, a copy of which is set forth
in Appendix II-Item 13, and which is hereby incorporated by
reference; and, 2) a letter, from Xxxxx & Heath, Inc., to
Compost, dated on and as of June 13, 1998, with respect to the
Miami Site and the above-referenced "Appraisal Report," a copy
of which is set forth in Appendix II-Item 14; and, 3) the
"No-Change Appraisal Letter," dated on or about the Closing
Date, for and with respect to (i) the above-referenced
Appraisal Report, as prepared and issued by Appraisal and Real
Estate Economics Associates Inc., and (ii) the letter, as
prepared and issued by Xxxxx & Xxxxx, Inc., as contemplated
under Section 13.03.01(I), Section 13.03.02(I) and Section
13.03.03(N) of this Agreement.
(m) Miami Project Disclosures. The term "Miami
Project Disclosures" is and shall mean the following:
(1) All reports, memoranda, correspondence
and all other documents that are compiled and set
forth in a notebook, entitled "Miami Recycling and
Composting Company Pertinent Documentation"
(including, without limitation, the Miami Project
Recap), that was compiled by Compost and Miami on or
about August 7, 1998, and that was disclosed and
delivered by Compost and Miami to Lionhart, LHI
and/or GEP on or about August 8, 1998, which is
hereby incorporated by reference; and,
(2) All reports, memoranda, correspondence
and all other documents that are compiled
Page 57 of 107 Pages
and included with an item of correspondence, from
Xxxxxxxx X. Xxxxx, Esq., to Xxxxxxx X. Xxxxxxx, Esq.,
dated August 7, 1998, that was and were disclosed and
delivered by Compost and Miami, by Xxxxxxxx X. Xxxxx,
Esq., to Lionhart, LHI and/or GEP, via Xxxxxxx X.
Xxxxxxx, Esq., on or about August 8, 1998, which is
hereby incorporated by reference; and,
(3) All reports, memoranda, correspondence
and all other documents that are compiled and
included with an item of correspondence, from
Xxxxxxxx X. Xxxxx, Esq., to Xxxxxxx X. Xxxxxxx, Esq.,
dated August 4, 1998, that was disclosed and
delivered by Compost and Miami, by Xxxxxxxx X. Xxxxx,
Esq., to Lionhart, LHI and/or GEP, via Xxxxxxx X.
Xxxxxxx, Esq., on or about August 15, 1998, which is
hereby incorporated by reference; and,
(4) The Summary, the Miami Project Recap,
the Miami Project Permits (including the Current
Permits and the Supplemental Prospective Permits),
the Put or Pay Contract (including the Solid Waste
Service Agreement, First Amendment, Restated Compost
Recycling Agreement and the Second Amendment), the
Miami Common Stock, the Miami-Xxxxxx Mortgage, the
Miami-Xxxxxx Note, the Xxxxxx Mortgage Extension and
the Xxxxxx Complaint, all of which are hereby
incorporated by reference; and,
(5) Compost's "SEC Reports" (as that term is
defined and described under Section 11.11 of this
Agreement), which are hereby incorporated by
reference; and,
(6) The Financial Statements and Interim
Financial Statements (as those terms are defined and
described under Section 11.12 of this Agreement),
which are hereby incorporated by reference;
and,
(8) The Miami Complaint and the Xxxxxx
Complaint, both of which are hereby incorporated by
reference; and,
(9) All reports, memoranda, correspondence
and all other documents that are set forth, or
otherwise compiled, in and with the Disclosure
Schedule and/or the Disclosure Documents; and,
(10) The Tax Returns (as that term is
defined under Section 11.25 of this Agreement), which
are hereby incorporated by reference; and,
(11) All reports, memoranda, correspondence
and all other documents that were compiled by Compost
and Miami, in Volumes 1, 2, 3, 4, 5 and 6, each such
Volume 1-6 of which is entitled "Response to Due
Diligence Prepared for Lionhart Global Appreciation
Fund, Ltd., by Compost America Holding Company"
("8/14/98 Compost/Miami Disclosure"), and that were
disclosed and delivered by Compost and Miami to
Lionhart, LHI and/or GEP, via Xxxxxxx X. Xxxxxxx,
Esq., on or about August 14, 1998, in response to a
Memorandum, from Xxxxxxx X. Xxxxxxx, Esq., to
Xxxxxxxx X. Xxxxx, Esq., dated August 10, 1998,
entitled "LGAF/CACH Deal-Due Diligence Protocol," all
of which are hereby incorporated by reference; and,
(12) The "General Company (Compost)
Questionnaire" and the "Officer, Director and
Management Certificates," that are referred to under
Module I-Items 1.1 and 1.2, of the above-referenced
LGAF/CACH Deal-Due Diligence Protocol, and that were
disclosed and delivered by Compost, Miami and
Bedminster to Lionhart, LHI and/or GEP on or about
October 30, 1998, and which are hereby incorporated
by reference; and,
(13) The "General Company (Compost)
Questionnaire" and the "Officer, Director and
Management Certificates," that are referred to under
Module II-Items 2.1 and 2.2, of the above-referenced
LGAF/CACH Deal-Due Diligence Protocol, and that were
disclosed and delivered by Compost, Miami and
Bedminster to Lionhart, LHI and/or GEP on or about
October 30, 1998, and which are hereby incorporated
by reference; and,
Page 58 of 107 Pages
(14) All disclosures made during the
"Personal Interview of Compost Management, Auditors
and Counsel," that is referred to under Module I,
Item 1.1, of the above-referenced LGAF/CACH Deal-Due
Diligence Protocol, on October 28, 1998, which are
hereby incorporated by reference, and all disclosures
made during the "Personal Interview of Miami
Management, Auditors and Counsel," that is referred
to under Module II, Item 2.1, of the above-referenced
LGAF/CACH Deal-Due Diligence Protocol, on October 28,
1998, which are hereby incorporated by reference;
and,
(15) The Miami Site Appraisal Report; the
Miami Balance Sheet; the Bedminster Balance Sheet;
and,
(16) The "Phase I Report," consisting of (i)
the Environmental Audit Phase I for Xxxxxx Vacant
Land II, dated on or about January 12, 1995, and
issued by Biscayne Engineering Company, Inc., to
Bedminster Bioconversion Corporation, for and with
respect to the Miami Site, (ii) the Phase I
Environmental Report, dated June 22, 1998, and
provided by AB2MT Consultants, Inc., to Compost, for
and with respect to the Miami Site, and (iii) the
"No-Change Phase I Report Letter," dated on or about
the Closing Date, for and with respect to the Miami
Site, as contemplated under Section 13.03.01(I),
Section 13.03.02(I) and Section 13.03.03(N) of this
Agreement; and,
(17) The "Miami Site Boundary Survey," as
contemplated under Section 13.03.01(I), Section
13.03.02(I) and Section 13.03.03(N) of this
Agreement, for and with respect to the Miami Site,
and that is dated on or about the Closing Date, and
that was prepared and issued on or about the Closing
Date by Xxxxxx Xxxxxxx & Associates, to and for
Lionhart, LHI and GEP, and all other surveys of or
with respect to the Miami Site that have been
provided and disclosed previously by Compost, Miami
and/or Bedminster, or any of their respective agents
or representatives, to Lionhart, LHI and/or GEP, or
any of their respective agents or representatives;
and,
(18) All reports, memoranda, correspondence
and all other documents that are compiled and
included with an item of correspondence, from
Xxxxxxxx X. Xxxxx, Esq., to Xxxxxxx X. Xxxxxxx, Esq.,
dated July 7, 1998, that was and were disclosed and
delivered by Compost and Miami, by Xxxxxxxx X. Xxxxx,
Esq., to Lionhart, LHI and/or GEP, via Xxxxxxx X.
Xxxxxxx, Esq., on or about July 8, 1998, which is
hereby incorporated by reference; and,
(19) All reports, memoranda, correspondence,
instruments, certificates and all other documents
that are compiled under Appendix I and Appendix II of
this Agreement, all of which are hereby incorporated
by reference, and the Disclosure Documents under
Appendix III of this Agreement, which are hereby
incorporated by reference; and,
(20) The proposed "Turnkey Agreement for
Engineering, Procurement, Construction and Start-Up
Operating Services," by and between Black & Xxxxxx
Construction, Inc., and Miami, for and with respect
to the Miami Project on the Miami Site, as delivered
by Xxxxxxxx X. Xxxxx, Esq., to Xxxxxxx X. Xxxxxxx,
Esq., on October 15, 1998; and,
(21) All disclosures made during a telephone
conference, on or about Friday, October 23, 1998, by
and among Xxxxx X. Xxxxxx, Xxxxxxxx X. Xxxxx, Esq.,
Xx Xxxxxxx (Xxxxxxx Xxxxx), Xxxxxxxx X. Xxxxx
(Lionhart, LHI and GEP), and Xxxx Xxxxxx Drics, Esq.,
and Xxxxxxx X. Xxxxxxx, Esq., which are hereby
incorporated by reference; and,
(22) All other all reports, memoranda,
correspondence and all other documents, and/or other
information and/or disclosures, that are or have been
made by Compost and/or Miami and/or Bedminster, or
any of their respective officers, directors, agents
or representatives, to Lionhart, LHI and/or GEP, via
counsel or otherwise, at any time, between the date
of consummation of the Term Sheet and the Term Loan
Closing and/or Ancillary Transactions Closing
(whichever is later), inclusive, all of which are
hereby incorporated by reference.
Page 59 of 107 Pages
(n) Miami Project Collateral. The term "Miami Project
Collateral" is and shall mean collateral, that is identified,
described and otherwise specified under the Security
Agreement, including 1) the Miami Project Permits, 2) the
Miami Claim and 3) the Put or Pay Contract.
(o) Miami Project Financing. The term "Miami Project
Financing" shall have the meaning as is ascribed to such term
in Section 11.26.22 of this Agreement.
11.26.02. Miami/Bedminster Capitalization. (a) The exclusive
authorized capital stock of Miami consists of 1,000 shares of common stock, with
no par value ("Miami Common Stock"), of which Miami has issued, sold and
delivered exclusively 1) to Compost, and Compost currently holds and owns, 810
shares of Miami Common Stock, consisting of 80.1% of all issued and outstanding
shares of capital stock of Miami, and 2) to Mestre, and Mestre currently holds
and owns, 190 shares of Miami Common Stock, consisting of 19.9% of all issued
and outstanding shares of capital stock of Miami. Miami is a direct controlled
subsidiary of Compost. Each of such outstanding shares of Miami Common Stock is
validly authorized, validly issued, fully paid and nonassessable, has not been
issued and is not owned or held in violation of any preemptive right of any
shareholders or any other stockholders of Miami, and is owned (of record,
beneficially and equitably), and solely and exclusively, by Compost, free and
clear of all Encumbrances, including (without limitation) all liens, security
interests, pledges, charges, encumbrances, shareholder agreements, voting
trusts, claims or restrictions of any kind. Except for the shares of Miami
Common Stock which are currently issued and outstanding (and owned and held
solely by Compost), Miami has never issued and does not have outstanding any
shares of any other capital stock of Miami. There is no commitment, plan,
agreement, arrangement or undertaking, by or on the part of Compost, Miami or
any other Person, to issue, transfer or otherwise dispose of, and there is no
outstanding option, warrant, or other right calling for the issuance, transfer
or other disposition of, any share of Miami Common Stock or of any other capital
stock of the Miami, or of any security or other instrument convertible into,
exercisable for, or exchangeable for any share of Miami Common Stock or any
other capital stock of Miami.
(b) The exclusive authorized capital stock of Bedminster
consists of 1,000 shares of common stock, with no par value ("Bedminster Common
Stock"), of which Bedminster has issued, sold and delivered to Miami, and Miami
currently holds and owns, all issued and outstanding shares of Bedminster Common
Stock. Bedminster is a direct wholly-owned subsidiary of Miami, and is an
indirect controlled subsidiary of Compost. Each of such outstanding shares of
Bedminster Common Stock is validly authorized, validly issued, fully paid and
nonassessable, has not been issued and is not owned or held in violation of any
preemptive right of any shareholders or any other stockholders of Bedminster,
and is owned (of record, beneficially and equitably), and solely and
exclusively, by Miami, free and clear of all Encumbrances, including (without
limitation) all liens, security interests, pledges, charges, encumbrances,
shareholder agreements, voting trusts, claims or restrictions of any kind.
Except for the shares of Bedminster Common Stock which are currently issued and
outstanding (and owned and held solely by Miami), Bedminster has never issued
and does not have outstanding any shares of any other capital stock of
Bedminster. There is no commitment, plan, agreement, arrangement or undertaking,
by or on the part of Compost, Miami or Bedminster or any other Person, to issue,
transfer or otherwise dispose of, and there is no outstanding option, warrant,
or other right calling for the issuance, transfer or other disposition of, any
share of Bedminster Common Stock or of any other capital stock of the
Bedminster, or of any security or other instrument convertible into, exercisable
for, or exchangeable for any share of Bedminster Common Stock or any other
capital stock of Bedminster.
11.26.03. Miami Common Stock/Bedminster Common Stock-No
Encumbrances. (a) Compost owns and holds solely all of its shares of Miami
Common Stock (as otherwise described and identified under Section 11.26.02 of
this Agreement), free and clear of all Encumbrances, including (without
limitation) all liens, security interests, pledges, charges, encumbrances,
shareholder agreements, voting trusts, claims or restrictions of any kind. To
the best of Miami's knowledge and information after due inquiry and
investigation, Mestre owns and holds solely all of his shares of Miami Common
Stock (as otherwise described and identified under Section 11.26.02 of this
Agreement), free and clear of all Encumbrances, including (without limitation)
all liens, security interests, pledges, charges, encumbrances, shareholder
agreements, voting trusts, claims or restrictions of any kind. Except as
provided and contemplated under this Agreement and/or the Definitive
Supplemental Documents, there is not commitment, plan, agreement, arrangement or
undertaking, by or on the part of Compost, Miami, Mestre or any other Person, to
pledge, impose a lien against, grant a security interest in, or otherwise
encumber, any shares of Miami Common Stock. Furthermore, there is no present
fact, event or circumstance, and there is no present set of facts, events and/or
Page 60 of 107 Pages
circumstances, pursuant to which, by operation of law, 1) there is or may be
imposed a lien, security interest or other Encumbrance on or against any shares
of the Miami Common Stock that are owned and held by Compost (as otherwise
described and identified under Section 11.26.02 of this Agreement), or 2) to the
best of Miami's knowledge and information after due inquiry and investigation,
there is or may be imposed a lien, security interest or other Encumbrance on or
against any shares of the Miami Common Stock that are owned and held by Mestre
(as otherwise described and identified under Section 11.26.02 of this
Agreement).
(b) Miami owns and holds solely all issued and outstanding
shares of Bedminster Common Stock, free and clear of all Encumbrances, including
(without limitation) all liens, security interests, pledges, charges,
encumbrances, shareholder agreements, voting trusts, claims or restrictions of
any kind. Except as provided and contemplated under this Agreement and/or the
Definitive Supplemental Documents, there is not commitment, plan, agreement,
arrangement or undertaking, by or on the part of Compost, Miami, Bedminster,
Mestre or any other Person, to pledge, impose a lien against, grant a security
interest in, or otherwise encumber, any shares of Bedminster Common Stock.
Furthermore, there is no present fact, event or circumstance, and there is no
present set of facts, events and/or circumstances, pursuant to which, by
operation of law, there is or may be imposed a lien, security interest or other
Encumbrance on or against any shares of the Bedminster Common Stock.
11.26.04. Subsidiaries. Bedminster is a direct wholly-owned
subsidiary of Miami. Except for Bedminster, Miami does not own any shares of
stock or other equity interest in any subsidiary or affiliate corporation, and
does not own any interest (either of record, beneficially or equitably) in any
corporation, limited liability company, association, partnership, joint venture,
unincorporated organization or any other enterprise (whether or not any such
enterprise is a corporation), except as provided in Schedule 11.26.04 of the
Disclosure Schedule. Bedminster does not own any shares of stock or other equity
interest in any subsidiary or affiliate corporation, and does not own any
interest (either of record, beneficially or equitably) in any corporation,
limited liability company, association, partnership, joint venture,
unincorporated organization or any other enterprise (whether or not any such
enterprise is a corporation), except as provided in Schedule 11.26.04 of the
Disclosure Schedule.
11.26.05. Organization and Qualification. Miami is a Delaware
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with all requisite corporate power and authority to
own, lease, license and to use its properties and assets and to carry on the
business in which it is now engaged. Miami is duly qualified to transact the
business in which it is engaged and, except as disclosed in Schedule 11.26.05 of
the Disclosure Schedule, is in good standing as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets, or the present conduct of its business makes such qualification
necessary as a foreign corporation, all of such foreign jurisdictions of which
are listed completely and correctly in Schedule 11.26.05 of the Disclosure
Schedule. Bedminster is a Florida corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, with all requisite
corporate power and authority to own, lease, license and to use its properties
and assets and to carry on the business in which it is now engaged. Bedminster
is duly qualified to transact the business in which it is engaged and, except as
disclosed in Schedule 11.26.05 of the Disclosure Schedule, is in good standing
as a foreign corporation in every jurisdiction in which its ownership, leasing,
licensing, or use of property or assets, or the present conduct of its business
makes such qualification necessary as a foreign corporation, all of such foreign
jurisdictions of which are listed completely and correctly in Schedule 11.26.05
of the Disclosure Schedule.
11.26.06. Litigation and Claims. Schedule 11.26.06 of the
Disclosure Schedule contains a true, correct and complete schedule and summary
description of each lawsuit, arbitration, claim, Action, governmental or
administrative or other proceeding, investigation, inquiry or other action, that
involves, relates to or is applicable to Miami and/or Bedminster, which is
anticipated, commenced, pending, threatened or in prospect. There is no
litigation, lawsuit, arbitration, claim, action, governmental or administrative
or other proceeding (formal or informal) or investigation, inquiry or other
Action, that is anticipated, pending, threatened, or in prospect with respect to
Miami and/or Bedminster, or any of its or his business, properties, or assets,
except as described in Schedule 11.26.06 of the Disclosure Schedule. Neither
Miami nor Bedminster is not in violation of, or in default with respect to, any
law, rule, regulation, order, judgment, or decree, and, neither Miami nor
Bedminster is required to take any action in order to avoid any such violation
or default.
11.26.07. Miami/Bedminster Balance Sheets. (a) Schedule
11.26.07-1 of the Disclosure Schedule contains
Page 61 of 107 Pages
a true, correct, accurate and complete balance sheet of Miami, as of the
Effective Date of this Agreement, that was compile, prepared and presented by
Compost and Miami ("Miami Balance Sheet"). The Miami Balance Sheet presents
fairly the financial condition, assets, liabilities and stockholder's equity as
of the Effective Date of this Agreement. The Miami Balance Sheet has been
prepared on the accrual basis of accounting, in accordance with GAAP,
consistently applied throughout the periods involved; are correct and complete;
present fairly the financial position of Miami for the periods indicated
thereon; and are in accordance with the books and records of Compost, Miami and
Bedminster.
(b) Schedule 11.26.07-2 of the Disclosure Schedule contains a
true, correct, accurate and complete balance sheet of Bedminster, as of the
Effective Date of this Agreement, that was compile, prepared and presented by
Compost, Miami and Bedminster ("Bedminster Balance Sheet"). The Bedminster
Balance Sheet presents fairly the financial condition, assets, liabilities and
stockholder's equity as of the Effective Date of this Agreement. The Bedminster
Balance Sheet has been prepared on the accrual basis of accounting, in
accordance with GAAP, consistently applied throughout the periods involved; are
correct and complete; present fairly the financial position of Bedminster for
the periods indicated thereon; and are in accordance with the books and records
of Compost, Miami and Bedminster.
11.26.08. Assets, Properties and Encumbrances. (a) All
buildings, structures, facilities, equipment, real and personal properties and
other material items of tangible property and assets of Miami, including
(without limitation) all Permits and Material Contracts ("Properties"), which
are owned, held, used or leased by Miami, are set forth, identified and
described reasonably in the Miami Balance Sheet (as set forth in Schedule
11.26.07-1 of the Disclosure Schedule) and/or in Schedule 11.26.08(a) of the
Disclosure Schedule. Miami has good, clear, valid and marketable title to all
such Properties, free and clear of all liens, mortgages, pledges, security
interests, charges, Encumbrances, restrictions, taxes and other defects of title
of any nature whatsoever, except for any such matters disclosed in Schedule
11.26.08(a) of the Disclosure Schedule. All such Properties are reasonably
necessary to the present operations of the business of Miami, and all such
Properties are in good operating condition and repair, subject to normal wear
and maintenance, are useable in the regular and ordinary course of business, and
conform to all applicable laws, ordinances, codes, rules and regulations
relating to their use and operation, including, without limitation, any and all
zoning and/or land use laws, ordinances, codes, rules and regulations. No real
property presently owned, leased, licensed, or used by Miami, or that is
anticipated will be owned, leased, licensed or used by Miami, including, without
limitation, the Miami Site, lies in an area which is, or to the knowledge of
Miami or Compost, will be, subject to zoning, use, or building code restrictions
which would prohibit, and no state of facts relating to the actions or inaction
of another person or entity or his or its ownership, leasing, licensing, or use
of any real or personal property exists which would prevent, the continued or
future effective ownership, leasing, licensing, or use of that real property
(including, without limitation, the Miami Site) in any business in which Miami
is now engaged or that it anticipates it will be engaged (as contemplated under
the Miami Project Disclosures).
(b) All buildings, structures, facilities, equipment, real and
personal properties and other material items of tangible property and assets of
Bedminster, including (without limitation) all Permits and Material Contracts
("Properties"), which are owned, held, used or leased by Bedminster, are set
forth, identified and described reasonably in the Bedminster Balance Sheet (as
set forth in Schedule 11.26.07-2 of the Disclosure Schedule) and/or in Schedule
11.26.08(b) of the Disclosure Schedule. Bedminster has good, clear, valid and
marketable title to all such Properties, free and clear of all liens, mortgages,
pledges, security interests, charges, Encumbrances, restrictions, taxes and
other defects of title of any nature whatsoever, except for any such matters
disclosed in Schedule 11.26.08(b) of the Disclosure Schedule. All such
Properties are reasonably necessary to the present operations of the business of
Bedminster, and all such Properties are in good operating condition and repair,
subject to normal wear and maintenance, are useable in the regular and ordinary
course of business, and conform to all applicable laws, ordinances, codes, rules
and regulations relating to their use and operation, including, without
limitation, any and all zoning and/or land use laws, ordinances, codes, rules
and regulations. No real property presently owned, leased, licensed, or used by
Bedminster, or that is anticipated will be owned, leased, licensed or used by
Bedminster, including, without limitation, the Miami Site, lies in an area which
is, or to the knowledge of Bedminster, Miami or Compost, will be, subject to
zoning, use, or building code restrictions which would prohibit, and no state of
facts relating to the actions or inaction of another person or entity or his or
its ownership, leasing, licensing, or use of any real or personal property
exists which would prevent, the continued or future effective ownership,
leasing, licensing, or use of that real property (including, without limitation,
the Miami Site) in any business in which Bedminster is now
Page 62 of 107 Pages
engaged or that it anticipates it will be engaged (as contemplated under the
Miami Project Disclosures).
11.26.09. Liabilities. Miami does not have any liability of
any nature, accrued or contingent, including without limitation liabilities for
federal, state, local, or foreign taxes, and liabilities to customers or
suppliers, except 1) liabilities for which full provision has been made on the
Miami Balance Sheet, or 2) any such liabilities that are set forth, identified
and described reasonably in Schedule 11.26.09-1 of the Disclosure Schedule, or
3) any immaterial debts, obligations or liabilities that arise, in the usual and
ordinary course of business, after the Effective Date of this Agreement and
prior to or on the Term Loan Closing Date or the Ancillary Transactions Closing,
whichever is later. Bedminster does not have any liability of any nature,
accrued or contingent, including without limitation liabilities for federal,
state, local, or foreign taxes, and liabilities to customers or suppliers,
except 1) liabilities for which full provision has been made on the Bedminster
Balance Sheet, or 2) any such liabilities that are set forth, identified and
described reasonably in Schedule 11.26.09-2 of the Disclosure Schedule, or 3)
any immaterial debts, obligations or liabilities that arise, in the usual and
ordinary course of business, after the Effective Date of this Agreement and
prior to or on the Term Loan Closing Date or the Ancillary Transactions Closing,
whichever is later.
11.26.10. Miami/Bedminster Bank Accounts. Schedule 11.26.10 of
the Disclosure Schedule contains a true, correct and complete list of all
accounts of Miami and/or Bedminster with each and every bank, financial or other
thrift institution, the account numbers thereof, and the name of each person who
is authorized to draw or deposit funds or is otherwise authorized to transact
business with respect to each such account.
11.26.11. Powers of Attorney. Schedule 11.26.11 of the
Disclosure Schedule, contains a true and complete list of the names of all
persons, firms, associations or business organizations holding general or
special powers of attorney from Miami and/or Bedminster, and a summary of the
material terms thereof. Except as set forth in Schedule 11.26.11 of the
Disclosure Schedule, neither Miami nor Bedminster has granted any general or
special powers of attorney to any person, firm, association or business
organization.
11.26.12. Guaranties. Except as set forth in Schedule
11.26.12-1 of the Disclosure Schedule, Miami has not guaranteed any liability or
obligation of Compost or any of its Subsidiaries, or any officer or director or
other employee of Compost or any of its Subsidiaries (including, without
limitation, Miami and Bedminster), or any other Person. Except as set forth in
Schedule 11.26.12-2 of the Disclosure Schedule, Bedminster has not guaranteed
any liability or obligation of Compost or any of its Subsidiaries, or any
officer or director or other employee of Compost or any of its Subsidiaries
(including, without limitation, Miami and Bedminster), or any other Person.
11.26.13. No Violations. Except as set forth in Schedule
11.26.13 of the Disclosure Schedule, neither the execution and delivery of this
Agreement and/or the Definitive Supplemental Documents (including, without
limitation, the Credit Documents), by Miami and/or Bedminster, nor the
consummation of the transactions or the performance of any duties or the
exercise of any rights contemplated or otherwise provided for under this
Agreement and/or the Definitive Supplemental Documents (including, without
limitation, the Credit Documents), will (a) violate any provision of the
Certificate (or Articles) of Incorporation or By-Laws of Compost, Miami and/or
Bedminster, (b) violate any law, statute, rule, regulation, order, ordinance,
injunction, writ or decree by which Compost, Miami and/or Bedminster is bound or
binding upon any of their Properties (including, Permits) or assets, or (c)
result in a violation or breach of, or constitute a default under, any license,
lease, franchise, permit, right, sales order or purchase order, contract,
indenture, agreement or other instrument to which Compost, Miami and/or
Bedminster is a party, or by which Compost, Miami and/or Bedminster, or any of
their respective assets or properties is bound, or otherwise impair the ability
of Compost, Miami and/or Bedminster to use the same, which are material to the
operations of the business of Compost, Miami and/or Bedminster.
11.26.14. Employees, Officers and Directors. (a) Schedule
11.26.14-1 of the Disclosure Schedule sets forth a true, correct and complete
list of all current directors and officers of Miami, and their addresses,
titles, length of service, total compensation (direct and indirect) and all
other benefits. With respect to Miami: (a) Miami has paid in full to all of its
employees all due and owing wages, salaries, commissions, bonuses, benefits and
fringe benefit payments for all services performed by them to the date hereof,
except as disclosed in Schedule 11.26.14-1; (b) Miami is in compliance in all
material respects with (i) all Federal, state, local and foreign laws,
ordinances and regulations dealing with employment and employment practices of
any kind, all of the terms and conditions of employment of any kind with respect
to its business, and all wage and hour requirements and regulations; (c) there
is no unfair labor practice, safety or health, discrimination or wage claim,
charge, complaint or suit pending or threatened against or involving Miami, or
any other officer, director or employee of Miami, before the National Labor
Relations Board, Occupational Safety and Health Administration, Equal Employment
Opportunity Commission, Department of Labor, or any other Federal, state, local
or foreign governmental agency or Governmental Authority; and, (d) Miami has not
violated and is in violation of the immigration laws of the United States.
(b) Schedule 11.26.14-2 of the Disclosure Schedule sets forth
a true, correct and complete list of all current directors and officers of
Bedminster, and their addresses, titles, length of service, total compensation
(direct and indirect) and all other benefits. With respect to Bedminster: (a)
Bedminster has paid in full to all of its employees all due and owing wages,
salaries, commissions, bonuses, benefits and fringe benefit payments for all
services performed by them to the date hereof, except as disclosed in Schedule
11.26.14-2; (b) Bedminster is in compliance in all material respects with (i)
all Federal, state, local and foreign laws, ordinances and regulations dealing
with employment and employment practices of any kind, all of the terms and
conditions of employment of any kind with respect to its business, and all wage
and hour requirements and regulations; (c) there is no unfair
Page 63 of 107 Pages
labor practice, safety or health, discrimination or wage claim, charge,
complaint or suit pending or threatened against or involving Bedminster, or any
other officer, director or employee of Bedminster, before the National Labor
Relations Board, Occupational Safety and Health Administration, Equal Employment
Opportunity Commission, Department of Labor, or any other Federal, state, local
or foreign governmental agency or Governmental Authority; and, (d) Bedminster
has not violated and is in violation of the immigration laws of the United
States.
11.26.15. Miami Site-Purchase/Ownership. On or about March 29,
1996, Miami purchased the Miami Site from Xxxxxx, for the total purchase price
of US $4,100,000, and, pursuant to which, and on March 29, 1998, 1) Miami
executed and delivered to Xxxxxx the Miami-Xxxxxx Note, in the original
principal amount of US $3,730,870.75, and 2) Miami executed and delivered to
Xxxxxx the original Xxxxxx Mortgage, to secure the timely payment by Miami of
the Miami-Xxxxxx Note. Miami is the sole owner, in fee simple absolute, of the
Miami Site, and has and possesses an indefeasible estate and title, in fee
simple absolute, in and to the Miami Site, which is free and clear of every kind
or description of lien, lease, restriction, mortgage and/or Encumbrance, except
for 1) the Miami Xxxxxx Mortgage, and any such Encumbrances that are set forth
on and described under Schedule 11.26.15 of the Disclosure Schedule.
11.26.16. Miami Site-Miscellaneous Representations. With
respect to the Miami Site, the legal description of which is set forth in
Appendix II-Item 3 to this Agreement:
(a) As set forth in Section 11.26.15 of this Agreement, Miami
is the sole owner, in fee simple absolute, and has and possesses an
indefeasible estate and title, in fee simple absolute, in and to the
Miami Site, that is free and clear of every kind or description of
lien, lease, restriction, mortgage and/or Encumbrance, except for 1)
the Miami Xxxxxx Mortgage, and any such Encumbrances that are set forth
on and described under Schedule 11.26.15 of the Disclosure Schedule.
Neither Compost nor Bedminster (or any other Person, including Mestre)
owns, holds or possesses any legal, equitable, possessory or any other
right, title or interest in and to, or against, the Miami Site.
(b) Miami has not executed, or permitted anyone in Miami's
behalf to execute, any conveyance, mortgage, lien, lease, security
agreement, financing statement or encumbrance of or upon the Miami Site
or any fixtures or improvements attached thereto, except as set forth
in Schedule 11.26.15 of the Disclosure Schedule, which is now
outstanding or enforceable against the Miami Site. Except as set forth
and disclosed in the Disclosure Documents, Miami has made no contract
to sell or otherwise dispose of all or a part of the Miami Site to any
Person, and Miami has not given (or granted, conveyed or delivered) to
any Person an option to purchase all or any part of the Miami Site,
which is enforceable or exercisable now or at any time in the future.
There has been no work performed or materials furnished on the Miami
Site which could give rise to a mechanic's lien being filed against the
Miami Site. To the best of the Miami's knowledge and information, there
are no unpaid claims for labor done upon or materials furnished for the
Miami Site in respect of which liens have been or may be filed. The
improvements upon the Miami Site are all located entirely within the
bounds of the Miami Site, and there are no encroachments thereon. There
are no existing violations of zoning ordinances or other restrictions
applicable to the Miami Site, and no proceedings have been commenced or
threatened by any Governmental Authority having power of eminent domain
to condemn any portion of the Miami Site.
Page 64 of 107 Pages
(c) There is no judgment of any court of the States of
Delaware, Florida or New Jersey, or of any other state or territory of
the United States, or of any court of the United States that is or may
become a lien on the Miami Site, or which could prevent or render
ineffective (and/or voidable or void) the valid execution and delivery
of the above-referenced Mortgage, or which could prevent the imposition
of a senior and unsubordinated mortgage, vis-a-vis the Mortgage, on and
against the Miami Site, as contemplated and otherwise provided for
under this Agreement and/or the Definitive Supplemental Documents
(including, without limitation, the Credit Documents).
(d) No petition for bankruptcy, insolvency, receivership
and/or incompetency has ever been filed by or against Miami (or Compost
or Bedminster), nor is any such petition now pending with respect to
Miami (or Compost or Bedminster) for bankruptcy, insolvency,
receivership or incompetency. No proceedings involving remedies for the
protection of Miami's creditors (or Compost's creditors or Bedminster's
creditors) are presently pending or contemplated. Miami is neither
principal nor surety on any bond payable to the States of Delaware,
Florida or New Jersey, or in any other state or territory of the United
States.
(e) The Miami Site is now in possession of Miami, as the fee
simple owner thereof, and no other Person (including, without
limitation, Compost, Bedminster or Mestre) has a right to possession or
claims possession of all or any part of the Miami Site.
(f) The fair market value of the Miami Site, as of the
Effective Date of this Agreement, and to the best information and
knowledge of Compost, Miami and Bedminster, after due inquiry and
investigation (including, without limitation, reliance on the Miami
Site Appraisal Report), is or about US $4,200,000 ("Appraised Value").
With respect to the Appraised Value of the Miami Site, Compost, Miami
and Bedminster have relied upon, and are currently relying upon, and
are authorized to rely unconditionally upon, the Miami Site Appraisal
Report. The Miami Site Appraisal Report is an independent and objective
report, by a qualified and independent expert, of the estimated market
value of the Miami Site. Compost, Miami and Bedminster, individually
and aggregately, know of no fact, event, circumstance, change, event,
transaction, loss, failure, effect or occurrence that, individually or
taken as a whole, has or have or is or are reasonably likely to have a
Material Adverse Effect on the Appraised Value of the Miami Site.
(g) The Miami Site has never been used, and is not being used
presently, by Compost, Miami and/or Bedminster, or, to the best
knowledge of Compost, Miami and Bedminster after due inquiry and
investigation, by Xxxxxx or any predecessor in interest thereto, or any
other Person, in violation of any applicable Environmental Laws, and,
to the best knowledge and information of Compost, Miami and Bedminster
after due inquiry and investigation, there has never been a material
Release of any Hazardous Substances on the surface or in the subsurface
of the Miami Site, or in or about the air or water in or about the
Miami Site. The Phase I Report is an independent and objective "Phase
I" environmental inspection, audit and report, by a qualified and
independent expert, of the Miami Site. The Phase I Report of the Miami
Site, to the best information and knowledge of Compost, Miami and
Bedminster after due inquiry and investigation, is accurate and
complete, and Compost, Miami and Bedminster, individually and
aggregately, know of no fact, event, circumstance, change, event,
transaction, loss, failure, effect or occurrence that, individually or
taken as a whole, has or have or is or are reasonably likely to have a
Material Adverse Effect on the Phase I Report of the Miami Site. With
respect to the Phase I Report, Compost, Miami and Bedminster have
relied upon, and are currently relying upon, and are authorized to rely
unconditionally upon, the Phase I Report.
(h) The Miami Project Disclosures, with respect to the Miami
Project and the Miami Site, and/or otherwise, do not contain any untrue
statement of material fact or omit to state a material fact necessary
in order to make any such statement not misleading.
(i) No special or general assessments for public improvements,
or otherwise, has or have been levied with respect to the Miami Site,
which remains unpaid, and Miami has not received any notice of
assessment, reassessment or otherwise, of the Miami Site, for tax
purposes or otherwise.
(j) Neither Miami nor Bedminster (or Compost or any Subsidiary
thereof) nor, to the best
Page 65 of 107 Pages
knowledge and information of Compost, Miami and Bedminster after due
inquiry and investigation, Xxxxxx or any predecessor in interest
thereto, or any other Person, has ever caused or permitted any
hazardous materials, and/or hazardous chemicals, and/or Hazardous
Substances, and/or hazardous wastes, and/or petroleum, and/or other
environmental hazards, to be placed, held, generated, stored,
transported, treated, located or disposed of on, under or about or at
the Miami Site, and the Miami Site has never been used by Miami,
Bedminster, Compost or any Subsidiary thereof, or, to the best
knowledge and information of Compost, Miami and Bedminster after due
inquiry and investigation, by Xxxxxx, or any predecessor in interest or
any other Person, as a temporary or permanent dump or storage site for
any hazardous materials, and/or hazardous chemicals, and/or Hazardous
Substances, and/or hazardous wastes, and/or petroleum, and/or other
environmental hazards. In addition, there are not now any actual,
possible, contingent or pending liens or claims or liabilities or
obligations against Compost, Miami, Bedminster, or, to the best
knowledge and information of Compost, Miami and Bedminster after due
inquiry and investigation, Xxxxxx, or any predecessor in interest
thereto or any other Person, with respect to the Miami Site, which
relate to and/or arise from any Environmental Laws, or any other
applicable federal, state or local Environmental Law, ordinance, code,
rule, regulation, order or decree, now or hereafter in force, including
(without limitation) the Comprehensive Environmental Responsibility,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the
Resource Conservation and Recovery Act, as amended, the Toxic Substance
Control Act, as amended, any "Superfund" and/or "Superlien" laws,
and/or any other applicable U.S. federal or state Environmental Laws,
ordinances, codes, rules, regulations, orders or decrees, now or
hereafter in force.
11.26.17. Questionable Payments. Neither Miami nor Bedminster
(or any director, officer, agent, employee, or other person associated with or
acting on behalf of Miami or Bedminster), nor Compost (or any director, officer,
agent, employee, or other person associated with or acting on behalf of
Compost), has, directly or indirectly (and notwithstanding the allegations,
impressions, statements or assertions that are set forth in or that may
reasonably be implied from, an article, entitled "Political Ties - How Miami's
Garbage Contract Could Cost Taxpayers Millions Extra," as published in The Miami
Herald, on June 14, 1998): used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practice Act of
1977; established or maintained any unlawful or unrecorded fund of corporate
monies or other assets; made any false or fictitious entry on the books or
records of Miami and/or Compost; made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment; given any favor or gift which is
not deductible for federal income tax purposes; or made any bribe, kickback, or
other payment of a similar or comparable nature, whether lawful or not, to any
person or entity, private or public, regardless of form, whether in money,
property, or services, to obtain favorable treatment in securing business or to
obtain special concessions, or to pay for favorable treatment for business
secured or for special concessions already obtained.
11.26.18. Compliance with Laws. Except as set forth in
Schedule 11.26.18 of the Disclosure Schedule, Compost, Miami and Bedminster,
with respect to the Miami Project, and otherwise, are in compliance with all
applicable laws, statutes, regulations, orders, ordinances, injunctions, writs,
judgments and decrees, except where the failure to so comply would not have a
Material Adverse Effect on the business, financial condition or results of
operations of Compost, Miami or Bedminster, and/or the Miami Project, taken
individually or as a whole.
11.26.19. Miami Project-Description. The Miami Project, as
defined and described under Section 11.26.01(a) of this Agreement, and as
described in the Miami Project Recap, the Summary, the Compost SEC Reports and
the other Miami Project Disclosures, is feasible, within the time periods
contemplated and otherwise described in the Miami Project Recap, the Summary,
the Compost SEC Reports and the other Miami Project Disclosures. The description
of the Miami Project, as set forth in the Miami Project Recap, the Summary, the
Compost SEC Reports and the other Miami Project Disclosures, is accurate and
complete, does not contain any untrue statement of material fact and does not
omit to state a material fact necessary to make any such statement not
misleading.
11.26.20. Put or Pay Contract-Status. With respect to the Put
and Pay Contract, as that term is defined under Section 11.26.01(e) of the
Agreement, including, without limitation, the Solid Waste Service Agreement, the
First Amendment, the Restated Compost Recycling Agreement and the Second
Amendment:
(a) Bedminster is entitled to and may assign, transfer and
deliver to Miami, all right, title and
Page 66 of 107 Pages
interest of Bedminster, in and to the Put or Pay Contract, and
to delegate all of its duties, under the Put or Pay Contract,
to Miami. Subject to the enforceability of the Put or Pay
Contract against the City of Miami as set forth in Section
11.26.20(b) of this Agreement, the City of Miami, based on the
best knowledge and information of Compost, Miami and
Bedminster, will accept or approve any such assignment from
Bedminster to Miami of the Put or Pay Contract, and any such
delegation by Bedminster to Miami of its duties under the Put
and Pay Contract.
(b) Bedminster is not now and does not reasonably
expect in the future to be in violation or breach of, or in
default with respect to, any term or provision of the Put or
Pay Contract, including the Solid Waste Service Agreement, the
First Amendment, the Restated Compost Recycling Agreement and
the Second Amendment (collectively referred to, in this
Section 11.26.20(b), as the "Put or Pay Undertaking(s)"), and
each of the Put or Pay Undertakings, to the best knowledge,
information and belief of Compost, Bedminster and Miami, after
due inquiry and investigation: 1) is in full force and effect,
2) is the legal, valid and binding obligation of Miami and/or
Bedminster, 3) based on a good faith belief of and by Compost,
Bedminster and Miami, which is based upon the actions of
officials of the City of Miami as more fully described in the
Miami Complaint, the Put or Pay Undertakings are the legal,
valid and binding obligation of the City of Miami as averred
and alleged in the Miami Complaint, notwithstanding (i) the
absence of any signature on the Second Amendment by Xxxx
Xxxxxx-Xxxxxxx, as the City Manager of the City of Miami, or
any other duly qualified officer or official of the City of
Miami, or (ii) the absence of any approval, adoption or
ratification of the Second Amendment by the Financial
Oversight Board of the State of Florida, and 4) is enforceable
in accordance with the respective terms thereof, by and
against Miami (including Bedminster). The execution, delivery
and performance of, and the consummation of the transactions
contemplated under, this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents will not
prejudice, or have a Material Adverse Effect upon, the Put and
Pay Contract and/or any such Put and Pay Undertaking, in any
way or manner whatsoever.
11.26.21. Miami Project Permits-Status, Validity and
Enforceability. With respect to the Miami Project Permits, as that term
is defined under Section 11:26.01(b) of this Agreement:
(a) Miami (either directly or through Bedminster)
and/or Bedminster has (have) and holds (hold) all Current
Permits, as that term is defined under Section 11:26.01(b)(1),
and all such Current Permits will remain in full force and
effect immediately following the execution, delivery and
consummation of the transactions under this Agreement, the
Credit Documents and the Definitive Supplemental Documents.
(b) Compost, Miami and Bedminster are currently
exercising commercially reasonable efforts, in good faith, and
will continue to exercise commercially reasonable efforts, in
good faith, following the execution and consummation of the
transactions under this Agreement, the Credit Documents and
the Definitive Supplemental Documents, to apply for or
continue the application of, and to procure and hold, as
promptly as is commercially reasonable, all Supplemental
Prospective Permits, as that term is defined under Section
11:26.01(b)(2) of this Agreement.
(c) The execution and delivery of this Agreement, the
Credit Documents and the Definitive Supplemental Documents,
and/or the consummation and performance of the transactions
contemplated under this Agreement, the Credit Documents and
the Definitive Supplemental Documents, and/or the granting
under the Security Agreement by Compost, Miami and Bedminster,
to Lionhart, LHI and GEP, of a security interest in and to the
Miami Project Collateral (including the Miami Project Permits,
the Put or Pay Contract and the Miami Claim), and/or the
granting by Compost and/or Miami to GEP of the Mortgage, (i)
will not conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Miami or by which its
or any of the Miami Project Permits are bound or affected, or
otherwise violate the terms and conditions of any such Miami
Project Permits, or (ii) result in any breach of or constitute
a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others
(including any Governmental Authority) any rights of
termination, amendment, nullification, revocation or
cancellation of any of the Miami Project Permits, or (iii)
will not have a Material Adverse Effect on the Miami Project,
the Miami Project Permits, the Put or Pay Contract, the Miami
Claim, the Miami Site or the Appraised Value.
Page 67 of 107 Pages
(d) This execution and delivery of this Agreement and
the Definitive Supplemental Documents (including, without
limitation, the Credit Documents), and the consummation and
performance of the transactions contemplated under this
Agreement and the Definitive Supplemental Documents
(including, without limitation, the Credit Documents), by
Miami and/or Compost, do not and will not require the assent,
consent, approval or authorization of any Governmental
Authority, including (without limitation) any Governmental
Authority which has issued or may issue to Miami any of the
Miami Project Permits.
(e) The Current Permits and the Supplemental
Prospective Permits constitute and represent all such material
licenses, permits authorizations and approvals that are or
will be necessary for the conduct of Miami's Business and the
Miami Project (through the auspices of Miami and/or
Bedminster, or otherwise), as otherwise described under the
Summary, the Miami Project Recap, the Compost SEC Reports and
the other Miami Project Disclosures.
11.26.22. Miami Project Financing. Schedule 11.26.22 of the
Disclosure Schedule contains a true, complete and accurate description
of all material terms, facts and details of the construction and
permanent financing, as contemplated currently by Compost, Miami and
Bedminster, for and with respect to the development, construction and
operation of the Miami Project ("Miami Project Financing"). To the best
knowledge and information of Compost, Miami and Bedminster, after due
inquiry and investigation, the Miami Project Financing is feasible.
Compost, Miami and Bedminster are currently exercising commercially
reasonable efforts, in good faith, and will continue to exercise
commercially reasonable efforts, in good faith, following the execution
and consummation of the transactions under this Agreement, the Credit
Documents and the Definitive Supplemental Documents, to secure and
procure, and to close upon, the Miami Project Financing, on a
commercially reasonable and prompt basis, as contemplated under
Schedule 11.26.22 of the Disclosure Schedule. Compost, Miami and
Bedminster each reasonably anticipates, and each hereby represents that
Compost and Miami and Bedminster do anticipate, based on their best
knowledge and information after due inquiry and investigation, 1) that
it is more probable than not that Compost, Miami and Bedminster will so
secure, procure and close upon the entire Miami Project Financing,
between November 1, 1998, and February 28, 1999, inclusive, and 2) that
such Miami Project Financing will include a corporate bond offering
and/or project bond offering in an approximate amount of at least US
$60,000,000.
11.26.23. Black & Xxxxxx/Professional Services Group-Status.
Compost, Miami and Bedminster are currently engaged in negotiations
with (i) Black & Xxxxxx with respect to providing the engineering,
design, procurement, construction, start-up and testing of the Miami
Project at a guaranteed price, with a guaranteed completion date, and
including Black and Veatch's responsibility for liquidated damages, and
(ii) Professional Services Group, with respect to the provision of
operations, maintenance and management services for the Miami Project.
Schedule 11.26.23 of the Disclosure Schedule contains a true, complete
and accurate description of all material terms, facts and details that
Compost, Miami and Bedminster anticipate will be included within the
terms of any prospective agreement (including, without limitation, the
anticipated execution and closing dates) by and between or among 1)
Compost, Miami, Bedminster and Black & Xxxxxx, and 2) Compost, Miami,
Bedminster and Professional Services Group.
11.26.24. Miscellaneous Supply Initiatives/Contracts. The
anticipated permitted municipal solid waste volume of and for the Miami
Project, pursuant to the Miami Project Permits, is 190,000 tons per
year ("MSW Volume"), and the City of Miami, under the Put or Pay
Contact, has guaranteed to Miami approximately 80% of that MSW Volume.
Schedule 11.26.24 of the Disclosure Schedule sets forth a true and
complete list and description of all other waste material suppliers or
generators who or which 1) have been contacted by or are reasonably
anticipated by Compost, Miami and/or Bedminster to be contacted by
Compost and/or Miami and/or Bedminster with respect to the Miami
Project, and 2) are or could reasonably be a potential, feasible and
material source of municipal solid waste for disposal at and treatment
by the Miami Project.
11.26.25. General. Sections 11.26.01 through 11.26.24,
inclusive, of this Agreement, do not contain any untrue statement of
material fact or omit to state a material fact necessary in order to
make any such statement not misleading.
Section 11.25. Private Offering. (a) Assuming the accuracy of the
representations and warranties of Lionhart, LHI and/or GEP, 1) the offer and/or
sale and/or issuance of any securities, under this Agreement, the Credit
Documents and/or the
Page 68 of 107 Pages
Definitive Supplemental Documents, by Compost and/or Miami (or any Subsidiaries
of Compost and/or Miami) to Lionhart, LHI and/or GEP, and/or 2) the offer and/or
purchase of any securities, under this Agreement, the Credit Documents and/or
the Definitive Supplemental Documents, by Lionhart, LHI and/or GEP from Compost
and/or Miami (and/or any Subsidiaries of Compost and/or Miami), is exempt from
the registration and prospectus delivery requirements of the Securities Act.
(b) No form of general solicitation or general advertising
(including, without limitation, advertisements, articles, notices or other
communications published in any newspaper, magazine or other medium or broadcast
over television or radio, or any seminar or meeting, whose attendees have been
invited by any general solicitation or general advertising) was used by 1)
Compost or Miami (and/or any Subsidiaries of Compost and/or Miami), with respect
to the offer and/or sale and/or issuance of any securities, under this
Agreement, the Credit Documents and/or the Definitive Supplemental Documents, by
Compost and/or Miami (and/or any Subsidiaries of Compost and/or Miami) to
Lionhart, LHI and/or GEP, or 2) Lionhart, LHI and/or GEP, with respect to the
offer and/or purchase of any securities, under this Agreement, the Credit
Documents and/or the Definitive Supplemental Documents, from Compost and/or
Miami (and/or any Subsidiaries of Compost and/or Miami).
Section 11.26. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions hereunder based upon arrangements made by or on behalf of
Compost and/or Miami.
Section 11.27. Disclosure Schedule and Disclosure Documents: Accuracy
of Information. Compost, Miami and Bedminster each has provided Lionhart, LHI
and/or GEP with all the information reasonably available to it that the
Lionhart, LHI and/or GEP have requested for evaluating and deciding, and that
Compost, Miami and Bedminster believe is reasonably necessary to enable
Lionhart, LHI and GEP to evaluate and determine, whether to execute, deliver
and/or consummate the transactions contemplated under this Agreement, the Credit
Documents and the Definitive Supplemental Documents. Each subsection made a part
of the Disclosure Schedule relates to the corresponding section of the Agreement
and each reference to a specific schedule within the Disclosure Schedule shall
be deemed to include reference to the corresponding amendment, if any, to such
schedule contained within any amendment or addendum to the Disclosure Schedule.
Neither Compost nor Miami (nor Bedminster) is not aware of any facts pertaining
to Compost or Miami or Bedminster, or any other Subsidiary of Compost, or any of
their respective businesses, that could have a Material Adverse Effect and that
have not been disclosed in this Agreement, the Credit Documents, the Definitive
Supplemental Documents, the Disclosure Schedule, the Disclosure Documents, the
Compost Disclosures (as that term is defined under Section 1.1.27 of this
Agreement), the Financial Statements, the Interim Financial Statements, the
Miami Balance Sheet, the Bedminster Balance Sheet, the Miami Project
Disclosures, Appendix I, II and/or III of this Agreement, or any Exhibits or
Schedules of or to this Agreement. This Agreement, the Credit Documents and the
Definitive Supplemental Documents, including, the Disclosure Schedule, the
Disclosure Documents, the Financial Statements, the Interim Financial
Statements, the Miami Balance Sheet, the Bedminster Balance Sheet, the Compost
Disclosures (as that term is defined under Section 1.1.27 of this Agreement),
the Miami Project Disclosures, Appendix I-III of this Agreement, and the
Exhibits and Schedules of or to this Agreement, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements herein or therein not misleading.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES RELATING TO LIONHART, LHI AND GEP
Lionhart, LHI and GEP, on a joint and several basis, each hereby
represent and warrant to Compost, Miami and Bedminster, as is set forth in
Section 12.01-Section 12.06, that:
Section 12.01. Organization. Lionhart is a limited liability company,
that is duly organized, validly existing and in good standing under the laws of
the British Virgin Islands, and has the requisite power and authority and any
necessary governmental authority to own, operate or lease the properties that is
purports to own, operate or lease and to carry on its business as it is now
being conducted. LHI is a limited liability company, that is duly organized,
validly existing and in good standing under the laws of the United Kingdom, and
has the requisite power and authority and any necessary governmental authority
to own, operate or lease the properties that is purports to own, operate or
lease and to carry on its business as it is now being conducted. GEP is a
limited liability company, that is duly organized, validly existing and in good
standing under the laws of the State of Indiana USA, and has the requisite power
and authority and any necessary governmental authority to own, operate or lease
the properties that is purports to own, operate or lease and to carry on its
business as it is now being conducted.
Section 12.02. Authority. Lionhart, LHI and GEP each has all necessary
power and authority to execute and deliver
Page 69 of 107 Pages
this Agreement and all Definitive Supplemental Documents (including, without
limitation, the Credit Documents) and to perform its obligations and to
consummate the transactions contemplated under this Agreement and all Definitive
Supplemental Documents (including, without limitation, the Credit Documents).
The execution and delivery of this Agreement, the Credit Documents and the
Definitive Supplemental Documents, by Lionhart, LHI and/or GEP, and the
consummation by Lionhart, LHI and/or GEP of the transactions contemplated under
this Agreement, the Credit Documents and/or the Definitive Supplemental
Documents, have been duly and validly authorized by all necessary action by
Lionhart, LHI and GEP, and no other proceedings on the part of Lionhart, LHI
and/or GEP are necessary to authorize this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents, or to consummate the transactions
contemplated by this Agreement, the Credit Documents and/or the Definitive
Supplemental Documents. This Agreement, the applicable Credit Documents and the
applicable Definitive Supplemental Documents, each has been duly and validly
authorized, executed and delivered by Lionhart, LHI and GEP, and, assuming its
due authorization, execution and delivery by Compost, Miami and Bedminster,
constitutes 1) the legal, valid and binding obligations of Lionhart, LHI and/or
GEP, that are enforceable against Lionhart, LHI and/or GEP in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
Section 12.03. No Conflict: Required Filings and Consent. The execution
and delivery of this Agreement, the applicable Credit Documents and the
applicable Definitive Supplemental Documents by Lionhart, LHI and GEP, do not,
and the performance of this Agreement, the Credit Documents and the Definitive
Supplemental Documents by Lionhart, LHI and GEP, will not (i) conflict with or
violate the Certificate of Incorporation or By-Laws of Lionhart, LHI and/or GEP,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Lionhart, LHI and/or GEP, or by which any of their
respective properties are bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of Lionhart, LHI and/or GEP,
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, insurance policy or other instrument or obligation to which
Lionhart, LHI and/or GEP is a party, or by which Lionhart, LHI and/or GEP, or
any of their respective properties are bound or affected, except in the case of
clauses (ii), (iii) and (iv) above, for any breaches, defaults or other
occurrences which would not, individually or in the aggregate, have a Material
Adverse Effect on the business, operations, properties (including intangible
properties), condition (financial or otherwise), assets or liabilities of
Lionhart, LHI and/or GEP. The execution and delivery of this Agreement, the
applicable Credit Documents and the applicable Definitive Supplemental
Documents, by Lionhart, LHI and/or GEP, do not, and the performance of this
Agreement and such Credit Documents and Definitive Supplemental Documents by
Lionhart, LHI and/or GEP (including, without limitation, the consummation of the
transactions contemplated hereunder) will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign.
Section 12.04. Sufficient Unreserved Funds. Lionhart, LHI and GEP have
and, immediately prior to the Term Loan Closing and the Ancillary Transactions
Closing, will have the funds necessary to consummate the applicable transactions
contemplated under this Agreement and the Definitive Supplemental Documents
(including, without limitation, the Credit Documents), including the delivery of
the Credit by GEP to Compost, Miami and Bedminster.
Section 12.05. Investment Purpose. The purchase or acquisition by
Lionhart of 1) the Compost-Lionhart Warrant # 1, the Compost-Lionhart Warrant #
2, the Compost-Lionhart Warrant # 3, the Compost-Lionhart Warrant # 4, the
Compost-Lionhart Warrant # 5 and the Compost-Lionhart Warrant # 6, and 2) the
Put Option # 1, for and with respect to the Series B Preferred Stock and the
Conversion Common Shares, and the Put Option # 2, for and with respect to the
Excess Common Shares, are being acquired by Lionhart for investment only and not
with a view to any sale or distribution (within the meaning of the Securities
Act) thereof. Lionhart agrees at all times to sell or otherwise dispose of all
or any part of 1) the Compost-Lionhart Warrant # 1, the Compost-Lionhart Warrant
# 2, the Compost-Lionhart Warrant # 3, the Compost-Lionhart Warrant # 4, the
Compost-Lionhart Warrant # 5 and the Compost-Lionhart Warrant # 6 (and any
securities, including Compost Common Stock, issued pursuant to or in exchange
therefor), and/or 2) the Put Option # 1, for and with respect to the Series B
Preferred Stock and the Conversion Common Shares, and/or the Put Option # 2, for
and with respect to the Excess Common Shares (and any securities, including
Compost Common Stock, issued in exchange therefor) only pursuant to a
registration or exemption therefrom, under and in compliance with 1) the
Securities Act, and 2) applicable state (US) securities laws.
Section 12.06. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated under this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents, upon any arrangements made by or
on behalf of Lionhart, LHI and/or GEP, or otherwise.
Page 70 of 107 Pages
ARTICLE XIII
CLOSINGS, CLOSING DATE AND LOCATION, AND CLOSING CONSIDERATIONS
Section 13.01. Closings and Closing Date and Location. The Term Loan
Closing and the Ancillary Transactions Closings, shall transpire as follows:
13.01.01. Closing Date/Location. The Closing Date is and shall
be October 30, 1998, commencing at or about 9:00 a.m., and the Closing
Location is Xxxxxxxxx Xxxxxxx, at 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx
00000, and/or 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, unless an alternative or different Closing Date
and/or Closing Location is mutually agreed to, in writing, by and among
Compost, Miami, Bedminster, Lionhart, LHI and GEP.
13.01.02 Term Loan Closing. The Term Loan Closing, of and with
respect to this Agreement and the Credit Documents, shall occur on
October 30, 1998, commencing at or about 9:00 a.m., at the offices of
Xxxxxxxxx Traurig, 0000 Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, unless
an alternative or different Term Loan Closing is mutually agreed to, in
writing, by and among Compost, Miami, Bedminster, Lionhart, LHI and
GEP.
13.01.03. Ancillary Transactions Closing. The Ancillary
Transactions Closing, of and with respect to all transactions that are
contemplated under this Agreement and/or the Definitive Supplemental
Documents, exclusive of the Term Loan Closing, shall occur, after but
reasonably concurrent with, the Term Loan Closing, on the Closing Date
at the Closing Location, unless an alternative or different Term Loan
Closing is mutually agreed to, in writing, by and among Compost, Miami,
Bedminster, Lionhart, LHI and GEP.
Section 13.02. Closing Considerations of Lionhart, LHI and GEP. At the
Term Loan Closing and the Ancillary Transactions Closing, on the Closing Date at
the Closing Location, and pursuant to the terms and subject to the conditions
set forth in this Agreement and/or the Definitive Supplemental Documents,
Lionhart, LHI and/or GEP shall execute or deliver the following documents,
instruments and considerations to Compost and/or Miami and/or Bedminster, all of
which shall be in a form that is required under this Agreement and/or the
Definitive Supplemental Documents, and that is acceptable reasonably to Compost
and Miami and their respective counsel:
13.02.01. Lender Closing Considerations/Undertakings to
Compost/Miami/Bedminster. The Lenders (as otherwise defined under
Article II of this Agreement) shall execute and/or deliver to Compost
and/or Miami and/or Bedminster, the following:
(A) Agreement Considerations. 1) The Credit; 2) the
Term Loan Closing Statement; 3) the Schedule of Uses and
Applications of Credit; 4) all Credit Documents that require
the signature of GEP (including, the Compost Stock Pledge
Agreement (Compost Common Stock), the Compost Stock Pledge
Agreement (Miami Common Stock), the Compost Stock Pledge
Agreement (Bedminster Common Stock), the Security Agreement,
the Guaranty Agreement and the Mortgage); 5) the Lender
Receipt # 1, as provided under Section 2.3.1(D) of this
Agreement; 6) the Lender Receipt # 2, as provided under
Section 2.3.1(E) of this Agreement; 7) the Opinion of Lender's
Counsel, as provided under Section 2.3.1(F) of this Agreement;
and, 8) if applicable, any Definitive Supplemental Documents;
and,
(B) Global Closing Statement. The Global Closing
Statement, by and among Compost, Miami, Bedminster, Lionhart,
LHI and GEP, in substantially the form that is set forth in
Exhibit YY of this Agreement; and,
(C) Settlement Agreement. The Settlement Agreement,
by and among Compost, Miami, Bedminster, Lionhart, LHI and
GEP, in substantially the form that is set forth in Exhibit ZZ
of this Agreement, pursuant to which all Disputes are settled,
compromised and resolved on and as of the Effective Date of
this Agreement; and,
(D) Incumbency Certificates. A certificate of the
Secretary of GEP, in substantially the form as is set forth in
Exhibit AAA of this Agreement, certifying to the names and
signatures of the officers of GEP who are authorized to sign,
execute and otherwise deliver, for and on behalf of GEP, any
and all documents
Page 71 of 107 Pages
that are required to be signed, executed and/or delivered
respectively by GEP under this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents; and,
(F) Miscellaneous. Each and every other document,
certificate, instrument, receipt or agreement, that is
required to be executed and/or delivered by GEP to Compost
and/or Miami and/or Bedminster under this Agreement and/or the
Definitive Supplemental Documents, or that may be requested
reasonably by Compost and/or Miami, and/or their respective
counsel, to consummate or effectuate one (1) or more of the
transactions contemplated under this Agreement and/or the
Definitive Supplemental Documents.
13.02.02. Lionhart Closing Considerations/Undertakings to
Compost/Miami/Bedminster. Lionhart shall execute and/or deliver to
Compost and/or Miami and/or Bedminster, the following:
(A) Agreement Considerations. 1) The joint
resolutions of the Lionhart Board and the LHI Board, as
provided under Section 3.2.4(A), Section 5.2.4(A) and Section
7.2.1(C) of this Agreement; 2) the Legal Opinion of Lionhart's
Counsel, as provided under Section 3.2.4(B), Section 3.3.2(B),
Section 4.3.1(B), Section 5.2.4(B), Section 6.2.1(B) and
Section 7.2.1(D) of this Agreement; 3) the Receipt, as
provided under Section 3.2.4(D) of this Agreement; 4) the
Receipt, as provided under Section 3.3.2(A) of this Agreement;
5) the Receipt, as provided under Section 4.3.1(D) of this
Agreement; 6) the Receipt, as provided under Section 5.2.4(C)
of this Agreement; 7) the Receipt, as provided under Section
6.2.1(C) of this Agreement; 8) the Receipt, as provided under
Section 7.2.1(E) of this Agreement; 9) the Receipt, as
provided under Section 8.2.1(A) of this Agreement; 10) the
Estoppel Certificate, as provided under Section 3.2.1(D) of
this Agreement; 11) the Estoppel Certificate, as provided
under Section 3.2.4(C) of this Agreement; 12) the Estoppel
Certificate, as provided under Section 3.2.4(E) of this
Agreement; 13) the Estoppel Certificate, as provided under
Section 3.3.2(C) of this Agreement; 14) the original
Outstanding Debentures, as provided under Section 4.3.1(A) of
this Agreement; 15) the resolutions of the Lionhart Board, as
provided under Section 4.3.1(C) of this Agreement; 16) the
certificate, power and resolutions, as provided and
contemplated under Section 6.2.1(A) of this Agreement; 17) the
Mutual Escrow Agent Instruction # 1, as provided under Section
7.2.1(A) of this Agreement; 18) the Mutual Escrow Agent
Instruction # 2, as provided under Section 7.2.1(B) of this
Agreement; and, 19) if applicable, any Definitive Supplemental
Documents; and,
(B) Global Closing Statement. The Global Closing
Statement, by and among Compost, Miami, Bedminster, Lionhart,
LHI and GEP, in substantially the form that is set forth in
Exhibit YY of this Agreement; and,
(C) Settlement Agreement. The Settlement Agreement,
by and among Compost, Miami, Bedminster, Lionhart, LHI and
GEP, in substantially the form that is set forth in Exhibit ZZ
of this Agreement, pursuant to which all Disputes are settled,
compromised and resolved on and as of the Effective Date of
this Agreement; and,
(D) Incumbency Certificates. A certificate of the
Secretary of Lionhart, in substantially the form as is set
forth in Exhibit BBB of this Agreement, certifying to the
names and signatures of the officers of Lionhart who are
authorized to sign, execute and otherwise deliver, for and on
behalf of Lionhart, any and all documents that are required to
be signed, executed and/or delivered respectively by Lionhart
under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents; and,
(E) Commitment Fee Receipt. A written confirmation,
in substantially the form that is set forth in Exhibit CCC of
this Agreement, and pursuant to which Lionhart confirms the
payment by Compost, Miami and Bedminster, to Lionhart, and the
receipt by Lionhart of the payment from Compost, Miami and
Bedminster, on and as of the Term Loan Closing and the
Ancillary Transactions Closing, on the Closing Date at the
Closing Location, of the Deal Commitment Fee, in the amount of
US $150,000, as otherwise provided under this Agreement; and,
(F) Registration Rights Agreement. The Registration
Rights Agreement, by and between Compost and Lionhart, in
substantially the form that is set forth in Exhibit DDD of
this Agreement; and,
Page 72 of 107 Pages
(G) Director Appointment Agreement. The Director
Appointment Agreement, by and between Compost and Lionhart, in
substantially the form that is set forth in Exhibit EEE of
this Agreement; and,
(H) Certificates: Series B Preferred Stock and
Conversion Common Shares. The stock certificates, representing
the Series B Preferred Stock and the Conversion Common Shares
of Lionhart, as provided under, and for the purposes set forth
in, Section 9.2.4 and Section 10.2.3 of this Agreement; and,
(I) Miscellaneous. Each and every other document,
certificate, instrument, receipt or agreement, that is
required to be executed and/or delivered by Lionhart to
Compost and/or Miami and/or Bedminster under this Agreement
and/or the Definitive Supplemental Documents, or that may be
requested reasonably by Compost and/or Miami, and/or their
respective counsel, to consummate or effectuate one (1) or
more of the transactions contemplated under this Agreement
and/or the Definitive Supplemental Documents.
13.02.03. LHI Closing Considerations/Undertakings to
Compost/Miami/Bedminster. LHI shall execute and/or deliver to Compost
and/or Miami and/or Bedminster, the following:
(A) Agreement Considerations. 1) The certificate,
power and resolutions, as provided under Section 3.2.1(A) of
this Agreement; 2) the certificate, power and resolutions, as
provided under Section 5.2.1(A) of this Agreement; 3) the
Legal Opinion of LHI's Counsel, as provided under Section
3.2.1(B) and Section 5.2.1(B) of this Agreement; 4) the Legal
Opinion of Lionhart's Counsel, as provided under Section
5.2.1(B) of this Agreement; 5) the Receipt, as provided under
Section 3.2.1(C) of this Agreement; 6) the Estoppel
Certificate, as provided under Section 3.2.1(D) of this
Agreement; 7) the Estoppel Certificate, as provided under
Section 3.2.4(C) of this Agreement, 7) the Receipt, as
provided under Section 5.2.1(C) of this Agreement; and, 8) if
applicable, any Definitive Supplemental Documents; and,
(B) Global Closing Statement. The Global Closing
Statement, by and among Compost, Miami, Bedminster, Lionhart,
LHI and GEP, in substantially the form that is set forth in
Exhibit YY of this Agreement; and,
(C) Settlement Agreement. The Settlement Agreement,
by and among Compost, Miami, Bedminster, Lionhart, LHI and
GEP, in substantially the form that is set forth in Exhibit ZZ
of this Agreement; pursuant to which all Disputes are settled,
compromised and resolved on and as of the Effective Date of
this Agreement; and,
(D) Incumbency Certificates. A certificate of the
Secretary of LHI, in substantially the form as is set forth in
Exhibit FFF of this Agreement, certifying to the names and
signatures of the officers of LHI who are authorized to sign,
execute and otherwise deliver, for and on behalf of LHI, any
and all documents that are required to be signed, executed
and/or delivered respectively by LHI under this Agreement, the
Credit Documents and/or the Definitive Supplemental Documents;
and,
(E) Miscellaneous. Each and every other document,
certificate, instrument, receipt or agreement, that is
required to be executed and/or delivered by LHI to Compost
and/or Miami and/or Bedminster under this Agreement and/or the
Definitive Supplemental Documents, or that may be requested
reasonably by Compost and/or Miami, and/or their respective
counsel, to consummate or effectuate one (1) or more of the
transactions contemplated under this Agreement and/or the
Definitive Supplemental Documents.
Section 13.03. Closing Considerations of Compost, Miami and/or
Bedminster to Lionhart/LHI/GEP. At the Term Loan Closing and the Ancillary
Transactions Closing, on the Closing Date at the Closing Location, and pursuant
to the terms and subject to the conditions set forth in this Agreement and/or
the Definitive Supplemental Documents, Compost, Miami and/or Bedminster shall
execute or deliver the following documents, instruments and considerations to
Lionhart, LHI and/or GEP, all of which shall be in a form that is required under
this Agreement and/or the Definitive Supplemental Documents, and that is
acceptable reasonably to Lionhart, LHI and GEP, and their respective counsel:
13.03.01. Compost/Miami/Bedminster Closing
Considerations/Undertakings to Lenders. Compost, Miami and/or
Bedminster shall execute and/or deliver to the Lenders (as otherwise
defined under Section 2.01 of this
Page 73 of 107 Pages
Agreement), the following:
(A) Principal Agreement Considerations. 1) The Credit
Receipt, as provided under Section 2.3.2(A) of this Agreement;
2) the Term Loan Closing Statement, as provided under Section
2.3.2(B) of this Agreement; 3) the Schedule of Uses and
Applications of Credit; 4) the Mortgage Note, the Mortgage,
the Security Agreement, the Compost Stock Pledge Agreement
(Compost Common Stock), the Compost Stock Pledge Agreement
(Miami Common Stock), the Compost Stock Pledge Agreement
(Bedminster Common Stock), the Pledged Compost Shares, the
Pledged Miami Shares, the Pledged Bedminster Shares, the UCC-1
Financing Statement, the Compost-Miami Guaranty, the Legal
Opinion of Compost's Counsel, the Legal Opinion of Miami's
Counsel, the Legal Opinion of Bedminster's Counsel, the
Compost Resolutions, the Compost Certificate of Resolutions,
the Miami Resolutions, the Miami Certificate of Resolutions,
the Bedminster Resolution, the Bedminster Certificate of
Resolutions, the Mortgagee's Title Insurance Commitment, the
Compost/Miami Mortgagor Affidavit, the Compost/Miami Owner's
Affidavit, and the Mortgagor's Certificate and Indemnification
Regarding Hazardous Substances, all as provided under Section
2.3.2(C) of this Agreement; 5) the Release and Satisfaction of
Xxxxxx Mortgage and the Miami-Xxxxxx Note, as provided under
Section 2.3.2(D) of this Agreement; 6) the Stipulated Motion
to Dismiss Complaint with Prejudice and the Order of Dismissal
with Prejudice, as provided under Section 2.3.2(D)of this
Agreement; and, 7) if applicable, any Definitive Supplemental
Documents; and,
(B) Incumbency Certificates. A certificate of the
Secretary of Compost, in substantially the form as is set
forth in Exhibit GGG of this Agreement, and the certificate of
the Secretary of Miami, in substantially the form as is set
forth in Exhibit HHH of this Agreement, and the certificate of
the Secretary of Bedminster, in substantially the form as is
set forth in Exhibit TTT, certifying to the names and
signatures of Compost, Miami and Bedminster respectively that
are authorized to sign, execute and otherwise deliver any and
all documents that are required to be signed, executed and/or
delivered respectively by Compost, Miami and/or Bedminster
under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents; and,
(C) Organizational Documents. A copy of (i) the
Certificates of Incorporation, as amended (or similar
organizational documents), of Compost, Miami and Bedminster,
and of each Subsidiary, certified by the secretary of state of
the jurisdiction in which each such entity is incorporated or
organized, as of a date not earlier than five (5) Business
Days prior to the Closing Date and accompanied by a
certificate of the Secretary or Assistant Secretary of each
such entity, dated as of the Closing Date, stating that no
amendments have been made to such Certificates of
Incorporation (or similar organizational documents) since such
date, and (ii) the By-laws (or similar organizational
documents) of Compost, Miami and Bedminster, and of each
Subsidiary, certified by the Secretary or Assistant Secretary
of each such entity and dated as of the Closing Date, stating
that such By-laws are the current and complete By-laws of each
such entity; and,
(D) Good Standing/Qualification to do Business. Good
standing certificates for Compost, Miami and Bedminster, and
for each Subsidiary from the secretary of state of the
jurisdiction in which each sun entity in incorporated or
organized and from the secretary of state of each other
jurisdiction in which the properties owned or leased by any of
Compost, Miami, Bedminster or any Subsidiary, or the operation
of its business in such jurisdiction, requires Compost, Miami,
Bedminster or any Subsidiary to qualify to do business as a
foreign corporation, in each case dated as of a date not
earlier than fifteen (15) Business Days prior to the Closing
Date and accompanied by bring-down certificates from the
respective Secretaries of Compost, Miami and each Subsidiary
dated as of and on the Closing Date; and,
(E) Global Closing Statement. The Global Closing
Statement, by and among Compost, Miami, Bedminster, Lionhart,
LHI and GEP, in substantially the form that is set forth in
Exhibit YY of this Agreement; and,
(F) Settlement Agreement. The Settlement Agreement,
by and among Compost, Miami, Bedminster, Lionhart, LHI and
GEP, in substantially the form that is set forth in Exhibit ZZ
of this Agreement, pursuant to which all Disputes are settled,
compromised and resolved on and as of the Effective Date of
this Agreement; and,
Page 74 of 107 Pages
(G) "Bring-Down Closing Certificates. The
"'Bring-Down" Certificate of Compost," in substantially the
form that is set forth in Exhibit JJJ of this Agreement, the
"'Bring-Down" Certificate of Miami," in substantially the form
that is set forth in Exhibit KKK of this Agreement, and the
"'Bring-Down" Certificate of Bedminster," in substantially the
form that is set forth in Exhibit SSS of this Agreement,
pursuant to which Compost, Miami and Bedminster each
respectively promise, covenant, warrant and represent to
Lionhart, LHI and GEP, as an inducement to consummate the
transactions contemplated under this Agreement and the
Definitive Supplemental Documents, 1) that all representations
and warranties of Compost, Miami and/or Bedminster, that are
set forth in Article XI of this Agreement, the Credit
Documents and all other Definitive Supplemental Documents, are
true, accurate and complete in all material respects, and do
not contain any untrue statement of material fact or omit to
state a material fact necessary in order to make any such
statement not misleading, as of the Term Loan Closing and the
Ancillary Transactions Closing on the Closing Date, and 2)
that Compost, Miami and Bedminster have complied with,
fulfilled and performed each and every promise, covenant,
term, provision and condition to be complied with, fulfilled
or otherwise performed respectively by Compost and/or Miami
and/or Bedminster under this Agreement, the Credit Documents
and all other Definitive Supplemental Documents, as of the
Term Loan Closing and the Ancillary Transactions Closing on
the Closing Date; and,
(H) Closing Costs. The payment by Compost, Miami and
Bedminster, pursuant to the written instructions furnished by
counsel for Lionhart, LHI and GEP at the Term Loan Closing, of
the professional, administrative and closing fees, costs and
expenses of Lionhart, LHI and GEP, in the amount of US
$292,750.00, pursuant to and as provided under Section 2.14 of
the Term Sheet; and,
(I) Miscellaneous Miami Site Documents. A "No Change
Appraisal Letter," a "No Change Phase I Report Letter" and a
"Miami Site Boundary Survey," all dated on or about the
Closing Date, and each of which shall be in a form and and
substance as is acceptable reasonably to Lionhart, LHI and
GEP, and their respective counsel; and,
(J) Miscellaneous. Each and every other document,
certificate, instrument, receipt or agreement, that is
required to be executed and/or delivered by Compost, Miami
and/or Bedminster to GEP under this Agreement and/or the
Definitive Supplemental Documents, or that may be requested
reasonably by GEP and/or its counsel, to consummate or
effectuate one (1) or more of the transactions contemplated
under this Agreement and/or the Definitive Supplemental
Documents.
13.03.02. Compost/Miami/Bedminster Closing
Considerations/Undertakings to LHI. Compost, Miami and/or Bedminster
shall execute and/or deliver to LHI, the following:
(A) Agreement Considerations. 1) The Receipt, as
provided under Section 3.2.2(A) of this Agreement; 2) the
Compost Resolutions and Compost Certificate of Resolutions, as
provided under Section 3.2.2(B) and Section 5.2.2(B) of this
Agreement; 3) the Legal Opinion of Compost's Counsel, as
provided under Section 3.2.2(C) and Section 5.2.2(C) of this
Agreement; 4) the Receipt, as provided under Section 5.2.2(A)
of this Agreement; and, 5) if applicable, any Definitive
Supplemental Documents; and,
(B) Global Closing Statement. The Global Closing
Statement, by and among Compost, Miami, Bedminster, Lionhart,
LHI and GEP, in substantially the form that is set forth in
Exhibit YY of this Agreement; and,
(C) Settlement Agreement. The Settlement Agreement,
by and among Compost, Bedminster, Miami, Lionhart, LHI and
GEP, in substantially the form that is set forth in Exhibit ZZ
of this Agreement; and,
(D) "Bring-Down Closing Certificates. The
"'Bring-Down" Certificate of Compost," in substantially the
form that is set forth in Exhibit JJJ of this Agreement, the
"'Bring-Down" Certificate of Miami," in substantially the form
that is set forth in Exhibit KKK of this Agreement, and the
"'Bring-Down" Certificate of Bedminster," in substantially the
form that is set forth in Exhibit SSS of this Agreement,
pursuant to which Compost, Miami and Bedminster each
respectively promise, covenant, warrant and
Page 75 of 107 Pages
represent to Lionhart, LHI and GEP, as an inducement to
consummate the transactions contemplated under this Agreement
and the Definitive Supplemental Documents, 1) that all
representations and warranties of Compost, Miami and/or
Bedminster, that are set forth in Article XI of this
Agreement, the Credit Documents and all other Definitive
Supplemental Documents, are true, accurate and complete in all
material respects, and do not contain any untrue statement of
material fact or omit to state a material fact necessary in
order to make any such statement not misleading, as of the
Term Loan Closing and the Ancillary Transactions Closing on
the Closing Date, and 2) that Compost, Miami and Bedminster
have complied with, fulfilled and performed each and every
promise, covenant, term, provision and condition to be
complied with, fulfilled or otherwise performed respectively
by Compost and/or Miami and/or Bedminster under this
Agreement, the Credit Documents and all other Definitive
Supplemental Documents, as of the Term Loan Closing and the
Ancillary Transactions Closing on the Closing Date; and,
(E) Incumbency Certificates. A certificate of the
Secretary of Compost, in substantially the form as is set
forth in Exhibit GGG of this Agreement, and the certificate of
the Secretary of Miami, in substantially the form as is set
forth in Exhibit HHH of this Agreement, and the certificate of
the Secretary of Bedminster, in substantially the form as is
set forth in Exhibit TTT, certifying to the names and
signatures of Compost, Miami and Bedminster respectively that
are authorized to sign, execute and otherwise deliver any and
all documents that are required to be signed, executed and/or
delivered respectively by Compost, Miami and/or Bedminster
under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents; and,
(F) Organizational Documents. A copy of (i) the
Certificates of Incorporation, as amended (or similar
organizational documents), of Compost, Miami and Bedminster,
and of each Subsidiary, certified by the secretary of state of
the jurisdiction in which each such entity is incorporated or
organized, as of a date not earlier than five (5) Business
Days prior to the Closing Date and accompanied by a
certificate of the Secretary or Assistant Secretary of each
such entity, dated as of the Closing Date, stating that no
amendments have been made to such Certificates of
Incorporation (or similar organizational documents) since such
date, and (ii) the By-laws (or similar organizational
documents) of Compost, Miami and Bedminster, and of each
Subsidiary, certified by the Secretary or Assistant Secretary
of each such entity and dated as of the Closing Date, stating
that such By-laws are the current and complete By-laws of each
such entity; and,
(G) Good Standing/Qualification to do Business. Good
standing certificates for Compost, Miami and Bedminster, and
for each Subsidiary from the secretary of state of the
jurisdiction in which each sun entity in incorporated or
organized and from the secretary of state of each other
jurisdiction in which the properties owned or leased by any of
Compost, Miami, Bedminster or any Subsidiary, or the operation
of its business in such jurisdiction, requires Compost, Miami,
Bedminster or any Subsidiary to qualify to do business as a
foreign corporation, in each case dated as of a date not
earlier than fifteen (15) Business Days prior to the Closing
Date and accompanied by bring-down certificates from the
respective Secretaries of Compost, Miami and each Subsidiary
dated as of and on the Closing Date; and,
(H) Closing Costs. The payment by Compost, Miami and
Bedminster, pursuant to the written instructions furnished by
counsel for Lionhart, LHI and GEP at the Term Loan Closing, of
the professional, administrative and closing fees, costs and
expenses of Lionhart, LHI and GEP, in the amount of US
$292,750.00, pursuant to and as provided under Section 2.14 of
the Term Sheet; and,
(I) Miscellaneous Miami Site Documents. A "No Change
Appraisal Letter," a "No Change Phase I Report Letter" and a
"Miami Site Boundary Survey," all dated on or about the
Closing Date, and each of which shall be in a form and
substance as is acceptable reasonably to Lionhart, LHI and
GEP, and their respective counsel; and,
(J) Miscellaneous. Each and every other document,
certificate, instrument, receipt or agreement, that is
required to be executed and/or delivered by Compost, Miami
and/or Bedminster to LHI under this Agreement and/or the
Definitive Supplemental Documents, or that may be requested
reasonably by LHI and/or its counsel, to consummate or
effectuate one (1) or more of the transactions contemplated
under this Agreement and/or the Definitive Supplemental
Documents.
Page 76 of 107 Pages
13.03.03. Compost/Miami/Bedminster Closing
Considerations/Undertakings to Lionhart. Compost, Miami and/or
Bedminster shall execute and/or deliver to Lionhart, the following:
(A) Agreement Considerations. 1) The Receipt, as
provided under Section 3.2.3(A) of this Agreement; 2) the
Replacement Certificate No. B-1, as provided under Section
3.2.3(B) of this Agreement; 3) the Compost Resolutions and
Compost Certificate of Resolutions, as provided under Section
3.2.3(C), Section 3.3.1(B), Section 4.3.2(D), Section
5.2.3(C), Section 6.2.2(C), Section 7.2.2(D) and Section
8.2.2(B) of this Agreement; 4) the 1998 Dividend Shares, and
the stock certificate, for and with respect to the 1998
Dividend Shares, as provided under Section 3.3.1(A) of this
Agreement; 5) the Legal Opinion of Compost's Counsel, as
provided under Section 3.3.1(C), Section 4.3.2(C), Section
6.2.2(D), Section 7.2.2(E) and Section 8.2.2(C) of this
Agreement; 6) the Conversion Shares, and the stock
certificate, for and with respect to the Conversion Shares, as
provided under Section 4.3.2(A) of this Agreement; 3) the
Legal Opinion of Compost's Counsel, as provided under Section
3.2.2(C) and Section 3.3.1(C), Section 4.3.2(C), Section
7.2.2(E) and Section 8.2.2(C) of this Agreement; 7) a check,
in good and certified US funds, in the amount of the Accrued
Cumulative Interest attributable to the Outstanding
Debentures, as provided under Section 4.3.2(B) of this
Agreement; 8) the Receipt, as provided under Section 4.3.2(E)
of this Agreement; 9) the Receipt, as provided under Section
5.2.3(A) of this Agreement; 10) the stock certificate, for and
with respect to the LHI-Select Agreement Shares, as provided
under Section 5.2.3(B) of this Agreement; 11) the Receipt, as
provided under Section 6.2.2(A) of this Agreement; 12) US
$3,000,000, in good US funds, by wire transfer or other
written instruction, as the Purchase Price for the purchase
and redemption by Compost from Lionhart of the Section 6.1
Shares, as provided under Section 6.2.2(B) of this Agreement;
13) if necessary, the new stock certificate, for and with
respect to 1,106,771 shares of Compost Common Stock, as owned
and held by Lionhart immediately after the Term Loan Closing
and the Ancillary Transactions Closing on the Closing Date
(subsequent to the purchase and redemption by Compost from
Lionhart of the Section 6.1 Shares), as provided under Section
6.2.2(E) of this Agreement; 14) the Receipt, as provided under
Section 7.2.2(A) of this Agreement; 15) the Mutual Escrow
Agent Instruction # 1, as provided under Section 7.2.2(B) of
this Agreement; 16) the Mutual Escrow Agent Instruction # 2,
as provided under Section 7.2.2(C) of this Agreement; 17) the
Compost-Lionhart Warrant # 1, the Compost-Lionhart Warrant #
1, the Compost-Lionhart Warrant # 2, the Compost-Lionhart
Warrant # 3, the Compost-Lionhart Warrant # 4, the
Compost-Lionhart Warrant # 5 and the Compost-Lionhart Warrant
# 6, as provided under Section 8.2.2(A) of this Agreement;
and, 18) if applicable, any Definitive Supplemental Documents;
and,
(B) Global Closing Statement. The Global Closing
Statement, by and among Compost, Miami, Bedminster, Lionhart,
LHI and GEP, in substantially the form that is set forth in
Exhibit YY of this Agreement; and,
(C) Settlement Agreement. The Settlement Agreement,
by and among Compost, Bedminster, Miami, Lionhart, LHI and
GEP, in substantially the form that is set forth in Exhibit ZZ
of this Agreement; and,
(D) Incumbency Certificates. A certificate of the
Secretary of Compost, in substantially the form as is set
forth in Exhibit GGG of this Agreement, and the certificate of
the Secretary of Miami, in substantially the form as is set
forth in Exhibit HHH of this Agreement, and the certificate of
the Secretary of Bedminster, in substantially the form as is
set forth in Exhibit TTT, certifying to the names and
signatures of Compost, Miami and Bedminster respectively that
are authorized to sign, execute and otherwise deliver any and
all documents that are required to be signed, executed and/or
delivered respectively by Compost, Miami and/or Bedminster
under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents; and,
(E) Organizational Documents. A copy of (i) the
Certificates of Incorporation, as amended (or similar
organizational documents), of Compost, Miami and Bedminster,
and of each Subsidiary, certified by the secretary of state of
the jurisdiction in which each such entity is incorporated or
organized, as of a date not earlier than five (5) Business
Days prior to the Closing Date and accompanied by a
certificate of the Secretary or Assistant Secretary of each
such entity, dated as of the Closing Date, stating that no
amendments
Page 77 of 107 Pages
have been made to such Certificates of Incorporation (or
similar organizational documents) since such date, and (ii)
the By-laws (or similar organizational documents) of Compost,
Miami and Bedminster, and of each Subsidiary, certified by the
Secretary or Assistant Secretary of each such entity and dated
as of the Closing Date, stating that such By-laws are the
current and complete By-laws of each such entity; and,
(F) Good Standing/Qualification to do Business. Good
standing certificates for Compost, Miami and Bedminster, and
for each Subsidiary from the secretary of state of the
jurisdiction in which each sun entity in incorporated or
organized and from the secretary of state of each other
jurisdiction in which the properties owned or leased by any of
Compost, Miami, Bedminster or any Subsidiary, or the operation
of its business in such jurisdiction, requires Compost, Miami,
Bedminster or any Subsidiary to qualify to do business as a
foreign corporation, in each case dated as of a date not
earlier than fifteen (15) Business Days prior to the Closing
Date and accompanied by bring-down certificates from the
respective Secretaries of Compost, Miami and each Subsidiary
dated as of and on the Closing Date; and,
(G) Commitment Fee. The payment by Compost, Miami and
Bedminster to Lionhart, on and as of the Term Loan Closing and
the Ancillary Transactions Closing, on the Closing Date at the
Closing Location, of the Deal Commitment Fee, in the amount of
US 150,000, in good and certified funds; and,
(H) Registration Rights Agreement. The Registration
Rights Agreement, by and between Compost and Lionhart, in
substantially the form that is set forth in Exhibit DD of this
Agreement; and,
(I) Director Appointment Agreement. The Director
Appointment Agreement, by and between Compost and Lionhart, in
substantially the form that is set forth in Exhibit EE of this
Agreement; and,
(J) "Bring-Down Closing Certificates. The
"'Bring-Down" Certificate of Compost," in substantially the
form that is set forth in Exhibit JJJ of this Agreement, the
"'Bring-Down" Certificate of Miami," in substantially the form
that is set forth in Exhibit KKK of this Agreement, and the
"'Bring-Down" Certificate of Bedminster," in substantially the
form that is set forth in Exhibit SSS of this Agreement,
pursuant to which Compost, Miami and Bedminster each
respectively promise, covenant, warrant and represent to
Lionhart, LHI and GEP, as an inducement to consummate the
transactions contemplated under this Agreement and the
Definitive Supplemental Documents, 1) that all representations
and warranties of Compost, Miami and/or Bedminster, that are
set forth in Article XI of this Agreement, the Credit
Documents and all other Definitive Supplemental Documents, are
true, accurate and complete in all material respects, and do
not contain any untrue statement of material fact or omit to
state a material fact necessary in order to make any such
statement not misleading, as of the Term Loan Closing and the
Ancillary Transactions Closing on the Closing Date, and 2)
that Compost, Miami and Bedminster have complied with,
fulfilled and performed each and every promise, covenant,
term, provision and condition to be complied with, fulfilled
or otherwise performed respectively by Compost and/or Miami
and/or Bedminster under this Agreement, the Credit Documents
and all other Definitive Supplemental Documents, as of the
Term Loan Closing and the Ancillary Transactions Closing on
the Closing Date; and,
(K) Compost-Miami Guaranty. The Compost-Miami
Guaranty, in substantially the form as is set forth in Exhibit
UUU of this Agreement; and,
(L) Closing Costs. The payment by Compost, Miami and
Bedminster, pursuant to the written instructions furnished by
counsel for Lionhart, LHI and GEP at the Term Loan Closing, of
the professional, administrative and closing fees, costs and
expenses of Lionhart, LHI and GEP, in the amount of US
$292,750.00, pursuant to and as provided under Section 2.14 of
the Term Sheet; and,
(M) Certificates: Series B Preferred Stock and
Conversion Common Shares. The stock certificates, representing
the Series B Preferred Stock and the Conversion Common Shares
of Lionhart, that are otherwise delivered by Lionhart to
Compost at the Ancillary Transactions Closing under Section
13.02.02(H) of this Agreement, and on which Compost has placed
and inscribed the applicable legends, as provided under, and
for the purposes set forth in, Section 9.3 and Section 10.3 of
this Agreement; and,
Page 78 of 107 Pages
(N) Miscellaneous Miami Site Documents. A "No Change
Appraisal Letter," a "No Change Phase I Report Letter" and a
"Miami Site Boundary Survey," all dated on or about the
Closing Date, and each of which shall be in a form and
substance as is acceptable reasonably to Lionhart, LHI and
GEP, and their respective counsel; and,
(O) Miscellaneous. Each and every other document,
certificate, instrument, receipt or agreement, that is
required to be executed and/or delivered by Compost, Miami
and/or Bedminster to LHI under this Agreement and/or the
Definitive Supplemental Documents, or that may be requested
reasonably by LHI and/or its counsel, to consummate or
effectuate one (1) or more of the transactions contemplated
under this Agreement and/or the Definitive Supplemental
Documents.
ARTICLE XIV
MISCELLANEOUS TAX INDEMNIFICATION
Section 14.01. Indemnity. (a) Compost, Miami and Bedminster each hereby
agree, promise and covenant to indemnify and hold harmless Lionhart, LHI and GEP
from and against the following Taxes, and against any loss (including, without
limitation, loss of value of Lionhart's investment in Compost, and/or loss of
value in any collateral that is pledged or otherwise encumbered by Compost,
Miami and/or Bedminster under 1) the Mortgage (including the Miami Site), 2) the
Security Agreement (including the Miami Project Collateral) and/or the Compost
Stock Pledge Agreement (Compost Common Stock), the Compost Stock Pledge
Agreement (Miami Common Stock) and/or the Compost Stock Pledge Agreement
(Bedminster Common Stock)), damage, liability or expense, including reasonable
fees for attorneys and other outside consultants, incurred in contesting or
otherwise in connection with any such Taxes: (i) Taxes imposed on Compost,
Miami, Bedminster or any Subsidiary with respect to taxable periods of such
corporation ending on or before the Closing Date; and (ii) Taxes imposed on any
member of any affiliated group with which any of Compost, Miami, Bedminster and
any Subsidiary file or have filed a Tax Return on a consolidated, combined or
unitary basis for taxable period ending on or before the Closing Date (together,
hereinafter "Tax Loss").
(b) The right of Lionhart, LHI and/or GEP to be indemnified pursuant to
this Section 14.01 shall be subject to the dollar threshold as is set forth in
Section 16.01.05 of this Agreement. Claims relating to Taxes and Tax Losses (as
provided under Section 14.01(a) of this Agreement) and claims for indemnity that
are otherwise within the scope of Article XVI of this Agreement, shall be
aggregated for the purpose of applying those limitations.
(c) The amount of any Tax Loss shall be the amount of Taxes and other
items described in Section 14.01 of this Agreement that are actually incurred by
Lionhart, LHI and/or GEP.
Section 14.02. Returns and Payments. Compost shall prepare and file or
otherwise furnish to the appropriate Tax-Governmental Authority (or cause to be
prepared and filed or so furnished) in a timely manner all Tax Returns, reports
or forms relating to or arising from Compost, Miami, Bedminster and any
Subsidiary that are due on or before, or relate to any taxable period ending on
or before, the Closing Date. Tax Returns of Compost, Miami, Bedminster and any
Subsidiary not yet filed for any taxable period that begins before the Closing
Date shall be prepared, and each item thereon treated, in a manner consistent
with past practices employed with respect to Compost, Miami, Bedminster and any
Subsidiary (except to the extent counsel for Compost, Miami, Bedminster and/or
any Subsidiary determines there is no reasonable basis in law therefor or
determines that a Tax Return cannot be so prepared and filed or an item so
reported without being subject to penalties).
Section 14.03. Contests. (a) After the Closing Date, Compost (or Miami,
Bedminster or any applicable Subsidiary) shall promptly notify Lionhart, LHI and
GEP in writing of any written notice of a proposed assessment or claim in an
audit or administrative or judicial proceeding involving Compost, Miami,
Bedminster or any applicable Subsidiary which, if determined adversely to the
taxpayer, would be grounds for indemnification under this Article XIV.
(b) Lionhart, LHI and GEP shall have the right to participate in any
audit or administrative or judicial proceedings to which Compost (or Miami, or
Bedminster or any such Subsidiary) may become a party that are reasonably likely
to result in an obligation on the part of Compost (or Miami, Bedminster or any
such Subsidiary) to Lionhart, LHI and/or GEP under this Article XIV.
(c) Compost (or Miami, Bedminster or any applicable Subsidiary) shall
not enter into any compromise or agree to
Page 79 of 107 Pages
settle any claim pursuant to any Tax audit or proceeding which would adversely
affect Lionhart, LHI and/or GEP for such year or a subsequent year without the
written consent of Lionhart, LHI and GEP, which consent may not be unreasonably
withheld.
Section 14.04. Time of Payment. Payment by Compost (or Miami or
Bedminster) to Lionhart, LHI and/or GEP of any amounts due under this Article
XIV, in respect of Taxes, shall be made within ten (10) Business Days following
the earliest of (i) an agreement between Compost (or Miami or Bedminster) and
Lionhart, LHI and/or GEP that an indemnity amount is payable; (ii) payment by
Compost (or Miami or Bedminster) of any Taxes which payment gives rise to an
indemnity obligation pursuant to this Article XIV; or (iii) a "determination" as
defined in Section 1313(a) of the Code giving rise to an indemnity obligation
pursuant to this Article XIV. If liability under this Article XIV is in respect
of costs or expenses other than Taxes, payment by Compost (or Miami or
Bedminster) of any amounts due under this Article XIV shall be made as promptly
as any such amount can be reasonably determined.
Section 14.05. Conveyance Taxes. Compost, Miami and Bedminster shall be
liable for and shall hold Lionhart, LHI and GEP harmless against any transfer,
recording, registration, and other fees, and any similar Taxes, if any, that
become payable in connection with the transactions contemplated under this
Agreement, the Credit Documents and/or the Definitive Supplemental Documents,
and shall file such applications and documents as shall permit any such Tax to
be assessed and paid on or prior to the Closing Date in accordance with any
available pre-sale filing procedure. Lionhart, LHI and GEP shall execute and
deliver all instruments and certificates necessary to enable Compost, Miami and
Bedminster to reasonably comply with the foregoing.
Section 14.06. Miscellaneous. (a) Compost, Miami and Bedminster, and
Lionhart, LHI and GEP, agree to treat all payments made to Lionhart, LHI and/or
GEP under this Article XIV, under other indemnity provisions of this Agreement
and for any misrepresentations or breach of warranties or covenants, to the
extent possible or practical, as adjustments to the purchase price or as capital
contributions for Tax purposes and that such treatment shall govern for purposes
hereof except to the extent that the laws of a particular jurisdiction provide
otherwise, in which case such payments shall be made in an amount sufficient to
indemnify the relevant party on an after-Tax basis.
(b) Notwithstanding any provision herein to the contrary, the
obligations of Compost, Miami and Bedminster to indemnify and hold harmless
Lionhart, LHI and GEP, pursuant to this Article XIV, and the representations and
warranties contained in Section 11.25 of this Agreement, shall terminate at the
close of business on the 180th day following the expiration of the applicable
statue of limitations with respect to the Tax liabilities in question (giving
effect to any waiver, mitigation or extension thereof).
(c) From and after the date hereof, Compost, Miami and Bedminster shall
not, without the prior written consent of Lionhart, LHI and GEP (which may, in
their sole and absolute discretion, withhold such consent) make or revoke, or
cause or permit to be made or revoked, any Tax election, or adopt or change any
method of accounting, that would affect Compost, Miami, Bedminster or any other
Subsidiary.
ARTICLE XV
CONDITIONS TO TERM LOAN CLOSING AND ANCILLARY TRANSACTIONS CLOSING
Section 15.01. Conditions to Obligations of Lionhart, LHI and GEP. The
obligations of Lionhart, LHI and GEP, 1) to consummate the transactions
contemplated under this Agreement, 2) to execute and deliver, and to consummate
the transactions contemplated under, the Credit Documents and/or the Definitive
Supplemental Documents, 3) to perform or discharge all of their respective
duties under Article II-Article X of this Agreement and/or Section 13.02 of this
Agreement, and/or 4) to otherwise effect the Term Loan Closing and/or the
Ancillary Transactions Closing, shall be subject to the prior fulfillment of
each of the following conditions:
15.01.01. Representations and Warranties/Agreements and
Covenants. (i) The representations and warranties of Compost, Miami
and/or Bedminster, as set forth in this Agreement, the Credit Documents
and the Definitive Supplemental Documents, that are qualified as to
materiality shall be true and correct in all aspects and all other
representations and warranties shall be true and correct in all
material respects on and as of the Closing Date, with the same force
and effect as if made as of the Closing Date, (ii) all of the
agreements, promises, covenants and undertakings of Compost, Miami
and/or Bedminster, as contained in this Agreement, the Credit Documents
and the Definitive Supplemental Documents, and that are to be performed
or complied with by Compost, Miami and/or
Page 80 of 107 Pages
Bedminster at or before the Closing Date, including, without
limitation, all such agreements, promises, covenants and undertakings
of Compost, Miami and/or Bedminster that are set forth in Section
13.03.01, Section 13.03.02 and Section 13.03.03 of this Agreement,
shall have been performed or complied with in all material respects at
or before and as of the Closing Date, and (iii) Xxxxx X. Xxxxxx, as the
President and Chief Executive Officer of Compost and Miami, and for and
on behalf of Compost and Miami, shall have provided to Lionhart, LHI
and GEP on and as of the Closing Date, and Lionhart, LHI and GEP shall
have received from Compost and Miami on and as of the Closing Date, the
"'Bring-Down' Certificate of Compost," in substantially the form of
Exhibit JJJ of this Agreement, the "'Bring-Down' Certificate of Miami,"
in substantially the form of Exhibit KKK of this Agreement, and
"'Bring-Down' Certificate of Bedminster," in substantially the form of
Exhibit SSS of this Agreement, each signed by Xxxxx X. Xxxxxx, as the
President and Chief Executive Officer of Compost, Miami and Bedminster,
as to the fulfillment of the conditions set forth in this Section
15.01.01(i)-(ii), and for the purposes that are otherwise contemplated
under Section 13.03 of this Agreement.
15.01.02. Litigation. There shall have been no order or
preliminary or permanent injunction entered in any action or proceeding
before any federal, state or foreign court or governmental,
administrative or regulatory authority or agency, and no other action
taken or threatened, or statute, rule, regulation, legislative,
interpretation, judgment or order enacted, entered, enforced,
promulgated, amended, issued or deemed applicable to Lionhart, LHI
and/or GEP, or to Compost, Miami and/or Bedminster, and/or any
Subsidiaries or Affiliates, by and federal, state or foreign
legislative body, court, government or governmental, administrative or
regulatory authority or agency which shall have remained in effect and
which shall have had the effect of making illegal, materially delaying
or otherwise directly or indirectly restraining or prohibiting the
consummation of any one (1) or more of the transactions contemplated or
otherwise provided for under this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents.
15.01.03. Compost Resolutions/Certificate. Compost shall have
provided to Lionhart, LHI and GEP, on and as of the Closing Date, and
Lionhart, LHI and GEP shall have received from Compost, on and as of
the Closing Date, a true and complete copy of the Compost Resolutions,
in substantially the form as is set forth in Exhibit N of this
Agreement, and a true and complete original of the Compost Certificate
of Resolutions, in substantially the form as is set forth in Exhibit O
of this Agreement, certified by the Secretary of Compost, of the
resolutions duly and validly adopted by the Compost Board evidencing
its authorization of the execution and delivery of this Agreement, the
Credit Documents and the Definitive Supplemental Documents, and the
consummation of the transactions contemplated under this Agreement, the
Credit Documents and the Definitive Supplemental Documents.
15.01.04. Miami Resolutions/Certificate. Miami shall have
provided to Lionhart, LHI and GEP, on and as of the Closing Date, and
Lionhart, LHI and GEP shall have received from Miami, on and as of the
Closing Date, a true and complete copy of the Miami Resolutions, in
substantially the form as is set forth in Exhibit P of this Agreement,
and a true and complete original of the Miami Certificate of
Resolutions, in substantially the form as is set forth in Exhibit Q of
this Agreement, certified by the Secretary of Miami, of the resolutions
duly and validly adopted by the Miami Board evidencing its
authorization of the execution and delivery of this Agreement, the
Credit Documents and the Definitive Supplemental Documents, and the
consummation of the transactions contemplated under this Agreement, the
Credit Documents and the Definitive Supplemental Documents.
15.01.05. Bedminster Resolutions/Certificate. Bedminster shall
have provided to Lionhart, LHI and GEP, on and as of the Closing Date,
and Lionhart, LHI and GEP shall have received from Bedminster, on and
as of the Closing Date, a true and complete copy of the Bedminster
Resolutions, in substantially the form as is set forth in Exhibit QQQ
of this Agreement, and a true and complete original of the Bedminster
Certificate of Resolutions, in substantially the form as is set forth
in Exhibit RRR of this Agreement, certified by the Secretary of
Bedminster, of the resolutions duly and validly adopted by the
Bedminster Board evidencing its authorization of the execution and
delivery of this Agreement, the Credit Documents and the Definitive
Supplemental Documents, and the consummation of the transactions
contemplated under this Agreement, the Credit Documents and the
Definitive Supplemental Documents.
15.01.06. Incumbency Certificate of Compost/Miami/Bedminster.
Compost, Miami and Bedminster shall have provided to Lionhart, LHI and
GEP, on and as of the Closing Date, and Lionhart, LHI and GEP shall
have received from Compost, Miami and Bedminster, on and as of the
Closing Date, 1) an incumbency certificate of the Secretary of Compost,
in substantially the form as is set forth in Exhibit GGG of this
Agreement, certifying the names
Page 81 of 107 Pages
and signatures of the officers of Compost who are authorized to sign
and deliver, for and on behalf of Compost, this Agreement, the Credit
Documents and the Definitive Supplemental Documents, including any
other documents or other considerations to be executed and/or delivered
thereunder; and, 2) an incumbency certificate of the Secretary of
Miami, in substantially the form as is set forth in Exhibit GGG of this
Agreement, certifying the names and signatures of the officers of Miami
who are authorized to sign and deliver, for and on behalf of Miami,
this Agreement, the Credit Documents and the Definitive Supplemental
Documents, including any other documents or other considerations to be
executed and/or delivered thereunder; and, 3) an incumbency certificate
of the Secretary of Bedminster, in substantially the form as is set
forth in Exhibit TTT of this Agreement, certifying the names and
signatures of the officers of Bedminster who are authorized to sign and
deliver, for and on behalf of Bedminster, this Agreement, the Credit
Documents and the Definitive Supplemental Documents, including any
other documents or other considerations to be executed and/or delivered
thereunder.
15.01.07. Consents and Approvals. Lionhart, LHI and GEP, and
Compost, Miami and Bedminster, shall have received, on and as of the
Closing Date, each in form and substance satisfactory to Lionhart, LHI
and GEP, in their sole and absolute discretion, all authorizations,
consents, orders and approvals of all Governmental Authorities and
officials and all third-party consents and estoppel certificates
identified to Compost, Miami and/or Bedminster, which Lionhart, LHI and
GEP in their sole and absolute discretion deems necessary or desirable
for the consummation of the transactions contemplated by or under this
Agreement, the Credit Documents and the Definitive Supplemental
Documents.
15.01.08. Organizational Documents. Lionhart, LHI and GEP,
shall have received, on and as of the Closing Date, a copy of (i) the
Certificates of Incorporation, as amended (or similar organizational
documents), of Compost, Miami, Bedminster and each Subsidiary,
certified by the secretary of state of the jurisdiction in which each
such entity is incorporated or organized, as of a date not earlier than
five Business Days prior to the Closing Date and accompanied by a
certificate of the Secretary or Assistant Secretary of each such
entity, dated as of the Closing Date, stating that no amendments have
been made to such Certificates of Incorporation (or similar
organizational documents) since such date, and (ii) the By-laws (or
similar organizational documents) of Compost, Miami, Bedminster and
each Subsidiary, certified by the Secretary or Assistant Secretary of
each such entity, certified by the Secretary or Assistant Secretary of
each such entity and dated as of the Closing Date, stating that such
By-laws are the current and complete By-laws of each such entity.
15.01.09. Good Standing/Qualification to do Business.
Lionhart, LHI and GEP, shall have received, on and as of the Closing
Date, good standing certificates for Compost, Miami, Bedminster and
each Subsidiary from the secretary of state of the jurisdiction in
which each sun entity in incorporated or organized and from the
secretary of state of each other jurisdiction in which the properties
owned or leased by any of Compost, Miami, Bedminster or any Subsidiary,
or the operation of its business in such jurisdiction, requires
Compost, Miami, Bedminster or any Subsidiary to qualify to do business
as a foreign corporation, in each case dated as of a date not earlier
than fifteen (15) Business Days prior to the Closing Date and
accompanied by bring-down certificates from the respective Secretaries
of Compost, Miami, Bedminster and each Subsidiary dated as of and on
the Closing Date.
15.01.10. Calamities. There shall not have occurred and be
continuing (i) any general suspension of, or limitation on prices for
or trading in securities on any United States securities exchange, (ii)
a declaration of a banking moratorium or any suspension of payments in
respect of banks in the Unites States, (iii) any limitation (whether or
not mandatory) by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, or other event
that materially adversely affects the ability of Lionhart, LHI or GEP,
and/or Miami, Compost or Bedminster, to consummate the transactions
contemplated under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, or (iv) a commencement of a war or
armed hostilities or other national or international calamity directly
involving the United States.
15.01.11 Bankruptcy or Insolvency. No proceeding shall have
been instituted or consented to by or against Compost, Miami,
Bedminster or any other Subsidiary seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding-up, reorganization,
arrangement, adjustment, protection, relief or composition of its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official
for it or any substantial part of its property (each such action being
a "Bankruptcy Proceeding"), and none of Compost, Miami, Bedminster or
any other
Page 82 of 107 Pages
Subsidiary shall have taken any corporate action to authorize and
Bankruptcy Proceeding.
15.01.12. No Material Adverse Effect. No fact, event or
condition (financial or otherwise) shall have occurred with respect to
Compost, Miami, Bedminster or any of the Subsidiaries having,
individually or in the aggregate, a Material Adverse Effect.
15.01.13. Legal Opinions. Lionhart, LHI and GEP, shall have
received, on and as of the Closing Date, 1) an opinion from Xxxxxxxxx
Traurig, the Legal Opinion of Compost's Counsel, in substantially the
form and to the effect as is set forth in Exhibit L of this Agreement;
2) an opinion from Xxxxxxxxx Xxxxxxx, P.A., the Legal Opinion of
Miami's Counsel, in substantially the form and to the effect as is set
forth in Exhibit M of this Agreement; 3) an opinion from Xxxxxxxxx
Traurig, P.A., the Legal Opinion of Bedminster's Counsel, in
substantially the form and to the effect as is set forth in Exhibit OOO
of this Agreement; and, 4) any other opinions that are required to be
delivered by Compost, Miami and/or Bedminster, via their respective
counsel, to Lionhart, LHI and/or GEP, pursuant to this Agreement.
15.01.14. Registration Rights Agreement. Lionhart shall have
received, on and as of the Closing Date, the Registration Rights
Agreement, in substantially the form of Exhibit DDD of this Agreement,
that is duly authorized, executed and delivered by Compost.
15.01.15. Director Appointment Agreement. Lionhart shall have
received, on and as of the Closing Date, the Director Appointment
Agreement, in substantially the form of Exhibit EEE of this Agreement,
that is duly authorized, executed and delivered by Compost.
15.01.16. Other Considerations. Lionhart, LHI and GEP shall
have received, on and as of the Closing Date, all other considerations
that are required to be executed and/or delivered by Compost, Miami
and/or Bedminster, to Lionhart, LHI and/or GEP, as provided under this
Agreement (including, Section 13.03 hereof).
15.01.17. Due Diligence. Lionhart, LHI and GEP shall have
completed all their business, legal, accounting and environmental due
diligence with respect to Compost, Miami and the Subsidiaries and
shall, in their sole and absolute judgment, be satisfied with the
results thereof.
Section 15.02. Conditions to Obligations of Compost, Miami and
Bedminster. The obligations of Compost, Miami and Bedminster, 1) to consummate
the transactions contemplated under this Agreement, 2) to execute and deliver,
and to consummate the transactions contemplated under, the Credit Documents
and/or the Definitive Supplemental Documents, 3) to perform or discharge all of
their respective duties under Article II-Article X of this Agreement and/or
Section 13.03 of this Agreement, and/or 4) to otherwise effect the Term Loan
Closing and/or the Ancillary Transactions Closing, shall be subject to the prior
fulfillment of each of the following conditions:
15.02.01. Representations and Warranties/Agreements and
Covenants. (i) The representations and warranties of Lionhart, LHI and
GEP, as set forth in this Agreement, the Credit Documents and the
Definitive Supplemental Documents, that are qualified as to materiality
shall be true and correct in all aspects and all other representations
and warranties shall be true and correct in all material respects on
and as of the Closing Date, with the same force and effect as if made
as of the Closing Date, (ii) all of the agreements, promises, covenants
and undertakings of Lionhart, LHI and GEP, as contained in this
Agreement, the Credit Documents and the Definitive Supplemental
Documents, and that are to be performed or complied with by Lionhart,
LHI and/or GEP, at or before the Closing Date, including, without
limitation, all such agreements, promises, covenants and undertakings
of Lionhart, LHI and/or GEP that are set forth in Section 13.02.01,
Section 13.02.02 and Section 13.02.03 of this Agreement, shall have
been performed or complied with in all material respects at or before
and as of the Closing Date, and (iii) Xxxxxxxx X. Xxxxx, as the
Managing Director of Lionhart, LHI and GEP, and for and on behalf of
Lionhart, LHI and GEP, shall have provided to Compost, Miami and
Bedminster on and as of the Closing Date, and Compost, Miami and
Bedminster shall have received from Lionhart, LHI and GEP, on and as of
the Closing Date, the "'Bring-Down' Certificate of Lionhart, LHI and
GEP," in substantially the form of Exhibit KKK of this Agreement, and
signed by Xxxxxxxx X. Xxxxx, as the Managing Director of Lionhart, LHI
and GEP, as to the fulfillment of the conditions set forth in this
Section 15.02.01(i)-(ii).
Page 83 of 107 Pages
15.02.02. Litigation. There shall have been no order or
preliminary or permanent injunction entered in any action or proceeding
before any federal, state or foreign court or governmental,
administrative or regulatory authority or agency, and no other action
taken or threatened, or statute, rule, regulation, legislative,
interpretation, judgment or order enacted, entered, enforced,
promulgated, amended, issued or deemed applicable to Lionhart, LHI
and/or GEP, or to Compost, Miami and/or Bedminster, and/or any
Subsidiaries or Affiliates, by and federal, state or foreign
legislative body, court, government or governmental, administrative or
regulatory authority or agency which shall have remained in effect and
which shall have had the effect of making illegal, materially delaying
or otherwise directly or indirectly restraining or prohibiting the
consummation of any one (1) or more of the transactions contemplated or
otherwise provided for under this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents.
15.02.03. Joint Resolutions/Certificate. Lionhart, LHI and GEP
shall have provided to Compost, Miami and Bedminster, on and as of the
Closing Date, and Compost, Miami and Bedminster shall have received
from Lionhart, LHI and GEP, on and as of the Closing Date, a true and
complete copy of the Joint Resolutions, in substantially the form as is
set forth in Exhibit Z of this Agreement, and a true and complete
original of the Certificate of Joint Resolutions, in substantially the
form as is set forth in Exhibit Z of this Agreement, certified by the
respective Secretaries of Lionhart, LHI and GEP of the resolutions duly
and validly adopted by the Lionhart Board, the LHI Board and the GEP
Board, evidencing their respective authorization of the execution and
delivery of this Agreement, the Credit Documents and the Definitive
Supplemental Documents, and the consummation of the transactions
contemplated under this Agreement, the Credit Documents and the
Definitive Supplemental Documents.
15.02.04. Incumbency Certificate of Lionhart, LHI and GEP.
Lionhart, LHI and GEP shall have provided to Compost, Miami and
Bedminster, on and as of the Closing Date, and Compost, Miami and
Bedminster shall have received from Lionhart, LHI and GEP, on and as of
the Closing Date, 1) an incumbency certificate of the Secretary of
Lionhart, in substantially the form as is set forth in Exhibit BBB of
this Agreement, certifying the names and signatures of the officers of
Lionhart who are authorized to sign and deliver, for and on behalf of
Lionhart, this Agreement, the Credit Documents and the Definitive
Supplemental Documents, including any other documents or other
considerations to be executed and/or delivered thereunder; and, 2) an
incumbency certificate of the Secretary of GEP, in substantially the
form as is set forth in Exhibit AAA of this Agreement, certifying the
names and signatures of the officers of GEP who are authorized to sign
and deliver, for and on behalf of GEP, this Agreement, the Credit
Documents and the Definitive Supplemental Documents, including any
other documents or other considerations to be executed and/or delivered
thereunder; and, 3) an incumbency certificate of the Secretary of LHI,
in substantially the form as is set forth in Exhibit LLL of this
Agreement, certifying the names and signatures of the officers of LHI
who are authorized to sign and deliver, for and on behalf of GEP, this
Agreement, the Credit Documents and the Definitive Supplemental
Documents, including any other documents or other considerations to be
executed and/or delivered thereunder.
15.02.05. Legal Opinions. Compost, Miami and Bedminster shall
have received, on and as of the Closing Date, an opinion from X'Xxxxx,
Xxxxxxx & Drics, L.L.P., 1) the Legal Opinion of Lionhart's Counsel, in
substantially the form and to the effect as is set forth in Exhibit FF
of this Agreement, 2) the Legal Opinion of LHI's Counsel, in
substantially the form and to the effect as is set forth in Exhibit AA
of this Agreement, and 3) the Legal Opinion of GEP's Counsel, in
substantially the form and to the effect as is set forth in Exhibit PPP
of this Agreement.
15.02.06. Registration Rights Agreement. Compost shall have
received, on and as of the Closing Date, the Registration Rights
Agreement, in substantially the form of Exhibit DDD of this Agreement,
that is duly authorized, executed and delivered by Lionhart.
15.02.07. Other Considerations. Compost, Miami and/or
Bedminster shall have received, on and as of the Closing Date, all
other considerations that are required to be executed and/or delivered
by Lionhart, LHI and/or GEP, to Compost, Miami and/or Bedminster, as
provided under this Agreement (including, Section 13.02 hereof).
15.02.08. Director Appointment Agreement. Compost shall have
received, on and as of the Closing Date, the Director Appointment
Agreement, in substantially the form of Exhibit EEE of this Agreement,
that is duly authorized, executed and delivered by Lionhart.
ARTICLE XVI
Page 84 of 107 Pages
INDEMNIFICATION
Section 16.01. Compost, Miami and Bedminster Indemnity. Compost, Miami
and Bedminster hereby agree, promise and covenant, and otherwise undertake, the
following indemnification duties, as provided under (and pursuant to the terms
and subject to the conditions set forth in) Section 16.01.01, Section 16.01.02,
Section 16.01.03, Section 16.01.04 and Section 16.01.05 of this Agreement, as
follows:
16.01.01. Indemnification Undertaking. Compost, Miami and
Bedminster hereby agree, promise and covenant, jointly and severally,
to indemnify, defend and hold harmless, Lionhart, LHI and GEP, and
their respective officers, directors, managers, employees, advisors,
consultants, agents and representatives and successors and assigns, as
well as their respective Affiliates and their respective officers,
directors, managers, employees, advisors, consultants, agents and
representatives and successors and assigns (collectively, "Indemnified
Party(ies)"), during the Survival Period (as provided under Section
16.01.03 of this Agreement), from and against, and for and in respect
of, any and all Liabilities, losses, depreciations in value, damages,
claims, costs and expenses, interest, awards, judgments and penalties,
forfeitures, actions, assessments, liabilities, obligations,
settlements and lawsuits and proceedings (including, without
limitation, reasonable attorneys' fees, expert witness fees and
charges, and court costs), as and when incurred or suffered by any one
(1) or more Indemnified Parties, including any Action brought or
otherwise initiated by any one (1) or more of such Indemnified
Parties(hereinafter, an "Indemnified Party Loss"), that relate to or
arise from:
(i) Any material breach, violation or default of any
representation or warranty made by Compost, Miami or
Bedminster as contained or otherwise set forth in any one (1)
or more of the Transaction Documents (as that term is defined
under Section 16.01.02 of this Agreement); or,
(ii) Any material breach, default or violation of any
covenant, promise, agreement or undertaking by Compost, Miami
or Bedminster as contained or otherwise set forth in any one
(1) or more of the Transaction Documents (as that term is
defined under Section 16.02 of this Agreement); or,
(iii) Any material liabilities or Indebtedness of
Compost, Miami, Bedminster or any Subsidiary not reflected on
the Financial Statements, the Interim Financial Statements,
the Miami Balance Sheet and/or the Bedminster Balance Sheet,
whether arising before or after the Closing Date; or,
(iv) Any material liabilities of Compost, Miami,
Bedminster or any Subsidiary, whether arising before or after
the Closing Date, and that relate to or arise from any of the
Transaction Documents; or,
(v) Any judgment or order of the Court, in and with
respect to the Miami Complaint and the Miami Claim, and/or any
material event relating to or arising from the Miami Complaint
and the Miami Claim (including, without limitation, any
settlement or arbitration award relating to or arising from
the Miami Complaint and the Miami Claim), which has a Material
Adverse Effect on the Miami Project, the Miami Project
Collateral, the Put or Pay Contract, the Miami Project
Permits, the Miami Site, the Miami Project Financing, the
Miami Balance Sheet, the Bedminster Balance Sheet and/or the
Appraised Value of the Miami Site; or,
(vi) Any Losses incurred by Compost, Miami or
Bedminster, or incurred by Lionhart, LHI and/or GEP, by reason
of, or in connection with, any termination, nullification,
cancellation, avoidance, expiration or invalidity or
unenforceability of the Put or Pay Contract, and/or any event
or occurrence that has a Material Adverse Effect on the Put or
Pay Contract; or,
(vii) Any material breach, violation or default by
Compost, Miami and/or Bedminster of any negative and/or
affirmative covenants or undertakings that are set forth in
Article XVII of this Agreement; or,
(viii) Any and all Losses suffered or incurred by
Lionhart, LHI and/or GEP, and/or Compost, Miami, Bedminster or
any Subsidiary, by reason of or in connection with any claim
or cause of action of any third party to the extent arising
out of any action, inaction, event, condition, liability or
obligation of Compost
Page 85 of 107 Pages
and/or Miami and/or Bedminster occurring or existing prior to
the Closing Date; or,
(ix) Any diminuation in the value of any collateral,
under the Mortgage (including, the Miami Site), or under the
Security Agreement (including, the Miami Claim, the Miami
Project Collateral, the Put or Pay Contract, the Miami Project
Financing and the Miami Project Permits) or under the Compost
Stock Pledge Agreement (Compost Common Stock), the Compost
Stock Pledge Agreement (Miami Common Stock) or the Compost
Stock Pledge Agreement (Bedminster Common Stock) (including,
the Pledged Compost Shares, the Pledged Miami Shares and the
Pledged Bedminster Shares), by reason of or in connection
with, or relating to or arising or resulting from any cause,
or breach, violation or default that is described or
contemplated under this Section 16.01; or,
(x) Any diminuation in the value of any material
asset of Compost, Miami or Bedminster (or any other
Subsidiary) by reason of or in connection with, or relating to
or arising or resulting from any cause, or breach, violation
or default that is described or contemplated under this
Section 16.01; or,
(xi) (A) Any and all Remedial Actions after the
Closing Date relating to any Release of Hazardous Materials or
Hazardous Substances in or upon the Environment or on or about
the Real Property and/or the Miami Site prior to or after the
Closing Date to the extent any such Remedial Action is
required under any Environmental Law or by any Governmental
Authority or is necessary to prevent or xxxxx a significant
and material risk to human health or the environment; or, (B)
any and all Environmental Claims arising at any time that
relate to the business or the operation of Compost, Miami,
Bedminster or any Subsidiary prior to or after the Closing
Date; or, (C) any and all noncompliances with or violations of
any applicable Environmental Law or Environmental Permit by
Compost, Miami, Bedminster or any Subsidiary prior to or after
the Closing Date.
To the extent that any undertakings set forth in this Section 16.01 may
be unenforceable, Compost and Miami shall contribute the maximum amount
that it is permitted to contribute under applicable law to the payment
and satisfaction of all Losses incurred by Lionhart, LHI and GEP. In
addition, and notwithstanding anything to the contrary in this Article
XVI, the rights and obligations of the parties with respect to any and
all Tax matters shall be governed by Article XIV of this Agreement. In
particular, this Article XVI shall not apply to any indemnity to which
Lionhart, LHI and/or GEP may be entitled under Article XIV of this
Agreement (relating to Taxes), except to the extent specified therein.
16.01.02. Transaction Documents-Definition. The term
"Transaction Documents," for purposes of this Section 16.01, shall mean
and include 1) this Agreement, 2) the Credit Documents (including,
without limitation, the Mortgage, the Mortgage Note, the Security
Agreement, the Compost Stock Pledge Agreement (Compost Common Stock),
the Compost Stock Pledge Agreement (Miami Common Stock), the Compost
Stock Pledge Agreement (Bedminster Common Stock) and the Compost-Miami
Guaranty), 3) the Definitive Supplemental Documents, 4) Appendix I,
Appendix II and Appendix III of this Agreement, 5) the Exhibits of this
Agreement, 6) the Disclosure Schedule, 7) the Disclosure Documents, 8)
the Miami Project Disclosures, 9) the Compost Disclosures, 10) the
8/14/98 Compost/Miami Disclosure, 11) the Financial Statements and
Interim Financial Statements, 12) the Miami Balance Sheet, 13) the
Bedminster Balance Sheet, 14) the SEC Reports, and, 15) all other
documents, reports, schedules, disclosures, certificates, and all other
written information and all considerations that are provided or
delivered by (or on behalf of) Compost and/or Miami and/or Bedminster
to (or on behalf of) Lionhart, LHI and/or GEP, pursuant to or in
connection with the execution and/or delivery of this Agreement, the
Credit Documents and/or the Definitive Supplemental Documents, and/or
pursuant to or in connection with the consummation of the transactions
contemplated by or under this Agreement, the Credit Documents and/or
the Definitive Supplemental Documents.
Section 16.01.03. Survival Period. The representations,
warranties, promises, agreements, covenants, statements and
undertakings of Compost, Miami and/or Bedminster, as are set forth in
any of the Transaction Documents, shall survive and remain operative
through the Term Loan Closing and the Ancillary Transactions Closing on
the Closing Date, and shall survive and remain operative thereafter,
until November 1, 2005 ("Survival Period"). The indemnification duties,
obligations and undertakings of Compost, Miami and Bedminster, under
this Section 16.01, shall continue during, and terminate with the
expiration of, the Survival Period. Any claim or demand that is pending
or asserted by any Indemnified Party (including, Lionhart, LHI and GEP)
against Compost, Miami and/or
Page 86 of 107 Pages
Bedminster, under this Section 16.01, prior to the expiration of the
Survival Period, may continue to be asserted under this Section 16.01
(notwithstanding the expiration of the Survival Period). Neither the
Survival Period nor the liability of any party with respect to the
parties' representations and warranties shall be reduced by any
investigation made at any time by or on behalf of any party.
Section 16.01.04. Claim Procedures. (a) An Indemnified Party
shall give Compost, Miami and Bedminster notice of any matter which an
Indemnified Party has determined, in good faith, and based on actual
disclosure to or actual knowledge by any such Indemnified Party, has
given or could give rise to a right of indemnification under Section
16.01 of this Agreement, within ninety (90) days of such determination,
stating the estimated amount of the Loss, if known, and the method of
computation thereof, and containing a reference to the provisions of
this Agreement and the applicable Transaction Documents in respect of
which such right of indemnification is claimed or arises.
(b) The obligations and Liabilities of Compost, Miami and
Bedminster, under Section 16.01 of this Agreement, with respect to
Losses arising from claims of any third party which are subject to the
indemnification provided for in this Section 16.01 ("Third Party
Claims") shall be governed by and contingent upon the following
additional terms and conditions: (i) if an Indemnified Party shall
receive notice of any Third Party Claim, the Indemnified Party shall
give Compost, Miami and Bedminster notice of such Third Party Claim
within thirty (30) days of the receipt by the Indemnified Party of such
notice, provided, however, that the failure to provide such notice
shall not release Compost, Miami or Bedminster from any of its or their
obligations under this Article XVI except to the extent that Compost,
Miami and/or Bedminster is or are materially prejudiced by such
failure, and shall not relieve Compost, Miami or Bedminster from any
other obligation or Liability that it or they may have to any
Indemnified Party otherwise than under this Article XVI; and, (ii) if
Compost, Miami or Bedminster acknowledges in writing its or their
obligation to indemnify the Indemnified Party hereunder against any
Losses that may result from such Third Party Claim, then Compost, Miami
and Bedminster shall be entitled to assume and control the defense of
such Third Party Claim at its and their expense and through counsel of
its and their choice if Compost, Miami and/or Bedminster give notice of
their intention to do so to the Indemnified Party within five (5) days
of the receipt of such notice from the Indemnified Party, provided,
however, that if there exists or is reasonably likely to exist a
conflict of interest that would make it inappropriate in the judgment
of the Indemnified Party, in its sole and absolute discretion, for the
same counsel to represent both the Indemnified Party and Compost and/or
Miami and/or Bedminster, then the Indemnified Party shall be entitled
to retain its own counsel, in each jurisdiction for which the
Indemnified Party determines counsel is required, at the expense of
Compost, Miami and Bedminster. In the event that Compost, Miami and
Bedminster exercise the right to undertake any such defense against any
such Third Party Claim as provided above, the Indemnified Party shall
cooperate with Compost, Miami and Bedminster in such defense and make
available to Compost, Miami and Bedminster, at Compost's and Miami's
and Bedminster's sole expense, all witnesses, pertinent records,
materials and information in the Indemnified Party's possession or
under the Indemnified Party's control relating thereto as is reasonable
required by Compost, Miami and/or Bedminster. Similarly, in the event
the Indemnified Party is, directly or indirectly, conducting the
defense against any such Third Party Claim, Compost, Miami and
Bedminster shall cooperate with the Indemnified Party in such defense
and make available to the Indemnified Party, at Compost's and Miami's
and Bedminster's expense, all such witnesses, records, materials and
information in Compost's or Miami's or Bedminster's possession or under
Compost's and/or Miami's and/or Bedminster's control relating thereto
as is reasonably required by the Indemnified Party. No such Third Party
Claim may be settled by Compost, Miami or Bedminster without the prior
written consent of the Indemnified Party.
(c) Each party shall within ninety (90) days of learning of
any asserted liability or damage claimed to give rise to
indemnification hereunder notify the party obligated to indemnify it
hereof in writing provided, however, that the failure of the
Indemnified Party to so notify the indemnifying party shall not relieve
the indemnifying party of its obligations hereunder unless, and only to
the extent that, such failure to notify prejudices the indemnifying
party. Thereafter, the indemnifying party shall have, at its election,
the right to compromise or defend any such matter at its sole cost and
expense through counsel chosen by it. If the indemnifying party so
undertakes to compromise and defend, the indemnifying party shall
notify the other party of its intention to do so. If the indemnifying
party fails to defend such matter diligently, the Indemnified Party may
assume control of the defense of such matter. Each party agrees in all
cases to cooperate with the defending party and its counsel in the
compromise of or defending of any such liabilities or claims. The
defending party and the nondefending party may be represented by the
same counsel unless such representation would be inappropriate due to
actual or potential differing interests between them. In addition, the
nondefending party shall at all times be entitled to monitor such
defense through the appointment of counsel of
Page 87 of 107 Pages
its own choosing, at its own cost and expense.
Section 16.01.05. Damage Threshold. Neither Lionhart, nor LHI
or GEP shall be entitled to indemnification under this Section 16.01
unless and until the aggregate amount of the claims against Compost,
Miami and/or Bedminster, by Lionhart, LHI or GEP, equals or exceeds US
$100,000. If the aggregate amount of such claims, by Lionhart, LHI or
GEP, and against Compost and/or Miami and/or Bedminster, equals or
exceeds US $100,000, then Lionhart, LHI and/or GEP may claim
indemnification for the entire aggregate amount of such claims, whether
or not any such Loss or Losses are material or immaterial.
Notwithstanding the preceding terms and provisions of this Section
16.01.05, any claim by any Indemnified Party under Section 16.01 for
any Indemnified Party Loss, and which relates to or arises from the
failure or omission by Compost (or Miami or Bedminster), under the
Transaction Documents, 1) to issue any shares of Compost Common Stock
to Lionhart, or any other Indemnified Party, 2) to issue any
Compost-Lionhart Warrant (#1-#6), or any part thereof, to Lionhart, or
any other Indemnified Party, 3) to issue any stock certificate (for any
Compost Common Stock or Series B Preferred Stock) to Lionhart or any
other Indemnified Party, or 4) to execute or deliver any document,
agreement, certificate, receipt, resolution and/or any other
considerations to Lionhart, or any other Indemnified Party, on the Term
Loan Closing and Ancillary Transactions Closing on the Closing Date as
required under the Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, shall not be subject to the dollar
threshold as set forth in this Section 16.01.05
Section 16.02. Lionhart, LHI and GEP Indemnity. Lionhart, LHI and GEP
hereby agree, promise and covenant, and otherwise undertake, the following
indemnification duties, as provided under (and pursuant to the terms and subject
to the conditions set forth in) Section 16.02.01, Section 16.02.02, Section
16.02.03 and Section 16.02.04 of this Agreement, as follows:
16.02.01. Indemnification Undertaking. Lionhart, LHI and GEP
hereby agree, promise and covenant, jointly and severally, to
indemnify, defend and hold harmless, Compost, Miami and Bedminster, and
their respective officers, directors, managers, employees, advisors,
consultants, agents and representatives and successors and assigns, as
well as their respective Affiliates and their respective officers,
directors, managers, employees, advisors, consultants, agents and
representatives and successors and assigns (collectively, "Indemnified
Party(ies)"), during the Survival Period (as provided under Section
16.02.02 of this Agreement), from and against, and for and in respect
of, any and all Liabilities, losses, depreciations in value, damages,
claims, costs and expenses, interest, awards, judgments and
penalties, forfeitures, actions, assessments, liabilities, obligations,
settlements and lawsuits and proceedings (including, without
limitation, reasonable attorneys' fees, expert witness fees and
charges, and court costs), as and when incurred or suffered by any one
(1) or more Indemnified Parties, including any Action brought or
otherwise initiated by any one (1) or more of such Indemnified
Parties(hereinafter, an "Indemnified Party Loss"), that relate to or
arise from:
(i) Any material breach, violation or default of any
representation or warranty made by Lionhart, LHI or GEP as
contained or otherwise set forth in this Agreement, the Credit
Documents or the Definitive Supplemental Documents, prior to
the Closing Date; or,
(ii) Any material breach, violation or default of any
agreement or covenant by Lionhart, LHI and/or GEP under this
Agreement, the Credit Documents or the Definitive Supplemental
Documents.
Section 16.02.02. Survival Period. The representations,
warranties, promises, agreements, covenants, statements and
undertakings of Lionhart, LHI and/or GEP, as are set forth in this
Agreement, the Credit Documents and/or the Definitive Supplemental
Documents, shall survive and remain operative through the Term Loan
Closing and the Ancillary Transactions Closing on the Closing Date, and
shall survive and remain operative thereafter, until August 1, 2001
("Survival Period"). The indemnification duties, obligations and
undertakings of Lionhart, LHI and/or GEP, under this Section 16.02,
shall continue during, and terminate with the expiration of, the
Survival Period. Any claim or demand that is pending or asserted by any
Indemnified Party (including, Compost, Miami and Bedminster) against
Lionhart, LHI and/or GEP, under this Section 16.02, prior to the
expiration of the Survival Period, may continue to be asserted under
this Section 16.02 (notwithstanding the expiration of the Survival
Period). Neither the Survival Period nor the liability of any party
with respect to the parties' representations and warranties shall be
reduced by any investigation made at any time by or on behalf of any
party.
Section 16.02.03. Claim Procedures. (a) An Indemnified Party
shall give Lionhart, LHI and GEP notice
Page 88 of 107 Pages
of any matter which an Indemnified Party has determined, in good faith,
and based on actual disclosure to or actual knowledge by any such
Indemnified Party, has given or could give rise to a right of
indemnification under Section 16.02 of this Agreement, within ninety
(90) days of such determination, stating the estimated amount of the
Loss, if known, and the method of computation thereof, and containing a
reference to the provisions of this Agreement and the applicable Credit
Documents and Definitive Supplemental Documents in respect of which
such right of indemnification is claimed or arises.
(b) The obligations and Liabilities of Lionhart, LHI and GEP,
under Section 16.02 of this Agreement, with respect to Losses arising
from claims of any third party which are subject to the indemnification
provided for in this Section 16.02 ("Third Party Claims") shall be
governed by and contingent upon the following additional terms and
conditions: (i) if an Indemnified Party shall receive notice of any
Third Party Claim, the Indemnified Party shall give Lionhart, LHI and
GEP notice of such Third Party Claim within thirty (30) days of the
receipt by the Indemnified Party of such notice, provided, however,
that the failure to provide such notice shall not release Lionhart, LHI
or GEP from any of its or their obligations under this Article XVI
except to the extent that Lionhart, LHI and/or GEP is or are materially
prejudiced by such failure, and shall not relieve Lionhart, LHI or GEP
from any other obligation or Liability that it or they may have to any
Indemnified Party otherwise than under this Article XVI; and, (ii) if
Lionhart, LHI or GEP acknowledges in writing its or their obligation to
indemnify the Indemnified Party hereunder against any Losses that may
result from such Third Party Claim, then Lionhart, LHI and GEP shall be
entitled to assume and control the defense of such Third Party Claim at
its and their expense and through counsel of its and their choice if
Lionhart, LHI and/or GEP give notice of their intention to do so to the
Indemnified Party within five (5) days of the receipt of such notice
from the Indemnified Party, provided, however, that if there exists or
is reasonably likely to exist a conflict of interest that would make it
inappropriate in the judgment of the Indemnified Party, in its sole and
absolute discretion, for the same counsel to represent both the
Indemnified Party and Lionhart and/or LHI and/or GEP, then the
Indemnified Party shall be entitled to retain its own counsel, in each
jurisdiction for which the Indemnified Party determines counsel is
required, at the expense of Lionhart, LHI and GEP. In the event that
Lionhart, LHI and GEP exercise the right to undertake any such defense
against any such Third Party Claim as provided above, the Indemnified
Party shall cooperate with Lionhart, LHI and GEP in such defense and
make available to Lionhart, LHI and GEP, at Lionhart's, LHI's and GEP's
sole expense, all witnesses, pertinent records, materials and
information in the Indemnified Party's possession or under the
Indemnified Party's control relating thereto as is reasonable required
by Lionhart, LHI and/or GEP. Similarly, in the event the Indemnified
Party is, directly or indirectly, conducting the defense against any
such Third Party Claim, Lionhart, LHI and GEP shall cooperate with the
Indemnified Party in such defense and make available to the Indemnified
Party, at Lionhart's, LHI's and GEP's expense, all such witnesses,
records, materials and information in Lionhart's or LHI's or GEP's
possession or under Lionhart's and/or LHI's and/or GEP's control
relating thereto as is reasonably required by the Indemnified Party. No
such Third Party Claim may be settled by Lionhart, LHI or GEP without
the prior written consent of the Indemnified Party.
(c) Each party shall within ninety (90) days of learning of
any asserted liability or damage claimed to give rise to
indemnification hereunder notify the party obligated to indemnify it
hereof in writing provided, however, that the failure of the
Indemnified Party to so notify the indemnifying party shall not relieve
the indemnifying party of its obligations hereunder unless, and only to
the extent that, such failure to notify prejudices the indemnifying
party. Thereafter, the indemnifying party shall have, at its election,
the right to compromise or defend any such matter at its sole cost and
expense through counsel chosen by it. If the indemnifying party so
undertakes to compromise and defend, the indemnifying party shall
notify the other party of its intention to do so. If the indemnifying
party fails to defend such matter diligently, the Indemnified Party may
assume control of the defense of such matter. Each party agrees in all
cases to cooperate with the defending party and its counsel in the
compromise of or defending of any such liabilities or claims. The
defending party and the nondefending party may be represented by the
same counsel unless such representation would be inappropriate due to
actual or potential differing interests between them. In addition, the
nondefending party shall at all times be entitled to monitor such
defense through the appointment of counsel of its own choosing, at its
own cost and expense.
Section 16.02.04. Damage Threshold. Neither Compost nor Miami
or Bedminster (or any other Indemnified Party under Section 16.02.01 of
this Agreement) shall be entitled to indemnification under this Section
16.02 unless and until the aggregate amount of the claims against
Lionhart and/or LHI and/or GEP, by Compost, Miami and/or Bedminster
(and all other Indemnified Parties under Section 16.02.01 of this
Agreement), equals or exceeds US $100,000. If the aggregate amount of
such claims, against Lionhart and/or LHI and/or GEP, by Compost, Miami
Page 89 of 107 Pages
and/or Bedminster, equals or exceeds US $100,000, then Compost, Miami
and Bedminster (and all other Indemnified Parties under Section
16.02.01 of this Agreement) may claim indemnification for the entire
aggregate amount of such claims, whether or not any such Loss or Losses
are material or immaterial. Notwithstanding the preceding terms and
provisions of this Section 16.02.04, any claim by any Indemnified Party
under Section 16.02 for any Indemnified Party Loss, and which relates
to or arises from the failure or omission by Lionhart and/or LHI and/or
GEP, under this Agreement, the Credit Documents or the Definitive
Supplemental Documents, to execute or deliver any document, agreement,
certificate, receipt, resolution and/or any other considerations to
Compost, Miami and/or Bedminster, or any other Indemnified Party, on
the Term Loan Closing and Ancillary Transactions Closing on the Closing
Date as required under the Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, shall not be subject to the dollar
threshold as set forth in this Section 16.02.04.
ARTICLE XVII
COVENANTS AND UNDERTAKINGS OF COMPOST, MIAMI AND BEDMINSTER
Section 17.01. Pre-Closing Covenants and Undertakings. Compost, Miami
and Bedminster hereby agree, promise and covenant, jointly and severally, that,
pending the Term Loan Closing and the Ancillary Transactions Closings on the
Closing Date, and in addition to any and all other pre-closing agreements,
promises, covenants and other undertakings of Compost, Miami or Bedminster that
is or are set forth in this Agreement, the Credit Documents and/or the
Definitive Documents:
17.01.01. Access/Review/Due Diligence. Compost, Miami and
Bedminster 1) will afford and provide to the officers, directors,
employees, counsel, agents, investment bankers, accountants, and other
professionals and agents and/or representatives of Lionhart, LHI and
GEP, open, friendly and full access to the Business, all other
business, the assets, the Properties, the Real Estate, and the offices,
facilities, properties, books, and legal, financial and business files
and records of Compost, Miami and Bedminster, and 2) will cooperate
with Lionhart, LHI and GEP, on a commercially reasonable basis with
respect to all due diligence questions, investigations or audits
conducted or sponsored by or on behalf of Lionhart, LHI and/or GEP,
that relate to or arise from Compost, Miami and/or Bedminster.
17.01.02. Maintenance/Disclosure of Financial Records.
Compost, Miami and Bedminster shall maintain their respective books,
accounts and records in the usual and regular manner, on a basis
consistent with GAAP and prior periods, and Compost, Miami and
Bedminster shall provide Lionhart, LHI and GEP with financial
statements prepared on a monthly basis and such additional financial
and operating data and other information relating to Compost, Miami
and/or Bedminster as may be requested reasonably by Lionhart, LHI
and/or GEP, or any authorized officer, director, employee counsel,
agent, investment banker, accountant or other professional or agent or
representative thereof.
17.01.03. Conduct of Business. Compost, Miami and Bedminster
shall conduct their Business, all other businesses, affairs and
operations, and shall manage, operate, preserve and conserve the
Business, all other business, and the assets and Properties of Compost,
Miami and Bedminster, such that at the Term Loan Closing and the
Ancillary Transactions Closing on the Closing Date, no representation
or warranty of Compost, Miami and/or Bedminster (as set forth in this
Agreement, the Credit Documents and/or the Definitive Supplemental
Documents), will be inaccurate or misleading, no covenant or agreement
of Compost, Miami and/or Bedminster (as set forth in this Agreement,
the Credit Documents and/or the Definitive Supplemental Documents) will
be breached, and no condition in this Agreement, the Credit Documents
or the Definitive Supplemental Documents, will remain unfulfilled by
reason of the actions or omissions of Compost, Miami and/or Bedminster.
Compost, Miami and Bedminster shall use their respective best efforts,
in good faith, in the ordinary course of business, 1) to preserve,
conserve and maintain the business operations of the Business, all
other business, the assets, Properties and the Real Estate of Compost,
Miami and Bedminster, 2) to preserve in full force and effect the
contracts, agreements, instruments, leases, licenses, arrangements, and
understandings of Compost, Miami and Bedminster, including, without
limitation, the Put or Pay Contract and all other Material Contracts,
3) to prosecute vigorously, in the Court, the Miami Claims as set forth
in the Miami Complaint, and 4) to preserve the goodwill by and among
the City of Miami, and Compost, Miami and Bedminster, and with respect
to all other municipalities in which Compost, Miami and/or Bedminster
is doing business or anticipates that it will do business with at any
time in the next twelve (12) months. Compost, Miami and Bedminster
shall conduct their respective Business, and all other business, and
their respective operations in all
Page 90 of 107 Pages
respects only in the ordinary and usual course, consistent with past
lawful practice, and in accordance with all applicable laws, rules and
regulations.
17.01.04. No Securities Transactions. Neither Miami nor
Bedminster shall issue, or enter into any commitment, plan, agreement,
arrangement or undertaking to issue, transfer, redeem or otherwise
dispose of, any Miami Common Stock and/or Bedminster Common Stock, any
other capital stock (or debt or equity securities) of Miami and/or
Bedminster, or any option, instrument, rights or other security that is
exercisable for, convertible into or exchangeable for any share of any
capital stock of Miami and/or Bedminster.
17.01.05. Advice of Changes. Compost, Miami and Bedminster
shall immediately advise and disclose to Lionhart, LHI and GEP, by a
detailed written notice, of any material fact or occurrence or any
pending or threatened occurrence of which any of them obtains knowledge
and which (if existing and known at the date of the execution of this
Agreement) would have been required to be set forth or disclosed in or
pursuant to this Agreement or in a Schedule or an Appendix hereto,
which (if existing and known at any time prior to or at the Closing
Date) would make the performance by any party of a covenant contained
in this Agreement (or the Credit Documents or Definitive Supplemental
Documents) impossible or make such performance materially more
difficult than in the absence of such fact or occurrence, or which, if
existing and known at the time of the Closing Date, would cause a
condition to any party's obligations under this Agreement (or the
Credit Documents or Definitive Supplemental Documents) not to be fully
satisfied.
17.01.06. Confidentiality. Compost, Miami and Bedminster shall
maintain and preserve the confidentiality of, and shall not publish,
disclose, disseminate or otherwise make available any information that
they (or any one of them) now possess or may hereafter create or obtain
relating to the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of Lionhart, LHI
and/or GEP, without the prior written consent of Lionhart, LHI and GEP.
17.01.07. Compliance with Laws. Compost, Miami and Bedminster
shall comply with all federal, state local and foreign laws,
ordinances, rules, regulations and orders applicable to the business
and operations of Compost, Miami and Bedminster, including, without
limitation, the Exchange Act and the Securities Act.
17.01.08. Public Statements. Except as required by applicable
law, and unless and until the Term Loan Closing and the Ancillary
Transactions Closing have been consummated on the Closing Date,
Compost, Miami and Bedminster shall not issue any public statements or
releases which relate to this Agreement, the Credit Documents and/or
the Definitive Supplemental Documents, or the transactions contemplated
thereunder, except for any such written statements as shall have been
approved in advance as to form and content by Lionhart, LHI and GEP.
Nothing contained herein shall prevent Compost, Miami and/or Bedminster
from furnishing any information to any Governmental Authority
(including, without limitation, the SEC) if required to do so by
applicable law, including, without limitation, disclosing any such
information (based solely on the determination by Compost, Miami and/or
Bedminster) in any SEC Report (under the Exchange Act), or otherwise.
17.01.09. Schedule/Appendices/Updates. Between the Effective
Date of this Agreement and the Closing Date, Compost, Miami and
Bedminster shall update the Schedules, Appendices, Exhibits, Disclosure
Schedule, Disclosure Documents, the Financial Statements, the Interim
Financial Statements, the Miami Balance Sheet, the Bedminster Balance
Sheet, the Miami Project Disclosures, and the Compost Disclosures, that
are annexed to this Agreement, promptly after the occurrence of any
change or event making any such document or disclosure inaccurate or
incomplete, or otherwise requiring changes thereon.
17.01.10. Consents Without Any Condition. Compost, Miami and
Bedminster shall not make any agreement or understanding, which is not
approved in advance and in writing by Lionhart, LHI and GEP, as a
condition for obtaining any consent, authorization, approval, order,
license, certificate, or permit required for the consummation of the
transactions contemplated by this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents.
17.01.11. Transactions. Compost, Miami and Bedminster agree,
promise and covenant that Miami and Bedminster, vis-a-vis their
respective Boards of Directors and/or Shareholders, or otherwise, will
not approve and/or
Page 91 of 107 Pages
shall reject:
(a) Any merger, consolidation, reorganization, or
other business combination involving or relating to or arising
from Miami and/or Bedminster; or,
(b) Any sale of material assets or substantially all
of the assets of Miami and/or Bedminster, to any Person; or,
(c) Any stock split, stock dividend, or reverse stock
split relating to the Miami Common Stock and/or the Bedminster
Common Stock, or any other class of capital stock of Miami
and/or Compost; or,
(d) Any issuance of any shares of capital stock of
Miami and/or Bedminster, any option, warrant, or other right
calling for the issuance of any such share of capital stock of
Miami and/or Bedminster, or any security convertible into or
exchangeable for any such share of capital stock of Miami
and/or Bedminster; or,
(e) (i) Any issuance by or on the part of Miami
and/or Bedminster of any debt securities, debentures or notes,
or (ii) any incurrence of any debt, credit or other
Indebtedness by Miami and/or Bedminster (except in the usual
and ordinary course of business consistent with past lawful
practice); or,
(f) Any authorization of any other class of stock of
Miami and/or Bedminster, other than the current classes of
capital stock that are authorized currently in the Articles of
Incorporation of Miami and/or Bedminster; or,
(g) Any amendment of the Articles of Incorporation
and/or Bylaws of Miami and/or Bedminster, other than as
contemplated or provided expressly under this Agreement, any
Credit Documents or Definitive Supplemental Documents; or,
(h) Any proposition, disposition, action, plan,
transaction or other undertaking, the effect of which may be
to inhibit, restrict, or delay the consummation of or
otherwise have a Material Adverse Effect with respect to, any
of the transactions contemplated by or otherwise provided
under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents.
17.1.12. Best Efforts. Compost, Miami and Bedminster each
agree, promise and covenant to use their respective commercially
reasonable efforts, in good faith:
(a) To cooperate reasonably with Lionhart, LHI and
GEP, and its and their respective agents and representatives,
to take all actions, and to cause to be done, and to assist
and cooperate with Lionhart, LHI and GEP, and its and their
respective agents and representatives, to close and otherwise
consummate, on the Term Loan Closing and the Ancillary
Transactions Closing, on the Closing Date, all transactions
that are contemplated under this Agreement, the Credit
Documents and the Definitive Supplemental Documents; and,
(b) To take or cause to be taken all action, to do or
cause to be done, and to assist and cooperate with the other
parties hereto in doing, all things necessary, proper or
advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated
by and under this Agreement, the Credit Documents and the
Definitive Supplemental Documents, including, but not limited
to: (i) the obtaining of all necessary waivers, consents and
approvals from governmental or regulatory agencies or
authorities and the making of all necessary registrations and
filings (including, but not limited to, filings with
governmental or regulatory agencies or authorities, if any)
and the taking of all reasonable steps as may be necessary to
obtain any approval or waiver from, or to avoid any action or
proceeding by, any governmental agency or authority; (ii) the
obtaining of all necessary consents, approvals or waivers from
any applicable third parties, that relate to or arise from
this Agreement, the Credit Documents and/or the Definitive
Supplemental Documents; (iii) the defending of any lawsuits or
any other legal proceedings whether judicial or
administrative, challenging this Agreement, the Credit
Documents and/or the Definitive Supplemental Documents, or the
consummation of the transactions contemplated thereunder, and,
(iv)
Page 92 of 107 Pages
causing all conditions to the obligations of Compost, Miami
and/or Bedminster, and/or Lionhart, LHI and/or GEP, under this
Agreement, the Credit Documents and the Definitive
Supplemental Documents, to be satisfied on or before the Term
Loan Closing and the Ancillary Transactions Closing on the
Closing Date.
Section 17.02. Post-Closing Covenants and Undertakings. Compost, Miami
and Bedminster hereby agree, promise and covenant, jointly and severally, that,
subsequent to the Term Loan Closing and the Ancillary Transactions Closings on
the Closing Date, and in addition to any other agreements, promises, covenants
or undertakings of Compost, Miami or Bedminster that are set forth in this
Agreement, the Credit Documents and/or the Definitive Supplemental Documents
(including, without limitation, the Transaction Documents as that term is
defined under Section 16.01.02 of this Agreement):
17.02.01. Continuing Disclosure. Until all Indebtedness is
paid and discharged in full and all Obligations are performed and
discharged in full by Compost and/or Miami and/or Bedminster, Compost,
Miami and Bedminster hereby agree, promise and covenant, jointly and
severally, that Compost, Miami and Bedminster shall provide, disclose
and deliver to Lionhart, LHI and GEP, the following:
(a) SEC Reports/Registration Statements. (i)
Conformed, accurate and complete copies of the all SEC Reports
of Compost, on a reasonably contemporaneous basis when and as
any such SEC Reports are filed with the SEC by Compost,
including, without limitation, any such Form 10-QSB, Form
10-KSB and Form 8-K, and (ii) any and all Registration
Statements of Compost, on a reasonably contemporaneous basis
when any such Registration Statements are filed with the SEC
by Compost, including, without limitation, any such
Registration Statement on Form S-3; and,
(b) Miami Project Permits. (i) A written notice,
disclosure and description of all applications for any
Environmental Permits, for and with respect to the Miami
Project, including, without limitation, all Miami Project
Permits, on a reasonably contemporaneous basis when and as any
such applications are filed by Compost, Miami and/or
Bedminster with any applicable Governmental Authority, and
(ii) a written notice and description of all facts, events or
occurrences that are material to the Miami Project Permits,
including all such facts, event or occurrences that may have a
Materially Adverse Effect on any such Miami Project Permits or
other Environmental Permits; and,
(c) Miami Complaint/Miami Claim. A written notice,
disclosure and description of all material facts, events or
occurrences (including any material pleadings, motions,
hearings, orders, mediations, settlement conferences,
settlements or judgments), on a reasonably contemporaneous
basis upon discovery or knowledge thereof by Compost, Miami
and/or Bedminster, that relate to or arise from the Miami
Complaint and/or the Miami Claim, including any and all such
material facts, events or occurrences that may have a Material
Adverse Effect on the Miami Claim; and,
(d) Put or Pay Contract. A written notice, disclosure
and description of all material facts, events or occurrences,
on a reasonably contemporaneous basis upon discovery or
knowledge thereof by Compost, Miami and/or Bedminster, that
relate to or arise from the Put or Pay Contract, and
notwithstanding whether or not any such material fact, event
or occurrence may have a Materially Adverse Effect on the Put
or Pay Contract, including, without limitation, all acts
and/or actions of the City of Miami (and/or its respective
counsel or other professionals) and/or the Court, that relate
to or arise from the Put or Pay Contract; and,
(e) Miami Project Scope. A written notice, disclosure
and description of all material facts, events or occurrences,
on a reasonably contemporaneous basis upon discovery or
knowledge thereof by Compost, Miami and/or Bedminster,
pursuant to which the executive management of Compost, Miami
and/or Bedminster modify, change, supplement or limit
materially the description of the Miami Project as is set
forth in Section 11.26.01(a) of this Agreement, and as is
described under the Miami Project Recap, the Summary and/or
the Design Report as otherwise set forth and referenced in
Section 11.26.01(a) of this Agreement; and,
(f) Miami Project Financing. A written notice,
disclosure and description of all material facts, events or
occurrences, on a reasonably contemporaneous basis upon
discovery or knowledge thereof by Compost, Miami and/or
Bedminster, that relate to or arise from or have a Materially
Adverse Effect on or with respect to the Miami Project
Financing; and,
Page 93 of 107 Pages
(g) Miami Project-General. A written notice, disclosure and
description of all material facts, events or occurrences, on a
reasonably contemporaneous basis upon discovery or knowledge thereof by
Compost, Miami and/or Bedminster, that relate to or arise from or have
a Material Adverse Effect on, the Miami Project, including any such
material facts, events or occurrences that relate to or arise from the
Miami Site, the Properties or Material Contracts of Miami and/or
Bedminster, or otherwise; and,
(h) Financial Statements. Accurate and complete copies of (i)
the audited consolidated financial statements and audit reports of and
for Compost and/or its Subsidiaries, for each of the fiscal years of
Compost, commencing with the fiscal year of Compost ending on April 30,
1998, including, without limitation, the related audited consolidated
statements of income, cash flows and changes in financial position of
Compost and its Subsidiaries, together with all related notes and
schedules thereto, accompanied by the reports thereon and management
letters from the accountants and auditors of Compost, on a reasonably
contemporaneous basis upon receipt thereof by Compost, Miami and/or
Bedminster; and, (ii) the unaudited balance sheets of Compost and its
Subsidiaries for each fiscal quarter beginning with the fiscal quarter
ending on October 31, 1998, including the related unaudited statements
of income, cash flows, and changes in financial positions of Compost
and its Subsidiaries for each, together with all related notes and
schedules thereto, which statements include all material known
adjustments as of the date of such statements, subject to ordinary
year-end adjustments which in the aggregate would not be material, on
the earlier of the date that any such unaudited balance sheets are
prepared, or forty-five (45) days after the end of each such fiscal
quarter of Compost; and,
(i) Press Releases. A copy of all material press releases with
respect to Compost and/or its Subsidiaries (including Miami and/or
Bedminster), when publicly issued or disseminated by Compost (Miami or
Bedminster, or any other Subsidiary) or any other Person, on a
reasonably contemporaneous basis upon discovery or knowledge thereof by
Compost, Miami and/or Bedminster; and,
(j) Management. A written notice, disclosure and description
of all material changes in management of Compost, Miami or any other
Subsidiaries, on a reasonably contemporaneous basis upon the occurrence
of any such material changes in management of Compost, Miami and/or any
other Subsidiaries; and,
(k) Collateral. A written notice, disclosure and description
of all material facts, events or occurrences, on a reasonably
contemporaneous basis upon discovery or knowledge thereof by Compost,
Miami and/or Bedminster, that have or may have a Materially Adverse
Effect on any collateral that is pledged or otherwise encumbered by
Compost, Miami and/or Bedminster, to secure the performance of any
obligations, duties or undertakings of Compost, Miami and/or Bedminster
under this Agreement, the Credit Documents and/or the Definitive
Supplemental Documents (including, without limitation, the Miami Site,
the Miami Claim, the Miami Project Permits, the Put or Pay Contract,
the Miami Project Financing, the Pledged Compost Shares, the Pledged
Miami Shares and/or the Pledged Bedminster Shares).
17.02.02. Miscellaneous Affirmative Covenants. Until all Indebtedness
is paid and discharged in full and all Obligations are performed and discharged
in full by Compost and/or Miami and/or Bedminster, Compost, Miami and Bedminster
hereby agree, promise and covenant, jointly and severally, that Compost, Miami
and Bedminster shall use commercially reasonable efforts, in good faith, unless
waived or modified (in writing and signed) by Lionhart, LHI and GEP, to:
(a) Sound Management. Conduct and manage the business and
operations of Compost, Miami and Bedminster, and all material
Subsidiaries, in a sound and prudent manner, in accordance with sound
and commercially reasonable business judgment, after due investigation
and consideration, and based on sound management policies that are
consistent, in all material respects, with the SEC Reports, the Miami
Project Disclosures and the Compost Disclosures; and,
(b) Material Contracts. Maintain each Material Contract of
Compost, Miami and Bedminster in full force and effect in accordance
with their respective terms; and,
Page 94 of 107 Pages
(c) Material Changes-Disclosure. On a reasonably prompt and
commercially reasonable basis, notify Lionhart, LHI and GEP, in
writing, of any material change in business, results of operations,
financial condition, assets, liabilities or prospects of Compost, Miami
and/or Bedminster that, either singly or in the aggregate, may have a
Materially Adverse Effect on their respective Properties, Business or
assets; and,
(d) Representations/Warranties. On a reasonably prompt and
commercially reasonable basis, notify Lionhart, LHI and GEP, in
writing, at any prospective date, if any representation or warranty of
Compost, Miami or Bedminster, that is made or asserted in this
Agreement, the Credit Documents and/or the Definitive Supplemental
Documents, or in any other Transaction Document (as that term is
defined under Section 16.01.02 of this Agreement), and contains on any
such prospective date any untrue statement of a material fact or omits
on any such prospective date to then state a material fact necessary in
order to then make the statement of facts made not misleading; and,
(e) Permits. On a reasonably prompt and commercially
reasonable basis, and based on sound management policies, use
commercially reasonable efforts, in good faith, to maintain each
Environmental Permit (including, the Miami Project Permits) that is or
has been issued by any Governmental Authority to Compost, Miami,
Bedminster or any other Subsidiary, and apply for (and vigilantly
prosecute all such applications for) any other Environmental Permits
(including, without limitation, the Supplemental Prospective Permits,
as defined under Section 11.26.01(b)(1) of this Agreement), that are
reasonably necessary for Compost, Miami and Bedminster, and all other
Subsidiaries, to conduct and operate their respective Business; and,
(f) Periodic Assessments. Afford Lionhart, LHI and GEP, or
their respective agents, representatives and professionals, open, free
and friendly access, during reasonable business hours on Business Days
and upon reasonable notice, (i) to the offices, buildings, equipment,
assets, Properties, records, files, books and records of account, Tax
Returns, Real Estate, and all other information relating to or arising
from Compost, Miami and Bedminster, and (ii) to the management of
Compost, Miami and/or Bedminster, for purposes of conducting any
commercially reasonable due diligence investigations, audits,
inspections or assessments of Compost, Miami and/or Bedminster, and/or
their respective Business; and,
(g) Valid Existence. Ensure that Compost, Miami and
Bedminster, as well as all material Subsidiaries, each continue to be a
corporation duly organized, validly existing, and in good standing, and
qualified to do business, in any reasonably necessary or required
jurisdictions; and,
(h) Corporate Authority. Ensure that Compost, Miami and
Bedminster, as well as all material Subsidiaries, each has all
requisite power and legal authority (i) to own and operate its
Properties and Business, (ii) to carry on its Business as now conducted
or as may be conducted prospectively, and (iii) to execute, consummate
and deliver, and to otherwise perform any of their respective duties
and obligations under, this Agreement, the Credit Documents and the
Definitive Supplemental Documents; and,
(i) Financings. Continue to use commercially reasonable
efforts, in good faith, to resource, structure and secure all
financings, for and with respect to Compost, Miami and Bedminster, as
described in and as contemplated under, and within such time periods as
are described in, the Miami Project Disclosures and the Compost
Disclosures, including, without limitation, the Miami Project
Financing; and,
(j) Compliance with Laws. Ensure that neither Compost nor any
of its Subsidiaries (including, without limitation, Miami and
Bedminster) is in conflict with, or in violation of, any law, rule,
regulation, order, judgment or decree applicable to Compost or any of
its Subsidiaries (including, without limitation, Miami and Bedminster)
or by which Compost or any of its Subsidiaries (including, without
limitation, Miami and Bedminster) or any of its or their respective
Properties are bound or affected, except for any such conflicts or
violations which would not, individually or in the aggregate, have a
Material Adverse Effect; and,
(i) Uses/Applications of Credit. Ensure that the Credit, that
is otherwise extended, made and delivered by Lionhart, LHI and GEP to
Compost, Miami and Bedminster, as otherwise provided and contemplated
under Article II of this Agreement, and as contemplated under the
Credit Documents and the
Page 95 of 107 Pages
Definitive Supplemental Documents, is used or applied by or on the part
of Compost, Miami and Bedminster as otherwise provided and prescribed
under the Schedule of Uses and Applications of Credit, as is set forth
in Exhibit B of this Agreement, and, pursuant to which, all such
amounts (of and from the Credit) that are otherwise allocated and
appropriated thereunder: 1) for uses by Compost as "Working Capital,"
shall be used exclusively by Compost, based on sound and commercially
prudent management policies, for bona fide, reasonable and legitimate
operating needs and working capital requirements of Compost, and,
pursuant to which, shall be invested and used by Compost in and with
respect to its current assets, and shall not be channeled into
Compost's long-term assets; and 2) for uses by Miami as "Working
Capital," shall be used exclusively by Miami, based on sound and
commercially prudent management policies, for bona fide, reasonable and
legitimate operating needs and working capital requirements of Miami,
and, pursuant to which, shall be invested and used by Miami in and with
respect to its current assets, and shall not be channeled into Miami's
long-term assets.
17.02.03. Miscellaneous Negative Covenants. Until all Indebtedness is
paid and discharged in full and all Obligations are performed and discharged in
full by Compost and/or Miami and/or Bedminster, Compost, Miami and Bedminster
hereby agree, promise and covenant, jointly and severally, that Compost, Miami
and Bedminster shall not, without the prior written consent of Lionhart, LHI and
GEP, take any of the following actions:
(a) Equity Securities-No Encumbrances. Create, assume, grant,
convey, deliver, or permit to exist, either voluntarily or by operation
of law, any Encumbrance or other lien on or pledge against any of the
Equity Securities of Miami or Bedminster (For purposes of this Section
17.02.03, the term "Equity Securities" shall mean, with respect to
Miami, the Miami Common Stock, any other capital stock of Miami, and
any option, warrant, security and/or other right (including any debt
securities) that is (are) directly or indirectly exercisable,
convertible or exchangeable for any such capital stock of Miami, and
shall mean, with respect to Bedminster, the Bedminster Common Stock,
any other capital stock of Bedminster, and any option, warrant,
security and/or other right (including any debt securities) that is
(are) directly or indirectly exercisable, convertible or exchangeable
for any such capital stock of Bedminster); or
(b) Redemptions/Dividends. Redeem any capital stock or
declare, make or pay any dividends or distributions (whether in cash,
securities or other property) to the holders of Miami's or Bedminster's
capital stock or otherwise except as contemplated by the Credit
Documents; or, redeem any capital stock or declare, make or pay any
dividends or distributions (whether in cash, securities or other
property) to the holders of Compost's capital stock, except (i) as
contemplated by or under the Credit Documents, and/or (ii) monthly
dividends inclusive of tax distributions as may be permitted from time
to time by the Wasteco Stock Purchase Agreement and the AW Compost
Stock Purchase Agreement.
(c) Miscellaneous Pledged Collateral-No Additional
Encumbrances. Create, assume, grant, convey, deliver, or permit to
exist, either voluntarily or by operation of law, any Encumbrance or
other lien on or pledge against any collateral that is pledged or
otherwise encumbered by Compost, Miami and/or Bedminster, to secure the
performance of any obligations, duties or undertakings of Compost,
Miami and/or Bedminster under this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents (including, without
limitation, the Miami Site, the Miami Claim, the Miami Project Permits,
the Put or Pay Contract, the Miami Project Financing, the Pledged
Compost Shares, the Pledged Miami Shares and/or the Pledged Bedminster
Shares); or,
(d) Asset Dispositions. Sell, lease or otherwise transfer any
of the assets, Material Contracts, Business, Properties or
Environmental Permits of Compost, Miami and/or Bedminster, or cancel
any rights or claims of Compost, Miami and/or Bedminster in and to any
such assets, Material Contracts, Business, Properties or Environmental
Permits of Compost, Miami and/or Bedminster, other than in the ordinary
course of business for fair and adequate consideration in money or
money's worth; or,
(e) Intellectual Properties. Sell, assign, transfer, encumber
or otherwise dispose of any Intellectual Property or other intangible
asset of Compost, Miami and/or Bedminster, other than in the ordinary
course of business for fair and adequate consideration in money or
money's worth; or,
Page 96 of 107 Pages
(f) Miami-Bedminster Indebtedness. Incur any material
indebtedness, for or on the part of Miami and/or Bedminster, whether
absolute or contingent, other than 1) current liabilities incurred in
the ordinary course of business for fair and adequate consideration in
money or money's worth, or 2) the refinancing of existing indebtedness
in the ordinary course of business and pursuant to usual and customary
credit terms and conditions; or, pay, prepay or discharge any
indebtedness of Miami and/or Bedminster, except in the ordinary course
of business for fair and adequate consideration in money or money's
worth; or,
(g) Compost Indebtedness. Incur any cumulative indebtedness,
for or on the part of Compost, in excess of $250,000, other than 1)
current liabilities incurred in the ordinary course of business for
fair and adequate consideration in money or money's worth, or 2) the
refinancing of existing indebtedness in the ordinary course of business
and pursuant to usual and customary credit terms and conditions; or,
pay, prepay or discharge any indebtedness of Compost, except in the
ordinary course of business for fair and adequate consideration in
money or money's worth; or,
(h) Permits. Lose, surrender or have revoked, limited,
terminated or restricted, any license, permit or other right granted by
any Governmental Authority to Compost and/or Miami and/or Bedminster;
or,
(i) Contracts. Enter into any contract, for or on the part of
Compost, Miami and/or Bedminster, not in the ordinary course of
business, or cancel, modify adversely, assign, encumber or in any way
discharge or terminate (other than by performance) any Material
Contract, except as may be reasonably required in the ordinary course
of business; or,
(j) Material Defaults. Allow to occur or exist any event of
material default under any Material Contract (including, without
limitation, the Put or Pay Contract), except in the case of a bona fide
dispute, inadvertence or mistake, provided that, with respect to any
event of default that is the result of any such inadvertence or
mistake, any such event of default is cured substantially after
discovery or knowledge thereof; or,
(k) Loans/Credit. Make any loan or advance or extend any
credit, except to customers in the ordinary course of business pursuant
to established credit policies, or acquire the securities or
obligations of any Person, except in the ordinary course of business,
and for fair and adequate consideration, consistent with past practice;
or,
(l) Capital Expenditures. Make any capital expenditure or any
commitment therefor, by or on the part of Miami and/or Bedminster,
except as may be required in the ordinary course of business consistent
with past practice; or, make any material capital expenditure or any
commitment therefor, by or on the part of Compost, in excess of
$250,000, except as may be required in the ordinary course of business
consistent with past practice; or,
(m) Accounting Principles. Alter or revise any accounting
principles, procedures, methods or practices of Compost, Miami or
Bedminster, or any material Subsidiary thereof, except as may be
recommended by independent professionals, and only then in accordance
with GAAP; or,
(n) Special Transactions. Engage, or participate in, or
otherwise consummate, any of the following actions or transactions:
(i) Any merger, consolidation,
reorganization, or other business combination involving or
relating to or arising from Miami and/or Bedminster; or,
(ii) Any sale of material assets or
substantially all of the assets of Miami and/or Bedminster, to
any Person; or,
(iii) Any stock split, stock dividend, or
reverse stock split relating to the Miami Common Stock and/or
the Bedminster Common Stock, or any other class of capital
stock of Miami and/or Bedminster; or,
Page 97 of 107 Pages
(iv) Any issuance of any Equity Securities
of Miami and/or Bedminster, or, without limiting the
foregoing, any issuance of any shares of capital stock of
Miami and/or Bedminster, or any option, warrant, or other
right calling for the issuance of any such share of capital
stock of Miami and/or Bedminster, or any security convertible
into or exchangeable for any such share of capital stock of
Miami and/or Bedminster; or,
(v) Any issuance by or on the part of Miami
and/or Bedminster of any debt securities, debentures or notes
or any other debt or bond obligations whatsoever; or,
(vi) Any authorization of any other class of
stock of Miami and/or Bedminster, other than the current
classes of capital stock that are authorized currently in the
Articles or Certificate of Incorporation of Miami and/or
Bedminster; or,
(vii) Any amendment of the Articles of
Incorporation and/or Bylaws of Miami and/or Bedminster, other
than as contemplated or provided expressly under this
Agreement, any Credit Documents or Definitive Supplemental
Documents; or,
(viii) Any proposition, disposition, action,
plan, transaction or other undertaking, the effect of which
may be to inhibit, restrict, or delay the consummation of or
otherwise have a Material Adverse Effect with respect to, any
of the transactions contemplated by or otherwise provided
under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents; or,
(ix) Any direct or indirect payments,
distributions, exchanges or transfers of cash, any cash
equivalents, Properties or other assets, by and between and/or
among Compost and/or Miami and/or Bedminster, or any of their
respective Subsidiaries or Affiliates (including, without
limitation, all such upstream, downstream and lateral
payments, distributions, exchanges or transfers thereof),
which are not reasonably in the usual and ordinary course of
business consistent with past practice, and which in the
aggregate exceed US $50,000 (in cash, cash equivalents or
value).
(o) Uses/Applications of Credit. Use or apply the proceeds of the
Credit, as otherwise provided and contemplated under Article II of this
Agreement, and as contemplated under the Credit Documents and the Definitive
Supplemental Documents, in any manner or for any purpose that is materially
inapposite of, contrary to or in contravention of the Schedule of Uses and
Applications of Credit, as is set forth in Exhibit B of this Agreement, and,
with respect to all such amounts (of and from the Credit) that are otherwise
allocated and appropriated thereunder: 1) for uses by Compost as "Working
Capital," use or apply any such amounts for other than bona fide, reasonable and
legitimate operating needs and working capital requirements of Compost, in and
with respect to its current assets; and, 2) for uses by Miami as "Working
Capital," use or apply any such amounts for other than bona fide, reasonable and
legitimate operating needs and working capital requirements of Miami, in and
with respect to its current assets; or,
(p) General. Without limiting any of foregoing provisions of this
Section 17.02.03, make any material changes in the customary methods of
operations of Compost, Miami or Bedminster including practices and policies
relating to purchasing, inventory, marketing, selling or pricing; fail to
maintain Compost, Miami or Bedminster's tangible personal property in good
repair, ordinary wear and tear excepted; issue or sell any capital stock, notes
bonds or other securities, or any option, warrant or other right to acquire the
same, of, or any other interest in Compost, Miami or Bedminster; amended or
restate Compost, Miami or Bedminster's Certificate of Incorporation or By-Laws;
merge with or enter into a consolidation or acquire an interest of 5% or more in
any Person, or acquire (by purchase, merger, consolidation, stock acquisition or
otherwise) a substantial portion of the assets of any Person or any division or
line of business thereof, or otherwise acquired assets other than in the
ordinary course and in accordance with past practice; disclose any secret or
confidential Intellectual Property (except by way of issuance of a patent) or
permit to lapse or abandon any Intellectual Property (or any registration or
grant thereof of any application relating thereto) to which, or under which,
Compost, Miami or Bedminster has any right, title, interest or license; or,
except as set forth in the Disclosure Documents, fail to pay any creditor any
material amount owed to such creditor when due; except as contemplated by the
Disclosure Documents, sell, transfer, lease, sublease, license or
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otherwise dispose of any properties or assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible assets),
other than a sale in the ordinary course of business consistent with past
practice; or, except as set forth in the Disclosure Documents, write down or
write up (or fail to write down or write up in accordance with GAAP consistent
with past practice) the value of any inventories or receivables or revalue any
assets of Compost, Miami or Bedminster other than in the ordinary course of
business consistent with past practice and in accordance with GAAP.
ARTICLE XVIII
DEFAULTS, CROSS-DEFAULTS AND REMEDIES
Section 18.01. Definitions: Obligations/Indebtedness. The terms
"Indebtedness" and "Obligations," for purposes of this Agreement, and the Credit
Documents and the other Definitive Supplemental Documents as otherwise described
under this Agreement, shall be defined and mean as follows:
18.01.01. Indebtedness. The term "Indebtedness," for purposes of this
Agreement, the Credit Documents and the other Definitive Supplemental Documents,
shall mean and include the following:
(a) Mortgage Note. All monetary, pecuniary and financial
duties, obligations, liabilities, responsibilities, debts and
undertakings of Compost, Miami and/or Bedminster, that are owed or
owing or that may be owed or owing to Lionhart, LHI and/or GEP under
and pursuant to a Mortgage Note, in the principal amount of US
$10,500,000, including, without limitation, all interest, prepayment
fees and other charges and other undertakings that are set forth in
such Mortgage Note; and,
(b) Closing Costs. The duty, obligation and undertaking, by
and on the part of Compost, Miami and Bedminster, under Section
13.03.01(H), Section 13.03.02(H) and Section 13.03.02(L) of this
Agreement, to pay and discharge, to and for the benefit of Lionhart,
LHI and GEP, at the Term Loan Closing and the Ancillary Transactions
Closing, on the Closing Date, the Closing Costs attributable to the
execution, delivery and consummation of the CCF Agreement, the Credit
Documents and the Supplemental Definitive Documents; and,
(c) Deal Commitment Fee. The duty, obligation and undertaking,
by and on the part of Compost, Miami and Bedminster, under Section
13.03.03(G) of the this Agreement, to pay and discharge, to and for the
benefit of Lionhart, at the Term Loan Closing and the Ancillary
Transactions Closing, on the Closing Date, the Deal Commitment Fee;
and,
(d) Debentures-Accrued Cumulative Interest. The duty,
obligation and undertaking, by and on the part of Compost, as provided
under Section 13.03.03(A)(7), to pay and deliver, to and for the
benefit of Lionhart, at the Term Loan Closing and the Ancillary
Transactions Closing, on the Closing Date, the Accrued Cumulative
Interest attributable to the Outstanding Debentures; and,
(e) Purchase Price-Section 6.1 Shares. The duty, obligation
and undertaking, by and on the part of Compost, as provided under
Section 13.03.03(A)(12), to pay and discharge, to and for the benefit
of Lionhart, the Purchase Price, for and with respect to the purchase
and redemption by Compost from Lionhart of the Section 6.1 Shares, at
the Term Loan Closing and Ancillary Transactions Closing on the Closing
Date; and,
(f) Puts. The duty, obligation and undertaking, by and on the
party of Compost, 1) to pay and deliver the Put Purchase Price, as
provided and contemplated under Section 9.2.3(b) of this Agreement,
upon the exercise of any Put Option # 1, pursuant to the terms and
subject to the conditions as are set forth in Article IX of this
Agreement, and 2) to pay and deliver the Put Purchase Price, as
provided and contemplated under Section 10.2.2(b) of this Agreement,
upon the exercise of any Put Option # 2, pursuant to the terms and
subject to the conditions as are set forth in Article X of this
Agreement; and,
(g) Miscellaneous Material Undertakings. All other such
monetary, pecuniary and financial duties, obligations, promises and/or
covenants to pay or discharge, and all liabilities, responsibilities,
debts and
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undertakings, by and on the part of Compost and/or Miami
and/or Bedminster, that are owed or owing to or that may be owed or
owing to and for the benefit of Lionhart and/or LHI and/or GEP, and
their respective successors and assigns:
(i) As provided under and pursuant to,
and/or that relate to or arise from, 1) the Mortgage, 2) the
Mortgage Note, 3) this Agreement, 4) the Compost-Miami
Guaranty, 5) the Security Agreement, 6) the Compost Stock
Pledge Agreement (Compost Common Stock), 7) the Compost Stock
Pledge Agreement (Miami Common Stock) 8) the Compost Stock
Pledge Agreement (Bedminster Common Stock), 9) any of the
Credit Documents, 10) any of the Definitive Supplemental
Documents, or 11) any and all of the Obligations; and/or,
(ii) Any and all other loans, advances,
credit, debts, liabilities, obligations, covenants and duties,
by Compost, Miami and/or Bedminster, that are owed or owing or
that may be owed or owing to or for the benefit of Lionhart,
LHI and/or GEP, of any kind or nature, present or future
(including, without limitation, any interest accruing thereon
after maturity, or after the filing of any petition in
bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to or arising from
Compost, Miami and/or Bedminster, whether or not a claim for
post-filing or post-petition interest is allowed in any such
proceeding), whether or not evidenced by any note, guaranty or
instrument, whether arising under any agreement, instrument or
document, whether or not for the payment of money, whether
arising by reason of any extension of credit, opening of a
letter of credit, loan or guarantee, or in any other manner,
whether direct or indirect, absolute or contingent, joint or
several, due or to become due, now existing or hereafter
arising, and any amendments, extensions, renewals, or
increases and all costs and expenses of Lionhart, LHI and/or
GEP incurred in the documentation, negotiation, modification,
enforcement, collection or otherwise in connection with any of
the foregoing Indebtedness, including, without limitation, any
and all reasonable attorneys' fees and other reasonable
professional and para-professional fees incurred by or on the
part of Lionhart, LHI and/or GEP.
18.01.02. Obligations. The term "Obligations," for purposes of this
Agreement, the Credit Documents and the other Definitive Supplemental shall mean
and include all duties, obligations, promises, agreements, covenants,
representations and warranties, and all other undertakings (including, without
limitation, all Indebtedness), by and on the part of Compost and/or Miami and/or
Bedminster, that are owed or owing or that may be owed or owing to (and that are
required to be performed and discharged for the benefit of) Lionhart and/or LHI
and/or GEP, and all successors and assigns thereof, as provided under and
pursuant to, and/or that relate to or arise from, 1) the Mortgage, 2) the
Mortgage Note, 3) this Agreement, 4) the Compost-Miami Guaranty, 5) the Security
Agreement, 6) the Compost Stock Pledge Agreement (Compost Common Stock), 7) the
Compost Stock Pledge Agreement (Miami Common Stock) 8) the Compost Stock Pledge
Agreement (Bedminster Common Stock), 9) any of the Credit Documents, and/or 10)
any of the Definitive Supplemental Documents, including, without limitation, and
in addition to all other such duties, obligations, promises, agreements,
covenants, representations and warranties, and all other undertakings that are
set forth therein or prescribed thereunder, all such duties, obligations,
promises, agreements, covenants, representations and warranties and/or
undertakings of or by Compost, Miami and/or Bedminster, that are owed or owing
or that may be owed or owing to Lionhart, LHI and/or GEP, that are set forth in
or are prescribed under, and/or that relate to or arise from, the following:
(a) Compost-Lionhart Warrants (#1-#6). The Compost-Lionhart
Warrant # 1, the Compost-Lionhart Warrant # 2, the Compost-Lionhart
Warrant # 3, the Compost-Lionhart Warrant # 4, the Compost-Lionhart
Warrant # 5 and/or the Compost-Lionhart Warrant # 6, as provided and
otherwise contemplated under Article VIII of the this Agreement; and,
(b) Put Option # 1. The Put Option # 1, as provided and
otherwise contemplated under Article IX of the CCF Agreement; and,
(c) Put Option # 2. The Put Option # 2, as provided and
otherwise contemplated under Article X of the CCF Agreement; and,
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(d) Compost-Miami Guaranty. The Compost-Miami Guaranty, as
provided and otherwise contemplated under Section 13.03.03(K) of this
Agreement; and,
(e) Compost Stock Pledge Agreement (Compost Common Stock). The
Compost Stock Pledge Agreement (Compost Common Stock), as defined,
provided and contemplated under Section 1.1.33 of this Agreement; and,
(f) Compost Stock Pledge Agreement (Miami Common Stock). The
Compost Stock Pledge Agreement (Miami Common Stock), as defined,
provided and contemplated under Section 1.1.34 of this Agreement; and,
(g) Compost Stock Pledge Agreement (Bedminster Common Stock).
The Compost Stock Pledge Agreement (Bedminster Common Stock), as
defined, provided and contemplated under Section 1.1.32 of this
Agreement; and,
(h) Security Agreement. The Security Agreement, as defined,
provided and contemplated under Section 1.1.130 of this Agreement; and,
(i) Debentures/Debenture Purchase Agreement. The Debentures
and Debenture Purchase Agreement, as those terms are defined
respectively under Section 1.1.40 and Section 1.1.41 of this Agreement;
and,
(j) Series B Preferred Stock. The Series B Preferred Stock,
including the Series B Preferred Shares Subscription Agreement and the
Designation of Rights of Series B Preferred Stock, as those terms are
defined respectively under Section 1.1.131, Section 1.1.132 and Section
1.1.43 of this Agreement; and,
(k) Director Appointment Agreement. The Director Appointment
Agreement, as defined, provided and contemplated under Section 1.1.44
of this Agreement; and,
(l) Registration Rights Agreement. The Registration Rights
Agreement, as defined, provided and contemplated under Section 1.1.120
of this Agreement; and,
(m) General Indemnification Undertakings. Any and all
indemnification duties, obligations and/or undertakings that are set
forth in or that relate to or arise from Article XIV and/or Article XVI
of this Agreement; and,
(n) General Affirmative/Negative Covenants. Any and all
affirmative and negative duties, covenants and undertakings that are
set forth in, or that relate to or arise from, Article XVII of this
Agreement; and,
(o) General Representations and Warranties. Any and all
affirmative and negative representations and warranties that are set
forth, or that relate to or arise from, Article XI of this Agreement;
and,
(p) Miscellaneous Material Undertakings. All duties,
obligations, promises, agreements, covenants, representations and
warranties, and all other undertakings, by and on the part of Compost
and/or Miami and/or Bedminster, that are owed or owing or that may be
owed or owing to (and that are required to be performed and discharged
for the benefit of) Lionhart and/or LHI and/or GEP, and their
respective successors and assigns:
(i) As provided under and pursuant to,
and/or that relate to or arise from, 1) the Mortgage, 2) the
Mortgage Note, 3) this Agreement, 4) the Compost-Miami
Guaranty, 5) the Security Agreement, 6) the Compost Stock
Pledge Agreement (Compost Common Stock), 7) the Compost Stock
Pledge Agreement (Miami Common Stock) 8) the Compost Stock
Pledge Agreement (Bedminster Common Stock), 9) any of the
Credit Documents, and/or 10) any of the Definitive
Supplemental Documents; and/or,
Page 101 of 107 Pages
(ii) Any and all other loans, advances,
credit, debts, liabilities, obligations, representations,
warranties, covenants and duties, and all other undertakings,
that are owed or owing or that may be owed or owing at any
time by Compost, Miami and/or Bedminster to or for the benefit
of Lionhart, LHI and/or GEP, of any kind or nature, present or
future (including, without limitation, any interest accruing
thereon after maturity, or after the filing of any petition in
bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding relating to or arising from
Compost, Miami and/or Bedminster, whether or not a claim for
post-filing or post-petition interest is allowed in any such
proceeding), whether or not evidenced by any note, guaranty or
instrument, whether arising under any agreement, instrument or
document, whether or not for the payment of money, whether
arising by reason of any extension of credit, opening of a
letter of credit, loan or guarantee, or in any other manner,
whether direct or indirect, absolute or contingent, joint or
several, due or to become due, now existing or hereafter
arising, and any amendments, extensions, renewals, or
increases and all costs and expenses of Lionhart, LHI and/or
GEP incurred in the documentation, negotiation, modification,
enforcement, collection or otherwise in connection with any of
the foregoing Indebtedness and/or Obligations, including,
without limitation, any and all reasonable attorneys' fees and
other reasonable professional fees incurred by or on the part
of Lionhart, LHI and/or GEP.
Section 18.02. Event(s) of Default-Definition. Any of the following
acts or omissions, or events or circumstances, are and shall be deemed to be a
default, breach and violation (separately and collectively referred to as an
"Event(s) of Default") of and under this Agreement (and all other Credit
Documents and Definitive Supplemental Documents as provided under Section 18.03
of this Agreement) by Compost, Miami and/or Bedminster:
18.02.01. Indebtedness. Any default, breach, violation,
failure and/or omission, by or on the part of Compost and/or Miami and/or
Bedminster, to pay and discharge, on a timely, punctual, complete and full
basis, 1) any Indebtedness under the Mortgage Note, when any such Indebtedness
is or becomes due and payable, including, without limitation, any default,
breach, violation, failure or omission, by or on the part of Compost, Miami
and/or Bedminster, in the payment of any Principal and/or Interest (as those
terms are defined under the Mortgage Note), whether on the Maturity Date (as
defined under the Mortgage Note) or by acceleration, or otherwise, or 2) any
other Indebtedness, when any other such Indebtedness is or becomes due and
payable (pursuant to the terms of this Agreement, or any of the Credit Documents
and/or the Definitive Supplemental Documents.
18.02.02. Obligations. Any default, breach, violation, failure
and/or omission, by or on the part of Compost and/or Miami and/or Bedminster, to
perform, observe or discharge, on a timely, punctual, complete and full basis,
any Obligation (sometimes referred to, for purposes of Article XVIII of this
Agreement, as a "Defaulted Obligation"); provided, however, that:
(a) If any such Defaulted Obligation is not an
Indebtedness-Related Obligation, as that term is defined under
Section 18.02.02(b) of this Agreement, then, notwithstanding
the occurrence of any such Defaulted Obligation, Compost,
Miami and Bedminster shall have the right under this Section
18.02.02(a), commencing on the date of such Defaulted
Obligation, and continuing thereafter for a commercially
reasonable period not to exceed sixty (60) days after the date
of any such Event of Default attributable to such Defaulted
Obligation ("Cure Period"), to proceed diligently to cure any
such Defaulted Obligation, and, whereupon, if Compost, Miami
and/or Bedminster do in fact cure any such Defaulted
Obligation on or before the expiration of such Cure Period,
then any such Defaulted Obligation shall not then or
thereafter be deemed to be an Event of Default.
Notwithstanding the foregoing, if Compost, Miami and/or
Bedminster, after any such Defaulted Obligation, act with
reasonable diligence to cure any such Defaulted Obligation
during the Cure Period and continue to proceed diligently to
cure the same thereafter, then and in that event the Cure
Period shall be deemed to be extended for a commercially
reasonable period to permit Compost, Miami or Bedminster to
cure any such Defaulted Obligation. If Compost, Miami and/or
Bedminster, after any such Defaulted Obligation, do not act
with reasonable diligence to cure any such Defaulted
Obligation during any such Cure Period, then any
Page 102 of 107 Pages
such Defaulted Obligation shall be and constitute an "Event of
Default." If, after the date of any such Defaulted Obligation,
Compost, Miami and/or Bedminster do act with reasonable
diligence to cure any such Defaulted Obligation during any
applicable Cure Period, but fail to cure any such Defaulted
Obligation within any such commercially reasonable period
after any such Cure Period, then any such Defaulted Obligation
shall be and constitute an "Event of Default."
(b) A Defaulted Obligation is an Indebtedness-Related
Obligation, for purposes of Section 18.02.02 of this
Agreement, if any such Defaulted Obligation is, or relates to
or arises from or otherwise involves, directly or indirectly,
any monetary, pecuniary or financial duty, obligation,
agreement, promise, covenant or other undertaking, by or on
the part of Compost, Miami and/or Bedminster, to pay or repay
any Indebtedness that is owed or owing to Lionhart, LHI and/or
GEP, or to pay and discharge any Indebtedness, in whole or in
part, to Lionhart, LHI and/or GEP, under this Agreement, the
Credit Documents and/or the Definitive Supplemental Documents.
18.02.03. Abandonment. Any abandonment by Compost and/or Miami
and/or Bedminster of the Miami Project, the Miami Project Permits, the Miami
Project Financing, the Miami Project Site, and/or the Put or Pay Contract.
18.02.04. False Representation. Any material misrepresentation
or warranty, or any false representation or warranty, made or otherwise asserted
by Compost and/or Miami and/or Bedminster, to Lionhart and/or LHI and/or GEP, as
set forth in or under this Agreement, the Credit Documents and/or the Definitive
Supplemental Documents.
18.02.05. Judgment. A judgment, writ or warrant or other order
of attachment, garnishment, levy or execution, or similar process, in excess of
US $100,000 individually, or in excess of US $200,000 cumulatively, shall, after
the Effective Date of this Agreement, be entered and become a lien, or issued or
levied or assessed against, Compost, Miami and/or Bedminster, and/or the
Mortgaged Miami Site or Collateral, or any part thereof (as those terms are
defined respectively under the Mortgage), or any of the Collateral (as that term
is defined under the Security Agreement), or any of the Collateral (as that term
is defined respectively under the Compost Stock Pledge Agreement (Compost Common
Stock), the Compost Stock Pledge Agreement (Miami Common Stock), the Compost
Stock Pledge Agreement (Bedminster Common Stock)).
18.02.06. Voluntary Bankruptcy. If Compost, Miami and/or
Bedminster shall (1) voluntarily be adjudicated a bankrupt or insolvent, (2)
seek or consent to the appointment of a receiver, trustee or conservator for any
or all of them, or for all or any part of their respective properties or assets,
(3) file a petition seeking relief under the bankruptcy or similar laws of the
United States (under Title 11 of the United States Bankruptcy Code, or
otherwise), or any state or any other competent jurisdiction, (4) make any
general assignment for the benefit of creditors, or (5) admit in writing that
any or all of them is or are bankrupt or insolvent or unable to pay debts as
such debts mature.
18.02.07. Involuntary Bankruptcy. If any United States
Bankruptcy Court or any other court of competent jurisdiction shall enter an
order, judgment, or decree appointing, a receiver or trustee for Compost, Miami
and/or Bedminster, or for all or any part of any or all of their respective
properties or assets, or approving a petition filed against Compost, Miami
and/or Bedminster seeking relief under Title 11 of the United States Bankruptcy
Code, or other similar laws of the United States or any state or other competent
jurisdiction, and such order, judgment or decree shall remain in force
undischarged for a period of sixty (60) or more days.
18.02.08. Dissolution/Cessation of Business. If Compost, Miami
and/or Bedminster shall dissolve or liquidate, or otherwise cease doing
business, and any such dissolution or liquidation or cessation of business is
not pursuant to, or in connection with, a merger or consolidation that is
approved and consented to in advance by Lionhart, LHI and GEP.
18.02.09. Impairment. Either Compost, Miami and/or Bedminster
knowingly, willfully, recklessly or negligently does or permits or suffers to be
done, anything that may reasonably be expected to impair, weaken or diminish (in
whole or in part) the security, value and/or lien of the Mortgage or of any
collateral that is pledged to or in which a security interest is granted to
Lionhart, LHI and/or GEP under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, as security and/or collateral for the payment
and repayment of any Indebtedness or the performance of any Obligations under
this Agreement, the Credit Documents and/or the Definitive Supplemental
Documents.
18.02.10. General. Subject to Section 18.02.02 of this
Agreement, if Compost, Miami and/or Bedminster
Page 103 of 107 Pages
fail or omit to perform, observe or discharge, or otherwise default in, any
other duty or undertaking of Compost, Miami and/or Bedminster, that is set forth
under this Agreement, any of the Credit Documents and/or the any of the
Definitive Supplemental Documents, or otherwise commit any other act (or engage
in any other omission) of default under this Agreement, any of the Credit
Documents and/or the any of the Definitive Supplemental Documents.
Section 18.03. Cross Default(s). Any Event of Default, by or on the
part of Compost, Miami and/or Bedminster (and/or their respective successors and
assigns), of any of their respective Indebtedness and/or Obligations, as
provided under Section 18.02 of this Agreement and subject to Section 18.02.02
of this Agreement, is and shall be, and shall be deemed and construed
conclusively as, a default by each "Signatory Compost Party" who or which is a
signatory party (and all successors and assigns of each such Signatory Compost
Party) under all Credit Documents, and all Definitive Supplemental Documents.
The term "Signatory Compost Party," for purposes of this Section 18.03, means,
and shall be defined to include, 1) Compost, 2) Miami and 3) Bedminster (and/or
their respective successors and assigns).
Section 18.04. Remedies. Upon any Event of Default, then and subject to
Section 18.02.02 of this Agreement, Lionhart, LHI and GEP shall have the right,
but not the obligation, in their sole discretion and option, to exercise any one
(1) or more of the following remedies, in addition to any other rights or
remedies that Lionhart, LHI and/or GEP may be entitled to assert and/or claim,
at law or in equity:
18.04.01. Acceleration-Indebtedness. Lionhart, LHI and GEP
may, from time to time and at any time(s), declare the entire unpaid amount or
portion of any, some or all of the Indebtedness (including, without limitation,
the unpaid amount or portion of all Principal and Interest under the Mortgage
Note), immediately due and payable, without further notice or demand, or
presentment, protest, notice of protest or notice of dishonor (of which Compost,
Miami and Bedminster each hereby expressly waive any such notice, demand,
presentment, protest, notice of protest or notice of dishonor), whereupon all
such Indebtedness, as accelerated under this Section 18.04.01, shall become
immediately due and payable in full.
18.04.02. Acceleration-Obligations. Lionhart, LHI and GEP may,
from time to time at any time(s), declare any and all Obligations, that have not
been theretofore performed and discharged, immediately due and required to be
performed and discharged immediately, without further notice or demand, or
presentment, protest, notice of protest or notice of dishonor (of which Compost,
Miami and Bedminster each hereby expressly waive any such notice, demand,
presentment, protest, notice of protest or notice of dishonor), whereupon all
such Obligations, as accelerated under this Section 18.04.02, shall become due
and immediately required to be performed and discharged completely.
18.04.03. Non-Exclusive Rights/Remedies/Reasonable
Professional Fees. Lionhart, LHI and GEP may, from time to time and at any
time(s), exercise any rights or remedies that Lionhart, LHI and/or GEP is or are
entitled or may be entitled to assert, under 1) this Agreement, 2) the Credit
Documents, 3) the Definitive Supplemental Documents and/or 4) any applicable
law; and, Lionhart, LHI and GEP shall have the right to recover from Compost,
Miami and Bedminster, jointly and severally, and Compost, Miami and Bedminster
shall have the affirmative duty and obligation, on a joint and several basis, to
pay or otherwise reimburse Lionhart, LHI and GEP for, any and all reasonable
attorneys' fees and other professional fees, as well as costs of collection,
that are or may be incurred by Lionhart, LHI and/or GEP in the exercise of any
of their rights or remedies as contemplated under Article XVIII of this
Agreement.
18.04.04. Lawsuits/Proceedings. Lionhart, LHI and GEP each
shall have the power and authority to institute, commence, maintain and
otherwise prosecute any suits, Actions, lawsuits, claims and proceedings against
Compost, Miami and/or Bedminster, as Lionhart, LHI and GEP may deem advisable.
18.04.05. Remedies-Cumulative and Concurrent. No right, power
or remedy conferred upon or reserved to Lionhart, LHI and/or GEP, by or under
this Agreement, or any of the Credit Documents or Definitive Supplemental
Documents, or under any applicable law, is exclusive of any other right, power
or remedy, but each and every such right, power and remedy shall be cumulative
and concurrent and shall be in addition to any other right, power and remedy
provided under this Agreement, or any of the Credit Documents or Definitive
Supplemental Documents, or under any applicable law, as now or hereafter
existing at law, in equity or by statute. The rights and remedies of Lionhart,
LHI and GEP, as provided under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, and/or as may be available to Lionhart, LHI
and/or GEP under applicable law, are and shall be cumulative and concurrent, and
may be pursued separately, successively or together against Compost, Miami
and/or Bedminster,
Page 104 of 107 Pages
or any one or more of them, at the sole discretion of Lionhart, LHI and GEP, and
may be executed as often a occasion therefor shall arise. The failure to
exercise any such right or remedy shall in no event be construed as a waiver or
release thereof.
18.04.06. Delays or Omissions. No delay or omission of
Lionhart, LHI and/or GEP to exercise any right, power or remedy accruing upon
any default shall exhaust or impair any such other right, power or remedy or
shall be construed to waive any such default or to constitute acquiescence
therein. Every right, power and remedy given to Lionhart, LHI and GEP shall be
exercised from time to time and often as may be deemed expedient by Lionhart,
LHI and GEP.
18.04.07. Waiver/Forbearance. No waiver of any default
hereunder shall extend to or affect any subsequent or any other default then
existing, or impair any rights, powers or remedies available in connection with
such other or subsequent default. If Lionhart, LHI and/or GEP, (i) grant
forbearance or an extension of time or other accommodation for the payment of
any Indebtedness or the performance or observance of any Obligations, (ii) take
other or additional security for the payment thereof, (iii) waive or do not
exercise any right granted under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, or under applicable law, (iv) release any
part of any collateral or any other instrument securing the Indebtedness or
Obligations; or (v) make or consent to any agreement changing the terms of this
Agreement, the Credit Documents and/or the Definitive Supplemental Documents,
then, and notwithstanding any such act or omission, no such act or omission
shall release, discharge, modify, change or affect the original Indebtedness
and/or Obligations of Compost, Mortgagor and/or Bedminster, under this
Agreement, the Credit Documents and/or the Supplemental Definitive Documents. No
such act or omission shall preclude Lionhart, LHI and/or GEP from exercising any
right, power or privilege herein granted or intended to be granted in case of
any default then existing or of any subsequent default.
18.04.08. Strict Performance. Any failure by Lionhart, LHI
and/or GEP to insist upon strict performance by Compost, Miami and/or Bedminster
of any of the terms or provisions of this Agreement, the Credit Documents and/or
the Definitive Supplemental Documents, shall not be deemed to be a waiver of any
of the terms or provisions of this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, and Lionhart, LHI and GEP shall have the
right thereafter to insist upon strict performance by Compost, Miami and
Bedminster of and under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents. Failure of Lionhart, LHI and/or GEP to
exercise any option for acceleration of any Indebtedness or Obligations,
following any default, or to exercise any other option granted to Lionhart, LHI
and GEP hereunder, or the acceptance by Lionhart, LHI and GEP of partial
payments or late payments with respect to any Indebtedness and/or partial
performance or late performance of any Obligations, shall not constitute a
waiver of any such default. Acceleration of maturity, once claimed or asserted
by Lionhart, LHI and GEP, may, at the option of Lionhart, LHI and GEP, be
rescinded by written acknowledgment to that effect by Lionhart, LHI and GEP, but
the tender and acceptance of partial payment or partial performance alone shall
not in any way affect or rescind any such acceleration of maturity.
18.04.09. Post-Maturity Payments/Performances. The acceptance
by Lionhart, LHI and GEP, of the payment of any Indebtedness or the performance
of any Obligation after any due or maturity date, as provided under this
Agreement, the Credit Documents and/or the Definitive Supplemental Documents, is
not and shall not be construed as a waiver by Lionhart, LHI and/or GEP of their
respective right to require the full and prompt payment, when due, of all other
Indebtedness, or the full and complete performance, when due, of all other
Obligations, or to exercise any legal rights that Lionhart, LHI and/or GEP may
have to collect any unpaid balance of the outstanding Indebtedness or to require
the performance of any Obligations. If Lionhart, LHI and GEP hold any security
for any Indebtedness or Obligation secured under any Credit Documents and/or
Definitive Supplemental Documents, Lionhart, LHI and GEP may enforce the sale
thereof, at the sole option of Lionhart, LHI and GEP, either before or
contemporaneously therewith.
18.04.10. Releases and Extensions. Without affecting the
liability of any person, including Compost, Miami and Bedminster, for the
payment of any Indebtedness or the performance of any Obligation, or any
security or collateral under any of the Credit Documents and/or the Definitive
Supplemental Documents, Lionhart, LHI and GEP shall have the right, from time to
time, and without notice, 1) to release any Person liable for the payment of any
Indebtedness or the performance of any Obligations, 2) extend the time or
otherwise alter the terms of payment of any of the Indebtedness or of
performance of any of the Obligations, 3) accept original, supplemental,
alternative or
Page 105 of 107 Pages
additional security therefor of any kind, including deeds of trust or other
mortgages, 4) alter, substitute, or release any security or collateral that is
securing the Indebtedness or the Obligations, or 5) join in any subordination or
other agreement affecting the priorities of any security or collateral that
otherwise secures the payment of any Indebtedness or the performance of any
Obligations.
ARTICLE XIX
UNTITLED
[This Article XIX is intentionally left blank.]
ARTICLE XX
MISCELLANEOUS AND GENERAL
Section 20.01. Further Actions. At any time and from time to time,
Lionhart, LHI and GEP, and Compost, Miami and Bedminster (hereinafter referred
to sometimes in this Article XVIII as the "Party" and/or "Parties") each agrees
to take such actions and to execute and deliver such documents as may be
required under this Agreement, the Credit Documents and/or the Definitive
Supplemental Documents, and to take such other reasonable actions and to execute
and deliver any other usual and customary documents (without additional material
expense to any Party to this Agreement) as may be reasonably necessary and/or
requested to effectuate the purposes of this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents.
Section 20.02. Availability of Equitable Remedies. Since a breach,
default or violation of any term or provision, or any promise, covenant or other
undertaking, of or under this Agreement, the Credit Documents and/or the
Definitive Supplemental Documents, could not adequately be compensated by money
damages, any Party shall be entitled, either before or after the Closing Date,
in addition to any other right or remedy available to it, to an injunction
restraining such breach or a threatened breach and to specific performance of
any such provision of this Agreement, the Credit Documents and/or the Definitive
Supplemental Documents, and in either case no bond or other security shall be
required in connection therewith, and the Parties hereby consent to the issuance
of such an injunction and to the ordering of specific performance.
Section 20.03. Modification. This Agreement, the Definitive
Supplemental Documents (including the Credit Documents), and all Appendices,
Exhibits and schedules of and to this Agreement, and all other documents
delivered pursuant to this Agreement, the Credit Documents and/or the
Supplemental Definitive Documents, set forth the entire understanding of the
Parties with respect to the subject matter hereof, supersede all existing
agreements among them concerning such subject matter, and may be modified only
by a written instrument duly executed by each Party (with the approval of the
Board of Directors of each corporate Party and the approval of the Managers or
Board of Managers or Directors of any limited liability company Party).
Section 20.04. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested (or by the most nearly comparable
method if mailed from or to a location outside of the United States), or
delivered against receipt to the Party to whom it is to be given, by direct hand
delivery or facsimile, with a copy to each of the other Parties hereto, to the
following addresses:
To Compost: Compost America Holding Company, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
Tx: 201.541.9393
Page 106 of 107 Pages
Fx: 201.541.1303
Copy to:
Xxxxxxxxx Traurig
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx, Esq.
Tx: 215.988.7805
Fx: 215.988.7801
To Miami: Miami Recycling and Composting Co., Inc.
c/o: Compost America Holding Company, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
Tx: 201.541.9393
Fx: 201.541.1303
Copy to:
Xxxxxxxxx Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx, Esq.
Tx: 215.988.7805
Fx: 215.988.7801
To Bedminster: Bedminster Seacor Services Miami Corporation
c/o: Compost America Holding Company, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx, President
Tx: 201.541.9393
Fx: 201.541.1303
Copy to:
Xxxxxxxxx Traurig
0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx, Esq.
Tx: 215.988.7805
Fx: 215.988.7801
To: Lionhart: Lionhart Global Appreciation Fund, Ltd.
c/o: Xxxx Xxxxxx Drics, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Page 107 of 107 Pages
Tx: 317.972.1112
Fx: 317.972.1118
Copy To:
X'Xxxxx, Xxxxxxx & Drics, L.L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Tx: 317.972.1112
Fx: 317.972.1118
To: LHI: Lionhart Investments, Ltd.
c/o: Xxxx Xxxxxx Drics, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Tx: 317.972.1112
Fx: 317.972.1118
Copy To:
X'Xxxxx, Xxxxxxx & Drics, L.L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Tx: 317.972.1112
Fx: 317.972.1118
To: GEP: Global EarthFund Partners, Ltd.
c/o: Xxxx Xxxxxx Drics, Esq.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Tx: 317.972.1112
Fx: 317.972.1118
Copy To:
X'Xxxxx, Xxxxxxx & Drics, L.L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Tx: 317.972.1112
Fx: 317.972.1118
Any notice given to any corporate Party shall be addressed to the person as
provided in this Section 20.04. Notice to the estate of any Party shall be
sufficient if addressed to the persons as provided in this Section 20.04. Any
notice or other communication given by certified mail (or by such comparable
method) shall be deemed given on the fifth (5th) day after the date of
certification thereof (or comparable act), except for a notice changing a
Party's address which will be deemed given at the time of receipt
Page 108 of 107 Pages
thereof, and any notice given by direct hand or facsimile delivery shall be
deemed given at the time of receipt or transmission thereof.
Section 20.05. Waivers. (a) No failure or delay on the part of any
Party in exercising any right, power, or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power, or remedy preclude any other or further exercise thereof or the exercise
of any other right, power, or remedy hereunder. Any waiver by any Party of a
breach of any provision of this Agreement shall not operate as or be construed
to be a waiver of any other breach of that provision or of any breach of any
other provision of this Agreement. The failure of a Party to insist upon strict
adherence to any term of this Agreement on one or more occasions will not be
considered a waiver or deprive that Party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement. The remedies
herein are cumulative and not exclusive of any remedies provided by law.
(b) Any Party to this Agreement may (i) extend the time for the
performance of any of the obligations or duties or other acts of any other Party
to this Agreement, (ii) waive any inaccuracies in the representations and
warranties set forth in this Agreement, the Definitive Supplemental Documents,
the Credit Documents, or any other document delivered hereof, and (iii) waive
compliance with any of the agreements, conditions or other terms or provisions
set forth herein. Any such extension or waiver shall be valid, and may be relied
upon by all Parties to this Agreement, if and only if any such extension or
waiver is set forth in an written instrument and duly signed by the Party to be
bound thereby.
Section 20.06. Binding Effect. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the Parties to this
Agreement, and their respective successors and assigns, and shall inure to the
benefit of the Indemnified Parties (under Article XVI of this Agreement) and
their respective successors and assigns.
Section 20.07. Confidential Nature of Information. After Term Loan
Closing and the Ancillary Transactions Closing on the Closing Date, or if this
Agreement is terminated rightfully before the Term Loan Closing and/or the
Ancillary Closing Transactions on the Closing Date, each Party promises, agrees
and covenants that it will treat in confidence all documents, materials and
other information which it shall have obtained regarding the other Party during
the course of the negotiations leading to the consummation of the transactions
contemplated herein (whether obtained before or after the date hereof), the
investigation provided for herein, and the preparation of this Agreement, the
Credit Documents, the Definitive Supplemental Documents, the Transactions
Documents, and any other related documents. The obligation of each Party to
treat such documents, materials and other information in confidence shall not
apply to any information which (i) such Party can demonstrate was already
lawfully in its possession prior to the disclosure thereof by the other Party,
(ii) is known to the public and did not become so known through any violation of
a legal obligation, (iii) became known to the public through no fault of such
Party, (iv) is later lawfully acquired by such Party from other sources, (v) is
required to be disclosed under the provisions of any state or United States
statute or regulation issued by a duly authorized agency, board or commission
thereof, or (vi) is required to be disclosed by a rule or order of any court of
competent jurisdiction.
Section 20.08. No Third Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a Party to this Agreement, except as provided expressly under this
Agreement.
Section 20.09. Separability. If any provision of this Agreement is
invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
Section 20.10. Applicable Law, Jurisdiction and Venue. Compost, Miami
and Bedminster, and Lionhart, LHI and GEP, each hereby agrees, promises and
covenants, as follows:
20.10.01. This Agreement, and the Credit Documents (except as
provided in the Mortgage) and Definitive Supplemental Documents shall be
governed by, construed in accordance with, and shall be enforced under, the laws
of the State of New Jersey, exclusive of its rules relating to conflict of laws.
20.10.02. Subject to applicable conflict of laws principles,
Compost, Miami, Bedminster, Lionhart, LHI and GEP each shall accept venue with
respect to all claims, actions or lawsuits that relate to or arise from this
Agreement, in any state court or U.S. Court of competent jurisdiction that sits
in Newark, New Jersey. Compost, Miami, Bedminster, Lionhart, LHI and GEP each
hereby, and irrevocably and unconditionally submits to the jurisdiction of any
such New Jersey court or U.S. Court sitting in Newark, New Jersey, and any
appellate court with jurisdiction
Page 109 of 107 Pages
thereover, in any action or proceeding relating to or arising from this
Agreement, the CCF Agreement (except as provided in the Mortgage), the Credit
Documents and/or the Definitive Supplemental Documents, or for the recognition
or enforcement of any judgment, and Compost hereby, and irrevocably and
unconditionally, agrees, promises and covenants that all such claims in respect
of any such action or proceeding shall be heard, determined and adjudicated in
by any such New Jersey court or, to the extent permitted by applicable law, by
any such U.S. Court. Compost hereby agrees, promises and covenants that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
20.10.03. Compost, Miami, Bedminster, Lionhart, LHI and GEP
each hereby, and irrevocably and unconditionally, waives, to the fullest extent
under applicable law, any defense or objection that it may now or hereafter have
1) to the laying of venue of any suit, action or proceeding relating to or
arising from this Mortgage Note, the CCF Agreement, the Credit Documents (except
as provided under the Mortgage) and/or the Definitive Supplemental Documents, in
any such New Jersey court or U.S. Court sitting in Newark, New Jersey, or 2) to
the personal jurisdiction and/or preferred and proper venue of any such New
Jersey court or any such U.S. Court in Newark, New Jersey.
SECTION 20.11. JURY WAIVER. COMPOST, MIAMI AND BEDMINSTER, AND
LIONHART, LHI AND GEP, EACH DO HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLE,
UNCONDITIONALLY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE CREDIT DOCUMENTS AND THE DEFINITIVE SUPPLEMENTAL DOCUMENTS,
OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PERSON. THIS IRREVOCABLE WAIVER OF THE RIGHT TO A
JURY TRIAL IS A MATERIAL INDUCEMENT FOR LIONHART, LHI AND/OR GEP TO DELIVER THE
CREDIT, AND TO EXECUTE AND DELIVER, AND OTHERWISE CONSUMMATE THE TRANSACTIONS
CONTEMPLATED UNDER, THIS AGREEMENT, THE CREDIT DOCUMENTS AND THE DEFINITIVE
SUPPLEMENTAL DOCUMENTS.
Section 20.12. Counterparts. This Agreement may be executed in two (2)
or more counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and agreement.
Section 20.13. Capitalized Terms. Any terms which are capitalized in
this Agreement shall have the meaning of such capitalized term as set forth in
this Agreement and in any applicable document referred to in this Agreement, and
any document which is referred to in this Agreement shall be deemed to be
incorporated by reference in this Agreement.
Section 20.14. Headings. The sections and other headings contained in
this Agreement are for reference purposes only and shall not effect in any way
the construction, meaning or interpretation of this Agreement.
Section 20.15. Exhibits/Schedules/Appendices. All exhibits, schedules
and appendices, that are attached to or are otherwise part of this Agreement,
are incorporated by reference and made a part hereof in the same manner as if
such appendices, exhibits and/or schedules are set forth in their entirety in
this Agreement.
Section 20.16. Facsimile Execution. This Agreement and or any exhibit,
appendix, schedule or other document, instrument or agreement which is required
to be delivered in conjunction with this Agreement (including, without
limitation, the Credit Documents and/or the Definitive Supplemental Documents),
may be executed by any Party by means of telephonic facsimile transmission, and
all Parties to this Agreement are entitled and authorized to rely on any such
telephonic facsimile transmission signature as an original signature.
Section 20.17. Assignment. This Agreement, and the rights of Lionhart,
LHI and/or GEP that relate to or arise from this Agreement, are and shall be
assignable by Lionhart, LHI and GEP, in their respective sole discretion.
Compost, Miami and Bedminster shall not have any right under this Agreement to
assign any rights or to delegate any duties under this Agreement, and Compost,
Miami and Bedminster shall not assign any rights or delegate any duties under
this Agreement, without the advance written consent of Lionhart, LHI and GEP
(which may be granted or withheld in the sole discretion of Lionhart, LHI and
GEP).
Section 20.18. Expenses. Except as otherwise specified or provided for
in this Agreement, all costs and expenses,
Page 110 of 107 Pages
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, that are or may be incurred in connection with the
negotiation, execution or delivery of this Agreement, the Credit Documents
and/or the Definitive Supplemental Documents, and/or in connection with the
consummation of the transactions contemplated under this Agreement, the
Definitive Supplemental Documents and/or the Credit Documents, shall be assumed,
paid and discharged by the Party who or which incurs any such costs and
expenses, whether or not the Term Loan Closing and the Ancillary Transactions
Closing shall have occurred on the Closing Date, or otherwise.
Section 20.19. Inter-Creditor Agent. Lionhart, LHI and GEP (hereinafter
referred to sometimes in this Section 20.19 as the "Creditor(s)," pursuant to
the terms and subject to the conditions set forth in an agreement, entitled
"Inter-Creditor Agreement," that is dated and was executed by and among the
Creditors, on or about October 30, 1998, and that is intended to be recorded
promptly hereafter in the Official Records Book or other Public Records of
Miami-Dade County, Florida, and any other appropriate public records as may
determined by the Creditors, each duly appointed GEP, as the their exclusive
agent and power of attorney ("Agent"), which power is coupled with an interest,
for all Creditors, with respect to this Agreement, the CCF Agreement, the Credit
Agreement and the Definitive Supplemental Documents, and the exercise of the
rights and remedies of each Creditor with respect thereto. Pursuant to and as
provided under the Inter-Creditor Agreement, 1) GEP, as Agent for all Creditors,
is authorized and empowered, in their respective name, place and stead, with
full power of substitution, to exercise and perform from time to time, and
without joinder of or by any Creditor, any act, power, duty, right or obligation
whatsoever that any Creditor or the Creditors (under this Agreement, the CCF
Agreement, the Credit Documents and/or the Definitive Supplemental Documents)
may now or hereafter exercise or perform, and to deal in all respects with
Compost, Miami and Bedminster with respect to the transactions evidenced under
this Agreement, the CCF Agreement, the Credit Documents and/or the Definitive
Supplemental Documents; and, 2) Compost, Miami and Bedminster, and any third
party dealing with the Agent, under this Agreement, the CCF Agreement, the
Credit Documents and/or the Definitive Supplemental Documents, shall have the
right to rely upon the power and authority of the Agent to bind each Creditor
with respect to the exercise of remedies or the giving of notices or consents
under and pursuant to this Agreement, the CCF Agreement, the Credit Documents
and/or the Definitive Supplemental Documents.
Signatures:
IN WITNESS WHEREOF, Lionhart, LHI and GEP, by their respective duly
authorized and appointed officers, and Compost, Miami and Bedminster, by their
respective duly authorized and appointed officers, have executed and delivered
this Agreement, on this 30th day of October, 1998, as follows:
Lionhart Global Appreciation Fund, Ltd. Compost America Holding Company, Inc.
---------------------------------- -------------------------------------------
Xxxxxxxx X. Xxxxx, Director Xxxxx X. Xxxxxx
President and Chief Executive Officer
Lionhart Investments, Ltd. Miami Recycling and Composting Company, Inc.
---------------------------------- -------------------------------------------
Xxxxxxxx X. Xxxxx, Director Xxxxx X. Xxxxxx
President and Chief Executive Officer
Global EarthFund Partners, L.L.C. Bedminster Seacor Services Miami Corporation
---------------------------------- -------------------------------------------
Xxx X. Xxxxx, President Xxxxx X. Xxxxxx
President and Chief Executive Officer
Page 111 of 107 Pages
