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EXHIBIT 10.13
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STOCK PURCHASE AND NOTE MODIFICATION AGREEMENT
BETWEEN
3C1 COMPLETE COMPLIANCE CORPORATION
AND
WASTE SYSTEMS, INC.
DATED AS OF FEBRUARY 19, 1998
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CONTENTS
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ARTICLE 1
THE CONSIDERATION
1.1. Purchase and Sale......................................................... 2
1.2. Modification of 1995 Note................................................. 2
1.3. Reinstatement of 1995 Note Principal Amount............................... 2
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
2.1. Representations and Warranties of the Company............................. 2
2.1.1. Organization and Standing........................................ 3
2.1.2. Agreement Authorized and its Effect on Other Obligations......... 3
2.1.3. Validity of Stock................................................ 3
2.1.4. Capitalization,.................................................. 3
2.1.5. Reports and Financial Statements................................. 4
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF WSI
3.1. Representations and Warranties of WSI..................................... 4
3.1.1. Organization and Standing........................................ 4
3.1.2. Agreement Authorized and its Effect on Other Obligations......... 4
3.1.3. Ownership of 1995 Note........................................... 5
3.1.4. Investment Intent................................................ 5
3.1.5. Investor Sophistication.......................................... 5
ARTICLE 4
ADDITIONAL AGREEMENTS OF THE COMPANY
4.1. Further Assurances........................................................ 6
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TABLE OF CONTENTS
(Continued)
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ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. Conditions Precedent to Obligations of WSI................................... 6
5.1.1. No Material Litigation.............................................. 6
5.1.2. Opinion of Counsel.................................................. 6
5.2. Conditions Precedent to Obligations of the Company........................... 7
5.2.1. No Material Litigation.............................................. 7
5.2.2. Opinion of Counsel.................................................. 7
ARTICLE 6
MISCELLANEOUS
6.1. Entirety..................................................................... 7
6.2. Counterparts................................................................. 7
6.3. Notice and Waivers........................................................... 7
6.4. Termination of Representations, Warranties, etc.............................. 8
6.5. Table of Contents and Captions............................................... 8
6.6. Successors and Assigns....................................................... 8
6.7. Severability................................................................. 8
6.8. Applicable Law............................................................... 8
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STOCK PURCHASE AND NOTE MODIFICATION AGREEMENT
STOCK PURCHASE AND NOTE MODIFICATION AGREEMENT (this "Agreement"), dated as
of February 19, 1998, among 3CI Complete Compliance Corporation, a Delaware
corporation (the "Company") and Waste Systems, Inc., a Delaware Corporation
("WSI").
WITNESSETH:
WHEREAS, the Company and certain of its affiliates are the Makers of (i) a
promissory note dated September 30, 1995, in the original principal amount of
$8,000,000 (the "1995 Note"), and a promissory note dated December 20, 1996, in
the original principal amount of $2,700,000 (the "1996 Note"), in each case,
payable to the order of WSI;
WHEREAS, all interest due under the Notes has, in accordance with the terms
of the Notes, been converted to principal;
WHEREAS, the Company is authorized to issue up to 1,000,000 shares of its
preferred stock, without par value;
WHEREAS, the Company issued to WSI 1,000,000 shares of its Series A
Preferred Stock in exchange for the cancellation of the 1996 Note and a
reduction in the principal amount of the 1995 Note in an amount equal to
$7,000,000 minus the principal amount of the 1996 Note as of January 1,1997;
WHEREAS, the Company has issued all authorized shares of preferred stock
and the Company desires to be able to designate additional series of, and to
issue additional shares of, preferred stock;
WHEREAS, the Company has received all stockholder and board of director
approvals necessary to amend the Company's Certificate of Incorporation to
increase the authorized Preferred Stock to 16,050,000 shares and Common Stock to
40,450,000 (the "Amendment"), but is unable to file such Amendment until at
least twenty days after it has distributed an Information Statement listing the
requirements of the Securities Exchange Act of 1934 to its stockholders;
WHEREAS, such Information Statement is currently expected to be distributed
to the Company's stockholders on or about February 24, 1998, and the Amendment
is expected to be filed on or about the twentieth day following the actual date
of distribution;
WHEREAS, the Company desires to sell to WSI, and WSI desires to purchase
from the Company 750,000 shares of Series C Preferred Stock (the "Series C
Preferred Stock") in the form of the Certificate of Designation of Series C
Preferred Stock attached hereto as Exhibit A on the terms and conditions herein
set forth;
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WHEREAS, WSI Intends to modify the 1995 Note to reflect a reduction in its
principal amount equal to the $750,000 purchase price of the Series C Preferred
Stock;
WHEREAS, the Company intends to file the Certificate of Designation of
Series C Preferred Stock within seven days after the filing of the Amendment;
NOW, THEREFORE, in consideration the premises and of the mutual covenants
and agreements herein contained, and to prescribe the terms and conditions of
the transactions contemplated hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
THE CONSIDERATION
1.1. Purchase and Sale. Upon the terms and subject to the conditions set
forth in this Agreement, the Company agrees to sell to WSI, and WSI agrees to
purchase and accept from the Company, 750,000 shares of the Company's Series C
Preferred Stock. The purchase price for such shares, due at the date of this
Agreement, shall be $750,000 payable by WSI by reduction of the principal amount
of the 1995 Note by $750,000. The Company agrees to file the Certificate of
Designation of Series C Preferred Stock within seven days following the filing
of the Amendment and to issue to WSI certificates representing 750,000 shares of
the Company's Series C Preferred Stock as soon as practicable after the filing
of the Certificate of Designation of Series C Preferred Stock (the "Issuance
Date").
1.2. Modification of 1995 Note. As consideration for the purchase and sale
in Section 1.1, on the date of this Agreement, WSI agrees to modify the 1995
Note by reducing its principal amount by $750,000 effective as of the date of
this Agreement.
1.3. Reinstatement of 1995 Note Principal Amount. If the 750,000 shares of
the Company's Series C Preferred Stock described in Section 1.1 are not issued
to WSI within ninety days of the date of this Agreement, the $750,000 principal
amount of the 1995 Note shall automatically be reinstated and this Agreement
shall be null and void.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
2.1. Representations and Warranties of the Company. The Company hereby
represents and warrants as follows:
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2.1.1. Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware, has full requisite corporate power and authority to carry on its
business as it is currently conducted, and to own and operate the properties
currently owned and operated by it, and is duly qualified or licensed to do
business and is in good standing as a foreign corporation authorized to do
business in all jurisdictions in which the character of the properties owned or
the nature of the business conducted by it would make much qualification or
licensing necessary, except where the failure to be so qualified or licensed
would not have a material adverse effect on its financial condition, properties
or business.
2.1.2. Agreement Authorized and its Effect on Other Obligations. The
execution and delivery of this Agreement has been authorized by the board of
directors of the Company, the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company, and this Agreement is a valid and binding
obligation of the Company, enforceable against the Company (subject to normal
equitable principles) in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, debtor relief or
similar laws affecting the rights of creditors generally. The consummation of
the transactions contemplated by this Agreement will not conflict with or
result in a violation or breach of any term or provision of, not constitute a
default under (i) the Certificate of Incorporation or Bylaws of the Company or
(ii) any obligation, indenture, mortgage, deed of trust, lease, contract or
other agreement to which the Company or any of its subsidiaries is a party or
by which any of them or their properties are bound.
2.1.3. Validity of Stock. On the Issuance Date, the Series C Preferred
Stock to be issued to WSI hereunder will be in due and proper form, will be
duly authorized by all necessary corporate action on the part of the Company,
and will be validly issued, fully paid and non-assessable shares of Series C
Preferred Stock, free of preemptive rights. Upon delivery of the shares of
Series C Preferred Stock, WSI will acquire valid and marketable title to such
shares of Series C Preferred Stock, free and clear of any encumbrances. The
Common Stock issuable upon conversion of the Series C Preferred Stock has been
duly authorized by all the necessary corporate acts on the part of the Company
and when issued will be validly issued, fully paid and nonassessable shares of
Common Stock of the Company free of preemptive rights. Upon delivery of the
shares of Common Stock upon conversion of the Series C Preferred Stock, WSI
will acquire valid marketable title to such Common Stock free and clear of any
encumbrances.
2.1.4. Capitalization. As of the Effective Date, the authorized
capitalization of the Company will consist of 15,000,000 shares of Common Stock
and 1,000,000 shares of preferred stock, without par value. As of the Issuance
Date, the authorized capitalization of the Company will consist of 40,450,000
shares of Common Stock and 16,050,000 shares of preferred stock, without par
value.
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2.1.5. Reports and Financial Statements. The Company has furnished to WSI
true and complete copies of its annual report (the "10-K") filed with the
Commission pursuant to the Exchange Act for the fiscal year ended September 30,
1997, and (ii) the Company's quarterly report (the "10-Q") flied with the
Commission for the fiscal quarter ended December 31, 1997 (the 10-K and l0-Q
collectively, the "Disclosure Documents"). The consolidated financial statements
of the Company and its consolidated subsidiaries included in the Disclosure
Documents were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved and fairly
present the consolidated financial position for the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and changes in financial position of the periods then ended, and the
10-K and lO-Q did not contain any untrue statement of a material fact or fail to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Since September 30, 1997, the Company has filed with the
Commission all material reports, registration statements and other material
filings required to be filed with the Commission under the rules and regulations
of the Commission.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF WSI
3.1. Representations and Warranties of WSI. WSI represents and warrants as
follows:
3.1.1. Organization and Standing. WSI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has full requisite corporate power and authority to carry on its business as it
is currently conducted, to own and operate the properties currently owned and
operated by it, and is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all jurisdictions
in which the character of the properties owned or the nature of the business
conducted by it would make such qualification or licensing necessary, except
where the failure to be so qualified or licensed would not have a material
adverse effect on its financial condition, properties or business.
3.1.2. Agreement Authorized and its Effect on Other Obligations. The
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of WSI, and this
Agreement is a valid and binding obligation of WSI enforceable (subject to
normal equitable principles) in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, debtor
relief or similar laws affecting the rights of creditors generally. The
consummation of the transactions contemplated by this Agreement will not
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conflict with or result in a violation or breach of any term or provision of, or
constitute a default under (i) the Certificate of Incorporation or Bylaws of WSI
or (ii) any obligation, indenture, mortgage, deed of trust, lease, contract, or
other agreements to which WSI or any of its subsidiaries is a party or by which
any of them or their properties are bound.
3.1.3. Ownership of 1995 Note. WSI owns the 1995 Note free and clear of any
encumbrances or rights of any third parties and has the full right and authority
to cancel the indebtedness represented thereby as contemplated by this
Agreement. Upon consummation of the transactions contemplated hereby, the
portion of the debt evidenced by the 1995 Note repaid upon issuance of the
Series C Preferred Stock shall no longer be outstanding.
3.1.4. Investment Intent. WSI is acquiring the shares of Series C Preferred
Stock solely for its own account and not with a view to the public distribution
thereof. WSI acknowledges that the shares of Series C Preferred Stock being
issued hereunder will not be registered under the Securities Act of 1933, as
amended (the "Securities Act"), and agrees that it will only re-offer or resell
the shares of Series C Preferred Stock in compliance with the requirements of
Rule 144 promulgated under the Securities Act, in accordance with any other
available exemption from the registration requirements of the Securities Act, or
pursuant to a valid registration statement under the Securities Act. WSI
acknowledges that upon acquisition of the shares of Series C Preferred Stock
(other than in connection with a registered offering thereof), and until such
time, if any, as WSI has received an opinion of counsel to WSI, in form and
substance satisfactory to the Company, that it is no longer necessary or
advisable, the certificate(s) representing such Series C Preferred Stock shall
bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED By THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
OTHER APPLICABLE SECURITIES LAW AND, ACCORDINGLY, THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE RESOLD, PLEDGED, OR OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER,
OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT AND
IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS."
3.1.5. Investor Sophistication. WSI acknowledges and understands that it
must bear the economic risk of this investment for an indefinite period of time.
WSI has experience in analyzing and investing in entities like the Company, can
bear the economic risk of its investment, including the full loss of its
investment, and by reason of its business or financial experience, has the
capacity to evaluate the merits and risks of its investment and to protect its
own interests in connection with the purchase of Series C Preferred Stock from
the Company.
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ARTICLE 4
ADDITIONAL AGREEMENTS OF THE COMPANY
4.1. Further Assurances. The Company hereby covenants and agrees to take
all actions within its power after the date hereof to effect the transactions
contemplated by this Agreement, including but not limited to the filing with the
Delaware Secretary of State of the Amendment and the certificate of designation
relating to the Series C Preferred Stock.
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. Conditions Precedent to Obligations of WSI. The obligation of WSI to
consummate and effect the transactions contemplated hereby shall be subject to
the satisfaction of the following conditions or to the waiver thereof by WSI:
5.1.1. No Material Litigation. No suit, action or other proceeding
shall be pending or threatened before any court or governmental agency in
which it will be, or it is, sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby.
5.1.2. Opinion of counsel. WSI shall have received a favorable
opinion, dated as of the date of this Agreement, from Xxxxxx & Xxxxxx,
L.L.P., counsel for the Company, in form and substance satisfactory to WSI,
to the effect that (i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware; (ii) all proceedings required to be taken by or on the
part of the Company to authorize the execution of this Agreement and the
implementation of the transactions contemplated hereby have been taken;
(iii) this Agreement has been duly executed and delivered by, and is the
legal, valid and binding obligation of the Company and is enforceable
against the Company in accordance with its terms, except as enforceability
may be limited by (a) equitable principles of general applicability or (b)
bankruptcy, insolvency, reorganization, fraudulent conveyance or similar
laws affecting the rights of creditors generally; and (iv) the Series C
Preferred Stock, when issued, will have been duly authorized by all
necessary corporate action on the part of the Company, and will be validly
issued, fully paid and nonassessable shares of Series C Preferred Stock,
free of preemptive rights. Such opinion also shall cover such other matters
incident to the transactions herein contemplated as WSI may reasonably
request.
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5.2. Conditions Precedent to Obligations of the Company. The obligations
of the Company to consummate the transactions contemplated hereby shall be
subject to the satisfaction of the following conditions or to the waiver
thereof by the Company.
5.2.1. No Material Litigation. No suit, action or other
proceeding shall be pending or threatened before any court or
governmental agency in which it will be, or it is, sought to restrain or
prohibit or to obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
5.2.2. Opinion of Counsel. The Company shall have received a
favorable opinion, dated the date of this Agreement, from Blanchard,
Walker, X'Xxxxx & Xxxxxxx, counsel to WSI, in form and substance
satisfactory to the Company, to the effect that (i) WSI has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware; (ii) all corporate or other
proceedings required to be taken by or on the part of WSI to authorize the
execution of this Agreement and the implementation of the transactions
contemplated hereby have been taken; (iii) this Agreement has been duly
executed and delivered by, and is the legal, valid and binding obligation
of WSI, and is enforceable against WSI in accordance with its terms,
except as enforceability may be limited by (a) equitable principles of
general applicability or (b) bankruptcy, insolvency, reorganization,
fraudulent conveyance or similar laws affecting the rights of creditors
generally. Such opinion shall also cover such other matters incident to
the transactions herein contemplated as the Company and its counsel may
reasonably request.
ARTICLE 6
MISCELLANEOUS
6.1. Entirety. This Agreement embodies the entire agreement among the
parties with respect to the subject matter hereof, and all prior agreements
between the parties with respect thereto are hereby superseded in their
entirety.
6.2. Counterparts. Any number of counterparts of this Agreement may be
executed and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
instrument.
6.3. Notices and Waivers. Any notice or waiver to be given to any party
hereto shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid,
return receipt requested as follows:
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IF TO THE COMPANY
Addressed to: With a copy to:
3CI Complete Compliance Corporation Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxxx, Xxxxx 000 700 Louisiana, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxxxx X. Crochet Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
IF TO WSI
Waste Systems, Inc. Blanchard, Walker, X'Xxxxx & Xxxxxxx
000 Xxxxxxxxxx, Xxxxx 000 Bank Xxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000 P.O. Drawer 1126
Attn: Xx. Xxxxxxx Pues Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, with return receipt requested, shall be
deemed to be received on the third business day after so mailed, and if
delivered by courier of facsimile to such address, upon delivery during normal
business hours on any business day.
6.4 Termination of Representations, Warranties, etc. The respective
representations and warranties of the Company and WSI contained herein shall
expire on the date of this Agreement.
6.5 Table of Contents and Captions. The table of contents and captions
contained in this Agreement are solely for convenient reference and shall not be
deemed to affect the meaning or interpretation of any article, section, or
paragraph hereof.
6.6 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
6.7 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
6.8 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Louisiana.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in their respective corporate names by their respective duly authorized
representatives, all as of the day and year first above written.
3CI COMPLETE COMPLIANCE CORPORATION
By: /s/ XXXXXXX X. CROCHET
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Xxxxxxx X. Crochet, President
WASTE SYSTEMS, INC.
By: /s/ XX. XXXXXXX PUES
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Xx. Xxxxxxx Pues
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