Exhibit 99.9
DIRECTOR APPOINTMENT AGREEMENT
October 30, 1998
THIS DIRECTOR APPOINTMENT AGREEMENT ("Agreement") is made, entered
into, executed and consummated effectively this 30th day of October, 1998
("Effective Date"), by and among Compost America Holding Company, Inc., a New
Jersey corporation (the "Company"); Lionhart Global Appreciation Fund, Ltd., an
international business company organized under the laws of the British Virgin
Islands ("Lionhart"); and, the Compost Stockholders (as that term is defined
under Recital Paragraph 3 of this Agreement).
Recitals:
1. On or about October 30, 1998, the Company, Miami Recycling and
Composting Co., Inc. ("Miami") and Bedminster Seacor Services Miami Corporation
("Bedminster"), and Lionhart, together with Lionhart Investments, Ltd. ("LHI")
and Lionhart EarthFund Partners, L.L.C. ("LEP"), entered into, executed and
consummated a "Credit, Capitalization and Financing Agreement" ("CCF
Agreement"), which is hereby incorporated by reference.
2. On or about November 3, 1997, the Company, Wasteco Ventures Limited
("Wasteco"), Xxxxxx X. Xxxxx ("Xxxxx"), Xxxxx X. Xxxxxx ("Xxxxxx"), Xxxx X.
Xxxxxx ("Xxxxxx"), Xxxxxx X. Xxxxxxxx ("X. Xxxxxxxx"), Xxxxxx X. Xxxxxxxx ("X.
Xxxxxxxx"), VRH Construction Company ("VRH"), Select Acquisitions, Inc.
("Select") and Xxxxxx X. Xxxxxx ("Rattie"), entered into, executed and
consummated a "Stockholders' Agreement" ("Stockholders' Agreement"), which is
hereby incorporated by reference. On or about December 12, 1997, the Company,
Wasteco, Long, Tuttle, Fetter, X. Xxxxxxxx, X. Xxxxxxxx, VRH, Select and Rattie
entered into, executed and consummated a "First Amendment to Stockholders'
Agreement" ("First Amendment"), and thereby amended the Stockholders' Agreement.
3. The term "Compost Stockholders," for purposes of this Agreement,
unless otherwise defined or indicated by the context thereof, shall mean and
include AW Compost Partners, L.L.C., and Wasteco, Long, Tuttle, Fetter,
X. Xxxxxxxx, X. Xxxxxxxx, VRH, Select and Rattie.
4. Pursuant to the CCF Agreement, and as a material part of the
consideration in providing or arranging for, or otherwise underwriting or
participating in the underwriting of, the credit, capitalization and financing
arrangements for the Company, Miami and Bedminster, the Credit Agreement
provides that Lionhart is to be granted the right by Compost to designate one
(1) qualified director to sit as a standing member on and for the Company's
Board of Directors and Finance Committee.
5. The Company's By-laws provide currently for a nine (9) member Board
of Directors, of which there is presently one (1) vacancy on the Company's Board
of Directors ("Vacancy").
NOW, THEREFORE, in consideration of the mutual and dependent promises
set forth in this Agreement, the Company, Lionhart and the Compost Shareholders
hereby agree as follows:
Agreement:
Section 1. Board/Committee Appointment. The Company and the Compost
Stockholders hereby promise and covenant, and hereby agree with Lionhart, and
hereby represent and warrant to Lionhart, that, during the Term of this
Agreement:
1.01. Subject to the terms and conditions set forth in Section 2
hereof, Lionhart shall have exclusive right and duty, subject to and as
specifically provided under Section 1.03, to designate, elect, qualify,
appoint, remove, substitute, replace and otherwise control one (1)
person, including all successors thereto (by the death, disability,
retirement, resignation, removal or subsequent election of any
predecessor thereto) ("Lionhart Appointee"), who is, shall be and shall
remain as 1) a director of and on the Board of Directors of the Company
("Board") and 2) a standing member of and on the Finance Committee of
the Company ("Finance Committee"), until any such Lionhart Appointee is
removed or until Lionhart designates, elects and otherwise appoints any
successor Lionhart Appointee thereof (pursuant to the terms and subject
to the conditions of this Agreement).
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1.02. Lionhart hereby nominates, designates, elects and appoints
Xxxx X. Xxxxxxxxxx as the initial Lionhart Appointee, and the Company
and the Compost Stockholders hereby confirm that, on and effective as
of October 30, 1998, the Board has voted to approve and confirm the
election of Xxxx X. Xxxxxxxxxx as the initial Lionhart Appointee, who
shall initially fill the above-referenced Vacancy on the Board, and who
shall serve on the Board and the Finance Committee until his successor
is designated, elected, qualified or otherwise appointed by Lionhart as
provided and otherwise contemplated under this Agreement.
1.03. The Company, vis-a-vis the Board, shall have the right, upon
a commercially reasonable notice to Lionhart and the Lionhart
Appointee, and upon at least a majority vote of the Board at a special
meeting of the Board lawfully called and convened for the purpose of so
removing for cause the Lionhart Appointee from the Board and the
Finance Committee, to remove a Lionhart Appointee in good faith and for
cause from the Board and the Finance Committee, whereupon Lionhart
shall have the right and duty to promptly appoint a successor Lionhart
Appointee to serve on the Board and the Finance Committee.
1.04. Lionhart shall have the right, upon a commercially
reasonable notice to the Company, the Board and the Finance Committee,
to remove any Lionhart Appointee from the Board and the Finance
Committee, with or without cause, whereupon Lionhart shall have the
right and duty to promptly appoint a successor Lionhart Appointee to
serve on the Board and the Finance Committee.
1.05. The Company (vis-a-vis its Board) and the Compost
Stockholders shall have the duty 1) to confirm, elect and otherwise
appoint each Lionhart Appointee, including the initial Lionhart
Appointee and all successor Lionhart Appointees, as a director of and
on the Board and as a member of and on the Finance Committee,
immediately upon the designation, election and appointment by Lionhart
of each such Lionhart Appointee as otherwise provided under this
Agreement, and 2) to confirm and remove each Lionhart Appointee, as a
director from the Board and as a member of the Finance Committee,
immediately upon the removal by Lionhart of any such Lionhart Appointee
as otherwise provided under this Agreement.
1.06. The Company and the Compost Stockholders are authorized to
execute, deliver and be bound by this Agreement, and so long as this
Agreement remains in effect, and notwithstanding any term, provision,
right or authority that is set forth under the Stockholders' Agreement
and/or the First Amendment, 1) neither the Company nor any of the
Compost Stockholders shall take any action, or refuse to take any
action, that is inconsistent with or otherwise frustrates any term of
this Agreement, 2) each Compost Stockholder shall vote all of their
respective shares of any securities of the Company, that are otherwise
entitled to vote, to cause the election of each Lionhart Appointee to
the Board, 3) the Company and the Compost Stockholders shall not cause
or suffer the existence of any empowerment of any committee or group of
directors to act in the place and stead of the Board and/or the Finance
Committee, and 4) the Company vis-a-vis its Board shall take all
actions and shall not refuse to take such actions, and the Compost
Stockholders shall vote their respective shares of any securities
entitled to vote and shall not refuse to vote any such securities, to
ensure that the Articles of Incorporation and By-laws of the Company
facilitate and do not at any time conflict with or otherwise frustrate
the terms and provisions of this Agreement.
Section 2. Term. The Term of this Agreement shall commence on October
30, 1998, and shall continue until and shall expire and terminate automatically
on the earliest date ("Termination") to occur of the following events: 1) a
written notice of repudiation or termination by Lionhart of this Agreement, with
or without cause, which is delivered by Lionhart to the Company; 2) the payment
in full and discharge by the Company, and Miami and Bedminster, of the Mortgage
Note, in the principal amount of US $10,500,000.00, that was executed by the
Company and delivered to Lionhart, LHI and LEP (pursuant to the terms of the CCF
Agreement), on or about October 30, 1998, which is hereby incorporated by
reference; or, 3) a mutual written agreement between the Company and Lionhart to
terminate this Agreement. Upon Termination of this Agreement, the Lionhart
Appointee shall be deemed automatically, and without further action, to have
resigned immediately from the Board and the Finance Committee, and the Board
shall be deemed automatically, and without further action, to have accepted and
approved immediately the resignation of such Lionhart Appointee from the Board
and the Finance Committee.
Section 3. Director Indemnification. The Company hereby represents and
warrants, and hereby agrees, promises and covenants that, upon the Effective
Date of this Agreement, and thereafter:
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3.01. The Company, to the maximum extent permissible under the
applicable laws of the State of New Jersey and the United States, and
the Articles and By-laws of the Company, and in manner that is
consistent with the written uniform policies and procedures of the
Company (including, without limitation, Board resolutions) with respect
to any and all directors, officers and/or other management of the
Company, shall defend and indemnify each Lionhart Appointee from and
against all liability relating to or arising from the performance and
discharge of his or her duties as a director on Board and as a member
of the Finance Committee.
3.02. The Company shall purchase and maintain director and officer
liability insurance, including any applicable excess liability
insurance ("D&O Policy"), and shall include and maintain each such
Lionhart Appointee as an insured under each such D&O Policy, and shall
thereby (through such D&O Policy) cause each such Lionhart Appointee to
be insured and otherwise indemnified from and against liability
relating to or arising from the performance and discharge of his or her
duties as a director on the Board and as a member of the Finance
Committee, to the maximum extent permissible under the applicable laws
of the State of New Jersey and the United States, and the Articles and
By-laws of the Company, and in a manner that is consistent with the
written uniform policies and procedures of the Company (including,
without limitation, Board resolutions) with respect to the purchase and
maintenance by the Company of any such D&O Policy for its directors,
officers and/or management.
3.03. Upon any reasonable or periodic request of Lionhart and/or
any Lionhart Appointee, the Company shall promptly make full and xxxxx
disclosure and provide to Lionhart and each such Lionhart Appointee, 1)
written copies of its Articles and By-laws, and all other written
policies and procedures of the Company (including, without limitation,
Board resolutions) that relate to or arise from, or otherwise regulate,
the duty of the Company to indemnify any and all directors, officers
and/or management of the Company, from and against (and to purchase and
maintain a D&O Policy with respect to) liability relating to or arising
from the performance and discharge of his or her duties as a director,
officer or manager of the Company, and 2) written copies of any D&O
Policy, including certificates of insurance and/or endorsements, with
respect to any such D&O Insurance, thereby evidencing compliance by the
Company of its duties and obligations to each such Lionhart Appointee
as provided under Section 3.02 of this Agreement.
Section 4. Miscellaneous. The Company, the Compost Stockholders and
Lionhart hereby agree, promise and covenant as follows:
4.01. The parties hereto agree that irreparable damage would occur
in the event any provision of this Agreement is or was not performed in
accordance with the terms hereof and that the parties shall be entitled
to specific performance of their terms hereof, in addition to any other
remedy available at law or in equity.
4.02. Any term of this Agreement may be amended and the observance
of any such term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the
written consent of both the Company, the Compost Stockholders and
Lionhart.
4.03. All notices and other communications provided for herein
shall be in writing and shall be delivered by hand, telecopied or sent
by certified or registered mail, return receipt requested, postage
prepaid, addressed in the manner set forth in Section 20.04 of the
Credit Agreement (or in such other manner for a party as shall be
specified in a notice given in accordance with this Section). All such
notices shall be conclusively deemed to be received and shall be
effective, if sent by hand delivery or telecopies, upon receipt, or if
sent by registered or certified mail, on the fifth day after the day on
which such notice is mailed.
4.04. This Agreement shall be binding upon and shall inure to the
benefit of the Company, the Compost Stockholders and Lionhart, and
shall inure to the benefit of each Lionhart Appointee (pursuant to
which each such Lionhart Appointee shall be deemed to be a third party
beneficiary with respect only to Section 3 of this Agreement).
4.05. This Agreement sets forth the entire agreement and
understanding among the parties hereto, and supersedes all prior
agreements and understandings, relating to the subject matter hereof.
If any term or other provision of this Agreement is held invalid, all
other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect, unless the term or provision held
invalid shall substantially impair the benefits of the remaining
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portions of this Agreement and shall not limit or otherwise affect the
meaning hereof. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New Jersey, except that if
the Company shall hereafter become a corporation governed by the laws
of another jurisdiction, the laws of that jurisdiction shall govern.
This Agreement may be executed in any number of counterparts, and/or by
fax, e-mail or other digital, telephonic or electronic transmission,
each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement in their individual capacity or caused it to be duly executed by their
respective authorized signatories thereunto duly authorized as of the day and
year first above written.
COMPOST AMERICA HOLDING COMPANY, INC.
By:
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Name: Xxxxx X. Xxxxxx
Title: President
LIONHART GLOBAL APPRECIATION FUND, LTD.
By:
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Name: Xxxxxxxx X. Xxxxx
Title: Director
AW COMPOST PARTNERS, L.L.C.
By:
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Name:
Title:
WASTECO VENTURES LIMITED
By:
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Name:
Title:
VRH CONSTRUCTION COMPANY
By:
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Name:
Title:
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SELECT ACQUISITIONS, INC.
By:
-----------------------------------
Name:
Title:
By:
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Xxxx X. Xxxxxx
By:
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Xxxxxx X. Xxxxx
By:
-----------------------------------
Xxxxx X. Xxxxxx
By:
-----------------------------------
Xxxxxx X. Xxxxxxxx
By:
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Xxxxxx X. Xxxxxxxx, Xx.
By:
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Xxxxxx X. Xxxxxx
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