EXHIBIT H
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of November 3, 1997 by and among
COMPOST AMERICA HOLDING COMPANY, INC., a New Jersey corporation (the "Company"),
WASTECO VENTURES LIMITED, a corporation organized under the laws of the British
Virgin Islands ("Wasteco"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual ("▇▇▇▇▇"), ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, an individual, ("▇▇▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇"),
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual ("▇. ▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., an
individual ("▇. ▇▇▇▇▇▇▇▇"), VRH CONSTRUCTION COMPANY, a New York corporation
("VRH"), SELECT ACQUISITIONS, INC., a Colorado corporation ("Select"), and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual ("Rattie").
WHEREAS, pursuant to separate stock purchase arrangements between
Wasteco and ▇▇▇▇▇ (together the "New Common Stockholders") and the Company, the
New Common Stockholders have acquired common stock ("Common Stock") of the
Company as well as certain other securities and rights; and
WHEREAS, the Company and the others signing this agreement (each a
"Stockholder Party") desire to set forth their agreement concerning the
management of the Company and such other matters as are set forth herein;
NOW, THEREFORE, in consideration of the mutual and dependent promises
set forth in this Agreement, the Company and the Stockholder Parties agree as
follows:
ARTICLE I
BOARD OF DIRECTORS AND STOCKHOLDERS
SECTION 1.01. The Stockholder Parties, except as otherwise provided
herein, shall vote to cause the Board of Directors of the Company (the "Board")
to consist of seven (7) directors and the various provisions of this Agreement
shall be construed to relate to a Board of seven (7) directors. At least two of
the directors (other than the directors designated as provided below) shall be
"independent" directors. Except as provided in Section 1.02, Wasteco shall have
the right to designate two directors and ▇▇▇▇▇ shall have the right to designate
one director. Should the Board be increased or decreased in size, the proportion
of directors then designated by Wasteco and ▇▇▇▇▇, as well as the proportion of
independent directors, shall be strictly maintained. Any right to designate
which shall result in a fraction of one shall be adjusted upward to provide an
additional director.
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SECTION 1.02. Should the total number of votes that Wasteco is entitled
to cast for the election of directors be less than 15% of the total number of
votes that could be cast in such election, the number of directors designated by
Wasteco shall be decreased to one. Should such total number of votes that
Wasteco is entitled to cast be more than 30% of such total number of votes that
could be cast, the number of directors designated by Wasteco shall be increased
to three. Should such total number of votes that Wasteco is entitled to cast be
more than 50% of such total number of votes that could be cast, the number of
directors designated by Wasteco shall be increased to four. Should the total
number of votes that either or both of Wasteco and ▇▇▇▇▇ is entitled to cast for
the election of directors be less than 5% of the total number of votes that
could be cast in such election, no director may be designated by such party,
provided, however, that one director each shall be retained until November 3,
2004 by each of Wasteco and ▇▇▇▇▇ if they retain any securities of the Company.
SECTION 1.03. Each Stockholder Party shall vote all shares of any
securities of the Company entitled to vote, owned by such Stockholder Party, to
cause the election to the Board of the individuals designated by the Stockholder
Parties in accordance with Sections 1.01 and 1.02.
SECTION 1.04. (a) Any agreement by the Stockholder Parties herein to
vote their shares of Common Stock in a certain manner shall be deemed, in each
instance, to include an agreement by each Stockholder Party to use such
Stockholder Party's best efforts and to take all actions necessary to call, or
cause the Company and the appropriate officers and directors of the Company to
call, as promptly as practicable, a special or annual meeting of stockholders or
to act by written consent.
(b) When any action is required to be taken by a Stockholder Party
pursuant to this Agreement, such Stockholder Party shall take all steps
necessary to implement such action, including, without limitation, executing or
causing to be executed, as promptly as practicable, a consent in writing in lieu
of an annual or special meeting of the stockholders.
(c) Unless expressly stated to the contrary herein, any action
requiring the vote of the directors (or any committee thereof) may be effected
by consent in lieu of a meeting of the directors or committee members, as the
case may be.
SECTION 1.05. Each Stockholder Party shall vote all shares of Common
Stock owned by such Stockholder Party for the removal (with or without cause) of
any director designated and elected pursuant to Section 1.01 hereof if the
Stockholder Party entitled to designate such director pursuant to Section 1.01
requests such removal by written notice to the other Stockholder Parties.
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SECTION 1.06. If, as a result of death, disability, retirement,
resignation, removal (with or without cause) of any director, or otherwise there
shall exist or occur any vacancy on the Board, then:
(i) the Stockholder Parties entitled to designate (pursuant to Section
1.01 hereof) the director whose death, disability, retirement, resignation
or removal resulted in such vacancy may designate another individual to
fill such capacity and to serve as a director of the Company, and
(ii) each Stockholder Party shall vote its respective shares in favor
of the individual designated in accordance with clause (i) above to fill
such vacancy.
SECTION 1.07. Each Stockholder Party shall vote its shares of Common
Stock, and shall take all other actions necessary, to ensure that the Articles
of Incorporation and By-laws facilitate and do not at any time conflict with the
provisions of this Agreement.
SECTION 1.08. Except as specified herein or as authorized by the entire
Board in writing, the Stockholder Parties shall not cause or suffer the
existence of any empowerment of any committee or other group of directors to act
in the place and stead of the Board.
SECTION 1.09. The Board shall have a Compensation Committee which shall
consist of four directors, the two independent directors and two directors
designated by Wasteco. All issuances of securities of Compost or any subsidiary
to employees of the Company or other persons or entities in respect of services
to the Company or any subsidiary shall be approved by a majority vote of the
Compensation Committee as well as by the Board.
SECTION 1.10. Except as specified herein, neither the Company or any
Subsidiary shall take, and no Stockholder Party to this Agreement shall cause
the Company or any Subsidiary to take, any action, without the resolution of a
majority of the Board with respect to (i) any significant project, construction
or engagement commenced after November 3, 1997, (ii) any merger, consolidation,
or divestiture, (iii) any sale, lease, transfer, exchange or other disposition
of substantial assets, (iv) any material financial arrangement or indebtedness,
(v) any purchase, lease, exchange or other acquisition of substantial assets,
(vi) any increase or reduction of, or change in, the Company's authorized
capital stock, or the creation of any additional class of capital stock of the
Company, (vii) any amendment to the Certificate of Incorporation or Bylaws of
the Company, (viii) the dissolution, liquidation, reorganization or application
for receivership of the Company, (ix) any significant change in the conduct of
the business of the Company, (x) to increase or decrease the size of the Board
from seven (7) directors, and (xi) any such other substantial corporate change
as determined by the Board.
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ARTICLE II
SUBSIDIARIES AND AFFILIATES
SECTION 2.01. The Company agrees that it will cause its subsidiary,
EPIC INC, a New Jersey corporation ("EPIC"), to have a Board that is in all
respects similar to that of the Company in accordance with Section 1.01 of this
Agreement and to have By-Laws, a Certificate of Incorporation and other
governance rules substantially the same as those governing the conduct of the
business of the Company.
SECTION 2.02. Upon written demand of any Stockholder Party who signed
this Agreement on or about November 3, 1997, the Company agrees that it will
cause such other subsidiaries of the Company, directly and indirectly owned, and
any affiliates controlled by the Company as such demand shall include to have a
Board that is in all respects similar to that of the Company in accordance with
Section 1.01 of this Agreement and to have By-Laws, a Certificate of
Incorporation and other governance rules substantially the same as those
governing the conduct of the business of the Company.
ARTICLE III
LISTING
SECTION 3.01. The Company agrees that it will use its best efforts to
cause its Common Stock to obtain "Small Cap" status and NMS status as soon as
reasonably feasible.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Each of the parties hereto represents that this Agreement
has been duly authorized, executed and delivered by such party and constitutes a
legal, valid and binding obligation of such party, enforceable against it in
accordance with the terms of this Agreement.
SECTION 4.02. The parties hereto agree that irreparable damage would
occur in the event any provision of this Agreement 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.
SECTION 4.03. 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 the Company and all of
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the Stockholder Parties who signed this Agreement on or about November 3, 1997.
Each Stockholder Party shall be bound by any amendment or waiver authorized by
this Section 4.03, whether or not such Stockholder Party shall have consented
thereto.
SECTION 4.04. 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 on the signature pages of this 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.
SECTION 4.05. Except as otherwise provided herein, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns (including without limitation the
contemplated transfer of Wasteco's rights under this Agreement to a limited
partnership or another entity); provided, however, that this Agreement shall not
inure to the benefit of any prospective transferee unless such prospective
transferee shall have agreed in writing to be bound by the terms of this
Agreement. No Stockholder Party may assign any of its rights hereunder to any
person other than a transferee that has complied with the requirements of this
Section 4.05 in all respects, except that each party to this Agreement may sell
or otherwise transfer some or all shares of Common Stock owned by such party to
a non-affiliated institutional investor or investors or in an underwritten
public offering. Upon such transfer, this Agreement shall not be effective as to
such investor or investors. Nothing in this Agreement either express or implied
is intended to confer on any person other than the parties hereto and their
respective successors and permitted assigns, any rights, remedies or obligations
under or by reason of this Agreement.
SECTION 4.06. This Agreement shall terminate on the earlier to occur of
(i) November 3, 2004 or (ii) such earlier time as the Stockholder Parties shall
not collectively own at least 25% of the Common Stock of the Company.
SECTION 4.07. 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 except for a certain
Wasteco Optional Participation Agreement between ▇▇▇▇▇▇ and Wasteco and a
certain ▇▇▇▇▇ Optional Participation Agreement between ▇▇▇▇▇▇ and ▇▇▇▇▇, both
dated November 3, 1997. 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 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,
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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, 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 signatories thereunto duly authorized as of the day and year first
above written.
COMPOST AMERICA HOLDING COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title:
WASTECO VENTURES LIMITED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Title:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
VRH CONSTRUCTION COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title:
SELECT ACQUISITIONS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
