Exhibit 3.57
▇▇▇▇▇▇ FACILITY ASSOCIATES AMENDMENT
TO AMENDED AND RESTATED GENERAL PARTNERSHIP AGREEMENT
WHEREAS, the General Partnership Agreement of the ▇▇▇▇▇▇ Facility
Associates, a New York State General Partnership ("Partnership"), was originally
dated as of May 20, 1988, and
WHEREAS, said general partnership agreement was thereafter amended and
restated in its entirety on July 19, 1989 by and between Allegany Environmental
Systems, Inc. ("Allegany"), LYA Associates, Inc. ("LYA") and ▇▇▇▇ ▇▇▇▇▇▇ Corp.
("SITA") ("Agreement"), and
WHEREAS, LYA did thereafter withdraw from the Partnership leaving Allegany
and SITA as the remaining partners, and
WHEREAS, Allegany and SITA are desirous of assigning their partnership
interests, representing complete interest in the Partnership, to ▇▇▇▇▇▇▇ Waste
Management of N.Y., Inc. ("Casella") and New England Waste Systems of N.Y., Inc.
("NEWS"), and
WHEREAS, SITA and Allegany are desirous of amending the Amended and
Restated General Partnership Agreement in order to effectuate said assignments,
NOW, THEREFORE, IT IS AGREED as follows:
1. MEMBERSHIP: Paragraph "1.18" shall be amended to recite that the
sole partners of the Partnership are Casella and NEWS having been transferred
the partnership interest of Allegany and SITA and LYA having previously resigned
as a partner of the Partnership.
2. DUTIES AND OBLIGATIONS: To the extent that SITA and Allegany have
duties and obligations as set forth in the Partnership Agreement, NEWS shall be
substituted for SITA
and Casella shall be substituted for Allegany.
3. PARTNERSHIP LOANS: To the extent that SITA and/or Allegany have lent
money to the Partnership, SITA and Allegany acknowledge that no monies are owed
by the Partnership to Allegany and/or SITA for partner loans.
4. EXECUTIVE COMMITTEE: Section "4.2" of the Agreement relative to the
Executive Committee is amended to delete the representation of Allegany's
and SITA's representatives from such committee. Section "4.2.1", relative the
frequency of Executive Committee meetings, shall be amended to reflect that such
meetings shall be annual.
5. PERCENTAGE INTEREST: Section "5.4" shall be amended to reflect the
fact that, upon execution of this Agreement, NEWS shall be the owner of 10% and
Casella shall be the owner of 90% of the Partnership.
6. ARTICLE VIII: Article VIII in all respects, and with all subparts, is
repealed.
7. NOTICES: Section "11.1" relative to notices is amended to reflect
that notices to the partners shall be at the addresses shown below:
If to New England Waste Systems of N.Y., Inc.:
New England Waste Systems of N.Y., Inc.
c/o Casella Waste Management
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., P.C.
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇ Waste Management of N.Y., Inc.
2
▇▇▇▇▇▇▇ Waste Systems of N.Y., Inc.
c/o Casella Waste Management
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone:(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., P.C.
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone:(▇▇▇) ▇▇▇-▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
The parties have executed this amendment to the amended and restated
general partnership agreement as of the date first above written.
ALLEGANY ENVIRONMENTAL SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ CORP.
By: /s/ [ILLEGIBLE]
-----------------------------------
[ILLEGIBLE], Vice President
▇▇▇▇▇▇▇ WASTE MANAGEMENT OF N.Y., INC.
By:
-----------------------------------
NEW ENGLAND WASTE SYSTEMS OF N.Y., INC.
By:
-----------------------------------
3
▇▇▇▇▇▇▇ Waste Systems of N.Y., Inc.
c/o Casella Waste Management
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., P.C.
▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The parties have executed this amendment to the amended and restated
general partnership agreement as of the date first above written.
ALLEGANY ENVIRONMENTAL SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ CORP.
By: /s/ [ILLEGIBLE]
-----------------------------------
[ILLEGIBLE], Vice President
▇▇▇▇▇▇▇ WASTE MANAGEMENT OF N.Y., INC.
By: /s/ [ILLEGIBLE]
-----------------------------------
NEW ENGLAND WASTE SYSTEMS OF N.Y., INC.
By: /s/ [ILLEGIBLE]
-----------------------------------
3
----------------------------------------------------
THE ▇▇▇▇▇▇ FACILITY ASSOCIATES
----------------------------------------------------
Amended and Restated
General Partnership Agreement
by and among
Allegany Environmental Systems, Inc.,
LYA Associates, Inc., and
▇▇▇▇ ▇▇▇▇▇▇ Corp.
----------------------------------------------------
July 19, 1989
----------------------------------------------------
----------------------------------------------------
Amended and Restated
General Partnership Agreement
of The ▇▇▇▇▇▇ Facility Associates ("HFA")
by and among
Allegany Environmental Systems, Inc. ("AES")
LYA Associates, Inc. ("LYA") and
▇▇▇▇ ▇▇▇▇▇▇ Corp. ("SITA")
----------------------------------------------------
----------------------------------------------------
TABLE OF CONTENTS
----------------------------------------------------
Document Item No.
-------- --------
Amended and Restated General Partnership
Agreement of HFA dated as of July 19, 1989
by and among AES, LYA and Sita. 1
Financial Statements and Projections of HFA
under cover of letter dated July 19, 1989 from
AES and LYA to Sita. 2
Letter Agreement dated July 19, 1989 among AES,
HFA and Sita regarding allocation of 2.5% of HFA
Revenues. 3
▇▇▇▇▇▇▇ Farm Agreement dated as of July 17, 1989
among HFA, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇., and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇. 4
Employment Agreement dated as of July 19, 1989
between HFA and ▇▇▇▇▇▇▇. 5
Limited Use License Agreement dated as of July
19, 1989 between Sita and HFA. 6
Technical Services Retention Agreement dated
July 19, 1989 between Sita and HFA. 7
Technical Services Retention Agreement dated
July 19, 1989 between AES and HFA. 8
Legal Services Retention Agreement dated July 19,
1989 between ▇▇▇▇▇▇ Beach & ▇▇▇▇▇▇ and HFA. 9
THE ▇▇▇▇▇▇ FACILITY ASSOCIATES
AMENDED AND RESTATED
GENERAL PARTNERSHIP AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
Parties ........................................................................................ 1
Recital ........................................................................................ 2
Agreement Terms ................................................................................ 2
General Provisions......................................................................... 2
1.1 Glossary......................................................................... 2
1.2 Purpose.......................................................................... 2
1.3 Continuation of the Partnership.................................................. 3
1.4 Formalities...................................................................... 3
1.5 Name of Partnership.............................................................. 4
1.6 Place of Business................................................................ 4
1.7 Duration......................................................................... 4
1.7.1 Continuation as Partners.................................................. 5
1.7.2 No Voluntary Termination.................................................. 5
1.7.3 No Partition.............................................................. 5
1.7.4 Death or Bankruptcy....................................................... 5
1.8 Membership....................................................................... 5
1.9 Fiscal Year and Fiscal Period.................................................... 5
1.10 Tax Matters Partner.............................................................. 5
Allegany and LYA's Representations and Warranties ......................................... 6
2.1 Authority........................................................................ 6
2.2 Enforceability................................................................... 7
2.3 Title in Partnership Interest.................................................... 8
2.4 Litigation; Claims............................................................... 8
2.5 Organization; Permits............................................................ 9
2.5.1 General................. ................................................. 9
2.5.2 Documentation.............. .............................................. 10
2.5.3 Compliance................................................................ 11
2.5.4 Waste Disposal............................................................ 12
2.6 Balance Sheet.................................................................... 13
2.7 Liabilities...................................................................... 14
2.8 No Bankruptcy.................................................................... 15
2.9 No Brokers....................................................................... 16
2.10 Title; Effects of Drilling....................................................... 16
2.11 Tax Matters...................................................................... 17
2.12 Contracts and Leases............................................................. 18
2.13 No Condemnation................. ................................................ 19
2.14 Access........................................................................... 19
2.15 Condition of Buildings and Personal Property..................................... 20
2.16 Insurance........................................................................ 20
2.16.1 General................................................................... 20
2.16.2 Title Insurance........................................................... 21
2.17 No Material Misstatements or Omissions .......................................... 21
2.18 Survival......................................................................... 22
Capital Contributions...................................................................... 22
3.1 Original Capital Contributions................................................... 22
i
3.1.1 Allegany and LYA.......................................................... 22
3.1.2 Sita...................................................................... 23
3.2 Additional Capital Contributions................................................. 24
3.2.1 General................................................................... 24
3.2.2 Alternative Financing..................................................... 24
3.2.3 Requests for Additional Contributions..................................... 25
3.2.4 Remainders................................................................ 27
3.2.5 Partner Loans............................................................. 28
3.2.6 Loan Remainders .......................................................... 29
3.2.7 Terms of Partner Loans.................................................... 30
3.3 Sale of Partnership Interests.................................................... 31
Management of the Partnership................................................................... 32
4.1 Definitions...................................................................... 32
4.1.1 Major Decisions........................................................... 32
4.1.2 Unanimous Decisions....................................................... 36
4.1.3 Daily Management.......................................................... 37
4.2 Executive Committee.............................................................. 37
4.3 Partnership Expenses............................................................. 40
4.4 Exculpation...................................................................... 40
4.5 Other Activities................................................................. 41
4.6 Title Holding.................................................................... 42
4.7 Manager.......................................................................... 42
4.8 Bank Accounts.................................................................... 43
4.9 Books of Account ................................................................ 43
4.10 Preparation and Approval of Annual Budget........................................ 44
Reserve Accounts; Distributions................................................................. 45
5.1 Reserve Accounts................................................................. 45
5.1.1 Operating Reserve......................................................... 45
5.1.2 Capital Reserve........................................................... 46
5.2 Distributions.................................................................... 46
5.3 Adjustments...................................................................... 47
5.4 Percentage Interest.............................................................. 47
5.5 Adjustments...................................................................... 48
Partner's Capital Accounts...................................................................... 49
6.1 Capital Accounts................................................................. 49
6.1.1 Increases................................................................. 49
6.1.2 Reductions................................................................ 49
6.2 Treasury Regulations............................................................. 50
6.3 Guarantees....................................................................... 50
Determination and Allocation of Income and Loss................................................. 50
7.1 Definition of Net Income or Losses............................................... 50
7.2 Allocation of Net Income......................................................... 51
7.2.1............................................................................ 51
7.2.2............................................................................ 51
7.3 Allocation of Net Losses......................................................... 52
7.3.1............................................................................ 52
7.3.2............................................................................ 52
7.4 Allocation after Assignment...................................................... 52
7.5 Excess Nonrecourse Liabilities................................................... 53
7.6 Monthly Proration................................................................ 53
ii
Admission of Additional Partners and Disposition of Partnership Interests....................... 54
8.1 Admission of Additional Partners................................................. 54
8.2 Disposition of Partnership Interest.............................................. 54
8.2.1 Transfers Not Permitted................................................... 54
8.2.2 Permitted Transfers....................................................... 55
8.3 First Refusal Offer.............................................................. 55
8.3.1 Notice.................................................................... 55
8.3.2 Acceptance ............................................................... 56
8.3.3 Sale of Partnership Interest.............................................. 57
8.3.4 Closing and Payment....................................................... 57
8.3.5 Come-Along; Take-Along.................................................... 58
8.3.6 Effect of Noncomplying Transfer........................................... 59
8.4 Additional and Substituted Partners.............................................. 59
8.5 Admission of Additional and Substitute Partners.................................. 59
8.5.1 Consent of................................................................ 60
8.5.2 Execution of Agreement.................................................... 60
8.5.3 Instrument of Transfer.................................................... 60
8.5.4 No Termination............................................................ 60
8.5.5 Securities Law Matters.................................................... 61
8.5.6 Investment Representation................................................. 61
8.5.7 Fees and Expenses......................................................... 61
8.6 Incompetence..................................................................... 61
8.7 No Withdrawal.................................................................... 62
8.8 Termination of a Partner......................................................... 62
8.8.1 Bankruptcy ............................................................... 62
8.8.2 Incompetence ............................................................. 62
8.8.3 Corporate Dissolution..................................................... 62
8.8.4 Partnership Dissolution .................................................. 62
8.8.5 Attempted Withdrawal...................................................... 62
8.9 Effect of a Partner Becoming a Withdrawn Partner................................. 63
8.9.1 Continuation.............................................................. 63
8.9.2 Executive Committee....................................................... 63
8.9.3 Estates, etc.............................................................. 63
Dissolution and Termination..................................................................... 64
9.1 Dissolution...................................................................... 64
9.2 Winding Up....................................................................... 64
9.3 Liquidation Proceeds............................................................. 65
9.3.1 Liabilities............................................................... 65
9.3.2 Reserves.................................................................. 65
9.3.3 Distributions............................................................. 65
9.3.4 Non-cash Distribution..................................................... 66
10.1 Confidentiality.................................................................. 66
10.2 Confidential Information......................................................... 67
10.3 Government or Court Order........................................................ 68
10.4 Publicity........................................................................ 69
10.5 Injunctive Relief................................................................ 69
Miscellaneous ................................................................................. 70
11.1 Notices.......................................................................... 70
11.2 Governing Law.................................................................... 72
iii
11.3 Amendments....................................................................... 72
11.4 Counterparts..................................................................... 72
11.5 Waivers.......................................................................... 72
11.6 No Third-Party Beneficiaries..................................................... 73
11.7 Integration...................................................................... 73
11.8 Partial Invalidity............................................................... 73
11.9 Power of Attorney................................................................ 74
Execution....................................................................................... 76
Exhibit A Description of ▇▇▇▇▇▇▇ Farm
iv
GLOSSARY
Defined Term Section
------------ -------
Accepting Partner 8.3.2
Additional Contributions 3.2.2
Additional Partner 8.4
Affiliate 4.7
Affiliated with 4.7
Agreement Parties
Allegany Parties
Alternative Financing 3.2.2
Capital Account 6.1
Capital Reserve 5.1
Chairman 4.2.1
Chase 3.3
Closing 8.3.4
Code 1.10
Confidential Information 10.2
Daily Management 4.1.2
Distributions 5.2
Electing Lender 3.2.5
Electing Partner 3.2.3
Event of Withdrawal 8.8
Executive Committee 4.2
Financial Statements 2.6
First Refusal Offer 8.3.1
Fully Participating Lender 3.2.4
Fully participating Partner 3.2.2
Funding Resolution 3.2.2
▇▇▇▇▇▇▇ Article II
▇▇▇▇▇▇▇ Farm Recital
Initial Contribution 3.1.2
Initial Contributions 3.1.1
Interest 8.2
Loan Remainder 3.2.4
Loan Request 3.2.4
IRS 2.11
LYA Parties
Major Decision 4.1.1
Manager 4.7
Managing Partner Parties
Managing Partners Parties
Net Income 7.1
Net Losses 7.1
Non-Fully Participating Lender 3.2.4
Non-Fully Participating Partner 3.2.2
offer 8.3.1
Operating Reserve 5.1
Optional Amount 3.2.2
Original Capital Account 6.1
Original Agreement Parties
Other Partners 8.3.1
v
Defined Term Section
------------ -------
Partner Parties
Partner Loan 3.2.4
Partners Parties
Partnership Parties
Percentage Interest 5.4
Permits 2.5.1
Pledge 8.3.1
Pledgor 8.3.1
Preference 5.2
Project Recital
Projections 2.6
Purchaser 3.2.4
Remainder 3.2.2
Representative 4.2
Required Amount 3.2.2
Revenues 5.1.2
Selling Price 8.3.1
Selling Partner 8.3.1
Shareholder 8.2.2
Sita Parties
Substituted Partner 8.4
Survey 2.16.2
Take-Along Right 8.3.5
Taxes 2.11
Title Policy 2.16.2
Transfer 8.2
Transferee 8.3.1
Unanimous Decisions 4.1.2
UPA 1.3
Withdrawn Partner 8.8
vi
THE ▇▇▇▇▇▇ FACILITIES ASSOCIATES
GENERAL PARTNERSHIP AGREEMENT
PARTIES
This GENERAL PARTNERSHIP AGREEMENT of THE ▇▇▇▇▇▇ FACILITY ASSOCIATES, a
New
York general partnership (the "PARTNERSHIP"), was originally dated as of May 20,
1988 (the "ORIGINAL AGREEMENT"), is hereby amended and restated in its entirety
as of July 19, 1989 (this "AGREEMENT") and is by and among ALLEGANY
ENVIRONMENTAL SYSTEMS, INC., a
New York corporation ("ALLEGANY"), LYA
ASSOCIATES, INC., a
New York corporation ("LYA"), and ▇▇▇▇ ▇▇▇▇▇▇ CORP., a
Delaware corporation ("SITA"). Allegany, LYA and Sita, so long as they are
partners in the Partnership, and any additional persons who are subsequently
admitted to Partnership membership pursuant to the terms of this Agreement, are
sometimes called collectively the "PARTNERS" and, individually, a "PARTNER".
Allegany and Sita, so long as they are partners in the Partnership, are
sometimes called collectively the "MANAGING PARTNERS" and, individually, a
"MANAGING PARTNER".
1
RECITAL
Pursuant to the Original Agreement, Allegany and LYA formed the Partnership
to engage in the business of developing, constructing, operating and maintaining
an ash monofill project (the "PROJECT") to be located primarily on the property
now owned or contiguous land subsequently acquired by the Partnership in
▇▇▇▇▇▇▇▇,
New York and more fully described on Exhibit A (including any such
land acquired after the date hereof, the "▇▇▇▇▇▇▇ FARM"). Sita wishes to become
a Partner in the Partnership, and the parties wish to amend and restate the
Original Agreement to provide for the admission of Sita as a Partner, to make
certain changes in the management of the Partnership and distributions of
Partnership income and to make certain other changes.
AGREEMENT TERMS
ARTICLE I
GENERAL PROVISIONS
1.1 GLOSSARY. For purposes of this Agreement, the terms listed on the
Glossary beginning on page (v) hereof are defined in the Section hereof
indicated therein.
1.2 PURPOSE. The sole purpose of the Partnership shall be to engage in
the business of (a) developing, permitting, constructing, operating and
maintaining the Project on the ▇▇▇▇▇▇▇ Farm, or (b) if the Partnership is unable
to construct or commercially operate the Project, quarrying clay on the ▇▇▇▇▇▇▇
2
Farm. The Partnership may exercise all powers incidental or necessary to
effectuate its purposes, and without limitation, may possess, lease, sell,
transfer, mortgage, pledge and otherwise deal in, and exercise all rights and
privileges and other incidents of ownership, possession or interest in the
▇▇▇▇▇▇▇ Farm, the Project and any and all other property and assets of the
Partnership. The Partnership shall be a partnership only for the purposes
specified in this Section 1.2, and this Agreement shall not be deemed to create
or continue a partnership between or among the parties with respect to any other
activities whatsoever.
1.3 CONTINUATION OF THE PARTNERSHIP. The Partners do hereby continue the
Partnership under and pursuant to the
New York Uniform Partnership Act (the
"UPA"). Except as expressly provided to the contrary in this Agreement, the
rights and obligations of the Partners shall be governed by the UPA. Promptly
upon the execution of this Agreement by the Partners, the Managing Partners
shall file, record and publish all Partnership certificates and certificates of
fictitious or assumed name and comply with all other requirements for the
continuation and operation of a general partnership in the State of
New York and
in each county in which the Partnership owns property or transacts business.
1.4 FORMALITIES. Each Partner shall promptly execute all certificates or
other documents, and shall perform such
3
filings, recordings, publications and other acts that shall constitute
compliance with all requirements for the continuation of a general partnership
under the laws of the State of
New York. The Managing Partners shall be
authorized and hereby agree to execute and file with the proper offices any and
all certificates required by the State of
New York, and each state and county in
which the Partnership owns property or transacts business, and to publish all
such notices required by the laws of the State of
New York and of each state and
county having jurisdiction over the Partnership, its business, property and
assets, and each of the Partners agrees promptly to execute any of such
certificates when requested to do so by the Managing Partners.
1.5 NAME OF PARTNERSHIP. The name of the Partnership shall be "THE ▇▇▇▇▇▇
FACILITY ASSOCIATES."
1.6 PLACE OF BUSINESS. The principal place of business of the Partnership
shall be on the ▇▇▇▇▇▇▇ Farm, and/or such other place or places as the Managing
Partners shall from time to time determine.
1.7 DURATION. The Partnership shall commence on May 20, 1988 and continue
until the fiftieth anniversary of the date the Project commences commercial
operations, or until earlier dissolved pursuant to Article IX of this Agreement.
Notwithstanding any rule of law to the contrary, except as specifically provided
in this Agreement:
4
1.7.1 CONTINUATION AS PARTNERS. The Partners shall continue as
Partners hereunder;
1.7.2 NO VOLUNTARY TERMINATION. No Partner shall terminate or
attempt to terminate this Agreement or voluntarily take any action which would
result in such termination except pursuant to Section 9.1;
1.7.3 NO PARTITION. No Partner shall file for, pursue or seek any
partition of the assets of the Partnership;
1.7.4 DEATH OR BANKRUPTCY. The death or bankruptcy of a Partner
shall not result in a termination of the Partnership.
1.8 MEMBERSHIP. The partners of the Partnership shall be Allegany, LYA
and Sita and such additional persons who are subsequently admitted to
Partnership membership in conformity with the provisions of Article VIII.
1.9 FISCAL YEAR AND FISCAL PERIOD. The Partnership's fiscal period shall
be the calendar year or such other period as the Executive Committee shall from
time to time determine.
1.10 TAX MATTERS PARTNER. Sita shall be the Partnership's Tax Matters
Partner, as that term is defined in
5
Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended (the
"CODE"), with all of the rights and obligations of the Tax Matters Partner set
forth in the Code.
ARTICLE II
ALLEGANY AND LYA'S REPRESENTATIONS
AND WARRANTIES
In order to induce Sita to enter into this Agreement, become a Partner and
make its Initial Contribution, each of Allegany, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an
individual who is a shareholder, officer and director of Allegany and the
initial Manager of the Partnership ("▇▇▇▇▇▇▇"), and LYA hereby severally
represents and warrants to Sita that as of the date on which this Agreement is
amended and restated:
2.1 AUTHORITY. Each of Allegany and LYA has full power and authority to
execute, deliver and perform this Agreement. The execution, delivery and
performance of this Agreement by Allegany and LYA have been duly authorized and
approved by all necessary corporate action. Neither the execution nor delivery
of this Agreement, the incurrence of the obligations set forth herein, nor the
consummation of performance of the transactions contemplated herein will: (i)
conflict with or violate the terms of the Original Agreement or the respective
Certificates of Incorporation or By-laws of Allegany or LYA; (ii) conflict with
or violate the terms of or constitute a default under any law, rule, regulation,
order, writ, injunction,
6
judgment or decree of any court, governmental or regulatory authority or
arbitrator, or any other legal requirement applicable to the Partnership,
Allegany or LYA or to their respective properties or assets, which conflict,
violation or default could have a material adverse effect on the Partnership's
business, financial condition, net worth, earnings, properties, results of
operations or business prospects; or (iii) conflict with, violate the terms of,
constitute a default under or cause acceleration of payment under, or give rise
to any preemptive, anti-dilution or other rights under, any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease, shareholders agreement,
partnership agreement or other agreement, instrument or arrangement to which the
Partnership, Allegany or LYA or their respective properties or assets
(including, without limitation, the ▇▇▇▇▇▇▇ Farm and the Project) are bound or
subject.
2.2 ENFORCEABILITY. This Agreement has been duly executed and delivered
by each of Allegany and LYA and constitutes the valid and binding obligation of
each of them enforceable against each of them in accordance with its terms,
except as enforcement of remedies may be subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to the discretion of courts in
granting equitable remedies.
7
2.3 TITLE IN PARTNERSHIP INTEREST. Upon its admission into the
Partnership, Sita will receive good title to its Interest in the Partnership,
free and clear of any pledge, hypothecation, security interest, claim, lien,
option, restriction or other encumbrance, other than restrictions on transfer
imposed by this Agreement or by federal or state securities laws and other than
encumbrances created by Sita. The only partners in the Partnership are Allegany,
LYA and Sita. Allegany and LYA own their respective Interests in the Partnership
free and clear of any pledge, hypothecation, security interest, claim, lien,
option, restriction or other encumbrance, other than restrictions on transfer
imposed by this Agreement or by federal or state securities laws.
2.4 LITIGATION; CLAIMS. There is no litigation, action, claim,
proceeding, arbitration or investigation pending or threatened relating to the
Partnership, Allegany, LYA, the ▇▇▇▇▇▇▇ Farm, the Project, or any of the
Partnership's other properties or assets. There is no current default (or event
which with notice or lapse of time or both would be a default) under any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease,
shareholders agreement, partnership agreement or any other agreement, instrument
or arrangement to which the Partnership, Allegany, ▇▇▇▇▇▇▇, ▇▇▇ or any of their
properties or assets (including, without limitation, the ▇▇▇▇▇▇▇ Farm and the
Project) are bound or subject. To the best knowledge of Allegany, LYA, and
▇▇▇▇▇▇▇, except as set forth on
8
Schedule 2.4, there are no claims, suits or judgments that may result in the
imposition of a mechanic's, serviceman's or materialman's lien against the
▇▇▇▇▇▇▇ Farm or any improvements thereon or on the Project. Neither the
Partnership, Allegany, LYA, nor ▇▇▇▇▇▇▇, to the best of his knowledge, is
currently in violation of any law, rule, regulation, order, writ, injunction,
judgment or decree of any court, governmental or regulatory authority or
arbitration or any other legal requirement applicable to the Partnership,
Allegany or LYA or to their respective property or assets.
2.5 ORGANIZATION; PERMITS.
2.5.1 GENERAL. The Partnership is a general partnership duly
organized, validly existing and in good standing under the laws of the State of
New York, has the power to own the Project but has not obtained any of the
necessary permits, licenses or authorizations required by any federal, state,
local or other governmental or regulatory authority for it to own the ▇▇▇▇▇▇▇
Farm and the Project, to undertake the design, development, permitting,
construction and operation of the Project, to own any of its other properties
and assets or to conduct its proposed business in the manner currently
anticipated by Allegany and LYA (collectively, "PERMITS") including, without
limitation, Permits relating to environmental, nuisance, health or safety laws,
regulations, orders or requirements. Without limiting the foregoing, "obtaining
a permit" shall be deemed to
9
include the repeal, over-turning by final judicial order of a court having
jurisdiction, or grant to the Partnership of an exception under, the ordinance
of the Town of ▇▇▇▇▇▇▇▇, New York prohibiting the development, construction and
operation of a waste disposal facility or landfill in that town. The Partnership
is not conducting business, and does not own any property, in any state other
than New York or in any county other than Allegany County, New York. Schedule
2.5 sets forth a list of all Permits, and of all applications, proceedings and
other actions taken to date by or on behalf of the Partnership to obtain such
Permits and a brief discussion of the status of all such applications,
proceedings and other actions as of the date this Agreement was amended and
restated. Except as set forth in Schedule 2.5, neither Allegany, ▇▇▇▇▇▇▇ nor LYA
has any reason to anticipate that the Partnership will be unable to obtain any
Permit.
2.5.2 DOCUMENTATION. Prior to Sita's execution of this Agreement,
the Partnership, Allegany, ▇▇▇▇▇▇▇ and LYA delivered to Sita true and correct
copies of: (i) all environmental engineering reports and feasibility studies
prepared by or on behalf of the Partnership, Allegany and LYA concerning the
▇▇▇▇▇▇▇ Farm, the Project or any other property, asset or business of the
Partnership or the conduct of the Partnership's proposed business in the manner
currently anticipated by Allegany, ▇▇▇▇▇▇▇ and LYA; (ii) all applications for,
and all pleadings filed in connection with any proceedings
10
relating to, any Permits; (iii) all material correspondence and communications
with any governmental authority concerning any such application or any
proceeding or other actions with respect to any Permit, or in anticipation of
such an application; (iv) all Permits issued to the Partnership; and (v) all
orders and determinations of a governmental or regulatory authority not to grant
any Permit.
2.5.3 COMPLIANCE. To their knowledge, based only upon, and limited
by the scope of, the investigation described in Schedule 2.5, except as set
forth in Schedule 2.5, the Partnership meets, and upon obtaining all Permits
indicated thereon as being required, the development, construction, operation
and maintenance of the Project and the conduct of the Partnership's proposed
business in the manner currently anticipated by Allegany, ▇▇▇▇▇▇▇ and LYA will
meet, all applicable federal, state, local or other environmental, nuisance, or
health and safety laws, regulations and ordinances governing the Project with
respect to all discharges into the ground or surface water, emissions into the
ambient air, and generation, accumulation, labelling, transportation, handling,
treatment, storage and disposal of waste materials or process by-products
(including hazardous or toxic waste or substances, if any), and the ▇▇▇▇▇▇▇ Farm
and the Project will be in compliance with all applicable zoning ordinances,
building codes and land use regulations. To their knowledge, based only upon,
and limited by the scope of, the investigation described in Schedule
11
2.5, the Partnership has complied with all notice, record keeping and reporting
requirements imposed by any governmental authority and any informational
requests or demands arising under any federal, state, local or other
environmental, nuisance, or health and safety laws. To their knowledge, based
only upon, and limited by the scope of, the investigation described in Schedule
2.5, neither the Partnership nor any Partner is liable for any penalties, fines,
or forfeitures or is subject to any restrictions on the acquisition or ownership
of the ▇▇▇▇▇▇▇ Farm, the Project and all other of its property and assets, the
development, construction or operation of the Project, or the conduct of the
Partnership's business, for failure to comply with any of the foregoing
requirements, requests or demands.
2.5.4 WASTE DISPOSAL. Neither the Partnership, LYA, Allegany, nor
any of their respective predecessors in interest, nor ▇▇▇▇▇▇▇, nor to his
knowledge after due inquiry, any of his predecessors in interest, has disposed
of or caused or permitted the disposal of any "hazardous waste" or "hazardous
substance" (as such terms are defined under federal, state, local or other laws
and regulations) upon the ▇▇▇▇▇▇▇ Farm or any other real property owned or
leased by the Partnership. To the best knowledge of the Partnership, LYA,
▇▇▇▇▇▇▇ and Allegany, there has not been any "release" or "threatened release"
of any "hazardous substance" (as such terms are defined under federal, state,
local or other laws and regulations) from or on the ▇▇▇▇▇▇▇ Farm, or from or on
any site, whether or not located on
12
the ▇▇▇▇▇▇▇ Farm, at which there has been any disposal of any "solid waste" or
"hazardous waste" (as such terms are defined under federal, state, local or
other laws and regulations) for which the Partnership, Allegany, ▇▇▇▇▇▇▇, ▇▇▇ or
any of their respective predecessors in interest may be liable. Neither the
Partnership, Allegany, LYA nor any of their respective predecessors in interest,
nor ▇▇▇▇▇▇▇, nor to his knowledge, any of his predecessors in interest, have,
directly or indirectly, disposed of "hazardous wastes" (as such term is defined
under federal, state, local or other laws and regulations) off-site. No
enforcement order or notice of violation has been issued by any governmental or
regulatory authority to the owners, operators or users of any off-site
facilities in which order or notice the Partnership, Allegany, LYA or any of
their respective predecessors in interest, or ▇▇▇▇▇▇▇, or to his knowledge, any
of his predecessors in interest, have been named as potentially responsible
parties.
2.6 BALANCE SHEET AND PROJECTIONS. Allegany, LYA and ▇▇▇▇▇▇▇ have
delivered to Sita, under cover of a letter of even date, a true and correct copy
of a balance sheet of the Partnership as at December 31, 1988, and May 31, 1989
and related unaudited statements of income for the 12 month and five month
periods then ended, respectively, and a balance sheet as of the date hereof or
as near thereto as possible (collectively, the "FINANCIAL STATEMENTS"); the
Financial Statements have been prepared in accordance with generally accepted
accounting
13
principles, and present fairly the financial condition of the Partnership and
the result of its operations as of the dates and for the periods specified
therein. Under cover of such letter, Allegany, ▇▇▇▇▇▇▇ and LYA have furnished
Sita with the Partnership's projections and budget and a statement of projected
earnings and expenses through the year 2010, all as revised as of the date
hereof (the "PROJECTIONS"), which contain forecasts of future operating results
of the Partnership, including a projection of permitting and pre-construction
expenses and cash flow through June 1990. The Projections were prepared in good
faith, and are based on assumptions believed by Allegany, ▇▇▇▇▇▇▇ and LYA to be
reasonable.
2.7 LIABILITIES. Except as set forth in the Financial Statements or on
Schedule 2.7, since the date of its formation: (i) the Partnership has not
incurred any debts, liabilities, obligations or charges; (ii) the Partnership
has no liabilities of any nature, whether absolute, accrued, contingent or
otherwise of any nature, and whether due or to become due; and (iii) there has
not been, occurred or arisen whether in the ordinary course of business or
otherwise: (a) any material adverse change in the financial condition or in the
results of operation of the Partnership from that shown in the Financial
Statements; (b) any material damage, loss or destruction of the ▇▇▇▇▇▇▇ Farm,
the Project or any other property or asset of the Partnership which is material
to the financial condition, results of operation of the Partnership or the
conduct of the Partnership's proposed
14
business in the manner currently anticipated by Allegany, ▇▇▇▇▇▇▇ or LYA; or (c)
to the best knowledge of ▇▇▇▇▇▇▇, ▇▇▇, Allegany or the Partnership, any other
fact or condition which materially and adversely affects the current business,
or could reasonably be expected materially and adversely to affect the proposed
business, of the Partnership; or (d) to the best knowledge of ▇▇▇▇▇▇▇, ▇▇▇,
Allegany or the Partnership, any statute, ordinance, order, requirement, law or
regulation (including, without limitation, zoning changes) or (e) any existing,
proposed or contemplated public improvement, in each case that may impose a
claim, lien or other encumbrance upon, result in the taking of all or any part
of, or adversely affect the current or planned use of, the ▇▇▇▇▇▇▇ Farm.
2.8 NO BANKRUPTCY. No court having jurisdiction has entered a decree or
order for relief in respect of the Partnership, Allegany or LYA in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointed a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Partnership,
Allegany or LYA or for any substantial part of their respective property, or
ordered the winding-up or liquidation of its affairs, nor has the Partnership,
Allegany or LYA filed a petition for relief or commenced a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, consented to the entry of an order for relief in an involuntary
15
case under any such law, or consented to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, the sequestrator (or
similar official) of the Partnership, Allegany or LYA or for any substantial
part of their respective property, nor has the Partnership, Allegany or LYA made
any general assignment for the benefit of its creditors, or failed to pay its
debts as they became due nor has any order, judgment or decree been entered in
any proceeding against the Partnership, Allegany or LYA decreeing the
dissolution of the Partnership, Allegany or LYA.
2.9 NO BROKERS. No broker or finder is entitled to any brokerage or
finder's fee or other commission from the Partnership or Sita based upon any
agreement, arrangements or undertakings made by them in connection with the
transactions contemplated hereby.
2.10 TITLE; EFFECTS OF DRILLING. The Partnership has good, valid,
marketable and indefeasible fee simple title to the ▇▇▇▇▇▇▇ Farm, and all
improvements located thereon and all of its other real property, personal
property and fixtures with good and indefeasible rights under all easements,
rights-of-way, accesses, reservations, hereditaments, licenses, uses and any
other rights, in perpetuity, real or incorporeal, necessary to develop,
construct, operate and maintain the Project and all intangible rights pertinent
to the ▇▇▇▇▇▇▇ Farm (including, without limitation, mineral, zoning or
development rights) free and clear
16
of all mortgages, pledges, hypothecations, security interests, claims, liens,
options, rights, reversionary interests, restrictions or other encumbrances
direct, contingent or otherwise, except as reflected in Schedule 2.10. All oil
and gas leases pursuant to which any drilling was conducted on the ▇▇▇▇▇▇▇ Farm
have expired by their terms or been terminated prior to the date hereof. Neither
the Partnership, Allegany, LYA nor ▇▇▇▇▇▇▇ have any reason to believe that any
such drilling materially adversely affected the suitability of the ▇▇▇▇▇▇▇ Farm
as an ash monofill site.
2.11 TAX MATTERS. Prior to Sita's execution of this Agreement, the
Partnership, Allegany and LYA delivered to Sita true and correct copies of all
tax returns filed by the Partnership, Allegany or LYA with any federal, state,
local or other taxing authority. All federal, state, local and other tax
returns, estimates, declarations and reports required to be filed by the
Partnership, Allegany or LYA have been filed when due, or will be filed when due
(taking into account extensions), with the appropriate governmental agencies in
all jurisdictions in which such returns are required to be filed. All federal,
state, local and other income, profits, franchise, gross receipts, payroll,
sales, use, occupation, property, occupancy, excise or other taxes, duties or
similar charges (including interest and penalties) (collectively, "TAXES") due
from the Partnership, Allegany or LYA for any period through the date of Sita's
execution of this Agreement have been fully paid. No waivers or
17
extensions of statutes of limitations or periods of assessment have been given
by the Partnership, Allegany or LYA to, or requested of the Partnership,
Allegany or LYA by, any taxing authority. The federal income tax returns of the
Partnership, Allegany or LYA have never been examined by the Internal Revenue
Service ("IRS"), and neither the Partnership, Allegany nor LYA have any notice,
actual or constructive, that any of them are subject to impending audit. There
are no liens for Taxes imposed by any federal, state, local or foreign authority
outstanding against any of the Partnership's, Allegany's or LYA's assets.
2.12 CONTRACTS AND LEASES. Neither the Partnership, Allegany or LYA,
individually, or collectively with respect to the Partnership, have entered
into any contracts for the sale of the ▇▇▇▇▇▇▇ Farm, any intangible rights
pertinent to the ▇▇▇▇▇▇▇ Farm, or any other property or asset of the Partnership
or any interest in the Partnership, nor do there exist any rights of first
refusal, reversions, options or other rights to purchase any portion thereof,
except as set forth in the ▇▇▇▇▇▇▇ Farm Agreement of even date among the
Partnership, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇. Except as set
forth in Schedule 2.12, there are no leases, licenses, equipment leases,
building service agreements, management agreements or other agreements relating
to the ▇▇▇▇▇▇▇ Farm, the Project or any property or assets of the Partnership or
in connection with the development, construction or operation of the Project or
the conduct of the Partnership's proposed business in the manner
18
currently anticipated by Allegany, ▇▇▇▇▇▇▇ and LYA, which would be binding on
the Partnership. Except as set forth on Schedule 2.12, the Partnership has no
employees.
2.13 NO CONDEMNATION. There is no pending condemnation proceeding or
threat with regard to all or part of the ▇▇▇▇▇▇▇ Farm, or any other real
property of the Partnership and, to the best knowledge of Allegany, LYA and
▇▇▇▇▇▇▇, no such proceeding is contemplated by any federal, state, local or
other governmental or regulatory authority.
2.14 ACCESS. Except as disclosed on Schedule 2.14, each of the parcels
comprising the ▇▇▇▇▇▇▇ Farm has free and uninterrupted access to and from a
dedicated public right-of-way by reason of the fact that the parcel either (i)
adjoins such dedicated public right-of-way, or (ii) connects to the dedicated
public right-of-way through a valid and subsisting ingress and egress easement
or through other parcels of the Real Property and such access is adequate for
the use being made of the parcel being accessed via that ingress and egress
easement. All water, sewer, gas, electricity, telephone and other utilities
serving the ▇▇▇▇▇▇▇ Farm are supplied directly to the ▇▇▇▇▇▇▇ Farm by facilities
of public utilities, and all of said utilities are installed and operating and
all installation charges have been paid in full. All assessments for public
improvements that have been made against the ▇▇▇▇▇▇▇ Farm have been paid.
19
2.15 CONDITION OF BUILDINGS AND PERSONAL PROPERTY. All of the buildings,
fixtures, machinery and equipment constituting part of the ▇▇▇▇▇▇▇ Farm
(including plumbing, heating and electrical systems) which are currently
contemplated to be used by the Partnership in connection with the Project are
listed on Schedule 2.15. Except as set forth in Schedule 2.15, to ▇▇▇▇▇▇▇'▇
knowledge, based on reasonable investigation, all of such buildings, fixtures,
machinery and equipment are in good operating condition and repair. Neither
Allegany, ▇▇▇▇▇▇▇ nor LYA are aware of any condition of or prospective changes
to any such improvements or equipment that will have or reasonably could have an
adverse effect on the uses for which the improvements or equipment were
intended.
2.16 INSURANCE.
2.16.1 GENERAL. Except as disclosed on Schedule 2.16, the
Partnership and the ▇▇▇▇▇▇▇ Farm are not covered by any valid, outstanding and
enforceable property or liability policies of insurance issued to the
Partnership by reputable insurers covering its properties, assets and business.
Schedule 2.16 contains a detailed description of each policy and each pending
insurance policy claim that relates to loss or damage to the ▇▇▇▇▇▇▇ Farm. The
Partnership has complied with all terms and conditions of, and has not failed to
give, in a timely manner, any notice required under, any policy to preserve the
Partnership's rights under the policy.
20
2.16.2 TITLE INSURANCE. The Partnership currently has, and has
delivered to Sita (i) an Owner Policy or Policies of Title Insurance ("TITLE
POLICY") on Alta Form B naming the Partnership as an insured covering the
▇▇▇▇▇▇▇ Farm and improvements in the aggregate amount of $250,000, and (ii) a
survey of the portions of the ▇▇▇▇▇▇▇ Farm and related improvements relevant to
the construction and operation of the Project ("SURVEY") reflecting the results
of a current on-the-ground survey by reputable surveyors, showing the location
of any buildings, improvements, structures, fences, and driveways situated on
such portions of the ▇▇▇▇▇▇▇ Farm, and the location of all related easements and
other exceptions, encroachments, building lines, railroad tracks, drainage
ditches, creekbeds, adjoining channels or bayous, bulkheads, wharf areas and
visible rights of way.
2.17 NO MATERIAL MISSTATEMENTS OR OMISSIONS. No representation or warranty
of the Partnership, Allegany, ▇▇▇▇▇▇▇ or LYA contained in this Agreement, or any
other document or instrument delivered by or on their behalf to Sita or Sita's
representatives, including, without limitation, auditors or counsel, in
connection with Sita's investment in the Partnership or with any of the
transactions contemplated by this Agreement, contains any untrue statement of a
material fact or omits any fact necessary to make the statements contained in
this Agreement, or in any document or instrument filed or distributed
21
pursuant to this Agreement, not false or misleading; and the Partnership,
Allegany, ▇▇▇▇▇▇▇ and LYA have not failed to disclose any information or
documents which, if disclosed, might be deemed material to a consideration by
Sita of the transactions contemplated in this Agreement.
2.18 SURVIVAL. Each representation and warranty contained in this
Agreement is independent of each other representation and warranty, and shall
survive the execution and delivery hereof and remain in full force and effect
until the earlier to occur of (a) the second anniversary of the date hereof, and
(b) the Partnership's obtaining all Permits necessary to commence construction
of the Project, notwithstanding any investigation, audit or review made at any
time by any party to this Agreement and notwithstanding the delivery of any
documents, exhibits, schedules or certificates pursuant to this Agreement.
ARTICLE III
CAPITAL CONTRIBUTIONS
3.1 ORIGINAL CAPITAL CONTRIBUTIONS.
3.1.1 ALLEGANY AND LYA. Prior to the date of the amendment and
restatement of this Agreement, Allegany contributed in cash $40,000 to the
Partnership and LYA contributed $99,721.31, to the Partnership. Such amounts
previously contributed by Allegany and LYA constitute their respective
22
"INITIAL CONTRIBUTIONS" and satisfy any and all obligations of Allegany and LYA
to make initial capital contributions to the Partnership. The obligations of
Allegany and LYA to make capital contributions in excess of such amounts
pursuant to Section 6(b) of the Original Agreement are hereby cancelled by the
amendment and restatement of this Agreement.
3.1.2 SITA. Sita's initial capital contribution (its "INITIAL
CONTRIBUTION") to the Partnership shall be $1,000,000, of which $50,000 has been
paid to the Partnership on behalf of Sita prior to the date of the amendment and
restatement of this Agreement. Sita shall contribute in cash to the Partnership
the portion of the unpaid balance of its Initial Contribution in amounts not
less, and at dates not later, than those set forth in the Projections. Sita
shall make such contributions promptly and in any event within 10 days after
receipt of demand therefor from either Managing Partner, PROVIDED, that each
demand shall be for amounts not larger, and at dates not earlier, than those set
forth in the Projections. France Dechets, an affiliate of Sita, hereby agrees to
guaranty the payment of Sita's Initial Contribution as set forth above.
3.1.2.1 Sita has delivered to LYA and Allegany a true and
correct copy of a balance sheet of France Dechets as at and for the period ended
December 31, 1988; such balance sheet has been prepared in accordance with
generally accepted accounting principles as in effect in France, and
23
presents fairly the financial condition of France Dechets as of the date
specified therein.
3.2 ADDITIONAL CAPITAL CONTRIBUTIONS.
3.2.1 GENERAL. No Partner shall be required to make capital
contributions to the Partnership in addition to their Initial Contributions but
each Partner may, in its sole discretion, make an additional capital
contribution to the Partnership if requested by both Managing Partners pursuant
to this Section 3.2.
3.2.2 ALTERNATIVE FINANCING. As of the date of the amendment and
restatement of this Agreement, the Partners anticipate that the Partnership
shall finance its operations through a combination of indebtedness and income
generated through operations and that the Executive Committee will not request
the Partners to make additional capital contributions above their respective
Initial Contributions or seek to sell interests in the Partnership or future
landfill capacity to third parties. If the Executive Committee decides that the
Partnership needs to raise additional funds, it shall by written resolution (the
"FUNDING RESOLUTION") determine the amount needed (the "REQUIRED AMOUNT"), which
shall be reasonably related in the Executive Committee's sole discretion, to the
Partnership's foreseeable requirements for financing the Project. If either
(a) the Executive Committee is unable to agree on a Required
24
Amount, or (b) the Executive Committee so agrees, but in either case one of the
Managing Partners nevertheless determines that it would be desirable for the
Partnership to raise funds in excess of the Required Amount, such amount (the
"OPTIONAL AMOUNT") shall be set forth in the Funding Resolution or the minutes
of the meeting at which the matter was considered. In either case, the Optional
Amount shall be reasonably related in that Managing Partner's sole discretion to
the Partnership's foreseeable requirements for financing the Project. The
Executive Committee shall have 70 days after the date of the Funding Resolution
to seek to raise the Required Amount through commercial financing and/or the
pre-sale of landfill capacity ("ALTERNATIVE FINANCING"). The Executive Committee
may determine that it is in the best interests of the Partnership to raise all
or part of the Required Amount through Alternative Financing if such financing
is available on terms acceptable to the Executive Committee in its sole
discretion.
3.2.3 REQUESTS FOR ADDITIONAL CONTRIBUTIONS. If after the
expiration of such 70 days, the Executive Committee determines that the
Partnership cannot raise the entire Required Amount through Alternative
Financing on terms acceptable to the Executive Committee in its sole discretion,
the Executive Committee may determine that it is in the best interest of the
Partnership to increase the capital of the Partnership, and may request that all
Partners make such additional capital contributions ("ADDITIONAL CONTRIBUTIONS")
to the Partnership as
25
may be necessary, in combination with any Alternative Financing, to raise the
Required Amount. Such a request shall be made in the form of a notice sent by
the Manager to all of the Partners. The amount requested from each Partner shall
be determined pro rata in accordance with that Partner's respective Percentage
Interest as of the date of the request. Upon receipt of the request, a Partner
may, in its sole discretion, either: (i) accept the request to make an
Additional Contribution to the Partnership, by delivery to the Manager of the
full amount requested in cash within 30 days of receipt of the request; or (ii)
reject the request in whole or in part, by giving notice to the Manager
specifying the Partner's decision within 30 days of receipt of a request
accompanied by payment in cash of the amount accepted. If a Partner fails to
give a notice to the Manager specifying the Partner's decision (or cash equal to
the amount accepted) within such 30-day period, it shall be deemed to have
rejected the request in full. A Partner who elects to make an Additional
Contribution in the full amount requested by the Managing Partners is referred
to as a "FULLY PARTICIPATING PARTNER". A Partner who elects not to make an
Additional Contribution in the full amount requested by the Managing Partners is
referred to as a "NON-FULLY PARTICIPATING PARTNER". The portion of a requested
Additional Contribution which any Non-Fully Participating Partner does not make
is called the "REMAINDER".
26
3.2.3.1 If the Executive Committee requests that the Partners make
Additional Contributions and the Required Amount is not more than $2,000,000,
Sita shall have the right, in its sole discretion, to lend to either or both
Allegany and LYA, on mutually acceptable terms, such amount as they may require
to make their respective Additional Contributions; PROVIDED, HOWEVER, that if
the Required Amount is greater than $2,000,000, Sita shall have the right to
lend either Allegany or LYA an amount which will enable the borrower to make its
respective pro rata portion of the amount by which the Required Amount exceeds
$2,000,000 plus an amount needed to purchase any Remainder, only if Sita offers
to lend to the other, on terms not less favorable, the other's respective pro
rata portion of such excess plus an amount needed to purchase any Remainder.
3.2.4 REMAINDERS. If any Partner does not make all or part of a
requested Additional Contribution, the Manager, on the Partnership's behalf,
shall send a notice to each Fully Participating Partner offering each Fully
Participating Partner the right to contribute to the Partnership an amount up to
the entire Remainder. Each Fully Participating Partner may, in its sole
discretion, either: (i) accept the request to make an Additional contribution in
an amount specified up to the entire Remainder by giving notice of acceptance to
the Manager within 20 days of the request; or (ii) reject the request, by giving
notice to the Manager specifying the Fully Participating Partner's decision not
more than 20 days following the receipt of the
27
Managing Partners' notice. If a Fully Participating Partner fails to give a
notice to the Manager specifying its decision within such period, it shall be
deemed to have rejected the offer in full. A Fully Participating Partner
electing to contribute all or part of the Remainder is referred to as an
"ELECTING PARTNER". If there is more than one Electing Partner, the Electing
Partners shall make their respective contributions pro rata in proportion to
their respective Percentage Interests as of the date of the request, or in such
other proportion as the Electing Partners agree. Each Electing Partner shall
make its contribution in cash promptly, and in any event, within 20 days of
receipt of notice from the Manager of the amount of the portion of the Remainder
to be contributed by that Electing Partner.
3.2.5 PARTNER LOANS. If a Managing Partner determines that it is in
the best interest of the Partnership for the Partners to lend the Partnership
the Optional Amount, such Managing Partner may request that all Partners make a
loan (each a "PARTNER LOAN") to the Partnership in an aggregate amount necessary
to raise the Optional Amount. Such a request shall be made in the form of a
notice ("LOAN REQUEST") sent by the Manager to all of the Partners at the
request of such Managing Partner. The amount requested from each Partner shall
be determined pro rata in accordance with that Partner's respective Percentage
Interest as of the date of the Loan Request. Upon receipt of the Loan Request, a
Partner may, in its sole discretion either:
28
(i) accept the request to make a Partner Loan to the Partnership, by delivery to
the Manager of the full amount requested in cash within 30 days of receipt of
the Loan Request; or (ii) reject the Loan Request in whole or in part, by giving
notice to the Manager specifying the Partner's decision within 30 days of
receipt of a request accompanied by payment in cash of the amount accepted. If a
Partner fails to give a notice to the Manager specifying the Partner's decision
(or cash equal to the amount accepted) within such 30-day period, it shall be
deemed to have rejected the Loan Request in full. A Partner who elects to make a
Partner Loan in the full amount requested is referred to as a "FULLY
PARTICIPATING LENDER". A Partner who elects not to make a Partner Loan in the
full amount requested is referred to as a "NON-FULLY PARTICIPATING LENDER". The
portion of a requested Partner Loan which any Non-Fully Participating Lender
does not make is called the "LOAN REMAINDER".
3.2.6 LOAN REMAINDERS. If any Partner does not make all or part of
a requested Partner Loan, the Manager, on the Partnership's behalf, shall send a
notice to each Fully Participating Lender offering each Fully Participating
Lender the right to lend to the Partnership an amount up to the entire Loan
Remainder. Each Fully Participating Lender may, in its sole discretion, either:
(i) accept the request to make a Partner Loan in an amount specified up to the
entire Loan Remainder by giving notice of acceptance to the Manager within 20
days of the request; or (ii) reject the request, by giving notice to the
29
Manager specifying the Fully Participating Lender's decision not more than 20
days following the receipt of the Manager's notice. If a Fully Participating
Lender fails to give a notice to the Manager specifying its decision within such
period, it shall be deemed to have rejected the offer in full. A Fully
Participating Lender electing to lend all or part of the Loan Remainder is
referred to as an "ELECTING LENDER". If there is more than one Electing Lender,
the Electing Lenders shall make their respective loans pro rata in proportion to
their respective Percentage Interests as of the date of the request, or in such
other proportion as the Electing Lenders agree. Each Electing Lender shall make
its loan in cash promptly, and in any event, within 20 days of receipt of notice
from the Manager of the amount of the portion of the Loan Remainder to be loaned
by that Electing Lender.
3.2.7 TERMS OF PARTNER LOANS. Each Partner Loan shall bear simple
interest at a rate equal to the lower of 25% per 365 day year or the highest
rate legally permissible from time to time for loans of that amount and nature.
Partner Loans shall be an unsecured obligation of the Partnership payable not
later than 30 days after the end of each fiscal quarter, prior to any
distributions to the Partners or payment of any Preference to ▇▇▇▇▇▇▇ or Sita,
out of all Revenues of the Partnership available for distribution after giving
effect to any payments made for such quarter of expenses or into the Operating
Reserve but prior to any such payments into the Capital Reserve. Payments of
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Partner Loans shall be subject to adjustment on the basis set forth in Section
5.3. Payments on Partner Loans shall be applied first to accrued and unpaid
interest on all Partner Loans then outstanding (regardless of the date such
Loans were made) pro rata to the amount of interest owed to each Partner, until
all such interest has been paid, and thereafter to principal. Payment of
principal shall be made in the proportion that the principal amount of all
Partner Loans made by each Partner bears to the principal amount of all Partner
Loans made by all Partners. Notwithstanding the foregoing, the Executive
Committee shall have the right to prepay any Partnership Loans in whole or part
out of the proceeds of any Alternative Financing available therefor.
3.3 SALE OF PARTNERSHIP INTERESTS. If the Partnership is unable to raise
the entire Required Amount through any combination of Alternative Financing and
Additional Contributions, the Executive Committee shall be permitted to attempt
to sell to a third party or parties (a "PURCHASER") other than a Partner, an
Interest in the Partnership for a price not less than that portion of the
Required Amount which the Partnership is unable to raise; PROVIDED, HOWEVER,
that the Purchaser complies with the requirements for new Partners set forth in
Section 8.5. Percentage Interests in distributions attributable to Interests
sold to a Purchaser pursuant to this Section 3.3 shall be determined pursuant to
Section 5.5.
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ARTICLE IV
MANAGEMENT OF THE PARTNERSHIP
4.1 DEFINITIONS.
4.1.1 MAJOR DECISIONS. The term "MAJOR DECISION" means:
4.1.1.1 Acquisition of real property or assets for a
purchase price in excess of $5,000 in any individual case or $20,000 in the
aggregate for all purchases in any 12-month period;
4.1.1.2 Subject to Section 4.1.2.1, sale, lease, license,
mortgage, hypothecation, pledge, grant of security interest or lien or other
disposition of, or creation of any encumbrance on, or grant of any option or
other right to acquire, any interest in any Partnership property or assets,
including, without limitation, the ▇▇▇▇▇▇▇ Farm, the Project or any intangible
assets, such as development plans or easements;
4.1.1.3 Borrowing on a secured or unsecured basis on the
Partnership's behalf from any third party other than from a Partner as set
forth in Section 3.2.7.
4.1.1.4 Development and construction of the Project,
although the specific manner in which those improvements
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are carried out shall be subject to the day-to-day control of the Manager as
long as they are made in a manner consistent with a general development plan
approved by the Managing Partners or with any development agreement or other
agreement approved by the Managing Partners to which the Partnership is a party;
4.1.1.5 Employment or retention of, or change in, or the
amount of compensation payable to, the Manager or any other persons or entities
to sell or manage the Property;
4.1.1.6 Prepayment of any Partnership indebtedness
(including Partner Loans) prior to its stated maturity;
4.1.1.7 Requiring the Partners to make Additional
Contributions to the Partnership's capital;
4.1.1.8 Increasing or decreasing salary or contract
payments to any employee or independent contractor of the Partnership;
4.1.1.9 Loaning Partnership funds to any Partner or any
third party;
4.1.1.10 Commencing service agreements or other contractual
arrangements exceeding $5,000 per agreement or amending the terms of or
terminating such agreement;
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4.1.1.11 (i) Commencing litigation; (ii) determining to
settle or not to defend any claim against the Partnership; or (iii) in the event
of a total condemnation of any property of the Partnership, the decision to
consent to any award or to participate in any condemnation proceeding;
4.1.1.12 Making any application for any Permits or
contesting government or regulatory action relating to a Permit;
4.1.1.13 Use of Partnership assets, contracts or credit by
any Partner or any third party;
4.1.1.14 Subject to Section 11.3 hereof, amendment of this
Partnership Agreement;
4.1.1.15 Admission of new or substituted Partners;
4.1.1.16 Creation of a subsidiary of the Partnership or
causing the Partnership to enter into a joint venture or partnership with any
other person or entity;
4.1.1.17 Indemnification by the Partnership of any third
party or guarantee by the Partnership of any Partner's or any third party's
obligation;
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4.l.1.18 Amount and type of insurance to be carried
on Partnership property;
4.1.1.19 Partnership bank account withdrawals in excess of
amounts anticipated by the annual budget approved by the Executive Committee
from time to time.
4.1.1.20 Whether to sell additional Interests in the
Partnership pursuant to Section 3.3.;
4.1.1.21 Making or withdrawing an election under Code
Section 754;
4.1.1.22 Retaining or changing attorneys, auditors,
engineers or any other professional providing services to the Partnership and
determining the terms and conditions of any such retention;
4.1.1.23 Filing a voluntary petition under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
consenting to the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official), of the Partnership or for a
substantial part of its property, liquidation of the Partnership's affairs or
consenting to or failure to contest any involuntary case brought under any such
law against the Partnership or its property;
35
4.1.1.24 Terminating or dissolving the Partnership except as
provided in Article IX;
4.1.1.25 Approving an annual budget;
4.1.1.26 Changing the annual budget during the course of a
year to increase expenses by more than 10% over budgeted expenses;
4.1.1.27 Establishing the Operating Reserve and Capital
Reserve or
4.1.1.28 Any other action not in the ordinary course of the
Partnership's business which could be reasonably expected to have a material
effect on the business or assets of the Partnership (other than those matters
which may be decided by one Managing Partner or Unanimous Decisions).
4.1.2 UNANIMOUS DECISIONS. The following decisions ("UNANIMOUS
DECISIONS") shall require the unanimous consent of all Partners:
4.1.2.1 Sale or other disposition of all or substantially
all of the Partnership's property and assets, including without limitation, the
▇▇▇▇▇▇▇ Farm and the Project; and
36
4.1.2.2 Except as otherwise provided in Section 11.3,
amendment of this Partnership Agreement.
4.1.3 DAILY MANAGEMENT. The term "DAILY MANAGEMENT" shall include
all matters relating to the conduct and management of the day-to-day business
and affairs of the Partnership (except for Major Decisions, Unanimous Decisions
and other than those matters which may be decided by one Managing Partner
pursuant to the terms hereof) and the implementation of all Major Decisions
subject, in all events, to the terms and conditions of this Agreement, the
Management or Employment Agreement described in Section 4.7 and the supervision
of the Managing Partners.
4.2 EXECUTIVE COMMITTEE. The Managing Partners shall delegate their
decisions as to Major Decisions to the Executive Committee (the "EXECUTIVE
COMMITTEE"). The Executive Committee shall consist of not more than four
Representatives (each, a "REPRESENTATIVE"). Not more than two Representatives
(and alternates thereof) shall be appointed by each of Sita and Allegany, which
shall fill vacancies as they occur within 15 days. LYA shall not be represented
on the Executive Committee, PROVIDED, that either Manager Partner shall have the
right to appoint an affiliate of LYA as one of its Representatives. The initial
Representatives shall be as follows: for Allegany: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
________________, and for Sita: ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
37
▇▇▇▇▇ ▇▇▇▇▇▇. Representatives shall serve for indefinite terms at the pleasure
of the appointing Partner.
4.2.1 MEETINGS. The Executive Committee shall meet no less
frequently than every three months, with the place of the meeting to be the
Partnership's place of business, or such other place or places as the
Representatives shall agree.
4.2.2 ACTION BY EXECUTIVE COMMITTEE.
4.2.2.1 The Executive Committee shall act either by
resolution adopted at a meeting of the Executive Committee or without a meeting
by written consent as evidenced by (i) an instrument signed (or several
instruments in like form together signed) by at least one Representative of each
Managing Partner holding such office at the time, or by (ii) cable or telex sent
by at least one such Representative of each Managing Partner.
4.2.2.2 At meetings of the Executive Committee, (i) two
Representatives (or their alternates), one representing (and having been
appointed by) each Managing Partner, shall constitute a quorum, (ii) each
Partner shall have one vote without regard to the number of its Representatives
present, and (iii) an act of the Executive Committee shall require the
affirmative vote of each Managing Partner acting through at least one of its
Representatives.
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4.2.2.3 All Major Decisions shall require action by the
Executive Committee, except that if there is only one Managing Partner at any
time, all references in this Agreement to the Executive Committee shall be
deemed to refer to the sole remaining Managing Partner.
4.2.2.4 In addition to and not in limitation of the powers
conferred by law, the Executive Committee shall have power and authority on the
Partnership's behalf and in its name, to enter into, make and perform such
contracts, arrangements, agreements and other undertakings and to do such other
acts as it deems necessary or advisable, or as may be incidental or necessary
for the conduct of the Partnership's business. All action taken by the Executive
Committee shall be binding and conclusive upon all the Partners; and shall not
be subject to question or review in any suit or proceeding except as provided in
Section 4.4.
4.2.2.5 LYA shall not be entitled to take part in or
interfere in any manner with the conduct or control of the Partnership or its
business without the prior written consent of the Executive Committee. LYA shall
have no right or authority to, and hereby agrees that it shall not, bind the
Partnership or execute any agreement, instrument or document on the
Partnership's behalf or hold itself out as having any such right or authority.
39
4.2.3 APPOINTMENTS AND REMOVALS. Appointments and removals of
Representatives and alternates by a Managing Partner shall be effective upon
notice given to the other Managing Partner.
4.2.4 MANAGERS, ETC. The Executive committee shall appoint a
Manager and such other personnel as it shall deem appropriate to manage the
Daily Management of the Partnership.
4.3 PARTNERSHIP EXPENSES. The Managing Partners may charge the
Partnership for any reasonable expenses incurred by them or the Executive
Committee or their respective Representatives in connection with the
Partnership's business, including any reasonable sum paid on behalf of or
chargeable to the Partnership in accordance with any agreement entered into by
the Partnership for consultation or management of the Property, and the
allocable portions of expenses incurred in connection with both the Partnership
and other activities. That allocation is to be determined by the Executive
Committee on any basis selected by them consistent with good accounting
practices. Payment shall be conditioned upon submission of appropriate
substantiation of such expenses.
4.4 EXCULPATION. The Managing Partners and the Representatives shall not
be liable to the Partnership or to any Partner for any loss, cost, damage or
expense arising out of or
40
in connection with the management, operation or conduct of Partnership business
and affairs or arising out of or in connection with their: (i) contracting for
the services of employees, brokers, agents or suppliers of the Partnership; (ii)
conduct or management of the Partnership's operations; or (iii) action taken,
determination made or expense incurred, by or on behalf of the Partnership;
PROVIDED, HOWEVER, that such act or omission was in accordance with, and duly
authorized in a manner consistent with, the terms of this Article IV; and
FURTHER PROVIDED that such act or omission did not constitute gross negligence,
willful misconduct or fraud. If the Partnership, either Managing Partner or any
Representative is a party to any claim, action or proceeding arising out of
conduct by either Managing Partner or Representative on behalf of, and duly
authorized by the Partnership, the other Partners shall defend, indemnify and
hold such Managing Partner or Representative harmless from more than its share
(measured by its share of Partnership loss allocations) of, all judgments, fines
and settlements, and for all reasonable expenses, including attorneys' fees';
PROVIDED, HOWEVER, that the Managing Partner or Representative acted in good
faith in the interest of the Partnership.
4.5 OTHER ACTIVITIES. The Managing Partners are authorized to manage the
Partnership's business in conjunction with their respective other business
interests, activities and investments and shall not be obligated to devote all
or any
41
particular part of their time and effort to the Partnership or its affairs.
Except as provided in this Article IV, neither this Agreement nor any activity
undertaken on behalf of the Partnership shall prevent any Partner from engaging
in other activities or businesses or from making investments, whether those
activities, businesses or investments are similar in nature to the Partnership's
business, whether individually or jointly with others, without any obligation to
account to the other Partners for any profits or other benefits derived, and
without having to offer an interest in those activities, businesses or
investments to the other Partners.
4.6 TITLE HOLDING. Title to the Partnership's property shall be held in
the name of the Partnership or its nominee, or by a land trustee, provided that
the trustee shall have issued a certificate of beneficial interest naming the
Partnership or its nominee as the beneficial owner. If, on behalf of the
Partnership, the Managing Partners or nominee of the Partnership shall at any
time acquire record title to or a beneficial interest in the Property, the title
holder shall certify to the Partnership by instrument duly executed in form for
recording that he is acting only in the capacity of nominal record title holder
or beneficial owner for the benefit of the Partnership pursuant to the terms of
this Agreement.
4.7 MANAGER. The Partnership shall retain a manager (the "MANAGER")
appointed by the Executive Committee who shall be
42
responsible for Daily Management. The Manager may be one of the Partners, or a
person affiliated with a Partner; PROVIDED, HOWEVER, that the terms of any
Management or Employment Agreement between the Partnership and the Manager shall
be on commercially reasonable and competitive terms. ▇▇▇▇▇▇▇ shall be the
initial Manager. For the purposes of this Agreement a person or entity is
"AFFILIATED WITH" and an "AFFILIATE" of another person if he, she or it
controls, is controlled by or is under common control with that other person.
4.8 BANK ACCOUNTS. The Partnership shall maintain one or more bank
accounts at a bank to be designated by the Executive Committee, in which shall
be deposited Partnership receipts, and from which Partnership expenses shall be
paid. All checks and all notes, bills of exchange, drafts or other documents for
the payment of money for Partnership purposes shall be signed in the
Partnership's name by such persons, determined by, and in accordance with rules
and procedures established by, the Executive Committee from time to time.
4.9 BOOKS OF ACCOUNT. At all times from and after the date hereof, the
Executive Committee shall keep or cause to be kept full and true books of
account in accordance with income tax principles and procedures applied in a
consistent manner, which shall reflect all Partnership transactions and shall be
appropriate and adequate for the Partnership's business. The books of account
shall be audited as at December 31st of each
43
year, and at other times as may be determined by the Executive Committee, by
Peat Marwick Main & Co. or such other independent accountants as shall be
selected by the Executive Committee. There shall be maintained at the principal
place of business of the Partnership: (i) copies of the Partnership's federal,
state and local income tax returns and reports, if any, for the three most
recent years; (ii) a copy of this Agreement and all amendments thereto and of
any financial statements of the Partnership for the three most recent years; and
(iii) copies of all other Partnership records. Each Partner or its duly
authorized representatives shall have the right at any time to inspect and copy
such books and documents during normal business hours upon reasonable notice.
4.10 PREPARATION AND APPROVAL OF ANNUAL BUDGET. The Executive Committee
shall attempt in good faith to approve a budget for the Partnership annually and
such approval shall be a Major Decision. If the Executive Committee shall fail
to approve a proposed annual budget, the previous year's budget shall remain in
effect. The initial annual budget shall be prepared and submitted to the
Executive Committee as soon as practicable after the execution of this
Agreement. The Manager of the Partnership shall be responsible for the
preparation of each annual budget, including the initial annual budget. The
Manager shall prepare and submit the annual budget to the Executive Committee
for its consideration prior to the commencement of each fiscal year. The
44
Manager shall deliver a copy of each annual budget to each Partner promptly
after its approval by the Executive Committee.
ARTICLE V
RESERVE ACCOUNTS; DISTRIBUTIONS
5.1 RESERVE ACCOUNTS.
5.1.1 OPERATING RESERVE. The Partnership shall establish and
maintain an operating reserve account (the "OPERATING RESERVE") in an amount not
to unreasonably exceed, in any fiscal year, the ordinary and necessary expenses
of the Partnership reasonably foreseeable in the sole discretion of the
Executive Committee, for such year in accordance with the annual budget,
including payment of taxes, indebtedness (including Partner Loans), costs of
insurance, acquisition, leasing, maintenance, repair and replacement of
Partnership property, administration, operating and other expenses, and any
necessary payments into any reserves required by applicable law, such as a "post
closure and remediation fund." The Partnership shall attempt to spread deposits
into the Operating Reserve as evenly as reasonably practicable in the sole
discretion of the Executive Committee over the course of each fiscal year and
not to fund such Reserve entirely out of Revenues received early in such year.
All determinations by the Executive Committee concerning the amount of the
Operating Reserve and Capital Reserve and the timing of deposits to fund such
reserves shall be made in good
45
faith and not with a primary view, toward reducing the amount of or delaying
distributions otherwise payable to Partners.
5.1.2 CAPITAL RESERVE. In addition, the Partnership shall
establish and maintain a capital reserve account (the "CAPITAL RESERVE") for
capital expenses such as the construction of landfill cells, which shall be
funded in the sole discretion of the Executive Committee, in any amount equal to
not more than 20% of the remainder of (a) the Partnership gross revenues for
each fiscal quarter (as defined in accordance with generally accepted accounting
principles as in effect in the United States, consistently applied, "REVENUES"),
minus (b) the sum of (i) any amounts deposited into the Operating Reserve during
that quarter plus (ii) the Partnership's actual expenses for that quarter
(including, without limitation, any Revenues payable to Sita and/or ▇▇▇▇▇▇▇
pursuant to the letter agreement among Sita, ▇▇▇▇▇▇▇ and the Partnership of even
date as to the allocation of 2.5% of the Partnership's Revenues (the
"PREFERENCE")). Any payments into the Capital Reserve shall be made not more
than 30 days after the last day of the fiscal quarter to which such payment
relates.
5.2 DISTRIBUTIONS. Not more than 30 days after the last day of each
fiscal quarter, the Partnership shall distribute to the Partners the remainder
of (a) the sum of (i) the Revenues received during that quarter plus (ii) any
amounts released from the Operating and/or Capital Reserve for that quarter to
reflect
46
a reduction in the level thereof, minus (b) the sum of (i) any amounts deposited
into the Operating Reserve during that quarter, plus (ii) any amounts deposited
into the Capital Reserve for that quarter plus (iii) the Partnership's actual
expenses for that quarter (including without limitation, the Preference). Each
payment shall be accompanied by a certificate of the Manager as to the
determination of the distribution. All distributions shall be made to the
Partners PRO RATA in accordance with their respective Percentage Interests.
5.3 ADJUSTMENTS. Any rebates, discounts or other adjustments made to the
Partnership's Revenues after any payment has been made into the Operating
Reserve, Capital Reserve, or any distribution made to the Partners or payment of
the Preference shall be reflected in an adjustment made to the payment into the
Operating Reserve, Capital Reserve, distribution, or payment of the Preference
made in the next succeeding quarter or as soon thereafter as reasonably
practicable.
5.4 PERCENTAGE INTEREST. The percentage of Partnership distributions to
which a Partner is entitled is called its "PERCENTAGE INTEREST". At all times
the total Percentage Interests of all Partners shall equal 100%. The Percentage
Interests of the Partners as of the date this Agreement was amended and restated
are as follows:
47
Allegany 40%
LYA 20%
Sita 40%
5.5 ADJUSTMENTS. If a Partner elects not to make a requested Additional
Contribution, pursuant to Section 3.2, and (i) all or a portion of the Remainder
attributable to the Non-Fully Performing Partner is contributed by an Electing
Partner(s) pursuant to Section 3.2.3, then immediately upon the contribution by
the Electing Partner(s), the Percentage Interest of the Non-Fully Participating
Partner shall be reduced and the Percentage Interest of each Electing Partner
shall be increased at the rate of one percentage point for each $25,000 of the
Remainder which the Electing Partner contributes to the Partnership; and (ii)
if, as a result, an Interest in the Partnership is sold to a Purchaser pursuant
to Section 3.3, then immediately upon the payment of the purchase price by the
Purchaser, the Percentage Interest of the Non-Fully Participating Partner shall
be decreased at the rate of one percentage point for each $25,000 of purchase
price paid by the Purchaser, and the Purchaser shall receive a Percentage
Interest of one percentage point for each $25,000 of the purchase price paid;
PROVIDED, HOWEVER, that the Percentage Interests of Allegany and LYA shall not
be reduced below 10% and 4%, respectively.
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ARTICLE VI
PARTNER'S CAPITAL ACCOUNTS
6.1 CAPITAL ACCOUNTS. A capital account shall be established and
maintained for each Partner on the Partnership books (a "CAPITAL ACCOUNT"). Each
Partner's Capital Account shall be his Initial Contribution ("ORIGINAL CAPITAL
ACCOUNT") as adjusted pursuant to the terms of this Agreement. The Capital
Accounts of Allegany and LYA shall be adjusted to reflect the activities of the
Partnership prior to the date hereof.
6.1.1 INCREASES. Each Partner's Capital Account shall be increased
(credited) by the amount of all Additional Contributions, if any, to Partnership
capital made by the Partner, the amount of all Net Income credited to the
Partner's account pursuant to Section 7.2 and the amount of any Partnership
liability assumed by the Partner or which are secured by any Partnership
property distributed to the Partner, unless the Partner's liability is limited
by a guarantee under Section 6.3.
6.1.2 REDUCTIONS. Each Partner's Capital Account shall be reduced
(charged) by the amount of all Net Losses charged to the Partner's account
pursuant to Section 7.3, the amount of all withdrawals by and distributions to
the Partner, and the amount of any liabilities of the Partner assumed by the
Partnership or which are secured by any Partnership property contributed by the
Partner to the Partnership.
49
6.2 TREASURY REGULATIONS. The provisions of Section 6.1 are intended to
comply with Treasury Regulation Section 1.704-1(b) and shall be interpreted and
applied consistently therewith.
6.3 GUARANTEES. If any Partner shall, with the written consent of both of
the Managing Partners, guarantee by separate agreement any Partnership
obligation or liability, the other Partners shall indemnify the guaranteeing
party for a pro rata share (based on each Partner's share of Partnership losses)
of any amount that it shall become obligated to pay as a result of such
guarantee.
ARTICLE VII
DETERMINATION AND ALLOCATION OF INCOME AND LOSS
7.1 DEFINITION OF NET INCOME OR LOSSES. For purposes of this Agreement
the terms "NET INCOME" and "NET LOSSES" shall mean the Partnership's annual
income or losses derived from its operations, after all operating expenses have
been paid or provided for, and after making all proper allowances for
depreciation, and including any gain or loss realized by the Partnership from
the sale or other disposition of any Partnership property. Net Income shall
include, without limitation, gross rents, tipping fees, interest, investment
income, and all other gross receipts or commissions received by the Partnership
for any other services, operations or transactions performed or taking place in,
upon or about the ▇▇▇▇▇▇▇ Farm or in connection with
50
the Project, whether similar or dissimilar to those enumerated above. Operating
expenses shall include, without limitation, general administration expenses,
allocable expenses of the Partnership from its investments, and expense incurred
in connection with the operation of the Partnership and the production of income
that are incurred in good faith by the Partners or the Partnership in accordance
herewith.
7.1.1 EXCESS NONRECOURSE LIABILITIES. The term "excess nonrecourse
liabilities" has the meaning set forth in Treasury Regulation Section
1.752-1T(e)(3)(ii).
7.2 ALLOCATION OF NET INCOME. Net Income shall be allocated to the
Partners as follows, and in the following order of priority:
7.2.1 first, in proportion to, and in an amount not greater
than, the excess of the aggregate amount of Net Losses allocated to the
respective Partners pursuant to Section 7.3 through the last day of the prior
fiscal year over the aggregate amount of Net Income allocated to the respective
Partners pursuant to this Section 7.2 through the last day of the prior fiscal
year; and
7.2.2 then, the balance shall be allocated to the Partners in
accordance with their respective Percentage Interests.
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7.3 ALLOCATION OF NET LOSSES. Net Losses shall be allocated to the
Partners as follows, and in the following order of priority:
7.3.1 first, to the Partners, PARI PASSU in proportion to and in
an amount not exceeding their respective positive Capital Accounts; and
7.3.2 then, the balance shall be allocated to the Partners in
accordance with their respective Percentage Interests.
7.4 ALLOCATION AFTER ASSIGNMENT. If all or any part of a Partnership
Interest is Transferred or assigned in accordance with the provisions of this
Agreement at any time other than at the end of a fiscal year of the Partnership,
the amount, in respect of that Partnership Interest, of Partnership income,
gains, losses, deductions and credits as computed both for Partnership
accounting purposes and for Federal income tax purposes, shall be allocated
between the transferor and the transferee in the same ratio as the number of
days in that year before the date of the Transfer bears to the number of days
after that transfer; PROVIDED, HOWEVER, that the amount of Partnership Net
Income, Net Losses, deductions and credits arising out of: (i) the sale or other
disposition of all or substantially all of the Partnership's property; or (ii)
other extraordinary non-
52
recurring items, shall be allocated to whomever holds the Partnership Interest
on the date such Net Income, Net Losses, deductions or credits are earned or
incurred.
7.5 EXCESS NONRECOURSE LIABILITIES. For purposes of determining each
Partner's proportionate share of the "excess nonrecourse liabilities" of the
Partnership, each Partner's interest in partnership profits equals its
Percentage Interest in the Partnership.
7.6 MONTHLY PRORATION. The Partnership shall use the
"interim-closing-of-the-books" method and the monthly convention. A Partner
entering the Partnership during the first 15 days of a month shall be treated as
entering the Partnership on the first day of the month in which it is admitted
as a Partner. A Partner entering after the fifteenth day of a month shall be
treated as entering the Partnership on the first day of the following month.
Each Partner entering or withdrawing from the Partnership shall be allocated its
share of Net Income and Net Losses, commencing or terminating with the month in
which the Partner is treated as having entered or withdrawn from the
Partnership.
53
ARTICLE VIII
ADMISSION OF ADDITIONAL PARTNERS
AND
DISPOSITION OF PARTNERSHIP INTERESTS
8.1 ADMISSION OF ADDITIONAL PARTNERS. No additional Partners may be
admitted to the Partnership without the prior written consent of both Managing
Partners and an appropriate amendment of this Partnership Agreement.
8.2 DISPOSITION OF PARTNERSHIP INTEREST. A Partner shall not, whether
voluntarily or by operation of law, sell, transfer, give, assign, mortgage,
hypothecate, pledge, grant a security interest in or otherwise dispose of,
distribute or encumber (each, a "TRANSFER") all or a portion of its interest in
the Partnership ("INTEREST") without first complying with the provisions of this
Article VIII. A Transfer of any equity interest in any Partner, or any option,
warrant, or other right to acquire any equity interest in any Partner, to any
person who was not an owner of any equity interest of that Partner immediately
prior to the Transfer shall be treated as a Transfer subject to the right of
first refusal pursuant to this Article VIII.
8.2.1 TRANSFERS NOT PERMITTED. The provisions of this Article VIII
shall not permit a Transfer of an Interest in the Partnership by gift or in
contemplation of or in connection with any matrimonial separation or divorce
without prior compliance with the provisions of this Article VIII.
54
8.2.2 PERMITTED TRANSFERS. Notwithstanding anything to the contrary
contained in this Article, neither (i) a Transfer of an Interest in the
Partnership to a corporation or other entity wholly-owned, directly or
indirectly, by Allegany or LYA, or in the case of Sita, to any affiliate of
Sita, (ii) a Transfer of an equity interest in a Partner, or an option, warrant,
or other right to acquire an equity interest in a Partner, by the holder of an
equity interest in that Partner (a "SHAREHOLDER") to the Shareholder's spouse,
children, trust solely for the benefit of the Shareholder, the Shareholder's
wife and/or children, or to a corporation wholly-owned by such persons or
trusts, nor (iii) a Transfer of an equity interest in Sita, or an option,
warrant or other right to acquire an equity interest in Sita, by a Shareholder
of Sita to any affiliate of Sita shall be subject to the provisions of this
Article VIII; PROVIDED, HOWEVER, that, in either case, the equity of the
Transferee shall not be further Transferred without conformance with this
Article VIII and provided that the Transferee complies with the requirements of
Section 8.5 (except Section 8.5.1).
8.3 FIRST REFUSAL OFFER.
8.3.1 NOTICE. If a Partner (a "SELLING PARTNER") wishes to Transfer
an Interest pursuant to a bona fide offer (an "OFFER") from an unrelated third
party (a "TRANSFEREE"), the Selling Partner shall notify the other Partners
("OTHER
55
PARTNERS") setting forth in that notice (i) the identity of the proposed
Transferee (including if the proposed Transferee is a corporation, the identity
of its directors, executive officers and principal shareholders or, if the
proposed transferee is a partnership, the identity of its general partner(s));
(ii) the percentage of the Interest to be sold or pledged; (iii) the proposed
selling price ("SELLING PRICE") and all other material terms and conditions of
the proposed Transfer and; (iv) a representation that the Offer is bona fide.
That notice shall constitute an offer ("FIRST REFUSAL OFFER") to sell all, but
not less than all, of the Interest specified in that notice at the Selling Price
and on the other terms specified in the First Refusal Offer to the other
Partners. In the case of a mortgage, hypothecation, pledge, security interest or
other lien (each, a "PLEDGE"), the pledging Partner ("PLEDGOR") shall before and
as a condition of making the pledge (a) notify the Other Partners of the pledge
terms, the pledgee's identity and the terms of the obligation secured by the
pledge and (b) obtain the pledgee's written agreement to (1) notify the Other
Partners prior to foreclosing upon the pledged Interest and (2) honor the first
refusal rights of the Other Partners provided in this Agreement. Any notice from
the pledgee of intended foreclosure shall constitute a First Refusal Offer as to
the pledged Interest.
8.3.2 ACCEPTANCE. An Other Partner receiving a First Refusal Offer
way accept it by giving notice of acceptance to the Selling Partner and the
Manager not later than 15 days
56
after delivery of the First Refusal Offer. An Other Partner accepting a First
Refusal Offer is called an "ACCEPTING PARTNER". The acceptance shall state that
the Accepting Partner wishes to purchase the offered Interest at the Selling
Price. If an Other Partner fails to accept a First Refusal offer within the
15-day period, it shall be deemed to have rejected the offer. If there is more
than one Accepting Partner, they shall purchase the Interest pro rata in
accordance with their respective Partnership Interests, or in such other
proportion as they shall agree.
8.3.3 SALE OF PARTNERSHIP INTEREST, A Selling Partner making a
First Refusal Offer that is not accepted in full by the Other Partners within
the 15-day period set forth in Section 8.3.2 shall be free to Transfer all (but
not less than all) of the Interest included in the First Refusal Offer to the
Transferee at a price not less than the Selling Price and on terms not more
favorable to the Transferee than those set forth in the First Refusal Offer, for
a period of 90 days after delivery of the notice contemplated by Section 8.3.2.
If the Transfer is not made within the 90-day period, no Transfer of the
Interest may be made without again fully complying with the restrictions on
Transfer imposed by this Article VIII. If the Selling Partner is a Managing
Partner, the Transferee shall not become a Managing Partner.
8.3.4 CLOSING AND PAYMENT. The closing of the Transfer of any
Interest offered to and accepted by an Accepting
57
Party pursuant to this Article VIII ("CLOSING") shall take place at the
Partnership's offices not more than 30 days after the date of timely acceptance
or such other place as the Accepting Partner(s) and the Selling Partner shall
agree.
8.3.5 COME-ALONG; TAKE-ALONG. If the Other Partners fail to accept
a First Refusal Offer with respect to all of the Interest specified therein
within the period provided in Section 8.3.2 the Offer shall nevertheless be
subject to the Other Partners' right (a "TAKE-ALONG RIGHT") to cause the Offer
to be conditioned on the Transferee's purchase of all (but not less than all) of
the Other Partner's(s') Interest(s) upon the same terms set forth in the Offer;
PROVIDED, HOWEVER, that the Other Partners shall have the right to elect to
receive cash equal to the fair market value of any non-cash consideration.
An Other Partner may exercise its Take-Along Right by giving written notice
of acceptance to the Selling Partner, the Manager and the proposed Transferee
not later than 15 days after delivery of the First Refusal offer. The notice of
exercise shall specify whether the Other Partner elects to receive all cash
consideration. If an Other Partner fails to exercise its Take-Along Right within
the required period, it shall be deemed to have waived such right. If the Other
Purchaser exercises its Take-Along Right, any closing of the Transfer shall take
place within the period specified in Section 8.3.4.
58
8.3.6 EFFECT OF NONCOMPLYING TRANSFER. Any attempted Transfer of an
Interest without: (i) compliance with the provisions of Sections 8.2 and 8.3,
and (ii) the Transferee's compliance with the requirements of Section 8.5 shall
be entirely void and shall not be effective to transfer legal title or
beneficial ownership.
8.4 ADDITIONAL AND SUBSTITUTED PARTNERS. Except as provided in this
Section 8.4 and Section 8.5, no "Additional" or "Substituted Partner" may be
admitted to the Partnership. A "SUBSTITUTED PARTNER" is a person admitted to the
Partnership as a Partner with all the rights of a Partner who has transferred
its Interest in accordance with the provisions of this Agreement. An
"ADDITIONAL PARTNER" is a person acquiring a Partnership Interest (other than an
Interest previously owned by a Partner) directly from the Partnership and who is
admitted to the Partnership as Partner in accordance with the provisions of this
Agreement.
8.5 ADMISSION OF ADDITIONAL AND SUBSTITUTE PARTNERS. No Additional
Partners shall be admitted to the Partnership except for Purchasers who purchase
Interests pursuant to Section 3.3. No Substituted Partners shall be admitted to
the Partnership except for permitted Transferees pursuant to Sections 8.2.2,
8.3.3 and 8.3.5. All Additional Partners and Substituted Partners must satisfy
the following conditions prior to admission to the Partnership:
59
8.5.1 CONSENT OF EXECUTIVE COMMITTEE. The Executive Committee
consents in writing to the admission, which consent may be given or withheld in
the sole discretion of the Executive Committee;
8.5.2 EXECUTION OF AGREEMENT. The Transferee or Purchaser executes
a counterpart of this Agreement or an instrument in form and substance
satisfactory to the Executive Committee and counsel for the Partnership, by
which the Transferee or Purchaser agrees to be bound by this Agreement as a
Partner, including, without limitation, the restrictions on transfer of this
Article VIII, including any amendments, and any necessary certificates and
agrees to be bound by each of its provisions and terms; and
8.5.3 INSTRUMENT OF TRANSFER, In the case of a Transfer, the
Selling Partner executes, acknowledges and delivers to the Executive Committee
an instrument of transfer satisfactory in form and substance to the Executive
Committee and counsel for the Partnership;
8.5.4 NO TERMINATION. The Transfer or purchase would not result in
the termination of the Partnership under the Code or any other applicable
federal and state law; and
60
8.5.5 SECURITIES LAW MATTERS. In the opinion of counsel for the
Partnership, a Transfer or purchase would not violate any applicable federal or
state securities laws or any other applicable laws; and
8.5.6 INVESTMENT REPRESENTATION. The Transferee or Purchaser
represents in writing that it is acquiring the Interest for its own account for
investment and not with the intention of resale, fractionalization or
distribution; and
8.5.7 FEES AND EXPENSES. The Partnership is paid a fee sufficient
to pay actual and reasonable expenses of the Partnership in connection with the
Transfer or purchase.
8.6 INCOMPETENCE. No Interest may be assigned or transferred to a person
who is a minor or a person adjudged to be insane or incompetent as of the date
of the Transfer or assignment or to any firm or entity not lawfully empowered to
own or possess an Interest. Any attempted Transfer, contrary to this Section
shall be entirely void, shall not be effective to transfer legal title or
beneficial ownership and shall not bind the Partnership. As a condition to
filing with the Partnership a Transfer of a Partnership Interest, the Executive
Committee may require an affidavit evidencing legal age and competence of the
Transferee.
61
8.7 NO WITHDRAWAL. No Partner may withdraw or retire from the Partnership
without the written consent of the Executive Committee, except in connection of
the Transfer of its entire Interest in accordance with Section 8.2 or 8.3.
8.8 TERMINATION OF A PARTNER. If any of the following events shall occur
with respect to a Partner (each an "EVENT OF WITHDRAWAL") such Partner shall be
deemed a "WITHDRAWN PARTNER":
8.8.1 BANKRUPTCY. If it becomes bankrupt;
8.8.2 INCOMPETENCE. If he or she is a natural person, upon his or
her death or adjudicated incompetence;
8.8.3 CORPORATE DISSOLUTION. If it is a corporation, upon the
filing of a certificate of dissolution or its equivalent for such corporation,
or the revocation of its charter or certificate of incorporation;
8.8.4 PARTNERSHIP DISSOLUTION. If it is a partnership, upon the
dissolution and commencement of winding up of such partnership, or the
occurrence of any of the events described in paragraphs (a), (b) and (c) above
with respect to the last general partner of such partnership.
62
8.8.5 ATTEMPTED WITHDRAWAL. If it attempts to withdraw or retire
from the Partnership in contravention of Section 8.7.
No Partner shall voluntarily take any action or omit to take any action)
which would cause any of the events described in Sections 8.8.1 through 8.8.5 to
occur with respect to it.
8.9 EFFECT OF A PARTNER BECOMING A WITHDRAWN PARTNER. If a Partner
becomes a Withdrawn Partner, the following shall apply:
8.9.1 CONTINUATION. The Partnership shall be continued as a
partnership except as otherwise provided in Section 8.9.2 below;
8.9.2 EXECUTIVE COMMITTEE. If such Event of Withdrawal shall occur
with respect to the last Managing Partner who is a Managing Partner on the date
of this Agreement, the remaining Partners shall elect a replacement Managing
Partner as of the date of the Event of Withdrawal. Failing the Partners' ability
to elect a replacement Managing Partner, the Partnership shall be terminated;
8.9.3 ESTATES, ETC. The estate, legal representatives or successors
of a Partner who retires, withdraws or with respect to whom an Event of
Withdrawal shall occur shall
63
not be admitted as Substituted Partners, but shall succeed to such Partner's
economic interest in the Partnership.
ARTICLE IX
DISSOLUTION AND TERMINATION
9.1 DISSOLUTION. Unless sooner terminated as provided in this Article IX,
the Partnership shall continue until the fiftieth anniversary of the
commencement of commercial operations or such earlier date as the Executive
Committee shall agree in writing; PROVIDED, HOWEVER, that either Managing
Partner shall have the right to terminate the Partnership after the fifth
anniversary of the date hereof if all Permits necessary to commence construction
of the Project shall not have been received, issued or granted on or prior to
that date.
9.2 WINDING UP. Upon dissolution or termination of the Partnership the
Partnership shall be liquidated as promptly as practicable under the supervision
and control of the Executive Committee. If there is no Managing Partner
available to liquidate the Partnership, the other surviving Partner shall wind
up the Partnership's affairs. The Partner winding up the Partnership shall have
all the rights and powers over Partnership assets and liabilities in connection
with the liquidation which all Partners had over Partnership assets and
liabilities during the Partnership term, including the right to make all Major
Decisions without the consent of the other Partner(s). The Partnership's assets
shall be liquidated as promptly as possible
64
without materially reducing their value. All income and losses incurred by the
Partnership in liquidation shall be allocated to the Partners in the manner
provided in Article VII. If any Partner's Capital Account has a deficit balance
(after giving effect to all contributions, distributions, and allocations for
all taxable years including the year in which liquidation occurs), that Partner
shall make a capital contribution to the Partnership in the amount necessary to
restore its deficit balance to zero in accordance with Treasury Regulation
Section 1.704-1(b)(2)(ii)(b)(3).
9.3 LIQUIDATION PROCEEDS. The proceeds from liquidation of Partnership
assets shall be applied as follows and in the following order of priority:
9.3.1 LIABILITIES. First, to the payment of the Partnership's debts
and liabilities and the expenses of liquidation.
9.3.2 RESERVES. Next, to the establishment of such reserves as the
Executive Committee (or remaining Partner) may deem necessary for any contingent
or unforeseen liabilities of the Partnership;
9.3.3 DISTRIBUTIONS. Then to the Partners PARI PASSU, in proportion
to their positive Capital Account balances
65
after taking into account all Capital Account adjustments for the taxable year
in which the liquidation occurs.
9.3.4 NON-CASH DISTRIBUTIONS. Each Partner may receive, at the
election of the Executive Committee, but shall not have the right to demand,
property other than cash upon determination and dissolution of the Partnership.
Any distributions of property other than cash will for the purposes of this
Article IX, be treated as if the property distributed were sold, the Partnership
received cash proceeds equal to the property's then fair market value (not of
liabilities encumbering the property), and the cash sales proceeds were then
distributed.
ARTICLE X
CONFIDENTIALITY; PUBLICITY
10.1 CONFIDENTIALITY. Except as compliance may be waived in writing in a
particular instance by Sita, each of the Partners shall, and shall cause their
respective officers, directors, shareholders, employees, and subcontractors to
hold all Confidential Information in strict confidence and shall not disclose
any Confidential Information unless: (i) the information in question is, or
becomes, public knowledge without fault of the disclosing party; (ii) is
rightfully obtained by the disclosing party from a third party with no
restriction on disclosure; or (iii) was previously known or is independently
developed or discovered by the disclosing party.
66
Each of the Partners shall restrict access to every portion of the
Confidential Information to those of its officers, directors, employees,
shareholders and subcontractors who shall have a need to receive or have access
to those portions for the purposes of this Agreement or of any employment,
management, services or other agreement between the Partnership and such person,
and shall take all reasonable steps to prevent any unauthorized access to,
copying, use, publication, disclosure or other dissemination of such
Confidential Information, all in such manner as to protect the trade secrets and
proprietary rights of the Partnership, Sita and its affiliates in and to the
Confidential Information. Each of the Partners represents, warrants and
covenants to Sita that it will have agreements in force with its officers,
directors, shareholders, employees and subcontractors in form and substance
satisfactory to Sita, which will adequately protect the trade secrets and
proprietary rights of the Partnership, Sita and its affiliates in and to the
Confidential Information, and each Partner will take all other reasonable steps,
through the use of other legally enforceable measures, to require that its
officers, directors, employees and subcontractors treat and maintain the
Confidential Information as confidential.
10.2 CONFIDENTIAL INFORMATION. For the purposes of this Agreement,
"CONFIDENTIAL INFORMATION" means all confidential and proprietary information of
the partnership, Sita and its affiliates not generally known in the landfill,
waste management
67
and disposal industries including, without limitation, manufacturing know-how,
lines of research and development previously undertaken, in process or planned
and the results thereof, identities of sources of supply, identities of
customers, special customer needs, operating and cost data, sales and pricing
data, and marketing, financial and other business plans. Without limiting the
generality of the foregoing, Confidential Information shall include all
Technology of Sita and its affiliates licensed to the Partnership pursuant to
the License Agreement of even date between Sita, as licensor, and the
Partnership, as licensee.
10.3 GOVERNMENT OR COURT ORDER. Nothing in Article X shall prevent a
person from disclosing Confidential Information under order of a court or
governmental agency having jurisdiction, but only after having given Sita timely
notice and affording it full opportunity to appeal such order, seek a protective
order or take other action for protection of its Confidential Information as it
deems appropriate. The person required to make such disclosure shall make all
reasonable efforts to have any such order modified to (i) limit production, use
and disclosure of the Confidential Information to the narrowest scope of
disclosures practicable under the circumstances, and (ii) provide for holding
all proceedings IN CAMERA, with a sealed record.
68
10.4 PUBLICITY. Neither the Partnership nor any Partner nor any of their
respective affiliates will release or file any press release or other public
announcement (including any document filed with any regulatory authority)
concerning the investments, transactions or agreements described in or
contemplated by this Agreement without the prior review of and consent to the
form of the release or filing by the Executive Committee. Notwithstanding the
foregoing, if any Partner is advised by its counsel that any such release or
announcement is required as of a specific date by applicable law, such Partner
shall submit such release or announcement to the Executive Committee for review
a reasonable period of time prior to the date on which release or filing is
required by law, but need not obtain such other Partner's approval, prior to
its timely release or filing.
10.5 INJUNCTIVE RELIEF. Each of the Partners agree that Sita and its
affiliates and the Partnership would be irreparably damaged by breach by a
Partner and/or its respective officers, directors, employees, shareholders and
subcontractors of any of their respective covenants and agreements under this
Article X and that, in the event of any breach or threatened breach of any such
covenant or agreement, in addition to any other remedy available to Sita and its
affiliates, at law or in equity, Sita and its affiliates and the Partnership
shall be entitled to a temporary restraining order and injunctive relief
69
compelling specific performance of, or other compliance with, the terms of this
Article X, or to prevent any threatened breach.
ARTICLE XI
MISCELLANEOUS
11.1 NOTICES. Any notices required under this Agreement shall be in
writing and shall be deemed to have been duly given if (i) sent by registered
mail, return receipt requested, or (ii) (a) hand delivered, (b) sent by
facsimile or telex or (c) sent by overnight courier (with, in the case of
(ii)(a), (b) or (c), a copy simultaneously sent by registered mail return
receipt requested), to the address or facsimile or telex number set forth below
and in the case of Allegany and Sita with copies provided in the same manner at
the same time to the persons shown below:
if to Allegany:
Allegany Environmental Systems, Inc.
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ____________
Telex: ______________, Answerback: _____________
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
70
if to Sita:
▇▇▇▇ ▇▇▇▇▇▇ Corp.
c/o Sita S.A.
7, rue de Logelbach
B.P. 702-75821
▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇▇
Facsimile: 011-33-1-47-63-77-55
Telex: 641 049F, Answerback: _______________
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ Thomajan & ▇▇▇ P.C.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: 662124, Answerback: ______________
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
if to LYA:
LYA Associates, Inc.
c/o Harris Beach & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telex: ______________, Answerback: _______________
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. and
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other addresses and number as shall be furnished from time to time by
the party entitled to receive such notices in the manner provided in this
Section 11.1. Each notice shall be deemed to have been given on the date
received (in the case of telex or facsimile, at the local time and date of
receipt of telex or facsimile).
71
11.2 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York applicable to agreements
negotiated, executed and wholly performed within that State and shall be binding
upon the parties, their heirs, executors, administrators, successors and
assigns.
11.3 AMENDMENTS. This Agreement may be amended or modified as it affects
Capital Accounts and distributions of the Partners, Percentage Interests,
purposes of the Partnership, obligations of the Partners to make capital
contributions, and the sale of Partnership Interests only upon written approval
of all of the Partners. This Agreement may be amended or modified by written
consent of the Executive Committee for all other purposes including admitting a
new partner pursuant to the terms of this Agreement.
11.4 COUNTERPARTS. This Agreement may be signed in multiple counterparts,
each of which shall constitute an original, but all of which shall together
constitute a single agreement.
11.5 WAIVERS. No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude the exercise of any other right,
power or
72
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided in law or equity.
11.6 NO THIRD-PARTY BENEFICIARIES. None of the provisions of this
Agreement shall be for the benefit of or enforceable by any third parties,
including, without limitation, creditors of the Partnership or of the Partners.
11.7 INTEGRATION. This Agreement and any other document referred to herein
or therein and any agreements executed in connection herewith, constitute the
entire agreement between the parties and their affiliates pertaining to the
subject matter of this Agreement and supersede all prior and contemporaneous
agreements and understandings of the parties in connection therewith including
the Original Agreement. No covenant, representation or condition not expressed
in this Agreement or such other agreements, if any, shall affect, or be
effective to interpret, change or restrict, the express provisions of this
Agreement.
11.8 PARTIAL INVALIDITY. If the application of any term or provision of
this Agreement or any part of such term or provision to any person or
circumstance shall be invalid or unenforceable, the remainder of this Agreement
or the application of such term or provision or remainder thereof to persons or
circumstances other than those as to which it is held invalid or
73
unenforceable shall not be affected thereby and shall be enforceable to the
fullest extent permitted by law.
11.9 POWER OF ATTORNEY. Each Partner hereby makes, constitutes and
appoints the Executive Committee and each Managing Partner, with the full power
of substitution, the true and lawful attorney of, and in the name, place and
stead of, such Partner, with the power from time to time to execute,
acknowledge, make, swear to, verify, deliver, record, file and/or publish: (i)
this Agreement or the Partnership certificate or fictitious or assumed name
certificate under the laws of any jurisdiction, any future amendment to the
Partnership certificate or fictitious name certificate (including, but not
limited to, amendments reflecting the withdrawal or admission of any Partner or
the return, in whole or in part, of the contribution of any Partner or the
addition or substitution of Partners or a reduction in Partnership capital) or
any other document required from time to time to admit such Partner, to effect
its substitution as a Partner, or to effect the substitution of the Partner's
assignee or Transferee as a Partner as to any or all of the Interest of the
Partner in the Partnership; PROVIDED, HOWEVER, that any such withdrawal,
admission, substitution or other action has been consented to by all Partners
whose consent is required hereunder; (ii) any amendment to the Partnership
certificate or fictitious or assumed name certificate or any other document
required to reflect any action of the Partners or the Executive Committee,
consented to by all Partners whose
74
consent is required hereunder or whether or not such Partner consented to such
action if such Partner's consent is not required therefor; and (iii) any other
instrument, certificate or document as may be required by any regulatory agency,
the laws of the United States, any state or any other jurisdiction in which the
Partnership is doing or intends to do business or which the Executive Committee
shall deem advisable to file or record; PROVIDED, HOWEVER, that such instrument,
certificate or document is in accordance with the terms of this Agreement as
then in effect and has been consented to by all Partners whose consent is
required hereunder.
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EXECUTION
The parties executed this Agreement whereupon it entered into full force
and effect in accordance with its terms.
ALLEGANY ENVIRONMENTAL SYSTEMS, INC.
By:
------------------------------------
Title:
LYA ASSOCIATES, INC.
By:
------------------------------------
Title:
▇▇▇▇ ▇▇▇▇▇▇ CORP.
By: /s/ [ILLEGIBLE]
------------------------------------
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Individually, solely
for the purpose of joining in the
representations and warranties set
forth in Article II
FRANCE DECHETS,
solely for the purpose of guaranteeing
Sita's Initial Contribution of capital
as set forth in Section 3.1.2
By: /s/ [ILLEGIBLE]
------------------------------------
Title: General Manager
72
EXECUTION
The parties executed this Agreement whereupon it entered into full force
and effect in accordance with its terms.
ALLEGANY ENVIRONMENTAL SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title:
LYA ASSOCIATES, INC.
By:
------------------------------------
Title:
▇▇▇▇ ▇▇▇▇▇▇ CORP.
By:
------------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Individually, solely
for the purpose of joining in the
representations and warranties set
forth in Article II
FRANCE DECHETS,
solely for the purpose of guaranteeing
Sita's Initial Contribution of capital
as set forth in Section 3.1.2
By:
------------------------------------
Title:
72
EXECUTION
The parties executed this Agreement whereupon it entered into full force
and effect in accordance with its terms.
ALLEGANY ENVIRONMENTAL SYSTEMS, INC.
By:
------------------------------------
Title:
LYA ASSOCIATES, INC.
By: /s/ [ILLEGIBLE]
------------------------------------
Title: Secretary
▇▇▇▇ ▇▇▇▇▇▇ CORP.
By:
------------------------------------
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Individually, solely
for the purpose of joining in the
representations and warranties set
forth in Article II
FRANCE DECHETS,
solely for the purpose of guaranteeing
Sita's Initial Contribution of capital
as set forth in Section 3.1.2
By:
------------------------------------
Title:
72