Exhibit 99.4
COMPOST STOCK PLEDGE AGREEMENT
(MIAMI COMMON STOCK)
Compost Stock Pledge Agreement (Miami Common Stock) Pursuant to CCF Agreement
October 30, 1998
THIS COMPOST STOCK PLEDGE AGREEMENT ("Agreement") is made, executed and
consummated effectively this 30th day of October, 1998 ("Effective Date"), by
and among COMPOST AMERICA HOLDING COMPANY, INC. ("Compost") and ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ("▇▇▇▇▇▇") (Compost and Mestre are sometimes collectively referred to in
this Agreement as the "Pledgor(s)"), and, LIONHART GLOBAL APPRECIATION FUND,
LTD. ("Lionhart"), LIONHART INVESTMENTS, LTD. ("LHI") and GLOBAL EARTHFUND
PARTNERS, L.L.C. ("GEP") (Lionhart, LHI and GEP are sometimes collectively
referred to in this Agreement as the "Pledgee(s)").
Recitals:
1. Compost is a New Jersey corporation. The principal office of Compost
is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. Mestre is a
resident and domicile of the State of Florida.
2. Miami Recycling and Composting Co., Inc. (Miami"), is a Delaware
corporation. The principal office of Miami is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. Bedminster Seacor Services Miami Corporation
("Bedminster") is a Florida corporation. The principal office of Bedminster is
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. Compost is the direct
parent of Miami, owns and controls 80.1% of all issued and outstanding capital
stock of Miami, and controls Miami. Miami is the direct parent of Bedminster,
Bedminster is a direct wholly-owned subsidiary of Miami, and Compost controls
Bedminster (which is an indirect controlled subsidiary of Compost).
3. Compost owns and controls 80.1% of all issued and outstanding
capital stock of Miami, and Mestre owns and controls 19.9% of all issued and
outstanding capital stock of Miami. Compost and Mestre own and control
collectively all of the issued and outstanding capital stock of Miami. Both
Compost and Mestre expect to benefit financially from the extension of the
Credit, by the Pledgees to Compost, Miami and Bedminster, as otherwise
contemplated under the CCF Agreement, as defined in Recital Paragraph 7 of this
Agreement.
4. Lionhart is a British Virgin Islands international business company.
The principal office of Lionhart, in the British Virgin Islands, is located at
c/o Citco B.V.I. Limited, Post Office Box 662, Road Town, Tortola, British
Virgin Islands.
5. LHI is a United Kingdom limited liability company. The principal
office of LHI, in the United Kingdom, is located at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ 4 RH, England. As of the Effective Date of this
Agreement, LHI is engaged by Lionhart as its investment advisor.
6. GEP is an Indiana limited liability company. The principal office of
GEP in the United States is c/o ▇▇▇▇ ▇▇▇▇▇▇ Drics, Esq., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. As of the Effective Date of this
Mortgage, Lionhart is the direct parent of GEP, and GEP is a direct wholly-owned
subsidiary of Lionhart.
7. On and effective as of October 30, 1998, Compost, Miami, Bedminster,
Lionhart, LHI and GEP are executing, consummating and delivering, or will or are
about to execute, consummate and deliver, an agreement, entitled "Credit,
Capitalization and Financing Agreement" ("CCF Agreement"), which is hereby
incorporated by reference. Except as otherwise defined separately in this
Agreement, and/or except as otherwise indicated by the context in this
Agreement, any terms that are capitalized in this Agreement shall have the same
definition and meaning as is ascribed to such terms in the CCF Agreement (and/or
in any Credit Document(s) or Supplemental Definitive Document(s) (as those terms
are defined under the CCF Agreement)). This Agreement is the same instrument,
agreement and document that is referred to, and as is otherwise defined as, the
Compost Stock Pledge Agreement (Miami Common Stock), under Section 1.1.34 of the
CCF Agreement.
8. Pursuant to the terms and subject to the conditions set forth in the
CCF Agreement, the Credit Documents and the Definitive Supplemental Documents,
Compost, Miami and/or Bedminster have the affirmative duty and obligation, inter
alia, to and for the benefit of Lionhart, LHI and/or GEP, 1) to pay and
discharge timely punctually, completely and fully certain Indebtedness (as that
term is defined under Section 18.01.01 of the CCF Agreement) and 2) to perform
and discharge timely, punctually, completely and fully certain Obligations (as
that term is defined under Section 18.01.02 of the CCF Agreement).
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For purposes of this Agreement, the terms "Indebtedness" and "Obligations" shall
have the same meanings and definitions as ascribed respectively to such terms
under Section 18.01.01 and Section 18.01.02 of the CCF Agreement.
8. Compost and Mestre, 1) for and in consideration of (i) the delivery
by GEP to Compost, Miami and Bedminster of the Credit (as defined under Section
2.1 of the CCF Agreement) and (ii) the execution, delivery or consummation of
the agreements, promises, covenants and other undertakings by Lionhart, LHI
and/or GEP as otherwise provided under the CCF Agreement, the Credit Documents
and/or the Supplemental Definitive Documents ("Consideration"), and 2) as an
inducement to Lionhart, LHI and GEP to enter into, agree, execute and deliver,
and otherwise consummate the transactions contemplated under, the CCF Agreement,
the Credit Documents and the Supplemental Definitive Documents, and, 3) to
additionally secure (to and for the benefit of Lionhart, LHI and GEP) the timely
and complete payment of the Indebtedness and the performance and discharge of
the Obligations, by and on the part of Compost, Miami and Bedminster, under and
pursuant the CCF Agreement, the Credit Documents and/or the Definitive
Supplemental Documents, have agreed to execute or deliver (at the Term Loan
Closing on the Closing Date), or cause to be executed and delivered (on the Term
Loan Closing on the Closing Date), to and for the benefit of Lionhart, LHI and
GEP, this Agreement, without the delivery of which Lionhart, LHI and GEP would
not exchange, execute or otherwise deliver the Consideration to or for the
benefit of Compost, Miami and/or Bedminster.
NOW, THEREFORE, for good and valuable consideration, the receipt and
legal adequacy of which are hereby acknowledged, and as part of the
consideration of Compost and as the consideration of Mestre for the
Consideration of Lionhart, LHI and GEP, as otherwise provided under the CCF
Agreement, the Credit Documents and the Definitive Supplemental Documents,
Compost and Mestre hereby promise, covenant, and represent and warrant to
Lionhart, LHI and GEP, and hereby agree with Lionhart, LHI and GEP, as follows:
Agreement:
Section 1. Pledge/Security Interest/Collateral. In consideration of and
as an inducement for the Consideration specified in this Agreement, and to
secure the timely, punctual, complete and full payment and discharge of the
Indebtedness and the timely, punctual, complete and full performance and
discharge of the Obligations, by and on the part of Compost, Miami and
Bedminster, under and pursuant to this Agreement, the CCF Agreement, the Credit
Documents and the Definitive Supplemental Documents:
1.01. Pledge. Compost and Mestre (hereinafter and collectively
referred to sometimes in this Agreement as the "▇▇▇▇▇▇▇(s)") hereby
grant, pledge, bargain, release, convey, warrant, sell, assign,
transfer, set over, confirm and deliver unto Lionhart, LHI and GEP, and
all of their respective successors and assigns, a security interest in,
and hereby deliver to Lionhart, LHI and GEP to perfect such pledge and
security interest, (i) 810 shares of Miami Common Stock that are
otherwise represented by Certificate No. 1, and, (ii) 190 shares of
Miami Common Stock that are otherwise represented by Certificate No. 2
(both such Certificates of which indicate thereon that the Agent, for
and on behalf of Lionhart, LHI and GEP, is the registered owner
thereof), and all amendments, additions, adjustments, modifications,
substitutions, replacements, extensions and additions thereof,
including, without limitation, all cash and non-cash proceeds thereof,
and all such additional shares or securities, or other rights, warrants
or options, as provided or otherwise contemplated under Section 6.02
and/or Section 6.04 of this Agreement ("Pledged Miami Shares" and/or
"Collateral"), which together constitute and represent, and shall
hereafter constitute all of the authorized, issued and outstanding
capital stock of Miami until such time that all Indebtedness is paid
and discharged in full and all Obligations are performed and discharged
in full. The Pledged Miami Shares, that are otherwise pledged by
Compost under this Agreement, are referred to sometimes in this
Agreement as the "Pledged Compost-Miami Shares," and the Pledged Miami
Shares that are otherwise pledged by Mestre under this Agreement, are
referred to sometimes in this Agreement as the "Pledged Mestre-Miami
Shares."
1.02. Transfer. The Pledgors shall immediately transfer to and
maintain in the name of the Agent (for and on behalf of Lionhart, LHI
and GEP under this Agreement), and Compost (by itself or through the
auspices of Miami) shall immediately transfer to and shall maintain in
the name of Agent (for and on behalf of Lionhart, LHI and GEP under
this Agreement) in all appropriate books, records and ledgers of Miami,
the Pledged Miami Shares, pursuant to which the Agent shall serve as
custodian and agent, for and on behalf of Lionhart, LHI and GEP, of
such Pledged Miami Shares, pursuant to the terms and subject to the
conditions of this Agreement.
1.03. Certificate/Legend. Prior to delivery of the Pledged Miami
Shares to the Agent, for and on behalf of
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Lionhart, LHI and GEP, as provided under Section 1.01 of this
Agreement, Compost (by itself or through the auspices of Miami), for
and on behalf of the Pledgors, shall place or cause to be placed on
each certificate, that represents any one (1) or more of the
above-referenced Pledged Miami Shares (including the above-referenced
Certificate No. 1 and Certificate No. 2), and each such certificate
shall bear, the following legend, as appropriate:
"The securities represented hereby are pledged by Compost America
Holding Company, Inc. [▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇], to Lionhart Global
Investments, Ltd. ("Lionhart"), Lionhart Investments, Ltd.
("LHI"), and Global EarthFund Partners, Ltd. ("GEP"), pursuant to
the terms and subject to the conditions of an agreement, entitled
"Compost Stock Pledge Agreement (Miami Common Stock)," by and
among Compost America Holding Company, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ and GEP, that is dated on and as of October 30,
1998, and pursuant to which GEP (for and on behalf of Lionhart,
LHI and GEP) is and shall remain as the registered holder of these
securities, as security and collateral for the payment in full of
certain Indebtedness and the performance in full of certain
Obligations as those terms are defined under such Compost Stock
Pledge Agreement (Miami Common Stock), until such Indebtedness is
paid in full and such Obligations are performed in full."
Section 2. Inter-Pledgee Agent. The Pledgees, pursuant to the terms and
subject to the conditions set forth in an agreement, entitled "Inter-Creditor
Agreement," that is dated and was executed by and among the Pledgees, on or
about October 30, 1998, and that is intended to be recorded promptly hereafter
in the Official Records Book or other Public Records of Miami-Dade County,
Florida, and any other appropriate public records as may determined by the
Pledgees, each duly appointed GEP, as the their exclusive agent and power of
attorney ("Agent"), which power is coupled with an interest, for all Pledgees,
with respect to this Agreement, the CCF Agreement, the Credit Agreement and the
Definitive Supplemental Documents, and the exercise of the rights and remedies
of each Pledgee with respect thereto. Pursuant to and as provided under the
Inter-Creditor Agreement, 1) GEP, as Agent for all Pledgees, is authorized and
empowered, in their respective name, place and stead, with full power of
substitution, to exercise and perform from time to time, and without joinder of
or by any Pledgee, any act, power, duty, right or obligation whatsoever that any
Pledgee or the Pledgees (under this Agreement, the CCF Agreement, the Credit
Documents and/or the Definitive Supplemental Documents) may now or hereafter
exercise or perform, and to deal in all respects with Compost, with respect to
the transactions evidenced under this Agreement, the CCF Agreement, the Credit
Documents and/or the Definitive Supplemental Documents; and, 2) Miami and Mestre
and any third party dealing with the Agent, under this Agreement, the CCF
Agreement, the Credit Documents and/or the Definitive Supplemental Documents,
shall have the right to rely upon the power and authority of the Agent to bind
each Pledgee with respect to the exercise of remedies or the giving of notices
or consents under and pursuant to this Agreement, the CCF Agreement, the Credit
Documents and/or the Definitive Supplemental Documents.
Section 3. Agreement Purpose and Security. This Agreement is executed
and delivered by the Pledgors, to Lionhart, LHI and GEP, pursuant to the terms
and subject to the conditions of the CCF Agreement. The pledge of and security
interest in and to the Pledged Miami Shares, is hereby given by the Pledgors, to
Lionhart, LHI and GEP, to secure the timely, punctual, complete and full payment
and discharge of the Indebtedness and the timely, punctual, complete and full
performance and discharge of the Obligations, by and on the part of Compost,
Miami and Bedminster, under and pursuant to this Agreement, the CCF Agreement,
the Credit Documents and the Definitive Supplemental Documents, including,
without limitation, all such Indebtedness and Obligations that relate to or
arise from the Mortgage Note, and any and all modifications, amendments,
restatements, extensions, renewals, supplements and replacements thereof, as any
of the foregoing may be amended and/or restated from time to time and at any
time, and all reasonable costs and expenses incurred or paid or incurred by
Lionhart, LHI and/or GEP to preserve and protect the Pledged Miami Shares and to
enforce the security interests and pledge of Lionhart, LHI and/or GEP therein,
all of which Compost promises and covenants to pay and discharge all such
Indebtedness when due and to perform and discharge all Obligations when due or
required to be performed, without relief from valuation and appraisement laws
and with reasonable attorneys' fees. The pledge and security interest in the
Pledged Miami Shares shall remain, and shall not be released, unless and until
all Indebtedness is paid in full and all Obligations are performed and
discharged in full. Upon the payment in full of the Indebtedness and the
performance in full of all of the Obligations, whereupon the Pledgees shall have
the affirmative duty, in a commercial reasonable and prompt manner, to return
the Pledged Miami Shares to Compost and Mestre and, upon any reasonable request
from time to time by Compost and/or Mestre, to execute any documents,
instruments
Page 3 of 10 Pages
or certificates necessary to terminate the security interest and pledge
evidenced by this Agreement.
Section 4. Release/Waiver. The Pledgors hereby and expressly release
and waive each and every of the following: 1) all rights, privileges and/or
claims under and/or by virtue of any homestead, stay, appraisement or exemption
laws that may now exist or hereinafter be enacted; 2) all rights, privileges
and/or claims to acquire or retain possession, custody or control of the Pledged
Miami Shares, or any part thereof, after any Event of Default under the CCF
Agreement, the Credit Documents (including this Agreement) and any Definitive
Supplemental Documents, as otherwise provided under Section 9 of this Agreement;
and, 3) all rights of redemption from the sale of the Pledged Miami Shares, or
any part thereof, under any order or decree of foreclosure or public or private
sale of and with respect to the Pledged Miami Shares, or any part thereof.
Section 5. Recital Paragraphs/Incorporation. The Recital Paragraphs
that are set forth on Pages 1-2 of this Agreement, are hereby made part of this
Agreement, as if set forth in their complete terms under this Section 5.
Section 6. Voting Rights, Dividends, Warrants and Adjustments. The
Pledgors hereby represent and warrant to Lionhart, LHI and GEP, and hereby
agree, promise and covenant, as follows:
6.01. Cash Dividends. Until all Indebtedness is paid and
discharged in full and all Obligations are performed and discharged in
full, all cash dividends and other pecuniary amounts received by the
Agent, as a result of its record ownership of and that are otherwise
attributable to the Pledged Miami Shares, shall be applied by the Agent
(for and on behalf of Lionhart, LHI and GEP), net of any taxes
whatsoever assessed to or against the Agent (and/or Lionhart, LHI
and/or GEP) for and with respect to any such cash dividends, to the
payment of Principal and Interest and other charges under the Mortgage
Note, pursuant to Section 2 thereof.
6.02. Adjustments. If, and in the event, during the period that
any Indebtedness is not paid and discharged in full or that any
Obligation is not performed and discharged in full, any share dividend,
reclassification, readjustment, or other change is declared or made in
the capital structure of Miami, and that relate to or arise from or
otherwise affect the Pledged Miami Shares, all new, substituted and
additional shares or other securities that are then or thereby issued
by reason of any such share dividend, reclassification, readjustment or
other such change, shall continue to be held by the Agent (for and on
behalf of Lionhart, LHI and GEP), as additional pledged Collateral and
security (and as part of the Pledged Miami Shares), pursuant to the
terms and subject to the conditions of this Agreement (in the same
manner as if such shares or securities were originally pledged and
delivered under this Agreement upon execution, consummation and
delivery hereof).
6.03. Voting Rights. Until all Indebtedness is paid and discharged
in full and all Obligations are performed and discharged in full, the
Agent (for and on behalf of Lionhart, LHI and GEP), at its sole option
and election, shall be entitled 1) to vote the Pledged Miami Shares, on
all questions, issues, positions, matters and/or transactions that are
otherwise submitted to the shareholders of Miami for consideration
thereof and/or a vote thereupon, or otherwise, or 2) to execute and
grant one (1) or more general or limited proxies to Compost in the
amount of its respective Pledged Miami Shares, that are pledged under
this Agreement, in and pursuant to any such proxy or proxy form as is
reasonable and usual and customary, as determined by the Agent, to vote
the Pledged Miami Shares on all questions, issues, positions, matters
and/or transactions that are otherwise submitted to the shareholders of
Miami for consideration thereof and/or a vote thereupon, or otherwise,
or 3) to execute and grant one (1) or more general or limited proxies
to Mestre in the amount of their respective Pledged Mestre Shares, that
are pledged under this Agreement, in and pursuant to any such proxy or
proxy form as is reasonable and usual and customary, as determined by
Lionhart, to vote the Pledged Mestre Shares, on all questions, issues,
positions, matters and/or transactions that are otherwise submitted to
the shareholders of Miami for consideration thereof and/or a vote
thereupon, or otherwise,
6.04. Warrants/Options/Rights. If, and in the event, during the
period that any Indebtedness is not paid and discharged in full or that
any Obligation is not performed and discharged in full, any
subscription warrants or any other rights, warrants or options shall be
issued in connection with the Pledged Miami Shares, then any and all
such rights, warrants and options shall be held by the Agent ( for and
on behalf of Lionhart, LHI and GEP) as additional pledged Collateral
and security and as part of the Pledged Miami Shares, and if exercised
by Compost or Mestre (and/or Lionhart, LHI and/or GEP), all such new
shares or other securities so acquired by and that are otherwise
attributable to the exercise of any such rights, warrants or options
shall be delivered to and shall be held by the Agent (for and on behalf
of Lionhart, LHI and GEP) as additional pledged Collateral and security
and shall be deemed as part of the Pledged Miami Shares, and shall be
deemed as immediately assigned, pledged, transferred and delivered to
the Agent
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(for and on behalf of Lionhart, LHI and GEP), in the same manner as is
otherwise provided and contemplated under Section 1 of this Agreement,
all of which shall thereafter be held by the Agent (for and on behalf
of Lionhart, LHI and GEP) as security and as part of the Pledged Miami
Shares pursuant to the terms and subject to the conditions set forth
under this Agreement.
Section 7. General Representations and Warranties. Each ▇▇▇▇▇▇▇ hereby
represents and warrants to Lionhart, LHI and GEP, and hereby promises and
covenants, as follows:
7.01. Collateral.
(a) Title. Compost owns and will maintain full and absolute title
in and to its Pledged Compost-Miami Shares, free of all security
interests, pledges, liens and encumbrances other than the pledge and
security interest herein granted to Lionhart, LHI and GEP under this
Agreement, and has good and legal right to subject, pledge and
otherwise encumber its Pledged Compost-Miami Shares to the pledge and
security interest granted by and under this Agreement. Mestre owns and
will maintain full and absolute title in and to his Pledged
Mestre-Miami Shares, free of all security interests, pledges, liens and
encumbrances other than the pledge and security interest herein granted
to Lionhart, LHI and GEP under this Agreement, and has good and legal
right to subject, pledge and otherwise encumber his Pledged
Mestre-Miami Shares to the pledge and security interest granted by and
under this Agreement. Compost shall defend the Pledged Miami Shares,
that are pledged under this Agreement, against all adverse claims, and
Mestre shall defend his Pledged Mestre-Miami Shares, that he has
pledged under this Agreement, against all adverse claims. The Pledged
Miami Shares, in whole or in part, are not and will not be the subject
of any financing statement (other than any filed by Lionhart, LHI
and/or GEP) on file in any public office, or pledged to or subjected to
the interest of any Person except as provided specifically under this
Agreement.
(b) Taxes and Assessments. Compost shall promptly pay, as they
become due and payable, all taxes and assessments imposed upon the
Pledged Miami Shares, if any, that either Compost or Mestre pledged
under this Agreement.
(c) Protection of Pledged Miami Shares. Compost shall not, without
the prior and advance written consent and approval of and by Lionhart,
LHI and GEP (pursuant to which any such consent and approval may be
granted or withheld in the sole and exclusive discretion of Lionhart,
LHI and GEP), sell, assign, transfer, encumber, hypothecate, pledge,
mortgage, or otherwise dispose of any of the Pledged Compost-Miami
Shares, that it has pledged under this Agreement, or any of its right,
title or interest therein or in any part thereof, and shall not
otherwise do or permit anything to be done or occur that may impair any
such Pledged Miami Shares as security hereunder. Mestre shall not,
without the prior and advance written consent and approval of and by
Lionhart, LHI and GEP (pursuant to which any such consent and approval
may be granted or withheld in the sole and exclusive discretion of
Lionhart, LHI and GEP), sell, assign, transfer, encumber, hypothecate,
pledge, mortgage, or otherwise dispose of any of the Pledged
Mestre-Miami Shares, that he has pledged under this Agreement, or any
of his right, title or interest therein or in any part thereof, and
shall not otherwise do or permit anything to be done or occur that may
impair any such Pledged Mestre-Miami Shares as security hereunder.
7.02. Financing Statements, Certificates, Etc. (i) Compost shall
do such acts as Lionhart, LHI and/or GEP may deem necessary or appropriate to
establish and maintain in Lionhart, LHI and/or GEP a valid security interest and
pledge in the Pledged Miami Shares (that either Compost or Mestre has otherwise
pledged under this Agreement), free of all other liens, pledges and claims not
permitted under this Agreement, to secure full and prompt payment and discharge
of the Indebtedness and the full and prompt performance and discharge of the
Obligations. Compost authorizes Lionhart, LHI and/or GEP, at the sole expense of
Compost, to sign and file, without the signature of Compost, such financing and
continuation statements, amendments and supplements thereto, and other documents
which Lionhart, LHI and/or GEP may from time to time deem necessary to perfect,
preserve and protect their respective pledges and security interests in such
Pledged Miami Shares (including the Pledged Compost-Miami Shares). Compost shall
from time to time, upon any request by Lionhart, LHI and/or GEP, deliver to
Lionhart, LHI and/or GEP, certified schedules, in such form as may be specified
by Lionhart, LHI and/or GEP, identifying the Pledged Miami Shares, or such part
thereof as may be specified by Lionhart, LHI and/or GEP, together with such
supporting documents and information as Lionhart, LHI and/or GEP reasonably may
request. (ii) Mestre shall do such acts as Lionhart, LHI and/or GEP may deem
necessary or appropriate to establish and maintain in Lionhart, LHI
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and/or GEP a valid pledge and security interest in the Pledged Mestre-Miami
Shares (that he has otherwise pledged under this Agreement), free of all other
liens, pledges and claims not permitted under this Agreement, to secure full and
prompt payment and discharge of the Indebtedness and the full and prompt
performance and discharge of the Obligations. Mestre authorizes Lionhart, LHI
and/or GEP, at the sole expense of Compost, to sign and file, without the
signature of Mestre, such financing and continuation statements, amendments and
supplements thereto, and other documents which Lionhart, LHI and/or GEP may from
time to time deem necessary to perfect, preserve and protect their respective
pledges and security interests in such Pledged Mestre-Miami Shares. Mestre shall
from time to time, upon any request by Lionhart, LHI and/or GEP, deliver to
Lionhart, LHI and/or GEP, certified schedules, in such form as may be specified
by Lionhart, LHI and/or GEP, identifying the Pledged Mestre-Miami Shares, or
such part thereof as may be specified by Lionhart, LHI and/or GEP, together with
such supporting documents and information as Lionhart, LHI and/or GEP reasonably
may request.
7.03. Taxes, Assessments and Expenses.
(a) Taxes and Assessments. Compost, agrees to pay promptly when
due all taxes, assessments and governmental charges upon or against
Compost, Miami and/or Bedminster, for the property or operations of
Compost, Miami and Bedminster, or otherwise, in each case before the
same become delinquent and before penalties accrue thereon, unless and
to the extent that the same are being contested in good faith by
appropriate proceedings and for which Compost, either directly or
through Miami and/or Bedminster, has established adequate reserves.
(b) Material Occurrences. Compost shall give written notice to the
Agent (for and on behalf of Lionhart, LHI and GEP) of all material
occurrences and events adversely affecting the Pledged Miami Shares
(that either Compost or Mestre has pledged under this Agreement) or the
value, security or amount thereof. Mestre shall give written notice to
Lionhart, LHI and GEP of all material occurrences and events adversely
affecting the Pledged Mestre-Miami Shares (that he has pledged under
this Agreement).
(c) Secured Party Expenses. In the event that Compost fails to pay
taxes, assessments, costs and expenses that Compost or Mestre is
required to pay under this Section 7, or in the event that either
Compost or Mestre fails to keep the Pledged Miami Shares, or any part
thereof, free from other security interests, pledges, liens, or
encumbrances not permitted under the terms of this Agreement, Lionhart,
LHI and/or GEP may make reasonable expenditures for any and all such
purposes. All reasonable costs and expenses of Lionhart, LHI and/or GEP
in retaking, holding, preparing for sale and selling or otherwise
realizing upon any Pledged Miami Shares or enforcing any provisions
hereof in the event of any default by Compost and/or Mestre, including
reasonable attorneys' fees, shall constitute part of the Indebtedness
and Obligations that are otherwise secured under this Agreement by the
Pledged Miami Shares, and Compost and Mestre shall forthwith reimburse
Lionhart, LHI and GEP for any such reasonable payments made or any such
reasonable expenses incurred by Lionhart, LHI and/or GEP.
Section 8. Performance by Secured Party of Debtor's Agreements.
Lionhart, LHI and/or GEP may, but shall have no duty, to perform any agreement,
promise or covenant of Compost and/or Mestre hereunder, which Compost and/or
Mestre shall have failed to perform or discharge, and Compost shall forthwith
reimburse Lionhart, LHI and GEP for any such reasonable payments made or any
such reasonable expenses incurred by Lionhart, LHI and/or GEP, including
reasonable attorneys' fees, and all such reasonable payments, costs and
expenses, including reasonable attorneys' fees, shall constitute part of the
Indebtedness and Obligations that are otherwise secured under this Agreement by
the Pledged Miami Shares.
Section 9. Event of Default. An "Event of Default," under this
Agreement, is and shall be defined as, and shall mean and include, any "Event of
Default" as that term is defined under Section 18.02 (and as otherwise qualified
under Section 18.02.02) of the CCF Agreement, including, without limitation, any
default, breach, violation, failure and/or omission, by or on the part of
Compost, to pay and discharge, on a timely, punctual, complete and full basis,
the Principal and Interest when the Principal and Interest are or become due and
payable under the Mortgage Note.
Section 10. Remedies Upon Default. Upon the occurrence of an Event of
Default (as defined under Section 9 of this Agreement), Lionhart, LHI and GEP
shall have the right, but not the obligation, in their sole discretion and
option, to exercise all rights and remedies that are set forth and described
under Section 18.04 of the CCF Agreement, and to exercise any one (1) or all of
the following remedies, in addition to any other rights or remedies that
Lionhart, LHI and/or GEP may be entitled to assert and/or claim, at law or in
equity:
Page 6 of 10 Pages
10.01. Acceleration-Indebtedness. Lionhart, LHI and GEP may, from
time to time and at any time(s), declare the entire unpaid amount or
portion of any, some or all of the Indebtedness (including, without
limitation, the unpaid amount or portion of all Principal and Interest
under the Mortgage Note), immediately due and payable, without further
notice or demand, or presentment, protest, notice of protest or notice
of dishonor (of which Compost and Mestre each hereby expressly waives
any such notice, demand, presentment, protest, notice of protest or
notice of dishonor), whereupon all such Indebtedness, as accelerated
under this Section 10.01, shall become immediately due and payable in
full, and Lionhart, LHI and GEP shall the right immediately to
foreclose upon the lien created by the Mortgage against the Mortgaged
Miami Site (as provided and otherwise contemplated under the Mortgage),
or any part thereof; to enforce and use lawful self-help or foreclose
upon every other security interest in any and all Collateral as
otherwise created or confirmed under this Agreement, or any part
thereof; to enforce, use lawful self-help or foreclose upon every
security interest in any of the pledged Collateral or any other
Collateral under the Security Agreement, the Compost Stock Pledge
Agreement (Compost Common Stock) and/or the Compost Stock Pledge
Agreement (Bedminster Common Stock), or any part thereof; and/or, to
commence or institute any action, suit or other proceeding which
Lionhart, LHI and/or GEP may deem necessary or proper to protect their
respective interests.
10.02. Acceleration-Obligations. Lionhart, LHI and GEP may, from
time to time at any time(s), declare any and all Obligations, that have
not been theretofore performed and discharged, immediately due and
required to be performed and discharged immediately, without further
notice or demand, or presentment, protest, notice of protest or notice
of dishonor (of which Compost and Mestre each hereby expressly waives
any such notice, demand, presentment, protest, notice of protest or
notice of dishonor), whereupon all such Obligations, as accelerated
under this Section 10.02, shall become due and immediately required to
be performed and discharged completely, and Lionhart, LHI and GEP shall
the right immediately to foreclose upon the lien created by the
Mortgage against the Mortgaged Miami Site (as provided and otherwise
contemplated under the Mortgage), or any part thereof; to enforce and
use lawful self-help or foreclose upon every other security interest in
any and all Collateral as otherwise created or confirmed under this
Agreement, or any part thereof; to enforce, use lawful self-help or
foreclose upon every security interest in any of the pledged Collateral
or any other Collateral under the Security Agreement, the Compost Stock
Pledge Agreement (Compost Common Stock) and/or the Compost Stock Pledge
Agreement (Bedminster Common Stock), or any part thereof; and/or, to
commence or institute any action, suit or other proceeding which
Lionhart, LHI and/or GEP may deem necessary or proper to protect their
respective interests.
10.03. Other Recourse and Remedies. Lionhart, LHI and GEP each
shall have all the remedies of a creditor and a secured party under the
New Jersey Uniform Commercial Code and all other applicable law, and as
otherwise provided by applicable law, including but not limited to, the
following:
(1) Possession/Sale. Lionhart, LHI and/or GEP shall have the
right, without notice to Compost and/or Mestre, and without
liability for any diminution in price that may have occurred, sell
all or any amount or part of the Pledged Miami Shares in such a
manner and for such a price as may be determined by Lionhart, LHI
and GEP. Without limiting any rights or remedies that are
otherwise available to Lionhart, LHI and/or GEP, at any bona fide
public sale, Lionhart, LHI and/or GEP shall have the sole right
and authority to bid for and otherwise purchase any amount or part
of the Pledged Miami Shares. If, and in the event, Lionhart, LHI
and/or GEP do sell any such amount or part of the Pledged Miami
Shares at any such sale (public or private), the proceeds derived
from any such sale, after the payment and discharge of expenses
(including, if applicable, reasonable expenses of retaking,
holding, preparing for sale, selling and the like, and reasonable
attorneys' fees that relate to or arise from any such sale), shall
be applied or otherwise credited to the payment of Principal and
Interest and other charges under the Mortgage Note, pursuant to
Section 2 thereof.
(2) Cumulative Remedies. All remedies of Lionhart, LHI and/or
GEP shall be cumulative to the fullest extent provided by law. Any
pursuance by Lionhart, LHI and/or GEP of any single judicial or
other remedies shall not ▇▇▇▇▇ nor bar resort to other remedies
with respect to the Pledged Miami Shares, and pursuit of certain
remedies with respect to all or some of the Pledged Miami Shares
shall not bar other remedies with respect to the Indebtedness, the
Obligations, or other portions of the Pledged Miami Shares, or as
may otherwise be provided under the CCF Agreement, the Credit
Documents (including the Mortgage Note) and/or the Definitive
Supplemental Documents, and/or under any applicable law. Lionhart,
LHI and GEP may exercise its rights to the Pledged Miami Shares,
or any part thereof, without resorting or regard to
Page 7 of 10 Pages
other Pledged Miami Shares or sources of security or reimbursement
for the Indebtedness and/or Obligations (whether under the CCF
Agreement, the Credit Documents the Definitive Supplemental
Documents, or otherwise).
Section 11. Nonwaiver-Expenses, Proceeds of Collateral. No waiver by
Lionhart, LHI and/or GEP of any of its or their respective rights or of an Event
of Default shall be effective unless in writing, and in no event shall it
operate as a waiver of any other of its or their respective rights or any other
Event of Default, nor of the same rights or Event of Default on any future
occasion. Compost and Mestre shall pay to Lionhart, LHI and GEP, on demand by
Lionhart, LHI and/or GEP, any and all reasonable expenses, including reasonable
attorneys' fees, incurred or paid by Lionhart, LHI and/or GEP in protecting or
enforcing its rights upon or under the Indebtedness, the Obligations, the
Pledged Miami Shares or this Agreement.
Section 12. Legal Authority/Compliance/Miscellaneous. Compost hereby
represents and warrants, and hereby promises, agrees and covenants, as follows:
12.01. General Board Authorization. Compost has all necessary
corporate power and authority, pursuant to the approval by and the duly
adopted resolutions of its Board of Directors, and otherwise, to
execute and deliver this Agreement, and to perform their respective
duties and obligations contemplated and as otherwise provided under
this Agreement, including, without limitation, the granting and
pledging to Lionhart, LHI and GEP of a security interest in and to, and
otherwise pledging, the Pledged Compost-Miami Shares.
12.02. No Violations. The execution and delivery of (and the
performance and consummation transactions contemplated under) this
Agreement, will not (i) conflict with or violate the Certificate of
Incorporation or By-Laws of Compost, (ii) conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to Compost
or by which any of its Properties are bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on
any of the Properties or assets of Compost, pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
insurance policy or other instrument or obligation to which is a party,
or by which Compost or its Properties, are bound or affected.
12.03. No Required Governmental Consents. The execution and
delivery of (and the performance and consummation transactions
contemplated under) this Agreement by Compost, does not and will not,
require any consent, approval, authorization or permit from any
Governmental Authority which has not been obtained.
12.04. Authority of Officers. Compost has good right and lawful
authority, through its designated and officers and representatives who
have signed and delivered this Agreement, for and on behalf of Compost,
to execute, deliver and consummate the transactions contemplated under
this Agreement.
12.05. Enforceability. This Agreement is a legal, valid and
binding obligation of and is enforceable against Compost, in accordance
with the terms of this Agreement, and there is no action or proceeding
at law or in equity, or by or before any court or Governmental
Authority now pending or to the knowledge of Compost threatened or
affecting Compost that may materially and adversely affect Compost.
12.06. Execution by Parties. Any person or party executing this
Agreement in a representative capacity, acknowledges, warrants and
represents 1) that he or she is an official representative of the firm
or corporation in whose name he or she is executing this Agreement, 2)
that he or she possesses full and complete authority to bind said firm
or corporation to the full and faithful performance of all conditions,
terms, provisions, covenants, warranties and representations as
contained in this Agreement, and 3) that all other parties are relying
on these representations and warranties as a material inducement to
execute, deliver and otherwise consummate the transactions contemplated
under this Agreement, the CCF Agreement, the Credit Documents and the
Definitive Supplemental Documents.
Section 13. Mestre Authority. Mestre hereby represents and warrants,
and hereby promises, agrees and covenants, that Mestre is emancipated and
competent; Mestre is legally authorized and entitled to execute and deliver this
Agreement, and to pledge the Pledged Mestre-Miami Shares as contemplated under
this Agreement; the execution and delivery of this Agreement and the
consummation of the transactions contemplated under this Agreement, will not
conflict with or violate any
Page 8 of 10 Pages
applicable law, judgment, order or agreement which is applicable to Mestre, and
will not result in a reach of constitute any default under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the properties or assets of
Mestre (pursuant to any undertaking whatsoever of Mestre); and, this Agreement
is a legal, valid and binding obligation of Mestre and is enforceable against
Mestre, in accordance with the terms of this Agreement, and there is not action
or proceeding at law or in equity, or by before any court or governmental agency
or authority, now pending, or to the knowledge of Mestre threatened or affecting
Mestre that may materially and adversely affect Mestre.
Section 14. Applicable Law, Jurisdiction and Venue. Compost and Mestre
hereby represent and warrant, and hereby promise, agree (with Lionhart, LHI and
GEP) and covenant, as follows:
14.01. This Agreement shall be governed by, construed in
accordance with, and shall be enforced under, the laws of the State of
New Jersey, exclusive of its rules relating to conflict of laws.
14.02. Subject to applicable conflict of laws principles, Compost
and Mestre shall accept venue with respect to all claims, actions or
lawsuits that relate to or arise from this Agreement, in any state
court or U.S. Court of competent jurisdiction that sits in Newark, New
Jersey. Compost and Mestre hereby, and irrevocably and unconditionally,
for themselves and their respective Properties, submits to the
jurisdiction of any such New Jersey court or U.S. Court sitting in
Newark, New Jersey, and any appellate court with jurisdiction
thereover, in any action or proceeding relating to or arising from this
Agreement, the CCF Agreement (exclusive of the Mortgage), the Credit
Documents and/or the Definitive Supplemental Documents, or for the
recognition or enforcement of any judgment, and Compost and Mestre each
hereby, and irrevocably and unconditionally, agrees, promises and
covenants that all such claims in respect of any such action or
proceeding shall be heard, determined and adjudicated in by any such
New Jersey court or, to the extent permitted by applicable law, by any
such U.S. Court. Compost and Mestre each hereby agrees, promises and
covenants that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
14.03. Compost and Mestre hereby, and irrevocably and
unconditionally, waives, to the fullest extent under applicable law,
any defense or objection that it may now or hereafter have 1) to the
laying of venue of any suit, action or proceeding relating to or
arising from this Agreement, the CCF Agreement, the Credit Documents
(exclusive of the Mortgage) and/or the Definitive Supplemental
Documents, in any such New Jersey court or U.S. Court sitting in
Newark, New Jersey, or 2) to the personal jurisdiction and/or preferred
and proper venue of any such New Jersey court or any such U.S. Court in
Newark, New Jersey.
Section 15. Captions/Headings. The captions and headings that are set
forth in this Agreement are for the purpose of convenience only and are not
intended to be a part of this Agreement and shall not be deemed to modify,
explain, enlarge or restrict any of the provisions hereof.
Section 16. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any applicable jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provisions in any other
jurisdiction.
Section 17. Binding Obligations. The terms and provisions, and
promises, covenants and undertakings of this Agreement, shall bind and be
enforceable against and upon Compost and Mestre, and its and his respective
successors and assigns and other legal agents and representatives, and shall
inure to the benefit of Lionhart, LHI and GEP, and their respective successors
and assigns, transferees, credit participants, guarantors and endorsees. If, at
any time or times, by assignment or otherwise, Lionhart, LHI and/or GEP
transfers any of the Indebtedness or Obligations, any such transfer shall carry
with it Lionhart's, LHI's and GEP's rights, interests and powers under this
Agreement, including all such rights, interests and powers that relate to or
arise from this Agreement and the Pledged Miami Shares (including the Pledged
Compost-Miami Shares and the Pledged Mestre-Miami Shares). Lionhart, LHI and
GEP, in their sole discretion and at their sole option, shall have the right to
assign this Agreement, as well as the CCF Agreement, the other Credit Documents
and the Definitive Supplemental Documents, to any successor(s) or assign(s) of
Lionhart, LHI and/or GEP.
Section 18. Time of the Essence. Time is hereby declared to be of the
essence of this Agreement, and of every part hereof.
Page 9 of 10 Pages
SECTION 19. JURY WAIVER. COMPOST AND MESTRE EACH DOES HEREBY KNOWINGLY,
VOLUNTARILY, IRREVOCABLE, UNCONDITIONALLY AND INTENTIONALLY WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE CCF AGREEMENT, THE CREDIT
DOCUMENTS AND/OR THE DEFINITIVE SUPPLEMENTAL DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PERSON. THIS IRREVOCABLE WAIVER OF THE RIGHT TO A JURY TRIAL IS A
MATERIAL INDUCEMENT FOR LIONHART, LHI AND/OR GEP TO DELIVER THE CREDIT, AND TO
EXECUTE AND DELIVER, AND OTHERWISE CONSUMMATE THE TRANSACTIONS CONTEMPLATED
UNDER, THE CCF AGREEMENT, THE CREDIT DOCUMENTS AND THE DEFINITIVE SUPPLEMENTAL
DOCUMENTS.
Section 20. Counterparts/Facsimile. This Agreement may be executed in
any number of counterparts, and each by fax, e-mail or other digital or
telephonic transmission, and each of which shall be an original, but all of
which together will constitute one and the same instrument.
Section 21. Notices. Any notices by or to Compost, Miami and/or
Bedminster, or by or to Lionhart, LHI and/or GEP, under this Agreement, shall be
given as provided under Section 20.04 of the CCF Agreement. Any notices to
Mestre shall be mailed to Compost and Miami, c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and/or ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, as provided under Section 20.04 of the CCF Agreement.
Section 22. Written Instrument Requirement. This Agreement cannot be
altered, amended, modified or discharged orally and no executory agreement shall
be effective to modify or discharge this Agreement, in whole or in part, unless
it is in writing and signed by the party against whom enforcement of the
modification, alteration, amendment or discharge is sought.
Section 23. Assignment. This Agreement, and any rights hereunder, may
be assigned by Lionhart, LHI and GEP, or any of their respective participants
and/or successors and assigns, at their sole discretion and option. This
Agreement may not be assigned by Compost or Mestre, and Compost and Mestre shall
not delegate any of its, his or their respective duties under this Agreement, in
whole or in part, without the advance written consent of Lionhart, LHI and GEP
(pursuant to which any such consent may be granted or withheld in the sole
discretion of the Pledgees).
Section 24. Definitions. All capitalized terms that are set forth in
this Agreement, and that are not expressly defined under this Agreement, shall
have the meanings and definitions that are assigned or ascribed to such terms in
the CCF Agreement, the Credit Documents and/or the Definitive Supplemental
Documents.
Section 25. Incorporation of Documents. The CCF Agreement, the Credit
Documents (including the Mortgage, the Mortgage Note, the Compost-Miami
Guaranty, the Security Agreement, the Compost Stock Pledge Agreement (Bedminster
Common Stock) and the Compost Stock Pledge Agreement (Compost Common Stock)) and
the Definitive Supplemental Documents, and all other agreements, instruments or
other documents that are referred to in this Agreement, are hereby incorporated
by reference and form a part of this Agreement.
IN WITNESS WHEREOF, Compost and Mestre, and Lionhart, LHI and GEP, have
executed and delivered this Agreement on and as of this 30th day of October,
1998.
Pledgors: MIAMI RECYCLING AND COMPOSTING CO., INC.
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and Chief Executive Officer
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Page 10 of 10 Pages
Pledgees/Secured Parties: LIONHART GLOBAL APPRECIATION FUND, LTD.
--------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director
LIONHART INVESTMENTS, LTD.
--------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director
GLOBAL EARTHFUND PARTNERS, LTD.
--------------------------------------
▇▇▇ ▇. ▇▇▇▇▇
President
Page 11 of 10 Pages