AMENDMENT NO. 1
TO REGISTRATION RIGHTS AGREEMENT
This Amendment No. 1, dated as of June 3, 1998 (the "Amendment"), to
the Registration Rights Agreement dated as of December 19, 1997 (the
"Agreement"), by and among Casella Waste Systems, Inc., a Delaware corporation
(the "Buyer") and the persons listed on Schedule I hereto (the "Company
Stockholders"), is entered into by said parties.
WHEREAS, the Company Stockholders (other than Maureen Winters) have
received a loan from Goldman, Sachs & Co. ("Goldman, Sachs") and have pledged
the Merger Shares owned by them as collateral therefor (the "Pledge");
WHEREAS, the Buyer has agreed to extend to Goldman, Sachs certain
benefits of the Agreement in the event Goldman, Sachs exercises its rights as
pledgee, and Goldman, Sachs, by its signature below, has agreed to become party
to the Agreement;
WHEREAS, Maureen Winters has collared 39,000 of the Registrable Shares
owned by her, with a maturity date of January 8, 1999 (the "Collar");
WHEREAS, the Company Stockholders have exercised their rights under
Section 2(a) of the Agreement to require the Buyer to effect the registration of
Registrable Shares owned by such Company Stockholders under the Securities Act,
and the Buyer is in the process of seeking to register those shares (the "Demand
Registration") pursuant to a registration statement on Form S-1 (the "Demand
Registration Statement");
WHEREAS, the Buyer and the Company Stockholders desire to amend certain
other provisions of the Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Amendment, the parties hereto agree that certain subsections
of the Agreement shall be amended to read as indicated below.
Capitalized terms used herein which are not otherwise defined shall
have the meanings ascribed to them in the Agreement.
1. Section 3(a) is hereby amended by deleting the reference to "14
days" in the first sentence thereof and inserting "five days" in lieu thereof,
and by deleting the
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reference to "10 days" in the first sentence thereof and inserting "two days" in
lieu thereof.
2. Section 4 of the Agreement is hereby deleted and the following shall
be inserted in lieu thereof:
"4. Registration Procedures. The Buyer shall:
(a) promptly prepare and file the Demand Registration
Statement with the Commission and use its best efforts to cause the Demand
Registration Statement to become and remain effective until the earlier of the
sale of all Registrable Shares covered thereby or December 19, 1998 (the
"Termination Date"), and as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Demand Registration Statement
and the prospectus included in the Demand Registration Statement as may be
necessary to keep the Demand Registration Statement effective until the
Termination Date; provided, that (i) upon the filing by the Buyer of a
registration statement on Form S-1 or S-3 for the sale of shares of its Common
Stock (the "Follow-on Offering"), the Buyer may terminate or withdraw the Demand
Registration Statement, and (ii) if at any other time the Buyer is engaged in
any other activity which, in the good faith determination of the Buyer's Board
of Directors would be required to be disclosed in the Demand Registration
Statement and such disclosure would, in the good faith determination of the
Buyer's Board of Directors interfere with the ability of the Buyer to consummate
such transaction, then the Buyer shall have the right, by written notice to the
Company Stockholders and Goldman, Sachs, to withdraw the Demand Registration
Statement (if it is not yet effective) and/or to require that the Company
Stockholders and any pledgees of Registrable Shares cease making offers of
Registrable Shares and to return all prospectuses to the Buyer. Following such
time as (i) the Buyer and Goldman, Sachs mutually agree that the Follow-on
Offering has been abandoned, and/or (ii) the Buyer discloses such other
transaction or such other transaction is abandoned by the Buyer, the Buyer shall
promptly use its best efforts to take such actions as may be necessary to
re-register the Registrable Shares (if the Demand Registration Statement has
been terminated) and provide the Company Stockholders and Goldman, Sachs (if
Goldman, Sachs is then still the pledgee of Registrable Shares) with revised
prospectuses, and following receipt of the revised prospectuses, the Company
Stockholders and Goldman, Sachs shall be free to resume making offers of the
Registrable Shares. For purposes hereof, any such registration statement which
is filed pursuant to this paragraph to re-register the Registrable Shares shall
be deemed to be a "Demand Registration Statement".
(b) as expeditiously as possible furnish to each selling
Company Stockholder and to Goldman, Sachs (if Goldman, Sachs is then still the
pledgee of Registrable Shares) such reasonable numbers of copies of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the selling
Company Stockholder or Goldman, Sachs may
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reasonably request in order to facilitate the public sale or other disposition
of the Registrable Shares owned by the selling Company Stockholder;
(c) as expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Demand Registration
Statement under the securities or Blue Sky laws of such states as the selling
Company Stockholders or Goldman, Sachs shall reasonably request, and do any and
all other acts and things that may be necessary or desirable to enable the
selling Company Stockholders and Goldman, Sachs to consummate the public sale or
other disposition in such states of the Registrable Shares owned by the selling
Company Stockholder; provided, however, that the Buyer shall not be required in
connection with this paragraph (c) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction;
(d) in connection with an underwritten public offering, to
furnish to each selling Company Stockholder and Goldman, Sachs a signed
counterpart, addressed to all such selling Company Stockholders and Goldman,
Sachs, of an opinion of counsel for the Buyer experienced in securities law
matters covering substantially the same matters with respect to the registration
statement and the prospectus as are customarily covered in opinions of issuer's
counsel delivered to underwriters in underwritten public offerings of
securities; and
(e) use its best efforts to comply with all applicable rules
and regulations of the Commission and make available to its security holders, as
soon as reasonably practicable, an earnings statement of the Buyer (in form
complying with the provisions of Rule 158 under the Securities Act) covering the
period of at least 12 months beginning with the first month following the
effective date of the registration statement.
If the Buyer has delivered preliminary or final prospectuses to the
selling Company Stockholders and/or Goldman, Sachs and after having done so the
prospectus is required to be amended to comply with the requirements of the
Securities Act, the Buyer shall promptly notify the selling Company Stockholders
and Goldman, Sachs, as the case may be, and, if requested, the selling Company
Stockholders and Goldman, Sachs shall immediately cease making offers of
Registrable Shares and return all prospectuses to the Buyer. Subject to the
provisions of Section 4(a) above, the Buyer shall promptly provide the selling
Company Stockholders and Goldman, Sachs with revised prospectuses and, following
receipt of the revised prospectuses, the selling Company Stockholders and
Goldman, Sachs shall be free to resume making offers of the Registrable Shares."
3. Section 5 of the Agreement is hereby deleted and the following shall
be inserted in lieu thereof:
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"5. Allocation of Expenses. Goldman, Sachs will pay all Registration
Expenses of the Demand Registration and any other registrations under Section 2
or registrations required by Section 4(a) above (including any amendments or
supplements to the Demand Registration Statement) and the Buyer will pay all
Registration Expenses of all registrations under Section 3. For purposes of this
Section 5, the term "Registration Expenses" shall mean all expenses incurred by
the Buyer in complying with this Agreement, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the Buyer and of the Buyer's accountants and the fees
and expenses of one counsel selected by the selling Company Stockholders to
represent the selling Company Stockholders, state Blue Sky fees and expenses,
but excluding underwriting discounts, selling commissions and the fees and
expenses of selling Company Stockholders' own counsel (other than the counsel
selected to represent all selling Company Stockholders)."
4. Section 6 of the Agreement is hereby deleted and the following shall
be inserted in lieu thereof:
"6. (a)(i) The Buyer agrees to indemnify and hold harmless Goldman,
Sachs, each of the selling Company Stockholders and each other person, if any,
who controls Goldman, Sachs or such selling Company Stockholder (collectively,
the "Sellers' Indemnified Parties") against any losses, claims, damages or
liabilities, joint or several, to which any of the Sellers' Indemnified Parties
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement under which Registrable
Shares are registered under the Securities Act or any preliminary prospectus
included in such Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Securities
Act (each, a "Preliminary Prospectus"), the form of final prospectus relating to
the resale of the Registrable Shares by the Company Stockholders (the
"Prospectus") in the form first filed pursuant to Rule 424(b) under the
Securities Act, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each of the Sellers' Indemnified Parties for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that (i) the Buyer shall not be liable to the
Company Stockholders or any controlling person thereof in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, Registration Statement or
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Buyer by the Company
Stockholders expressly for use therein, and (ii) the Buyer
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shall not be liable to Goldman, Sachs or any controlling person thereof in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, Registration
Statement or Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Buyer by Goldman, Sachs
expressly for use therein. Notwithstanding the foregoing, the Buyer shall have
no obligations to Goldman, Sachs under this paragraph with respect to any
Registration Statement, Preliminary Prospectus or Prospectus used in connection
with an underwritten offering of the shares of the Buyer for which there is an
underwriting agreement containing indemnification provisions for the benefit of
Goldman, Sachs.
(ii) Each of the Company Stockholders, severally and not jointly, will
indemnify and hold harmless the Buyer and Goldman, Sachs and their respective
officers and directors and each other person, if any, who controls the Buyer or
Goldman, Sachs against any losses, claims, damages or liabilities, joint or
several, to which any of such persons may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, Registration Statement or Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, Registration
Statement or Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Buyer by such Company
Stockholder expressly for use therein; and will reimburse each such person for
any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such action or claim as such expenses are
incurred. The obligations of each Company Stockholder under this subparagraph
(a)(ii) shall be limited to an amount equal to the proceeds to each Company
Stockholder of Registrable Shares sold in connection with such registration;
(b) Goldman, Sachs will indemnify and hold harmless the Buyer and its
officers and directors and each selling Company Stockholder and each other
person, if any, who controls the Buyer or such selling Company Stockholder
against any losses, claims, damages or liabilities, joint or several, to which
any such person may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
Registration Statement or Prospectus, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements
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therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, Registration Statement or
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Buyer by Goldman, Sachs
expressly for use therein; and will reimburse each such person for any legal or
other expenses reasonably incurred by such person in connection with
investigating or defending any such action or claim as such expenses are
incurred;
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may otherwise have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party; and
(d) If the indemnification provided for herein is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein for any reason, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportions as is appropriate to reflect not only (i)
the relative benefits received from the sale of the Registrable Shares by the
Buyer and the Company Stockholders (it being understood that any sale of the
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Registrable Shares by or for Goldman, Sachs as pledgee of such shares is to
repay loans to the Company Stockholders and is therefore for their benefit) but
also (ii) the relative fault of the Buyer, the Company Stockholders and Goldman,
Sachs in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Buyer, the Company
Stockholders or Goldman, Sachs and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Buyer, the Company Stockholders and Goldman, Sachs agree that it
would not be just and equitable if contributions pursuant to this indemnity
agreement were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this paragraph. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Company Stockholders'
obligations in this subsection to contribute are several and not joint and no
Company Stockholder shall be required to contribute any amount in excess of the
proceeds to him, her or it of all Registrable Shares sold by him, her or it
pursuant to such Demand Registration Statement."
5. Section 9 of the Agreement is hereby amended by designating the
paragraph appearing therein as paragraph "(a)" and by inserting the following
paragraph after said paragraph:
"(b) Without limiting the generality of the foregoing, and in
consideration of Buyer's promises set forth herein and for other good and
valuable consideration, each of the Company Stockholders agrees that (other than
the Pledge by the Company Stockholders other than Maureen Winters and the Collar
by Maureen Winters) he, she or it will not offer, sell, contract to sell, grant
any option to sell, transfer or otherwise dispose of, directly or indirectly, or
otherwise seek to reduce or limit his, her or its economic risk of ownership in,
any shares of Common Stock of the Buyer, or securities convertible into or
exchangeable for shares of Common Stock of the Buyer, until August 31, 1998,
otherwise than (i) as a bona fide gift or a transfer effected solely for estate
planning purposes, provided the donee or transferee agrees in writing to be
bound by the terms hereof, (ii) pursuant to an effective registration statement
filed by the Buyer covering such shares (other than the Demand Registration
Statement), or (iii) with the prior written consent of the Buyer. Goldman, Sachs
& Co. agrees to be bound by the terms of the foregoing with respect to the
shares of Common Stock of the Buyer
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pledged to it by any of the Company Stockholders except in connection with the
exercise of its rights as pledgee of such shares following a bona fide margin
call on such shares. Each of the Company Stockholders and Goldman, Sachs agrees
and consents to the entry of stop transfer instructions with the Buyer's
transfer agent against the transfer of shares of Common Stock held by such
persons, except in accordance with the terms of this paragraph."
6. Section 10(a) of the Agreement is hereby amended by adding the
following paragraph immediately following the provisions for notice to the
Buyer:
"If to Goldman, Sachs, at 85 Broad Street, New York, New York 10004,
Attention: Special Execution;"
7. Section 10(c) of the Agreement is hereby deleted and the following
shall be inserted in lieu thereof:
"(c) Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Buyer and the holders of at least 50% of the Registrable
Shares; provided, however, that any such amendment or waiver shall also require
the written approval of Goldman, Sachs to the extent the same would materially
and adversely affect the rights of Goldman, Sachs herein; and provided further,
however, that this Agreement may be amended with the consent of the holders of
less than all Registrable Shares only in a manner which affects all Registrable
Shares in the same fashion. No waivers of or exceptions to any term, condition
or provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision."
8. The Buyer hereby agrees that the Winters Family Partnership, as
transferee of certain of the Registrable Shares, shall have the benefit of the
Agreement, subject to the execution and delivery by the Winters Family
Partnership of a counterpart of this Amendment. By its signature below, the
Winters Family Partnership agrees to be bound by the Agreement, as amended
hereby, and is hereby deemed included within the definition of "Company
Stockholders".
9. In all other respects, the Agreement shall remain in full force and
effect.
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Executed as of the date first written above.
BUYER:
CASELLA WASTE SYSTEMS, INC.
By:
---------------------------------
Title:
------------------------------
COMPANY STOCKHOLDERS:
-------------------------------------
Joseph M. Winters
-------------------------------------
Andrew B. Winters
-------------------------------------
Brigid Winters
-------------------------------------
Sean Winters
-------------------------------------
Maureen Winters
WINTERS FAMILY PARTNERSHIP
By:
----------------------------------
General Partner
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GOLDMAN, SACHS & CO.
By:
---------------------------------
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Schedule I
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List of Company Stockholders
Joseph M. Winters
Andrew B. Winters
Brigid Winters
Sean Winters
Maureen Winters
Winters Family Partnership
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