Document:

Blueprint

 

Exhibit 10.1

Membership Interest Purchase Agreement

(Waste Services Industries, LLC)

This
Membership Interest Purchase Agreement (this “Agreement”) is entered
into as of February 15, 2017 (the “Effective Date”), by and
between Meridian Waste Solutions, Inc., a New York corporation
(“Buyer”), and Waste
Services Industries, LLC, a Delaware limited liability company
(“Seller”). Buyer and
Seller are referred to collectively herein as the
“Parties” and each a
“Party.”

BACKGROUND FACTS

Seller
owns all legal and beneficial right, title and interest in and to
all of the issued and outstanding membership interests of The CFS
Group, LLC, a Virginia limited liability company
(“CFS
Group”), The CFS Group Disposal & Recycling
Services, LLC, a Virginia limited liability company
(“CFS
Disposal”), and RWG5, LLC, a Virginia limited
liability company (“RWG5” and together with
CFS Group and CFS Disposal, the “Companies” and each a
“Company”).

The
Companies, collectively, (i) own fee simple title
to approximately 200+/- acres of real property located at 45
Old Mansion Road, Lunenburg Virginia, 23952, including all
Improvements, structures and fixtures located thereon and
appurtenances thereto, as more particularly described in
Exhibit A attached
hereto (the “Lunenburg Property”),
which is operated as a municipal solid waste landfill on the
Lunenburg Property having not less than 250,000 cubic yards of
useable airspace at Closing (the “Lunenburg Landfill”),
together with all applicable state and local Permits, Governmental
Authorizations, Consents, Approvals, licenses, and any other
permits and approvals necessary or required to own, operate,
develop and construct the Lunenburg Landfill; (ii) own fee simple
title to (A) approximately 83+/- acres of real property located at
390 Industrial Drive, Petersburg, Virginia, 23803, (B)
approximately 2.926+/- acres of real property located at 2053 North
Factory Lane, Petersburg, Virginia 23803, and (C) approximately
8.6471+/- acres of real property located at 350 Industrial Drive,
Petersburg, Virginia 23803, including all Improvements, structures
and fixtures located thereon and appurtenances thereto, as more
particularly described in Exhibit B attached here to (the
“Petersburg
Property”), which the parcel described in the forgoing
(A) is operated as a municipal solid waste landfill on the
Petersburg Property having not less than 2,477,000 cubic yards of
useable airspace at Closing (the “Petersburg Landfill”) and
the parcels described in the forgoing (B) and (C) are intended for
use in the future expansion of the Petersburg Landfill, together
with all applicable state and local Permits, Governmental
Authorizations, Consents, Approvals, licenses, and any other
permits and approvals necessary or required to own, operate,
develop and construct the Petersburg Landfill; (iii) lease
approximately 1.265+/- acres of real property located at 337-B
Industrial Drive, Petersburg, Virginia, 23803, including all
Improvements, structures and fixtures located thereon and
appurtenances thereto, as more particularly described in
Exhibit C attached
here to (the “Transfer Station
Property”), which is operated as a municipal solid
waste transfer station located on the Transfer Station Property
(the “Transfer
Station”), together with all applicable state and
local Permits, Governmental Authorizations, Consents, Approvals,
licenses, and any other permits and approvals necessary or required
to own or lease, operate, develop and construct the Transfer
Station; (iv) lease warehouse space in two buildings located
at 333-B and 333-C Industrial Drive, Petersburg, Virginia 23803, as
more particularly described in Exhibit D attached here to (the
“Hauling Company
Property”), which is operated as a residential,
commercial roll-off, and front load solid waste collection,
transportation and disposal business (the “Hauling Company
Business”), together with all applicable state and
local Permits, Governmental Authorizations, Consents, Approvals,
licenses, and any other permits and approvals necessary or required
to own or lease and operate the Hauling Company Business; and (v)
lease warehouse space located at 337 Industrial Drive, Petersburg,
Virginia, 23803, as more particularly described in Exhibit E attached hereto (the
“DuPont Recycle
Property”), which is operated as a recycling facility
for DuPont Tyvek post-industrial scrap collected by the Hauling
Company Business (the “DuPont Recycle
Business”). The Lunenburg Landfill, Petersburg
Landfill, Transfer Station, Hauling Company Business and DuPont
Recycle Business are collectively, the “Businesses” and each a
“Business.” The Lunenburg
Property, Petersburg Property, Transfer Station Property, Hauling
Company Property and DuPont Recycle Property are collectively, the
“Properties” and each a
“Property.”

 

1

 

Buyer
desires to purchase and acquire from Seller all of the issued and
outstanding membership interests of the Companies, and Seller
desires to sell all of the issued and outstanding membership
interests of the Companies to Buyer, all in accordance with the
terms and conditions set forth in this Agreement.

RECITAL OF CONSIDERATION

Now,
therefore, in consideration of the premises and the mutual
covenants and agreements contained herein, the receipt and
sufficiency of which is hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:

SECTION
1

DEFINITIONS AND
USAGE

1.1 Definitions. For purposes of
this Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires, initially capitalized terms
used in this Agreement have the meanings set forth in Schedule 1.1.

1.2 Interpretation and Usage. In
this Agreement, unless a clear contrary intention appears: (a) the
singular number includes the plural number and vice versa; (b)
reference to any Person includes such Person’s successors and
assigns but, if applicable, only if such successors and assigns are
not prohibited by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually; (c) reference to any gender includes the other gender
and the neuter, as applicable; (d) reference to any agreement,
document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in
accordance with the terms thereof; (e) reference to any Legal
Requirement means such Legal Requirement as amended, modified,
codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated
thereunder, and reference to any section or other provision of any
Legal Requirement means that provision of such Legal Requirement
from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or reenactment
of such section or other provision; (f) “hereunder,”
“hereof,” “hereto,” and words of similar
import will be deemed references to this Agreement as a whole and
not to any particular Section or other provision hereof or any
Exhibit or Schedule attached hereto; (g) “including”
(and with correlative meaning “include” and
“includes”) means including, without limiting the
generality of any description preceding such term, and will be
deemed to be followed by the words “without
limitation”; (h) Section headings are provided for
convenience of reference only and will not affect the construction
or interpretation of any provision hereof; (i) any references to
“Section”, “Schedule” or
“Exhibit” followed by a number or letter or combination
of the two refers to the corresponding Section, Schedule or Exhibit
of or to this Agreement; (j) with respect to the determination of
any period of time, “from” means “from and
including” and “to” means “to but
excluding”; and (k) references to documents, instruments or
agreements will be deemed to refer as well to all addenda,
exhibits, schedules or amendments thereto.

1.3 Legal Representation of the
Parties. This Agreement was negotiated by the Parties with
the benefit of legal representation, and any rule of construction
or interpretation otherwise requiring this Agreement to be
construed or interpreted against any Party will not apply to any
construction or interpretation hereof.

1.4 Incorporation by Reference. The
Parties agree that the Background Facts set forth above are true
and correct and are hereby incorporated herein by this
reference.

SECTION
2

PURCHASE OF THE
MEMBERSHIP INTERESTS FROM THE SELLER

2.1 Purchase and Sale of Membership
Interests. On and subject to the terms and conditions of
this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell to Buyer, all of the membership interests in the
Companies, free and clear of all Liens (the “Membership Interests”),
for the consideration specified in Section 2.2.

 

2

 

2.2 Consideration. For and in
consideration of the sale, assignment, transfer and conveyance of
the Membership Interests by Seller, Buyer agrees to pay to Seller,
as follows (the “Purchase
Price”):

(i) Prior to the
execution of this Agreement, Buyer has deposited with Seller the
sum of One Million Five Hundred Thousand and 00/100 DOLLARS
($1,500,000.00) (the “Deposit”). The Deposit
has been used by Seller to pay the amounts set forth on
Schedule 2.2(i)
to the parties set forth on Schedule
2.2(i).

(ii) At the Closing,
Forty Million and no/100 Dollars ($40,000,000.00) (the “Cash
Purchase Price”), less the Deposit and amounts payable
pursuant to Section
2.4 and subject to the Working Capital Adjustment set forth
at shall be delivered by Buyer to Seller by wire transfer pursuant
to the wiring instructions set forth on Schedule 2.2(ii).

(iii) Five Hundred
Thousand and no/100ths (500,000.00) shares of Buyer’s
restricted voting common stock, par value $0.025 per share (the
“Purchase Price
Shares”), shall be issued to Seller at
Closing.

(iv)            The
Purchase Price shall be allocated in accordance with Schedule
2.2(iv). After the Closing, the Parties shall make
consistent use of the allocation, fair market value and useful
lives specified in Schedule 2.2(iv) for all Tax
purposes and in all filings, declarations and reports with the IRS
in respect thereof, including the reports required to be filed
under Section 1060 of the Code. In any proceeding related to the
determination of any Tax, neither Buyer nor Seller shall contend or
represent that such allocation is not a correct
allocation.

2.3 Closing Date. Unless Buyer and
Seller otherwise agree, the purchase and sale of the Membership
Interests will take place by facsimile transmission or by
electronic mail in PDF format of all required documents (with the
original executed documents to be delivered by overnight courier)
to the offices of Richard J. Dreger, located at 11660 Alpharetta
Highway, Building 700, Suite 730, Roswell, Georgia 30076, and will
occur within five Business Days after satisfaction of the required
conditions as set forth in this Agreement (“Closing Date” or
“Closing”). At Closing,
all of Seller’s right, title and interest in and to the
Membership Interests and in any such right, title or interest that
Seller may have or had with respect to the Businesses will be
transferred and conveyed to Buyer free and clear of all
Liens. 

2.4           Payment
of Current Seller Liabilities; Retained Liabilities.
Schedule 2.4 (to be
updated immediately prior to Closing) lists (i) the amount of
the aggregate Indebtedness of the Companies outstanding on the
Closing Date, all of which is to be paid at the Closing together
with all prepayment penalties and costs incurred or to be incurred
in connection with the repayment of any such Indebtedness; (ii) the
aggregate amount of all undischarged judgments against the
Companies; (iii) the aggregate amount of all obligations secured by
Tax Liens against the Companies as of the Closing Date;
(iv) the total of the aggregate mortgage debt secured by, and
the judgment Liens encumbering, and the federal Tax Liens filed
against, any of the Assets, including the Properties as of the
Closing Date, (v) any obligation of the Companies as of the Closing
Date to reimburse or advance amounts to any officer, director,
manager, employee or agent of the Companies, (vi) all Accounts
Payable for goods or services received by or performed for the
benefit of the Companies entirely prior to the Closing Date, and
(vii) the amount of any and all accrued obligations of the
Companies as of the Closing Date pursuant to: any employment,
severance, retention or termination agreement or Contract to which
any Company is a party, any bonus program or plan of any Company,
all Employee Benefit Plans of the Companies and all other employee
benefit plans and other employee benefits with respect to employees
of any Company, and any Company obligation relating to payroll,
vacation, sick leave, workers’ compensation, unemployment
benefits, pension benefits, employee stock option or profit-sharing
plans, health care plans or benefits or any other employee plans or
benefits of any kind for the current or former employees of the
Companies (subsections (i)-(vii) collectively, “Current Seller
Liabilities” and each a “Current Seller
Liability”); (viii) any Liability arising out of or
relating to services performed by the Companies in connection with
the Businesses entirely before the Closing Date; (ix) any Liability
under any Company Contract that arises after the Closing Date out
of or relating to any Breach or other action that occurred entirely
before the Closing Date; (x) any Liability under any Excluded
Contract; (xi) any Liability for (A) any Taxes relating to or
arising as a result of the operation of the Businesses prior to the
Closing Date, and (B) any Tax Liability of Seller that will arise
as a result of the sale of the Membership Interests pursuant to
this Agreement; (xii) (A) any Liability arising out of or relating
to any Company employee grievance arising out of or relating to
events or actions that occurred entirely before Closing, and (B)
any Liability to indemnify, reimburse or advance amounts to any
officer, director, member, manager, employee or agent of the
Companies arising out of or relating to events or actions that
occurred entirely before Closing; (xiii) any Liability arising out
of any Current Litigation Matters; and (xiv) any Liability of
Seller or the Companies based upon Seller’s acts occurring
after the Closing Date (collectively, subsections (viii) –
(xiv) the “Retained
Liabilities”). Schedule 2.4, when delivered
and updated at Closing by the Parties, will include wire transfer
instructions for creditors holding Indebtedness and any other
Current Seller Liabilities, and attached to Schedule 2.4 will be pay-off
letters or instructions from such creditors or other payees. On or
prior to the Closing, Seller will pay all Current Seller
Liabilities not previously discharged by Seller by deduction from
the Purchase Price the amounts listed on Schedule 2.4 and pursuant to
the pay-off letters or instructions from such creditors attached to
Schedule 2.4.
Following the Closing, Seller will promptly obtain and file all
applicable Lien discharges for any Lien encumbering any Asset from
all applicable creditors and deliver copies of such filings to
Buyer. All Current Seller Liabilities and Retained Liabilities
shall remain the exclusive responsibility of Seller and will be
assigned to, retained, paid, performed and discharged exclusively
by Seller and will not be retained by the Companies nor assumed or
acquired by, or conveyed or transferred to, Buyer or any Related
Person of Buyer.

 

3

 

2.5 Closing
Obligations.

(a) Deliveries by Seller. At the
Closing, Seller will deliver to Buyer: (i) the various
certificates, instruments, and documents referred to in
Section
6.1.

(b) Deliveries by Buyer. At the
Closing, Buyer will deliver to Seller: (i) the various
certificates, instruments, and documents referred to in
Section 6.2; and
(ii) the applicable consideration specified in Section 2.2.

2.6           

Working Capital Adjustments.
The Cash Purchase Price shall be adjusted by the “Working
Capital Adjustment”, which shall be determined as
follows:

(i)           Increased
by the following amounts:

 

A.

Prepaid items
representing the expenses incurred by the Companies in the Ordinary
Course of Business prior to the Closing Date for services to be
performed or goods to be received, in whole or in part, after the
Closing Date, as set forth on Schedule 2.6(i)(A).

B.

Outstanding
Accounts Receivable of the Companies as of the Closing Date, which
are set forth on Schedule
2.6(i)(B). For the purposes of calculating the Estimated
Working Capital Adjustment, the outstanding Accounts Receivable of
the Companies as of the Closing Date shall be based upon the
following aging categories and amounts:

 

(1)

95% of the Accounts
Receivables outstanding for 30 days or less as of the Closing
Date;

 

(2)

70% of the Accounts
Receivables outstanding for more 30 days but less than 60 days as
of the Closing Date; and

 

(3)

25% of the Accounts
Receivables outstanding for more 60 days but less than 90 days as
of the Closing Date.

 

Notwithstanding the
foregoing calculation method with respect to the Estimated Working
Capital Adjustment, for the purposes of calculating the Final
Working Capital Determination and the Final Statement, the value of
the outstanding Accounts Receivable of the Companies as of the
Closing Date shall equal the amounts actually collected within 90
days after the Closing Date with respect to the specific Accounts
Receivable set forth on Schedule
2.6(i)(B).

 

 

4

 

 (ii)           Decreased
by the following amounts:

 

A.

The amount of any
deferred revenue or prepaid income for services to be performed in
connection with the Ordinary Course of Business of the Companies on
or after the Closing Date as described on Schedule
2.6(ii)(A).

 

B.

The amounts set
forth on Schedule
2.6(ii)(B) which constitute the remaining amounts to be paid
on or after the Closing Date for the current terms of the equipment
leases described on Schedule
2.6(ii)(B).

 

Five
(5) business days prior to the Closing, Seller shall have delivered
to Buyer the estimated Working Capital Adjustment (the
“Estimated Working
Capital Adjustment”), which shall be attached to this
Agreement as Schedule
2.6 used for determining the preliminary amount of the
Working Capital Adjustment paid to Seller at Closing.

Within
ninety (90) calendar days after the Closing Date, Buyer shall
prepare and deliver to Seller: (i) a balance sheet as of the
Closing Date (the “Closing Date Balance
Sheet”), and (ii) a statement reflecting Buyer’s
determination of the Working Capital Adjustment as of the Closing
Date (the “Final
Working Capital Determination”) and the calculation
thereof (the “Final
Statement”). Buyer shall provide Seller with access to
copies of all work papers and other relevant documents to verify
the entries contained in the Closing Date Balance Sheet and the
Final Statement. Seller shall have a period of thirty (30) calendar
days after delivery of the Closing Date Balance Sheet and the Final
Statement to review them and make any written objections Seller may
have in writing to Buyer. If written objections to the Closing Date
Balance Sheet and Final Statement are delivered to Buyer within
such thirty (30) day period, then Buyer and Seller shall attempt to
resolve the matter or matters in dispute. If no written objections
are made by Seller within such thirty (30) day period, the Final
Net Working Capital Determination shall be deemed accepted by
Seller and the Purchase Price shall be adjusted by the amount of
the Working Capital Adjustment pursuant to the Final
Statement.

If
disputes with Final Working Capital Determination cannot be
resolved by Buyer and Seller within thirty (30) calendar days after
the delivery of Seller’s objections to the Closing Date
Balance Sheet or the Final Statement, then the specific matters in
dispute (the “Disputed Amounts”), along
with each party’s written calculation of the Final Working
Capital Determination, the Closing Date Balance Sheet, the Final
Statement, Seller’s written objections, and all work papers
related thereto (the “Determination Materials”)
shall be submitted to an independent certified accounting firm (the
“Accounting
Arbitrator”) with an office in Richmond, Virginia
mutually agreed to by the Parties. The Accounting Arbitrator shall
review the Determination Materials and shall determine, in
accordance with this paragraph, the Final Working Capital
Determination (and any adjustment, if any, shall only be based upon
the Disputed Amounts), which may not be outside the range comprised
of the parties Final Working Capital Determinations, and which
shall be final, binding and non-appealable. Within five (5)
calendar days after delivery of such opinion to Buyer and Seller,
the Purchase Price shall be adjusted by the amount of the Final
Working Capital Determination by the Accounting Arbitrator. All
fees and other costs charged by the Accounting Arbitrator shall be
borne based upon the percentage that the amount actually contested
but not awarded to Seller or Buyer, respectively, bears to the
aggregate amount actually contested by Seller and
Buyer.

 

If the
Final Net Working Capital Determination is less than the Estimated
Working Capital Adjustment, Seller shall pay the amount of such
shortfall to Purchaser within ten (10) days of the deemed
acceptance of the Final Net Working Capital Determination or the
receipt of the Final Working Capital Determination from the
Accounting Arbitrator, as the case may be. If the Final Net Working
Capital Determination is greater than the Estimated Working Capital
Adjustment, Purchaser shall pay Seller the amount of such
difference within ten (10) days of the deemed acceptance of the
Final Net Working Capital Determination or the receipt of the Final
Working Capital Determination from the Accounting Arbitrator, as
the case may be. The parties shall make any deliveries or payment
required by this Section 2.6 within ten (10) days after (i) any
undisputed portion of the Final Net Working Capital Determination
is deemed accepted by Seller, and (ii) for the Disputed Amounts,
the determination of the Final Working Capital Determination. Any
payments made pursuant to this paragraph shall be treated for all
purposes as an adjustment to the Purchase Price.

 

 

5

 

In the
event any amount from any of the Accounts Receivable set forth on
Schedule
2.6(i)(B) is not actually collected by the Companies within
90 days after the Closing Date (and the failure of such collection
is taken into account in connection with the Final Working Capital
Determination) but is subsequently collected by the Companies, the
Companies shall pay such amount to Seller within 5 Business Days of
receipt thereof. The Companies shall bill and send invoices with
respect to all Accounts Receivable set forth on Schedule
2.6(i)(B) in the ordinary course consistent with the past
practice of the Companies but shall have no further duties to
collect such Accounts Receivable. All amounts collected by the
Companies from any customer or affiliate of a customer owing
amounts related to any of the Accounts Receivable set forth on
Schedule
2.6(i)(B) shall apply to the oldest outstanding invoices of
such customer or its affiliate first.

 

2.7 Closing Costs;
Expenses.

(a) Seller agrees to
pay all documentary stamp tax or other transfer taxes relating to
the transfer of the Membership Interests to Buyer. Seller shall be
solely responsible for all State or Federal income Taxes or similar
Taxes imposed on Seller as a result of the Contemplated
Transactions. Seller acknowledges and agrees that neither the Buyer
nor the Companies shall have a duty or obligation to pay any Taxes
attributable to Seller as a result of the purchase and sale of the
Membership Interests.

(b) Each Party shall be
solely responsible for any legal or accounting fees, brokerage or
finders’ fees or agents’ commissions or other similar
payments incurred by or agreed to by such Party in connection with
the execution and delivery of this Agreement or the completion of
the Contemplated Transactions.

(c) Property taxes,
transaction privilege taxes and periodic fees, if any, related to
the ownership or operation of the Property, Assets or the Business
(but not State or Federal income taxes) and all other applicable
taxes and assessments related to the Assets, Businesses and
Properties will be prorated; provided, however, that if the rate
and/or amount of the taxes for the year of the Closing are not
available on the Closing Date, such taxes will be prorated based
upon the prior tax year’s assessment. Seller will be
responsible for all such taxes attributable to the Assets, Business
and Property through the Closing Date and Buyer will be responsible
for all such taxes attributable to the Assets from and after the
Closing Date. If Buyer undertakes any dispute, protest or request
for reassessment with respect to all or any portion of taxes for
the tax year in which the Closing occurs, or any previous year, any
refund relating to any previous year will be the property of
Seller, and any refund relating to the tax year in which the
Closing occurs (reduced by the out-of-pocket costs incurred in
regard to such dispute, protest or request for reassessment) will
be prorated between Seller and Buyer as of the Closing
Date.

(d) Payroll
obligations, including salaries and payroll taxes will be prorated
at Closing.

SECTION
3

REPRESENTATIONS AND
WARRANTIES CONCERNING

PURCHASE AND SALE
OF THE MEMBERSHIP INTERESTS OF THE COMPANIES

3.1 Representations and Warranties of
Seller. In order to induce Buyer to enter into this
Agreement and consummate the Contemplated Transactions, Seller
represents and warrants to Buyer as follows:

(a) Organization of Seller. Seller
is a limited liability company duly organized, validly existing,
and in good standing under the laws of the State of Delaware.
Seller is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such
qualification is required, except those jurisdictions where the
failure to qualify would not have a Material Adverse
Effect.

 

6

 

(b) Authorization of Transaction.
Seller has full power and legal capacity to execute and deliver
this Agreement, and all other agreements and written instruments to
which Seller is a party as contemplated hereby, and to perform its
obligations hereunder and thereunder. This Agreement, and such
other agreements and written instruments, constitute the valid and
legally binding obligations of Seller, enforceable in accordance
with their terms and conditions, except as enforcement thereof may
be limited by applicable Insolvency Laws. The execution, delivery,
and performance of this Agreement and all other agreements
contemplated hereby have been duly authorized by Seller. Seller has
all right, power and capacity to execute and deliver this
Agreement, and all other agreements, documents and written
instruments to be executed by Seller in connection with the
Contemplated Transactions, and to perform its obligations under
this Agreement and all such other agreements, documents and written
instruments.

(c) No Conflict with Restrictions; No
Default. Except as set forth on Schedule
3.1(c), neither the execution, delivery, and performance of
this Agreement nor Seller’s performance of and compliance
with the terms and provisions contemplated hereby (i) will conflict
with, violate, or result in a Breach of any of the terms,
covenants, conditions, or provisions of any Legal Requirements in
effect on the date hereof applicable to, or any Order, Consent or
Governmental Authorization of any Governmental Body directed to, or
binding on Seller, (ii) will conflict with, violate, result in a
Breach of, or constitute a default under any of the terms,
conditions, or provisions of any agreement or instrument to which,
Seller is a party or by which Seller is or may be bound or to which
any of their properties or assets is subject, (iii) will conflict
with, violate, result in a Breach of, constitute a default under
(whether with notice or lapse of time or both), accelerate or
permit the acceleration of the performance required by, give to
others any material interests or rights, or require any Consent
under any indenture, mortgage, lease agreement, or instrument to
which either Seller is a party or by which Seller or Seller’s
property or assets is or may be bound, or (iv) will result in the
creation or imposition of any Lien upon any of the Properties or
Assets of the Companies, or upon the Membership Interests, or cause
Buyer (or any Related Person thereof) or the Companies to become
subject to, or to become liable for the payment of, any
Tax.

(d) Consents; Governmental
Authorizations. Except as set forth on Schedule
3.1(d), Seller is not required to give any notice to, or
obtain any Consent from, any Person in connection with the
execution and delivery of this Agreement or the consummation of any
of the Contemplated Transactions. Any registration, declaration, or
filing with, or Consent, or Governmental Authorization or Order by
any Governmental Body that is required in connection with the valid
execution, delivery, acceptance, and performance by Seller under
this Agreement or the consummation by Seller of any transaction
contemplated hereby will be completed, made, or obtained on or
before the Closing Date.

(e) Litigation. Except as set forth
in Schedule
3.1(e), there are no Proceedings pending or, to the
Knowledge of Seller and the Companies, threatened against or
affecting Seller or any of their properties, assets, rights, or
businesses in any court or before or by any Governmental Body that
could, if adversely determined (or, in the case of an
investigation, could lead to any Proceeding that could, if
adversely determined), reasonably be expected to materially impair
Seller’s ability to perform its obligations under this
Agreement or to have a Material Adverse Effect on the Companies;
and Seller has not received any currently effective notice of any
default, and Seller is not in default, under any applicable Order
of any Governmental Body that could reasonably be expected to
impair Seller’s ability to perform its obligations under this
Agreement or to have a Material Adverse Effect on the
Companies.

(f) Brokers’ Fees. Seller has
no obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the Contemplated
Transactions.

(g) Membership Interests. As of the
Closing Date, Seller will hold of record and will own beneficially
all of the issued and outstanding Membership Interests of the
Companies as described in Section 4.2, free and clear of
any restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Liens, options,
warrants, purchase rights, contracts, commitments, equities,
claims, and demands. Seller is not a party to any option, warrant,
purchase right, or other Contract or commitment that could require
Seller to sell, transfer, or otherwise dispose of any Membership
Interests or other equity interests of the Companies (other than
this Agreement). Seller is not a party to any voting trust, proxy,
or other agreement or understanding with respect to the voting of
any of the Membership Interests of the Companies. At Closing, upon
payment of the Purchase Price as herein provided pursuant to
Section 2.2, good
and valid title to the Membership Interests described in
Section 4.2 will
pass to Buyer, free and clear of all Liens, restrictions on
transfer (other than any restrictions under the Securities Act and
state securities laws), Taxes, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands.

 

7

 

(h) Exempt Transaction. Assuming
the accuracy of the representations and warranties of Buyer set
forth in Section
3.2, the sale and exchange of the Membership Interests of
the Companies as contemplated herein will be exempt from the
registration requirements of the Securities Act, and will be exempt
from registration and qualification under the registration or
qualification requirements of all applicable state securities laws.
Seller has not taken and will not take any action that would cause
the loss of any such exemption. Assuming the accuracy of the
representations and warranties of Buyer set forth in Section 3.2, the sale and
exchange of the Membership Interests of the Companies as
contemplated herein will comply with all applicable Legal
Requirements.

3.2 Representations and Warranties of
Buyer. Buyer represents and warrants to Seller that the
statements contained in this Section 3.2 are correct and
complete:

(a) Organization of Buyer. Buyer is
a corporation duly organized, validly existing, and in good
standing under the laws of the State of New York. Buyer is duly
authorized to conduct business and is in good standing under the
laws of each jurisdiction where such qualification is required,
except those jurisdictions where the failure to qualify would not
have a Material Adverse Effect.

(b) Authorization of Transaction.
Buyer has full power and authority to execute and deliver this
Agreement, and all other agreements and written instruments to
which Buyer is a party as contemplated hereby, and to perform its
obligations hereunder and thereunder. This Agreement, and such
other agreements and written instruments, constitutes the valid and
legally binding obligation of Buyer, enforceable in accordance with
its terms and conditions, except as enforcement thereof may be
limited by applicable Insolvency Laws. The execution, delivery, and
performance of this Agreement and all other agreements contemplated
hereby have been duly authorized by Buyer. Buyer has all right,
power and capacity to execute and deliver this Agreement, and all
other agreements, documents and written instruments to be executed
by Buyer in connection with the Contemplated Transactions, and to
perform its obligations under this Agreement and all such other
agreements, documents and written instruments.

(c) Notices and Consents. Except as
set forth on Schedule
3.2(c), Buyer is not required to give any notice to, or
obtain any Consent from, any Person in connection with the
execution and delivery of this Agreement or the consummation of any
of the Contemplated Transactions.

(d) Litigation. There are no
Proceedings pending or, to the Knowledge of Buyer, threatened
against or affecting Buyer or any of its properties, assets,
rights, or businesses in any court or before or by any Governmental
Body that could, if adversely determined (or, in the case of an
investigation, could lead to any Proceeding that could, if
adversely determined), reasonably be expected to materially impair
Buyer’s ability to perform its obligations under this
Agreement; and Buyer has not received any currently effective
written notice of any default, and Buyer is not in default, under
any applicable Order of any Governmental Body that could reasonably
be expected to impair Buyer’s ability to perform its
obligations under this Agreement.

(e)           Taxes
and Tax Returns. Except as shown on Schedule 3.2(e), each of
Buyer and its subsidiaries has duly and timely filed (including all
applicable extensions) all material Tax returns required to be
filed by it on or before the Effective Date (all such returns being
accurate and complete in all material respects), has paid all Taxes
shown thereon as arising and has duly paid or made provision for
the payment of all Taxes that have been incurred or are due or
claimed to be due from it by federal, state, foreign or local
taxing authorities other than Taxes that are not yet delinquent or
are being contested in good faith, have not been finally determined
and have been adequately reserved against. Except as shown on
Schedule 3.2(e), there are no material disputes pending, or claims
asserted, for Taxes or assessments upon Buyer or any of its
subsidiaries for which Buyer does not have reserves that are
adequate under GAAP.

 

8

 

 

(f)   
Environmental
Liability. Except as disclosed in the SEC Documents, there
are no legal, administrative, arbitral or other Proceedings,
claims, actions, causes of action, orders, assessments (including
penalty assessments) or notices of any kind with respect to any
environmental, health or safety matters or any private or
governmental environmental, health or safety investigations or
remediation activities of any nature seeking to impose, or that are
reasonably likely to result in, any liability or obligation of
Buyer or any of its subsidiaries arising under common law or under
any local, state or federal environmental, health or safety
statute, regulation or ordinance, including CERCLA, pending or, to
Buyer’s Knowledge, threatened against Buyer or any of its
subsidiaries. To the Knowledge of Buyer, there is no reasonable
basis for, or circumstances that are reasonably likely to give rise
to, any such proceeding, claim, action, investigation or
remediation by any governmental entity or any third party that
would give rise to any liability or obligation on the part of Buyer
or any of its subsidiaries. Neither Buyer nor any of its
subsidiaries is subject to any agreement, order, judgment, decree,
letter or memorandum by or with any governmental entity or third
party imposing any liability or obligation with respect to any of
the foregoing.

 

(g)         Brokers’
Fees. Buyer has no obligation to pay any fees or commissions
to any broker, finder, or agent with respect to the Contemplated
Transactions.

(h)         Purchase
for Investment. Buyer is acquiring the Membership Interests
for investment and not with a view to distributing all or any part
thereof in any transaction which would constitute a
“distribution” within the meaning of the Securities
Act. Buyer acknowledges that the Membership Interests have not been
registered under the Securities Act.

(i)         Investor
Qualifications. Buyer: (i) has such knowledge and experience
in financial and business matters that it is capable of evaluating
the merits and risks of its investment in the Membership Interests;
(ii) is able to bear the complete loss of its investment in the
Membership Interests; (iii) has had the opportunity to ask
questions of the Seller and each of the Companies and their
management concerning the terms and conditions of the Membership
Interests, the business of each of the Companies, the
Companies’ ownership and use of their respective assets,
estimates and judgments utilized and relied upon by the Companies
in preparing their financial statements; (iv) has had the
opportunity to obtain additional information about each of the
Companies and its business and all of Buyer’s questions have
been answered to its satisfaction; and (v) is otherwise an
“accredited investor” as such term is defined in Rule
501 promulgated under the Securities Act.

(j)           Capitalization.
The authorized capital stock of Buyer consists of 75,000,000 shares
of common stock, par value $0.025 per share, of which 6,438,112
shares were issued and outstanding as of the Effective Date. The
Purchase Price Shares have been duly authorized and when issued and
delivered to Seller at the Closing, will be validly issued, fully
paid and non-assessable. All of the Purchase Price Shares to be
issued to Seller in accordance with this Agreement will be issued
and delivered by Buyer in compliance with all applicable state and
federal laws concerning the issuance of securities and none of the
Purchase Price Shares will be issued in violation of the preemptive
rights of any shareholder of Buyer.

 

(k)           Preemptive
Rights. Except as disclosed in the SEC Documents (as
hereinafter defined), there are no preemptive or similar rights on
the part of any holders of any class of securities of Buyer. Except
as disclosed in the SEC Documents, other than this Agreement, no
subscriptions, options, warrants, conversion or other rights,
agreements, commitments, arrangements or understandings of any kind
obligating Buyer, any of its subsidiaries or any other affiliate of
the foregoing, contingently or otherwise, to issue or sell, or
cause to be issued or sold, any shares of capital stock of any
class of Buyer, or any securities convertible into or exchangeable
for any such shares, are outstanding, and no authorization therefor
has been given. There are no outstanding contractual or other
rights or obligations to or of Buyer, any of its subsidiaries or
any affiliate of the foregoing to repurchase, redeem or otherwise
acquire any outstanding shares of other equity interests of
Buyer.

 

 

9

 

(l)           SEC
Documents. Buyer has timely filed with the U.S. Securities
and Exchange Commission (the “Commission”) all forms,
reports and other documents required to be filed by it under the
Securities and Exchange Act of 1934, as amended (the
“Exchange
Act”) or the Securities Act of 1933, as amended (the
“Securities
Act”) (as such documents have been amended through the
date hereof, collectively, the “SEC Documents”). The SEC
Documents, including without limitation any financial statements or
schedules included therein, at the time filed, complied in all
material respects with the applicable requirements of the Exchange
Act and the Securities Act, as the case may be. The consolidated
financial statements of Buyer included in the SEC Documents comply
in all material respects with applicable accounting requirements
and with the published rules and regulations of the Commission with
respect thereto, have been prepared in accordance with GAAP applied
on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-Q of the Commission) and fairly
present (subject, in the case of the unaudited statements, to
normal, recurring audit adjustments and for the absence of
footnotes) the consolidated financial position of Buyer and its
consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flow for the
periods than ended.

 

(m)           
Market for Common
Stock. The stock of Buyer is quoted on the OTC Markets under
the symbol “MRDN.” Buyer has not, in the twelve (12)
months preceding the date hereof, received notice from any trading
market on which shares of the common stock of Buyer (the
“Common
Stock”) are or have been listed or quoted to the
effect that Buyer is not in compliance with the listing or
maintenance requirements of such trading market. Buyer is in
compliance in all material respects with all such listing and
maintenance requirements and the consummation of the transactions
contemplated by this Agreement do not violate any rules or
regulations of a trading market on which shares of the Common Stock
of Buyer are or have been listed.

 

(n)           
Enforcement Actions or
Proceedings. Except for normal examinations conducted by a
governmental or regulatory agency in the ordinary course of the
business of Buyer and its subsidiaries, or as disclosed in the SEC
Documents, no governmental or regulatory agency has pending any
Proceeding, enforcement action or, to the Knowledge of Buyer,
investigation into the business, disclosures or operations of Buyer
or its subsidiaries.

 

(o)           
Accuracy of SEC
Documents. At the time filed or furnished (and, in the case
of registration statements and proxy statements, on the dates of
effectiveness and the dates of the relevant meetings,
respectively), each SEC Document filed by the Buyer did not contain
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances
in which they were made, not misleading, except that information as
of a later date (but before the date of this Agreement) shall be
deemed to modify information as of an earlier date.

 

(p)           
Financial
Statements. Neither Buyer nor any of its subsidiaries has
any liabilities, obligations or commitments of a type required to
be reflected on a balance sheet prepared in accordance with GAAP,
except (i) those liabilities that are reflected or reserved against
in the financial statements of the Buyer included in the SEC
Documents, or (ii) liabilities incurred in the Ordinary Course of
Business consistent with past practice since the date of the last
of such financial statements.

 

SECTION
4                                 

REPRESENTATIONS AND
WARRANTIES CONCERNING THE COMPANIES

Seller
represents and warrants to Buyer that the statements contained in
this Section 4 are
true, correct and complete as of the Effective Date and as of the
Closing Date, except as set forth in the disclosure schedule
delivered by Seller to Buyer on the date hereof (the
“Disclosure
Schedule”). The Disclosure Schedule will be arranged
in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section
4.

4.1 Organization, Qualification, and
Power. Each of the Companies is a limited liability company
duly organized and validly existing under the laws of the
Commonwealth of Virginia. Each of the Companies is duly authorized
to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required, except those
jurisdictions where the failure to qualify would not have a
Material Adverse Effect. The Companies all have full power and
authority and all licenses, Consents, permits, Approvals, and
authorizations necessary to carry on the Business in which each
Company is engaged and to own or lease, as applicable, and use the
Property owned and used by each Company. Schedule 4.1
lists the members, managers, directors and officers of the
Companies. Seller has delivered to Buyer correct and complete
copies of the Organizational Documents of the Companies (as amended
to date). The Companies do not maintain minute books and the
Membership Interests of the Companies are not certificated. None of
the Companies is in default under or in violation of any provision
of its Organizational Documents.

 

10

 

4.2 Capitalization. Seller is the
record owner of and has good and valid title to the Membership
Interests. The Membership Interests constitute 100% of the total
issued and outstanding membership interests in each Company. All of
the issued and outstanding Membership Interests of the Companies
have been duly authorized, are validly issued, fully paid, and
non-assessable. Except as set forth on Schedule
4.2, the Membership Interests of the Companies are held of
record by the Seller free and clear of any restriction on transfer,
Taxes, Liens, options, warrants, purchase rights, contracts,
commitments, equities, claims and demands (except restrictions
under the Securities Act and state securities laws). Except as set
forth on Schedule
4.2, no other Person has any right, title or interest in or
to the Membership Interests or any other equity interest of the
Companies. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could
require any of the Companies to issue, sell, or otherwise cause to
become outstanding any of its membership interests or any other
equity interest or other security. There are no outstanding or
authorized appreciation, phantom stock, profit participation, or
similar rights with respect to the Companies. There are no voting
trusts, proxies, or other agreements or understandings with respect
to the voting of the Membership Interests or units of the
Companies. Schedule 4.2
contains and complete and accurate capitalization of the Companies
and the respective ownership of the Membership Interests by the
Seller. The Seller is the sole member of the
Companies.

4.3 No
Conflict; Consents.

(a) Except as set forth
on Schedule
4.3(a), neither the execution and delivery of this Agreement
by Seller, nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time): (i) Breach or otherwise conflict
with any provision of the Organizational Documents of the
Companies, or contravene any resolution adopted by the officers,
managers, or members of the Companies; (ii) Breach or otherwise
conflict with any Legal Requirement or Order to which the Companies
may be subject or give any Governmental Body or other Person the
right to challenge the Contemplated Transactions or to exercise any
remedy or obtain any relief under any Legal Requirement or any
Order to which the Companies may be subject; (iii) Breach or
otherwise conflict with or result in a violation or Breach of any
of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate or modify,
any Governmental Authorization that is held or being applied for by
or on behalf of the Companies or that otherwise relates to the
Companies or their Assets, including the Properties, or the
Businesses of the Companies; (iv) cause Buyer (or any Related
Person thereof) to become subject to, or to become liable for the
payment of, any Tax; (v) Breach or otherwise conflict with any
provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or
modify, any contract or agreement to which the Companies are a
party or by which the Companies are bound; or (vi) result in the
imposition or creation of any Lien on any of the Companies’
Businesses, or Assets, including the Properties.

(b) Except as set forth
on Schedule
4.3(b), the Companies are not required to give any notice
to, or obtain any Consent from, any Person in connection with the
execution and delivery of this Agreement or the consummation of any
of the Contemplated Transactions, including any Consent required in
order to preserve and maintain all Governmental Authorizations
required for the ownership and continued operation of the Business
of the Companies either before or after Closing and the
consummation of the Contemplated Transactions. Any registration,
declaration, or filing with, or Consent, or Governmental
Authorization or Order by, any Governmental Body with respect to
the Companies that is required in connection with the consummation
of the Contemplated Transactions has been or will be completed,
made, or obtained on or before the Closing Date.

 

11

 

4.4 Brokers’ Fees. The
Companies have no obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the Contemplated
Transactions.

4.5 Books and Records. The books of
and records of the Companies as well as all books of account,
financial statements and other financial records of each of the
Companies, all of which have been made available to Buyer, are
complete and correct in all material respects, represent actual,
bona fide transactions and have been maintained in accordance with
sound business practices and GAAP.

4.6 Title to Assets. Each of the
Companies has good and marketable title to, or a valid leasehold
interest in, all of the Assets, free and clear of all
Liens, except for those
items set forth on Schedule
4.6. Except as set forth in Schedule
4.6, the Assets are not leased, Seller has not granted to
any Person the right to use, operate or own the Assets owned by the
Companies or any portion thereof. There are no outstanding options,
rights of first offer or rights of first refusal to purchase any of
the Assets owned by any Company, or any portion thereof, or
interest therein. The Assets of the Companies constitute all the
Assets, tangible and intangible, of any nature whatsoever,
necessary to operate the Businesses in the manner presently
operated by the Companies and include all of the operating assets
of the Companies.

4.7 Description of Assets. Other
than the right to recover damages in the Adenauer Litigation (as
hereinafter defined), the assets of the Companies constitute
only (a) the
Properties, (b) the Company Contracts, (c) the Permits, Approvals,
Consents, Governmental Authorizations, licenses and other permits
and approvals obtained to date by the Seller or that will be
obtained by Seller prior to Closing to conduct the Businesses of
the Companies and to own or lease, operate, construct and develop
the Lunenburg Landfill, the Petersburg Landfill, the Transfer
Station and the Hauling Company Business, including all right,
title and interest thereto, (d) all data, documentation, books and
records related to the Lunenburg Landfill, the Petersburg Landfill,
the Transfer Station and the Hauling Company Business, or the
ownership or lease, operation, construction or development thereof,
or used or useful in the permitting, siting, ownership or lease,
construction, operation and development of the Lunenburg Landfill,
the Petersburg Landfill, the Transfer Station and the Hauling
Company Business, including research and engineering reports and
drawings, permit records, title reports and policies, surveys
relating to the Properties, correspondence and all other similar
documents and records, including all right, title and interest
thereto, (e) all Intangible Personal Property, (f) all Tangible
Personal Property, and (g) the Intellectual Property Assets
(collectively, the “Assets”). Complete and
correct copies of all material documentation related to the Assets
have been made available or provided to Buyer. The Companies own no
other assets.

4.8 Tangible Personal Property. All
Tangible Personal Property owned or leased by the Companies as of
the Effective Date is and will be as of Closing in the possession
of the Companies, except for any Tangible Personal Property sold or
transferred in the Ordinary Course of Business between the
Effective Date and the Closing Date. The condition of the Assets of
the Companies collectively is sufficient to operate the Businesses
in the manner presently operated by the Companies and will be
collectively in substantially similar condition as of Closing as
when they are inspected by Buyer during the Inspection Period,
ordinary wear and tear excepted.

4.9 Subsidiaries. Except as
disclosed on Schedule
4.9, none of the Companies own, and no Company has any right
to acquire, directly or indirectly, any outstanding capital stock
of, or other equity interests in, any Person.

4.10 No Adverse Change. Since the
Most Recent Fiscal Month End (as defined below):

(a) there has not been
any Material Adverse Change, and, to the Knowledge of Seller, there
has been no event, occurrence or development that could reasonably
be expected to have a Material Adverse Change;

(b) except for the
Company Contracts and except as set forth on Schedule
4.10(b), none of the Companies have entered into any
agreement, Contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) outside the Ordinary
Course of Business;

 

12

 

(c) except as set forth
on Schedule
4.10(c), to the Knowledge of Seller, no party (including the
Companies) has accelerated, terminated, modified, given rise to a
notice of default, or cancelled any agreement, Contract, lease,
Permit, Governmental Authorization, or license (or series of
related agreements, contracts, leases, and licenses) to which the
Companies are a party or by which they is bound or which materially
affect the Companies and their Assets and Businesses;

(d) except as set forth
on Schedule
4.10(d), none of the Companies have granted any Liens upon
any of its Assets, tangible or intangible;

(e) except as set forth
on Schedule
4.10(e), none of the Companies have made any capital
expenditure (or series of related capital expenditures) outside the
Ordinary Course of Business;

(f) none of the
Companies have made any capital investment in, any loan to, or any
acquisition of the securities or assets of, any other Person (or
series of related capital investments, loans, and acquisitions) or
have issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for borrowed
money or capitalized lease obligation;

(g) none of the
Companies have sold, leased, transferred, or assigned any of its
Assets, outside the Ordinary Course of Business;

(h) (i) there has been
no acceleration of Accounts Receivable, (ii) any agreement to the
delay or postponement of the payment of accounts payable or other
obligations of the Companies, or (iii) change in any material
respect in the Companies’ practices in connection with the
payment of accounts payable in respect of purchases from
suppliers;

(i) none of the
Companies have cancelled, compromised, waived, or released any
right or claim (or series of related rights and claims) or suffered
any extraordinary loss;

(j) none of the
Companies have transferred, assigned, or granted any license or
sublicense of any rights under or with respect to any Intellectual
Property Assets;

(k) except as set forth
on Schedule
4.10(k), there has been no change made or authorized in the
Organizational Documents of the Companies;

(l) none of the
Companies have issued, sold, pledged or otherwise disposed of any
of its equity interests, or granted any options, warrants, or other
rights to purchase or obtain (including upon conversion, exchange,
or exercise) any of equity interests or securities;

(m) none of the
Companies has declared, set aside, or paid any dividend or made any
distribution with respect to its equity interests (whether in cash
or in kind) or redeemed, purchased, or otherwise acquired any of
its equity interests;

(n) except as set forth
on Schedule
4.10(n), none of the Companies have experienced any material
damage, destruction, or loss (whether or not covered by insurance)
to its property and Assets, including any Property or any
Business;

(o) except as set forth
on Schedule
4.10(o), none of the Companies have made any loan to, or
entered into any other transaction with, any of its members,
managers, officers, directors, or employees;

(p) none of the
Companies have entered into any employment Contract, severance or
other benefit agreement, consulting agreement or collective
bargaining agreement, written or oral, or modified the terms of any
existing such Contract or agreement;

 

13

 

(q) none of the
Companies have granted any increase in the base compensation of any
of its officers, directors, members, managers or employees outside
the Ordinary Course of Business;

(r) none of the
Companies have adopted, amended, modified, or terminated any bonus,
profit sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its members, managers,
officers, directors and employees (or taken any such action with
respect to any other Employee Benefit Plan);

(s) none of the
Companies have made any other change in employment terms for any of
its directors, officers, members, managers and employees outside
the Ordinary Course of Business;

(t) none of the
Companies have made or pledged to make any charitable or other
capital contribution;

(u) neither Seller nor
the Companies have received any written notice from any
Governmental Body or any other Person regarding the ability of the
Companies own or operate the Businesses or the Assets, or the
intention of any Governmental Body to challenge or oppose the
Buyer’s ownership or operation of the Businesses or the
Assets;

(v) except as set forth
on Schedule
4.10(v), none of the Companies have discharged, in whole or
in part, a material obligation or Lien outside the Ordinary Course
of Business;

(w) except as set forth
on Schedule
4.10(w), there has been no written indication by any
customer or supplier of the Businesses of an intention to
discontinue or change the terms of its relationship with the
Companies or the Businesses;

(x) none of the
Companies have disclosed any Confidential Information except
pursuant to a non-disclosure or similar agreement governing such
disclosure;

(y) there has been no
change in the accounting methods, principles or practices for
financial accounting with respect to the Companies (except for
those changes required by the Companies’ independent auditors
to comply with GAAP) or for IRS reporting purposes;

(z) neither the Seller
nor any of the Companies has committed to do any of the foregoing;
and

(aa)      there
has not been any other material occurrence, event, incident,
action, or transaction outside the Ordinary Course of Business
involving the Companies.

4.11 Undisclosed Liabilities; Financial
Statements; Accounts Receivable.

(a) Except as
specifically disclosed on Schedule
4.11(a), the Companies have no liabilities, obligations or
commitments of a type required to be reflected on a balance sheet
prepared in accordance with GAAP, except (i) those which are
adequately reflected or reserved against in the Most Recent
Financial Statements as of the Most Recent Fiscal Month End, and
(ii) those which have been incurred in the Ordinary Course of
Business since the Most Recent Fiscal Month End and which are not
material in amount.

(b) Schedule
4.11(b) contains copies of the following financial
statements (collectively, the “Financial Statements”):
(a) audited balance sheets and statements of income, changes in
members’ equity, and cash flow as of and for the fiscal years
ended December 31, 2015 (the “Most Recent Fiscal Year
End”) for the Companies; and (b) unaudited balance
sheets and statements of income, changes in stockholders’
equity, and cash flow (the “Most Recent Financial
Statements”) as of and for the nine (9) months ended
September 30, 2016 (the “Most Recent Fiscal Month
End”), for the Companies. In addition, on or before
Closing, Sellers will provide Buyer with the Closing Statement in
accordance with Section 6.1(j). The Financial
Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly in accordance with GAAP the
financial condition of the Companies as of such dates and the
results of operations of the Companies for such periods, are
correct and complete in all material respects, and are consistent
with the books and records of the Companies (which books and
records are correct and complete in all material respects);
provided,
however, that the
Most Recent Financial Statements are subject to normal year-end
adjustments (which will not be material individually or in the
aggregate) and lack footnotes and other presentation
items.

 

14

 

(c) Schedule
4.11(c) to this Agreement sets forth a list of the Accounts
Receivable as of the date hereof.

 

4.12 Permits.

(a) Schedule
4.12(a) contains (i) a complete and accurate list of all
material Permits, licenses, Consents, Governmental Authorizations
and Approvals owned by the Companies that are necessary or required
to own, construct, operate and develop the Businesses, the Assets
and the Properties (collectively, the “Permits”). Schedule
4.12(a) also contains a complete and accurate list of all
Permits, Governmental Authorizations, Consents, licenses, and
Approvals for which the Companies or Seller have made application
with respect to the ownership, operation, construction, and
development of the Businesses and the Properties where such
application is still pending as of the Effective Date and at
Closing. The Companies have not received any written notice from
any Governmental Body of rejection of any such application or any
notice that any such application is being considered for rejection.
Each Permit is valid and in full force and effect. The Permits
listed or required to be listed in Schedule
4.12(a) collectively constitute all of the material Permits
necessary or required to permit the Companies to lawfully conduct
and operate each Business on each Property in accordance with all
Legal Requirements. The Companies are in material compliance with
all of the terms and requirements of each Permit listed or required
to be listed in Schedule
4.12(a).

(b) Seller has
delivered or made available, or has caused to be delivered or made
available, to Buyer (or its Representatives) copies of (i) all
Permits and Approvals and applications therefor referred to above
in this Section
4.12, and (ii) all other written correspondence between
Seller or the Companies (or their Representatives) and the
applicable Governmental Bodies in connection with such Permits and
applications therefor since January 1, 2013.

(c) Except as set forth
in Schedule
4.12(c), to the Knowledge of Seller, no event has occurred
or circumstance exists that could reasonably be expected to (A)
constitute or result in a material violation of or a material
failure to comply with any material term or material requirement of
any Permit listed or required to be listed in Schedule
4.12(a), or (B) result in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to,
any Permit or Approval.

(d) Except as set forth
in Schedule
4.12(d), neither Seller nor the Companies have received any
notice from any Governmental Body or any other Person regarding (A)
any actual, alleged, possible or potential violation of or failure
to comply with any term or requirement of any Permit or (B) any
actual, proposed, possible or potential revocation, withdrawal,
suspension, cancellation, termination of or modification to any
Permit; and

(e) All applications
required to have been filed for the renewal of the Governmental
Authorizations listed or required to be listed in Schedule
4.12(a) have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings required to
have been made with respect to such Permits have been duly made on
a timely basis with the appropriate Governmental
Bodies.

4.13 Governmental
Authorizations.

 

15

 

(a) Schedule
4.13(a) contains a complete and accurate list of each
Governmental Authorization (including document title or name,
issuing authority and identifying number) held by the Companies or
the Seller that relates to the Companies, the Assets, including the
Properties, or the Businesses. Seller has delivered or made
available to Buyer a true and complete copy of all such
Governmental Authorizations. Each Governmental Authorization listed
or required to be listed on Schedule
4.13(a) is valid and in full force and effect. The Companies
are in material compliance with all of the terms and requirements
of each Governmental Authorization identified or required to be
identified on Schedule
4.13(a). To
the Knowledge of Seller, no event has occurred or circumstance
exists that could reasonably be expected to (a) constitute or
result in a material violation of or a material failure to comply
with any term or requirement of any Governmental Authorization
listed or required to be listed on Schedule
4.13(a), or (b) result in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to,
any Governmental Authorization listed or required to be listed on
Schedule
4.13(a).

(b) Except as set forth
in Schedule
4.13(b), neither the Companies nor the Seller have received
within four (4) years prior to the Most Recent Fiscal Year
End, any notice from any Governmental Body or any other Person
regarding (i) any actual, alleged, possible or potential violation
of or failure to comply with any term or requirement of any
Governmental Authorization relating to any Company, any Business or
the Assets, including any Property, or (ii) any actual, proposed,
possible or potential revocation, withdrawal, suspension,
cancellation, termination of or modification to any Governmental
Authorization relating to the Companies, the Businesses or the
Assets, including the Properties. Any registration, declaration, or
filing with, or Consent, or other Governmental Authorization or
order by, any Governmental Body that is required in connection with
the valid execution, delivery, acceptance, and performance by
Seller and the Companies under this Agreement, or the consummation
by Seller of any Contemplated transaction under this Agreement, has
been or will be completed, made, or obtained on or before the
Closing Date.

(c) All applications
required to have been filed for the renewal of the Governmental
Authorizations listed or required to be listed on Schedule
4.13(a) have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings required to
have been made with respect to such Governmental Authorizations
have been duly made on a timely basis with the appropriate
Governmental Bodies.

(d) The Governmental
Authorizations listed or required to be listed on Schedule
4.13(a) collectively constitute all of the Governmental
Authorizations necessary to permit the Companies to lawfully own,
lease, operate, construct and develop each Business on each
Property and to otherwise operate and conduct the Businesses in the
manner in which the Companies are currently conducted. Such
Governmental Authorizations also collectively constitute all of the
Governmental Authorizations necessary to permit the Companies to
own, lease, occupy, operate, improve, develop and use the Assets,
including the Properties, and the Businesses in the manner in which
the Companies currently own occupy, operate, improve, develop and
use the Assets, including the Properties and operate the
Businesses, and are valid and in full force and
effect.

4.14 Compliance
With Legal Requirements.

(a) Except as set forth
in Schedule
4.14: (i) to the Knowledge of Seller, the Companies are, and
at all times have been, in material compliance with each Legal
Requirement that is or was applicable to it or to the conduct or
operation of the Businesses or the ownership or use of any of their
Assets, including the Properties; (ii) to the Knowledge of Seller,
no event has occurred or circumstance exists that (with or without
notice or lapse of time) (A) may constitute or result in a
violation by any Company of, or a failure on the part of any
Company to comply with, any material Legal Requirement, or (B) may
give rise to any obligation on the part of any Company to
undertake, or to bear all or any portion of the cost of, any
Remedial Action of any nature; and (iii) neither the Seller nor the
Companies have received any notice from any Governmental Body or
any other Person regarding (A) any actual, alleged, possible or
potential violation of, or failure to comply with, any Legal
Requirement, or (B) any actual, alleged, possible or potential
obligation on the part of the Company to undertake, or to bear all
or any portion of the cost of, any Remedial Action of any
nature.

4.15 Tax Matters.

 

16

 

(a) From the date of
its organization, each Company has been taxed and treated as a
partnership under the Code and relevant state law for federal
and/or state income tax purposes.

(b) Each Company has
filed all Tax Returns that it was required to file under applicable
Legal Requirements and regulations. Except as described on
Schedule
4.15(b), all such Tax Returns were correct and complete in
all respects and have been prepared in substantial compliance with
all applicable laws and regulations. All Taxes due and owing by the
Companies (whether or not shown on any Tax Return) have been paid.
No Company is currently the beneficiary of any extension of time
within which to file any Tax Return. No claim has ever been made by
an authority in a jurisdiction where no Company files Tax Returns
that any Company is or may be subject to taxation by that
jurisdiction. There are no Liens for Taxes (other than Taxes not
yet due and payable) upon any of the Assets of the Companies. As of
the Closing Date, each Company will have paid all Taxes (other than
Taxes not yet due and payable) and with respect to any Taxes that
are not yet due and payable as of the Closing Date, each Company
has adequately reserved for such Taxes, except as described on
Schedule
4.15(b).

(c) Each Company has
withheld and paid all Taxes required to have been withheld and paid
in connection with any amounts paid or owing to any employee,
independent contractor, creditor, member, or other third
party.

(d) Neither Seller, nor
any member, manager, director or officer (or employee responsible
for Tax matters) of the Companies, expects any authority to assess
any additional Taxes for any period for which Tax Returns have been
filed. Except as shown on Schedule
4.15(d), no foreign, federal, state, or local tax audits or
administrative or judicial Tax proceedings are pending or being
conducted with respect to any Company. No Company has received from
any foreign, federal, state, or local taxing authority (including
jurisdictions where such Company has filed Tax Returns) any (i)
notice indicating an intent to open an audit or other review, (ii)
request for information related to Tax matters, or (iii) notice of
deficiency or proposed adjustment for any amount of Tax proposed,
asserted, or assessed by any taxing authority against such
Company.

(e) Schedule
4.15(e) lists all federal, state, local, and foreign income
Tax Returns filed with respect to each Company for taxable periods
ended on or after December 31, 2013, indicates those Tax Returns
that have been audited, and indicates those Tax Returns that
currently are the subject of audit. Seller has delivered to Buyer
correct and complete copies of all federal income Tax Returns,
examination reports, and statements of deficiencies assessed
against or agreed to by each Company filed or received since the
formation of each Company.

(f) No Company has
waived any statute of limitations in respect of Taxes or agreed to
any extension of time with respect to a Tax assessment or
deficiency.

(g) Schedule
4.15(g) sets forth the tax basis of each Company in its
depreciable assets as of December 31, 2015, the most recent
practicable date, as well as on an estimated pro forma basis
immediately prior to the Closing (without giving effect to the
consummation of the Contemplated Transactions).

(h) Except as set forth
on Schedule
4.15(h), the unpaid Taxes of each Company, if any (i) did
not, as of the most recent fiscal month end of each Company, exceed
the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and
Tax income) set forth on the face of the most recent balance sheet
of each Company, and (ii) do not exceed that reserve as adjusted
for the passage of time through the Closing Date in accordance with
the past custom and practice of each Company in filing its Tax
Returns. Since the date of the most recent balance sheet of each
Company, no Company has incurred any liability for Taxes arising
from extraordinary gains or losses, as that term is used in GAAP,
outside the Ordinary Course of Business consistent with past custom
and practice.

(i) No Company will be
required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion
thereof) ending after the Closing Date as a result of any: (i)
change in method of accounting for a taxable period ending on or
prior to the Closing Date, (ii) “closing agreement” as
described in Code Section 7121 (or any corresponding or similar
provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date, (iii) installment sale or open
transaction disposition made on or prior to the Closing Date, or
(iv) prepaid amount received on or prior to the Closing
Date.

 

17

 

4.16 Condition of the
Properties.

(i) To the Knowledge of
Seller, there are no structural deficiencies or latent or patent
defects affecting any of the Improvements on any Property and, to
the Knowledge of Seller, there are no facts or conditions affecting
any of the Improvements which would, individually or in the
aggregate, reasonably be expected to interfere in any material
respect with the use or occupancy of the Improvements or any
portion thereof as they are currently being used by the
Companies.

(ii) There is no
condemnation, expropriation or other proceeding in eminent domain,
pending or, to the Knowledge of Seller, threatened, affecting any
of the Properties or any portion thereof or interest therein.
Except as shown on Schedule
4.16(i), there is no injunction, decree, order, writ or
judgment outstanding, nor any claims, litigation, administrative
actions or similar proceedings, pending or, to the Knowledge of
Seller, threatened, relating to the ownership, lease, use or
occupancy of each Property or any portion thereof.

(iii) To the Knowledge of
Seller, the operation of the Lunenburg Landfill does not violate
the current zoning for the Lunenburg Property. The Petersburg
Property is currently zoned (i) “Ordinance 09-ORD-57”
under Article 37, Municipal Solid Waste Landfill Uses, of the
Petersburg Zoning Ordinance (Landfill); and (ii) “M-2”
Heavy Industrial District under Article 37, Municipal Solid Waste
Landfill Uses, of the Petersburg Zoning Ordinance (350 Industrial
Drive and 2053 North Factory Lane). To the Knowledge of Seller, the
operation of the Transfer Station does not violate the current
zoning for the Transfer Station Property. To the Knowledge of
Seller, the operation of the Hauling Company does not violate the
current zoning for the Hauling Company Property. To the Knowledge
of Seller, there is no pending or anticipated change in any zoning
or land use laws applicable to the Properties that will materially
impair the development, construction, operation or use of any
Property or any portion thereof as a municipal solid waste
landfill, a municipal solid waste transfer station, or a Hauling
Company Business, or otherwise as each Property is currently being
used. The Seller has not received any notice of violation of any
building, zoning, comprehensive planning, subdivision, health and
safety and other land use laws, regulations, ordinances and rules
affecting the Properties. To the Knowledge of Seller, the
Properties are in compliance with all Legal Requirements, including
all applicable building, zoning, comprehensive planning,
subdivision, health and safety and other land use laws,
regulations, ordinances and rules affecting the Properties
(collectively, the “Real Property Laws”),
and, to the Knowledge of Seller, the current use, operation and
occupancy of the Properties, including the use, occupancy and
operation of the Businesses, does not violate any Real Property
Laws. The Seller has not received any written notice of violation
of any Real Property Law.

(iv)  All water,
oil, gas, electrical, telecommunications, sewer, storm and waste
water systems and other utility services or systems for each
Property which have been installed are operational.

(v) All material
Governmental Authorizations, Approvals, Consents and Permits which
are required or appropriate to use or occupy the Properties by the
Companies and for the Companies to own, operate, construct and
develop the Businesses on the Properties have been issued and are
in full force and effect. Except as shown on Schedule
4.16(v), Seller has not received any notice from any
Governmental Body or other entity having jurisdiction over the
Properties threatening a current or prospective suspension,
revocation, modification or cancellation of any Governmental
Authorization, Consent, Approval or Permit and, to the Knowledge of
Seller, there is no basis for the issuance of any such notice or
the taking of any such action.

(vi) Other than as set
forth on Schedule
4.l6(viii), to the Knowledge of Seller, there are no leases
affecting any Property and, to the Knowledge of Seller, the
Properties are not subject to any outstanding agreement of sale,
option, or other right of any third party to acquire any interest
therein, except this Agreement. Other than as set forth on
Schedule
4.l6(vi), none of the Seller or the Companies is a party to
any Contract or any other agreement which will affect the
Properties, the Companies and/or Buyer from and after the Closing,
including, but not limited to any maintenance, repair, service,
pest control or supply, management, employment, equipment,
equipment rental, or any other agreements used in connection with
the Properties.

 

18

 

(vii) To the Knowledge of
Seller, each Property has legal access to a public right-of-way.
None of the Seller or the Companies is a party to any easements,
rights of way, reservations of gas, timber, mineral rights, leases
or other Liens which do not appear in the Public Records of City of
Petersburg, Virginia or the County of Lunenburg, Virginia. Seller
shall not grant, convey, dispose of, sell, encumber, assign or
transfer any interest in any Property, including but not limited to
any contract, option, lease, easement, or other agreement granting
any interest whatsoever in the Properties, without the prior
written consent of Buyer. Except as set forth in Schedule
4.16(vii), the Companies hold fee simple title to the
Properties.

(viii) Schedule
4.16(viii) lists each Real Property Lease to which any
Company is a party. Each Real Property Lease is legal, valid,
binding, enforceable and in full force and effect. Except as set
forth on Schedule
4.16(viii), the Contemplated Transactions do not require the
Consent of any other party to such Real Property Lease, will not
result in a Breach of or default under such Real Property Lease,
and will not otherwise cause such Real Property Lease to cease to
be legal, valid, binding, enforceable and in full force and effect
on identical terms following the Closing. The possession and quiet
enjoyment of the any Property under any Real Property Lease has not
been disturbed and there are no currently unresolved disputes with
respect to such Real Property Lease. Neither the Companies, nor, to
the Knowledge of Seller, any other party to such Real Property
Lease, is in Breach or default under the Real Property Lease, and,
to the Knowledge of Seller, no event has occurred or circumstance
exists which, with the delivery of notice, the passage of time or
both, would constitute such a Breach or default, or permit the
termination, modification or acceleration of rent under such Real
Property Lease. No security deposit or portion thereof deposited
with respect to such Real Property Lease has been applied in
respect of a breach or default under such Real Property Lease which
has not been redeposited in full. No Company owes, or will owe in
the future, any brokerage commissions or finder’s fees with
respect to such Real Property Lease. Except as shown on
Schedule
4.16(viii), the other party to each Real Property Lease is
not an affiliate of, and otherwise does not have any economic
interest in Seller or its respective Related Persons. Except as
shown on Schedule
4.16(viii), neither Seller nor any Company has subleased,
licensed or otherwise granted any Person the right to use or occupy
any Property or any portion thereof. Except as shown on
Schedule
4.16(viii), neither Seller no any Company has collaterally
assigned or granted any other security interest in any Property
subject to a Real Property Lease or any interest therein. Except as
shown on Schedule
4.16(viii), there are no Liens or other encumbrances on the
estate or interest created by any Real Property Lease.

4.17 Conveyance of Entire Interest In the
Companies. At Closing, all of Seller’s right, title
and interest in and to the Membership Interests will be transferred
and conveyed to Buyer free and clear of all Liens.

4.18 Contracts.

(a) The only Contracts
to which any Company is a party are described in Schedule
4.18(a) (“Company Contracts”), and
correct and complete copies of all such Contracts have been made
available or provided to Buyer.

(b) The Seller does not
have and may not acquire any rights under any Company Contract, and
Seller does not have and will not become subject to any obligation
under any Company Contract, that relates to the Businesses of the
Companies.

(c) Except as set forth
on Schedule
4.18(c), (i) the
Company Contracts are legal, valid, binding, enforceable, and in
full force and effect (except as enforcement thereof may be limited
by applicable Insolvency Laws), and will continue to be legal,
valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the Contemplated
Transactions; (ii) each Company is, and at all times has been, in
material compliance with all applicable terms and requirements of
the Company Contracts; (iii) to the Knowledge of Seller, no event
has occurred or circumstance exists that (with or without notice or
lapse of time) will contravene, conflict with or result in a Breach
of, or give the Companies or other Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity
or performance of, or payment under, or to cancel, terminate or
modify, the Company Contracts; (iv) to the Knowledge of Seller, no
party to the Company Contracts has threatened to terminate its
business relationship with the Companies for any reason; and (v)
neither Seller or any Company has given to or received from any
other Person any notice regarding the actual, alleged, possible or
potential Breach of any Company Contract.

 

19

 

(d) Except as set forth
on Schedule
4.18(d), there are no
renegotiations of, attempts to renegotiate or outstanding rights to
renegotiate any material amounts paid or payable to the Companies
under the Company Contracts Outside the Ordinary Course of Business
with any Person having the contractual or statutory right to demand
or require such renegotiation and no such Person has made written
demand for such renegotiation.

(e) Each Company
Contract relating to the sale or provision of services by the
Companies has been entered into in the Ordinary Course of Business
of any Company and has been entered into without the commission of
any act alone or in concert with any other Person, or any
consideration having been paid or promised, that is or would be in
violation of any Legal Requirement.

4.19 Powers of Attorney. There are
no outstanding powers of attorney executed on behalf of the
Companies.

4.20 Litigation. Except as set forth
in Schedule
4.20 (which lists pending or threatened Proceedings, all of
which are referred to as “Current Litigation
Matters”), there is no pending or, to the Knowledge of
Seller, threatened Proceeding: (i) by or against the Companies;
(ii) that could reasonably be expected to have a Material Adverse
Affect on the Business of, or any of the Assets owned or used by,
the Companies or (iii) that challenges, or that may have the effect
of preventing, delaying, making illegal or otherwise interfering
with, any of the Contemplated Transactions, the Businesses or the
Assets, or the ownership, construction, development, or operation
of any of the Properties as either a municipal solid waste
landfill, municipal solid waste transfer station or Hauling Company
Business by the Companies. To the Knowledge of Seller, no event has
occurred or circumstance exists that is reasonably likely to give
rise to or serve as a Basis for the commencement of any such
Proceeding. Except as set forth in Schedule
4.20, (i) there is no Order to which the Companies, their
Businesses or any of the Assets is subject or that in any way
relates to or could reasonably be expected to affect the Companies,
the Businesses or the Assets, or the ownership, construction,
development, or operation of the Properties as either a municipal
solid waste landfill, municipal solid waste transfer station or
Hauling Company Business by the Companies; and (ii) no officer,
director, member, manager, agent or employee of the Companies is
subject to any Order that prohibits such officer, director member,
manager, agent or employee from engaging in or continuing any
conduct, activity or practice relating to the Businesses of the
Companies. Except as set forth on Schedule
4.20, (i) each of
Seller and the Companies are, and at all times have been, in
compliance with all of the terms and requirements of any Order,
(ii) to the Knowledge of Seller, no event has occurred or
circumstance exists that is reasonably likely to constitute or
result in (with or without notice or lapse of time) a violation of
or failure to comply with any term or requirement of any such
Order, and (iii) neither Seller nor the Companies has received any
notice from any Governmental Body or any other Person regarding any
actual, alleged, possible or potential violation of, or failure to
comply with, any term or requirement of any such
Order.

4.21 Employees. Schedule
4.21 sets forth for all employees of the Companies: the (i)
name, (ii) job title, (iii) date of hiring or engagement, (iv) date
of commencement of employment or engagement, (v) current or
deferred compensation paid or payable, (vi) sick and vacation leave
that is accrued but unused, (vii) service credited for purposes of
vesting and eligibility to participate under any Employee Benefit
Plan, or any other employee benefit plan and (viii) details of any
material disciplinary problems within the past two (2) years. No
retired employees of the Companies, or their dependents, are
receiving benefits or are scheduled to receive benefits in the
future from the Companies. To the Knowledge of Seller, no officer,
director, agent, manager, employee, consultant, or independent
contractor of the Companies is bound by any Contract that purports
to limit the ability of such officer, director, manager, agent,
employee, consultant, or independent contractor (a) to engage in or
continue or perform any conduct, activity, duties or practice
relating to the Businesses of the Companies or (b) to assign to the
Companies or to any other Person any rights to any invention,
improvement, or discovery used in the Businesses. To the Knowledge
of Seller, no former or current officer, director, member, manager,
agent, employee, consultant, or independent contractor of the
Companies is a party to, or is otherwise bound by, any Contract
that in any way adversely affected, affects, or will affect the
ability of the Companies to conduct the Businesses as currently
carried on by the Companies. Except as set forth on Schedule
4.22, all salaries, wages and other compensation and
benefits payable to each officer, director, agent, manager,
employee, consultant, or independent contractor of the Companies
has been accrued and paid by the Companies when due for all periods
through the Closing Date, or will have been paid by the Companies
when due for all periods through the Closing Date. Except as set
forth in Schedule
4.21, the employment of each employee who is employed by
each Company can be terminated by the Companies upon not more than
fourteen (14) days’ notice without severance, penalty or
premium, other than payment of accrued salaries, wages and vacation
benefits. Neither Seller nor any Company has violated the Worker
Adjustment and Retraining Notification Act (the “WARN Act”) or any similar
state or local Legal Requirement. Robert W. Guidry, Charles A.
Wilcox, Timothy L. Webb, and A. Jeffrey Kraus are the only
employees or individuals actively engaged in the fundamental
operations of the Companies who own any interest in
Guarantor.

 

20

 

4.22 Labor
Disputes; Compliance.

(a) Except as set forth
on Schedule
4.22, each Company has complied in all respects at all times
with all Legal Requirements, including all Occupational Safety and
Health Laws, relating to employment practices, terms and conditions
of employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, payment of social security and
similar Taxes, collective bargaining and other requirements under
applicable Legal Requirements. The Companies are not liable for the
payment of any Taxes, including any social security and similar
Taxes, fines, penalties, interest, back wages, front pay,
liquidated or compensatory damages, exemplary damages or other
amounts, however designated, for failure to comply with any of the
foregoing Legal Requirements.

(b) The Companies have
not been, and are not now, a party to any collective bargaining
agreement or other labor Contract. There has not been, there is not
presently pending or existing, and to The Knowledge of Seller,
there is not threatened, any strike, slowdown, picketing, work
stoppage or employee grievance process involving the Companies.
Except as set forth on Schedule
4.22, to the Knowledge of Seller, no event has occurred or
circumstance exists that could provide the Basis for any work
stoppage or other labor dispute. Except as set forth on
Schedule
4.22, there has not been, there is not presently pending or
existing, and, to the Knowledge of Seller, there is not overtly
threatened any Proceeding, charge, grievance proceeding or other
claim against or affecting the Companies (or any director, officer,
manager, member or employee thereof) relating to the actual or
alleged violation of any Legal Requirement pertaining to labor
relations or employment matters, including any charge or complaint
filed by an employee or union with the National Labor Relations
Board, the Equal Employment Opportunity Commission or any
comparable Governmental Body, and there is no organizational
activity or other labor dispute against or affecting the Companies
or the Businesses. There is no organizational activity or other
labor dispute against or affecting the Businesses or the Companies
and no application or petition for an election of or for
certification of a collective bargaining agent is pending. No
grievance or arbitration Proceeding exists that might have a
Material Adverse Effect upon the Companies or the conduct of the
Businesses. Except as set forth on Schedule
4.22, neither the Companies nor the Seller have been served
notice of, and Seller and the Companies do not otherwise have
Knowledge of, any grievance or arbitration Proceeding by any
employee of the Companies that might have an adverse effect upon
the Companies, the Assets or the conduct of the Businesses. Since
January 1, 2013, there has been no charge of discrimination filed
against or, to the Knowledge of Seller, threatened against the
Companies with the Equal Employment Opportunity Commission or
similar Governmental Body. There is no lockout by the Companies of
any employees of the Companies, and no such action is contemplated
by Seller or the Companies.

4.23 Employee Benefits. Schedule
4.23 sets forth each Employee Benefit Plan pursuant to which
any employee or former employee is entitled to benefits that the
Companies maintain, to which the Companies contribute, or have any
obligation to contribute. Schedule
4.23 also sets forth each Employee Welfare Benefit Plan (as
defined by ERISA) which the Companies maintain, contribute to or
have an obligation to contribute to for providing health or life
insurance or other welfare-type benefits for current or future
retired or terminated directors, officers or employees (or any
spouse or other dependent thereof) of the Companies other than in
accordance with COBRA. 

 

21

 

4.24 Guaranties. Except as set forth
on Schedule
4.24, the Companies are not a guarantor and are not
otherwise liable for any obligation (including Indebtedness) of any
other Person.

4.25 Environmental
Matters.

(a) Except as disclosed
on Schedule
4.25, (i) the Companies have not treated, stored, disposed
of, arranged for or permitted the disposal of, transported,
handled, manufactured, distributed, or released any substance,
including without limitation any Hazardous Material, or owned or
operated any property or facility (and no such property or facility
is contaminated by any such substance) so as to give rise to any
current or future Liabilities, including any Liability for fines,
penalties, response costs, corrective action costs, personal
injury, property damage, natural resources damages or
attorney’s fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”), the Solid Waste
Disposal Act, as amended (“SWDA”) or any other
Environmental Laws; (ii) the Properties do not now contain any
underground storage tanks; (iii) neither this Agreement nor the
consummation of the Contemplated Transactions will result in any
obligations for site investigation or cleanup, or notification to
or consent of government agencies or third parties, pursuant to any
of the so-called “transaction-triggered” or
“responsible property transfer” Environmental Laws; and
(iv) the Companies have not assumed, including without limitation
any obligation for corrective or Remedial Action, any obligation of
any other Person relating to Environmental Laws.

(b) Except as disclosed
on Schedule
4.25 (b) to the Knowledge of Seller, (i) each Company has
complied in all material respects, and is presently in compliance
in all material respects, with all applicable Environmental Laws
pertaining to the ownership and operation of the Assets, the
Properties and the Businesses, and (ii) neither Seller nor the
Companies have received any communication alleging that they are
not in compliance with any Environmental Law. Except as disclosed
on Schedule
4.25 (b), there
are no pending or, to the Knowledge of Seller, threatened
Proceedings of any nature resulting from any Environmental, Health
and Safety Liabilities or arising under or pursuant to any
Environmental Law with respect to or affecting the Companies, the
Businesses, the Properties or any of the Assets of the Companies.
Except as disclosed on Schedule
4.25 (b), to
the Knowledge of Seller, no Property contains wetlands, vegetation,
animal species or significant historic/archaeological sites which
are subject to special regulations or limitations under any Legal
Requirement. To the Knowledge of Seller, no unacceptable material
has deposited or buried on or under the Properties in violation of
any Permit, Governmental Authorization or Legal Requirement, no
toxic wastes or Hazardous Materials have been deposited, disposed
of, stored, generated or released on or from the Properties, and
there are no cemeteries, grave sites or other burial sites located
on the Properties.

4.26 Certain Business Relationships with
the Company. Except as disclosed on Schedule
4.26, neither Seller, nor their Related Persons, nor the
officers, directors, managers, members and employees of the
Companies have been involved in any business arrangement or
relationship with the Companies within the past twelve (12) months,
and neither Seller, nor their Related Persons, nor the officers,
directors, employees, members, managers, directors and officers of
the Companies owns any asset, tangible or intangible, which is used
in the Business of the Companies. Neither the Companies nor its
Related Persons, their respective officers, employees, members,
managers, directors and officers of the Companies nor any Seller
nor any Related Person of any of them owns, or has owned, of record
or as a beneficial owner, an equity interest or any other financial
or profit interest in any Person that has (a) had business dealings
or a material financial interest in any transaction with the
Companies other than business dealings or transactions disclosed in
Schedule
4.26, each of which has been conducted in the Ordinary
Course of Business with the Companies at substantially prevailing
market prices and on substantially prevailing market terms or (b)
engaged in competition with the Companies with respect to any line
of the products or services of the Companies in any market
presently served by the Companies. Except as set forth
in Schedule
4.26, neither the Companies nor its Related Persons, their
respective officers, employees, members, managers, directors and
officers of the Companies, nor the Seller nor any Related Person of
any of them is a party to any Contract with, or has any claim or
right against, the Companies.

 

22

 

4.27 Intellectual Property.
Schedule
4.27 contains a complete and accurate list and summary of
all Intellectual Property owned or possessed by the Companies, or
which the Companies have the right to use pursuant to a valid and
enforceable, written license, sublicense, agreement, or permission
(collectively and together with the Intangible Personal Property,
the “Intellectual
Property Assets”). Such Intellectual Property Assets
constitute all of the Intellectual Property necessary for the
operation of the Businesses of the Companies as presently
conducted. To the Knowledge of Seller, the Intellectual Property
Assets do not infringe on the intellectual property rights of any
Person. The Companies are the owner or licensee of all right, title
and interest in and to each of the Intellectual Property Assets,
free and clear of all Liens. The Companies have the right to use
all of the Intellectual Property Assets without payment to any
third party. Each Company owns or has the right to use pursuant to
ownership, license, sublicense, agreement, permission or free and
unrestricted availability to general public all of the Intellectual
Property Assets used by such Company. To the Knowledge of Seller,
the Companies have not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and neither Seller,
nor the Companies, or their respective members, managers, directors
and officers and employees has ever received any written charge,
complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim
that the Companies must license or refrain from using any
intellectual property rights of any third party). To the Knowledge
of Seller, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any
proprietary intellectual property rights of the
Companies.

4.28 Insurance. Schedule
4.28 sets forth the following
information with respect to each insurance policy (including
policies providing property, casualty, liability, and
workers’ compensation coverage and bond and surety
arrangements) to which the Companies have been a party, a named
insured, or otherwise the beneficiary of coverage at any time
within the past five (5) years (“Insurance Policies” and
“Insurance
Policies”): (a) the name, address, and telephone
number of the agent; (b) the name of the insurer, the name of the
policyholder, and the name of each covered insured; and (c) the
policy number and the period of coverage. Such Insurance Policies
constitute policies of insurance of the type and in the amounts
customarily carried by Persons conducting businesses or assets
similar to the Businesses and Assets of the Companies. True,
correct and complete copies of the Insurance Policies have been
made available or furnished to Buyer. With respect to each such
Insurance Policy: (i) the Insurance Policy is in full force and
effect; (ii) the Insurance Policy will continue to be in full force
and effect on identical terms following the consummation of the
Contemplated Transactions; (iii) the Companies are not in Breach or
default (including with respect to the payment of premiums or the
giving of notices), and, to the Knowledge of Seller, no event has
occurred which, with notice or the lapse of time, would constitute
such a Breach or default, or permit termination, modification, or
acceleration, under the Insurance Policy; and (iv) to the Knowledge
of Seller, no party to any Insurance Policy has repudiated any
provision thereof. All premiums due and payable on any of Insurance
Policies or renewals thereof have been paid or will be paid timely
through the Closing Date. Neither Seller nor the Companies have
received any notice of cancellation or non-renewal of any Insurance
Policy nor, to the Knowledge of Seller, is the termination of any
such policies threatened. Neither Seller nor the Companies have
received any notice of cancellation or non-renewal of any Insurance
Policy nor, to the Knowledge of the Seller, is the termination of
any such Insurance Policies threatened. Neither the Seller nor the
Companies have received any notice from the insurer denying
coverage or reserving rights with respect to a material claim
currently pending under any Insurance Policy or with respect to any
Insurance Policy in general. The Companies have not incurred any
material loss, damage, expense or obligation that was or would be
covered by any Insurance Policy for which it has not properly
asserted a claim under any Insurance Policy and which has been paid
in an amount equal to the full claim made or pending. The Companies
have been covered during the past four (4) years by insurance
in scope and amount customary and reasonable for the Businesses in
which it has engaged. Schedule
4.28 describes any self-insurance arrangements affecting the
Companies.

4.29 Corrupt Practices. Except in
compliance with all Legal Requirements, neither the Seller, the
Companies, nor any of their Related Persons, or each of their
respective officers, directors, employees or agents, have, directly
or indirectly, ever made, offered or agreed to offer anything of
value to (a) any employees, Representatives or agents of any
customers of Seller or the Companies for the purpose of attracting
business to Seller or the Companies or (b) any domestic
governmental official, political party or candidate for government
office or any of their employees, Representatives or
agents.

 

23

 

4.30 Disposal Agreements. Except as
disclosed on Schedule
4.30, the Companies are not a party to, nor are they bound
by, any Contract, undertaking, obligation, responsibility or other
agreement which requires any solid waste (of any class) collected
by any Company to be deposited in any landfill or transferred
through any transfer station or other disposal facility, or
requires any Company to deposit any such solid waste at the
Properties or mandates the terms and conditions pursuant to which
the Companies will accept any such solid waste at the Properties.
Except as disclosed on Schedule
4.30, the Companies are not bound by any disposal contract,
put or pay contract or other agreement or undertaking which after
Closing will restrict the Companies in any way from depositing,
transferring or delivering any solid waste to the Properties or any
other solid waste disposal, processing or transfer facility
selected by the Companies.

4.31 Solvency. Neither Seller nor
the Companies are Insolvent and neither the Seller nor any Company
has committed an act of bankruptcy, proposed a compromise or
arrangement to its creditors generally, had any petition in
bankruptcy filed against it, filed a petition or undertaken any
action or proceeding to be declared bankrupt, to liquidate its
assets or to be dissolved. The Contemplated Transactions will not
cause the Companies to become Insolvent or to be unable to satisfy
and pay their respective debts and obligations generally as they
come due.

4.32 Exclusivity of Representations and
Warranties. Buyer is not aware of any facts and/or
circumstances that would make any of the representations and
warranties of Seller contained in this Agreement untrue or
misleading. In entering into this Agreement, Buyer has relied
solely upon its own investigation and analysis and the
representations and warranties of Seller contained in this
Agreement, and Buyer acknowledges that, other than as set forth in
this Agreement, neither Seller or any of its directors, officers,
employees, Affiliated Groups, members, agents or representatives
makes or has made any representation or warranty, either express or
implied, (x) as to the accuracy or completeness of any of the
information provided or made available to Buyer or any of its
agents, representatives, lenders or Affiliated Groups prior to the
execution of this Agreement or (y) with respect to any projections,
forecasts, estimates, plans or budgets of future revenues, expenses
or expenditures, future results of operations (or any component
thereof), future cash flows (or any component thereof) or future
financial condition (or any component thereof) of the Company
heretofore or hereafter delivered to or made available to Buyer or
any of their respective agents, representatives, lenders or
Affiliated Groups. Neither Seller nor any of its directors,
officers, employees, Affiliated Groups, members, agents or
representatives has made, and shall not be deemed to have made, any
representations or warranties in the materials relating to the
business, assets or liabilities of the Companies made available to
Buyer, and no statement contained in any such materials or made in
any such presentation shall be deemed a representation or warranty
hereunder or otherwise or deemed to be relied upon by Buyer in
executing, delivering and performing this Agreement and the
transactions contemplated hereby. It is understood that any cost
estimates, projections or other predictions, any data, any
financial information or any memoranda or offering materials or
presentations, including but not limited to, any offering
memorandum or similar materials made available to Buyer and its
Representatives are not and shall not be deemed to be or to include
representations or warranties of Seller, and are not and shall not
be deemed to be relied upon by Buyer in executing, delivering and
performing this Agreement and the transactions contemplated
hereby.

SECTION
5                                 

COVENANTS

5.1 General. The Parties will
cooperate reasonably with each other and with their respective
Representatives in connection with any steps required to be taken
as part of their respective obligations under this Agreement, and
will (a) furnish upon reasonable request to each other such further
information, (b) execute and deliver to each other such other
documents, and (c) do such other acts and things, all as any other
Party may reasonably request for the purpose of carrying out the
intent of this Agreement and the Contemplated Transactions. In case
at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of
the requesting Party (unless the requesting Party is entitled to
indemnification therefor under Section 7 or Section 8, or unless such cost
or expense is the obligation of the non-requesting Party under this
Agreement). Seller acknowledges and agrees that, from and after the
Closing, Buyer will be entitled to possession of all documents,
books, records (including Tax records), Permits, Governmental
Authorizations, certificates of title, agreements, Company
Contracts, Organizational Documents, financial data and all other
documents of any sort relating to the Companies (all of the
forgoing, the “Company
Documents”).

 

24

 

5.2 Inspection Period. Buyer shall
have an inspection period beginning on the Effective Date and
ending January 31, 2017 (the “Inspection Period”).
Buyer shall have the Inspection Period within which to physically
inspect the Assets, including the Properties, and the Company
Documents and to conduct its due diligence with respect to the
Assets, including the Properties, the Businesses and the Companies.
Buyer and Buyer’s officers, directors, employees,
consultants, agents and attorneys and other authorized
representatives, shall have the right to reasonable access to the
Assets, the Properties and Company Documents and to all records of
Seller and the Companies related thereto, including without
limitation title information, property information, surveys,
maintenance records, environmental assessment reports, engineering
reports and any other information of the Companies, the Businesses
and the Assets, at reasonable times during the Inspection Period,
without unreasonably interfering with the operation of the
Business, for the purpose of inspecting the Assets, including the
Properties, and the Businesses, and conducting all studies, tests,
inspections and measurements of all kinds as deemed necessary by
Buyer, reviewing the books and records of Seller and the Companies
concerning the Companies, the Businesses and the Assets, including
the Properties, and otherwise conducting its due diligence review
of the Companies, the Businesses, and the Assets, including the
Properties. Seller shall cooperate with and assist Buyer in making
such inspections and reviews and in obtaining copies of any
documentation related to the Companies, the Businesses, and the
Assets and Properties, including the review and inspection of any
and all Permits, Approvals, Consents, licenses, Governmental
Authorizations and other permits and approvals necessary or
required for the Companies to own, operate, construct and develop
the Businesses and in accordance with such other applicable local,
state and federal Legal Requirements. Seller shall make available
to Buyer such of the foregoing as may be in Seller’s
possession, or the Companies’ possession, in order to
facilitate Buyer’s due diligence. Seller shall give Buyer any
authorizations which may be required by Buyer in order to gain
access to records or other information pertaining to the Companies,
the Assets, including the Properties, and the Businesses, or the
use thereof maintained by any third party, Governmental Body or
organizations. Buyer and Seller shall mutually agree, prior to the
expiration of the Inspection Period, on any Company Contract that
Buyer does not wish for any Company to continue to be a party
thereto and be bound thereby (“Excluded Contracts”) and
the parties shall execute an amendment to this Agreement to include
a Schedule 5.2
setting forth all Excluded Contracts. If
Buyer or its agents, employees, consultants and contractors shall
in any material manner cause any damage or alteration to the
Assets, including the Properties in conducting any testing or other
due diligence investigation of Assets, including the Properties,
Buyer shall, at its sole cost and expense, promptly and fully
repair and restore any such damage or alteration caused by Buyer or
its agents, employees, consultants and contractors to the condition
same was in immediately prior to the commencement of Buyer’s
testing or due diligence of the Assets, including the Properties.
If the parties do not proceed with the Closing, Buyer shall
promptly return to Seller all written material pertaining to or
reflecting any information provided to Buyer by Seller or
Seller’s agents and will not retain any copies, extracts or
other reproductions in whole or in part of such written material,
and all documents, memoranda, notes and other writings whatsoever
prepared by Buyer or its advisors based on the information provided
to Buyer by Seller or Seller’s agents shall be destroyed.
Prior to Closing and following the termination of this Agreement if
Closing does not occur, Buyer agrees not to disclose to any third
party any non-public information provided to Buyer by Seller or
generated by Buyer through its inspections, except to Buyer’s
agents, contractors, accountants, engineers, consultants, attorneys
or lenders, to the extent necessary for the purposes of this
transaction, or as may be required by law or by court order. Buyer
agrees to indemnify Seller and the Companies, together with
Seller’s Affiliated Group, and the successors, assigns,
employees, officers, directors, trustees, shareholders, attorneys,
representatives and agents of Seller and the Companies
(collectively, the “Seller Indemnified
Parties”) against and to defend and hold the Seller
Indemnified Parties harmless from and against all costs, claims,
injuries, damages, liabilities, accidents, losses arising out of,
caused by or created in connection with (i) death, personal injury,
and/or property damage resulting from Buyer’s and its
agents’ and representatives’ entry upon, or inspections
or tests of, the Properties, or (ii) mechanic’s liens or
claims that may be filed against the Properties and/or adjacent
land by contractors, subcontractors or materialmen performing such
work for Buyer, other than as may be caused by the negligence or
willful misconduct of Seller.

 

25

 

5.3 Intentionally
Omitted.

5.4 Transition. Seller and its
Related Persons will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor,
vendor, customer, supplier, or other business associate of the
Companies from maintaining the same business relationships with the
Companies after the Closing as it maintained with the Companies or
Seller prior to the Closing. The Parties will cooperate to provide
each other with reasonable information systems support to permit a
smooth transfer of business operations between the Parties. In such
regard, Seller will provide Buyer with all information and systems
support in connection with the operation of the Companies and the
Businesses. Such assistance shall include electronic, computer and
other system assistance. Seller will refer all customer inquiries
relating to the Businesses of the Companies to Buyer from and after
the Closing.

5.5 Confidentiality.

(a) Seller hereby
acknowledges and agrees that, through its ownership or operation of
the Companies, it has occupied positions of trust and confidence
with respect to the Companies and the Businesses up to the date
hereof and has had access to, and has become familiar with, the
confidential and non-public information of the Companies and the
Businesses any and all other confidential or proprietary
information concerning the affairs or conduct of the Companies and
the Businesses prior to the date hereof, whether prepared by or on
behalf of the Seller or the Companies (collectively, the
“Confidential
Information”).

(b) Seller hereby
acknowledges and agrees that the protection of the Confidential
Information of the Companies is necessary to protect and preserve
the value of the Companies and the Businesses and Assets of the
Companies, and that without such protection, Buyer would not have
entered into this Agreement and consummated the Contemplated
Transactions. Accordingly, subject to the provisions of
Section 5.5(c),
Seller hereby covenants and agrees, for itself, its Representatives
and Related Persons and its and their successors and permitted
assigns, that, without the prior written Consent of Buyer (which
Consent will be at the Buyer’s absolute discretion to give or
withhold), Seller will not, nor will Seller cause or permit any of
its Representatives or Related Persons to, at any time on or after
the Closing Date, directly or indirectly, disclose to any Person or
use for its own account or benefit or for the account or benefit of
any other Person any Confidential Information.

(c) The provisions of
Section 5.5(b) will
not apply to any Confidential Information (i) that the Seller can
demonstrate with documentary evidence is generally known to, and
available for use by, the public other than as a result of the
Breach of this Agreement or, to the Knowledge of Seller, any other
agreement pursuant to which any Person (including Seller or any
Representative or Related Person thereof) owes any duty of
confidentiality to the other Party or previously owed any duty of
confidentiality to Buyer; (ii) that is required to be disclosed
pursuant to Legal Requirement or an Order, or (iii) that the Seller
can reasonably determine is necessary to be disclosed to a
Representative of Seller in order for Seller to perform its
covenants and obligations, or to enforce its rights against Buyer,
under this Agreement or any related agreement (and then only to the
extent necessary to perform such covenants and obligations or to
enforce such rights). If Seller (including any Representative or
Related Person thereof) becomes compelled by a Legal Requirement or
any order to disclose any Confidential Information, Seller will
provide Buyer with prompt written notice of such requirement so
that Buyer may seek a protective order or other remedy in respect
of such compelled disclosure. If such a protective order or other
remedy is not obtained by or is not available to Buyer, then Seller
will use reasonable efforts to ensure that only the minimum portion
of such Confidential Information that is legally required to be
disclosed is so disclosed, and Seller will use all reasonable
efforts to obtain assurances that confidential treatment will be
given to such Confidential Information. Seller acknowledge its
responsibility to ensure that its Representatives and agents who
are given, or now have, access to the Confidential Information will
comply with the terms of this Section 5.5. Seller shall be
liable for any Breach of this Agreement caused by its
Representatives and agents.

5.6 Injunctive Relief. The Parties
acknowledge and agree that (a) each of the provisions of
Sections 5.1, 5.4, 5.5,
5.8, 5.9, and 5.10 are reasonable and
necessary to protect the legitimate business interests of the
Parties and their Related Persons, (b) any violation of any such
covenant contained in Sections 5.1, 5.4, 5.5, 5.8,
5.9, and 5.10 would result in
irreparable injury to the Parties and their Related Persons, the
exact amount of which would be difficult, if not impossible, to
ascertain or estimate, and (c) the remedies at law for any such
violation would not be reasonable or adequate compensation to the
Parties and their Related Persons for such a violation.
Accordingly, notwithstanding any other provision of this Agreement,
if either Party, directly or indirectly, violates any of its
covenants or obligations under Sections 5.1, 5.4, 5.5, 5.8,
5.9, or 5.10
then, in addition to any other remedy which may be available to the
other Party or any Related Person thereof, at law or in equity, the
Parties and their Related Persons will be entitled to seek
injunctive relief against the other Party, without posting bond or
other security, and without the necessity of proving actual or
threatened injury or damage.

 

26

 

5.7 Employees. Subject to any
employment agreements with employees of the Companies set forth in
Schedule
5.7, Buyer shall, in its sole and absolute discretion,
determine those employees that the Companies shall retain after
Closing. Buyer shall be under no obligation to cause the Companies
to retain any such employees on any terms or conditions other than
such terms or conditions determined by Buyer, or to continue
employment benefits or compensation other than as determined in the
sole discretion of Buyer. Any employment will be at base salary or
wage rates determined in the sole and absolute discretion of Buyer.
The provision of any other compensation or employee benefits,
including, without limitation, bonuses, commissions, health
benefits or compensation plans, will be at Buyer’s sole
discretion.

5.8 Public Announcements. The
Parties will keep the existence of this Agreement, the terms and
conditions hereof and the Contemplated Transactions confidential,
and the Parties will not, nor will they cause or permit any Related
Person or Representative to, make any public announcement in
respect of this Agreement or the Contemplated Transactions without
the prior written Consent of the other Party, which Consent may be
given or withheld in any Party’s sole discretion; provided,
however that the foregoing confidentiality and non-disclosure
obligations will not apply to: (1) Buyer if at Closing, if Buyer
determines to issue a press release announcing the fact of the
acquisition of the Companies, and (2) the Parties to the extent
that (a) disclosure of such information is reasonably necessary to
consummate the Contemplated Transactions, (b) disclosure of such
information is required pursuant to Legal Requirement (including
the Securities Exchange Act of 1934, as amended, and the rules of
any national stock exchange or automated dealer quotation system)
or an Order, (c) disclosure of such information is reasonably
necessary for the Parties to enforce their rights under this
Agreement, or (d) such information is already in the public domain
other than as a result of a breach of this Section 5.8 or Section 5.5 or any other
confidentiality or non-disclosure obligation owed to a Party by any
Person (including the other Party). To the extent that any public
announcement of this Agreement, any of the provisions hereof or the
Contemplated Transactions is required of the Parties by Legal
Requirement or Order, the Parties will cooperate reasonably with
respect to reaching agreement on the contents and timing of such
announcement. Prior to any public announcement of this Agreement or
the consummation of the transactions contemplated hereby, Robert W.
Guidry shall reasonably approve the contents and timing of such
announcement. Any Consent required from Seller pursuant to this
Section 5.8 or
Section 5.5 shall
require the Consent of Robert W. Guidry.  

5.9 Use of Name. Seller hereby
agrees that from and after the Closing Date, Seller and its Related
Persons shall not, directly or indirectly, use the name “The
CFS Group,” “The CFS Group Disposal &
Recycling,” “RWG5,” or any derivation or
variation thereof in any manner. Seller also hereby agrees that
from and after the Closing Date, Seller and its Related Persons
shall not, directly or indirectly, use the trade name/s
“Container First Services”, “CFS”,
“Tri-City Regional Landfill”, “TCR”,
“Petersburg Landfill”, “Disposal & Recycling
Services of Lunenburg”, “Lunenburg Landfill” and
“Arena Trucking”.

5.10 Pre-Closing Covenants. The
Parties agree as follows with respect to the period between the
Effective Date and the Closing or earlier termination of this
Agreement:

(a) Seller will not
engage, and will not cause or permit the Companies, to engage, in
any practice, take any action, or enter into any transaction
outside the Ordinary Course of Business with respect to the Assets,
including the Properties, the Businesses or the Companies. Neither
Seller nor the Companies will sell, lease, transfer or assign any
of the Membership Interests or the Assets, including the
Properties, outside the Ordinary Course of Business and will not
impose any Liens upon any of the Membership Interests or the
Assets, including the Properties. Seller will not and will not
cause or permit the Companies to, without Buyer’s prior
Consent, cancel, compromise, waive or release any right or claim
under, in or to the Membership Interests or the Assets, including
the Properties.

 

27

 

(b) Seller will not,
and will not cause or permit the Companies to, without
Buyer’s prior Consent, voluntarily incur any obligation
outside the Ordinary Course of Business or enter into any material
transaction, contract, capital expenditure or commitment for which
Buyer may have responsibility or obligation after Closing outside
the Ordinary Course of Business.

(c) Seller will, and
will cause the Companies to, keep the Assets, including the
Properties, of the Companies substantially intact and will maintain
all of the Assets, including the Properties, of the Companies in a
state of condition that complies with all Legal Requirements and is
consistent with the Ordinary Course of Business of Seller and the
Companies.

(d) Seller will, and
will cause the Companies to, comply with all applicable Legal
Requirements of each Governmental Body having jurisdiction over the
Companies, the Properties, the Assets and the
Businesses.

(e) Seller will not (a)
solicit, initiate, or encourage the submission of any proposal or
offer from any Person relating to the acquisition of the Membership
Interests or any portion of the Assets, including the Properties,
of the Companies (including any acquisition structured as a merger,
consolidation, or share exchange) or (b) participate in any
discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other
manner any effort or attempt by any Person to do or seek any of the
foregoing. Seller will not vote the equity interests in the
Companies in favor of any such acquisition.

(f) Seller will not
cause or permit, and will not permit the Companies to commit, any
waste of the Assets, including the Properties, of the
Companies.

(g) Seller will not,
and will not cause or permit the Companies to, without prior
written consent of Buyer, enter into any compromise or
settlement of any litigation, including any Current Litigation,
Proceeding or investigation by any Governmental Body relating to
the Companies, the Businesses, or the Companies’ Assets,
including the Properties.

(h) Seller will not,
and will not cause or permit the Companies to, take any action, or
knowingly omit to take any action, that would or would reasonably
be expected to result in (i) any representation or warranty of
Seller set forth in Section 3 and 4 becoming untrue
or (ii) any of the conditions to the obligations of Seller set
forth in this Agreement not being fully satisfied. Seller will give
prompt written notice to Buyer of any material adverse development
causing any of the representations and warranties in Sections 3 or 4 to become inaccurate or
untrue. No disclosure pursuant to this Section 5.10(h), however, shall
be deemed to cure any misrepresentation, breach of warranty, or
breach of covenant.

(i) Seller shall not
perform, nor shall it authorize or allow any of its
Representatives, officers, employees or agents to perform, any acts
or omissions to manipulate the price of Buyer’s Common
Stock.

(j) Buyer shall not
perform, nor shall it authorize or allow any of its
representatives, officers, directors, employees, or agents, or any
of its shareholders owning more than five percent (5%) of the
outstanding stock in Buyer, to perform, any acts or omissions to
manipulate the price of Buyer’s common stock.

The
Parties will do all other acts that may be reasonably necessary or
desirable in the reasonable opinion of the Parties to consummate
the Contemplated Transactions, all without further
consideration.

5.11 Termination of this Agreement.
The Parties may terminate this Agreement as provided
below:

 

28

 

(a) Buyer and Seller
may terminate this Agreement by mutual written Consent at any time
prior to the Closing Date;

(b) Buyer may terminate
this Agreement by giving written notice to Seller at any time prior
to the expiration of the Inspection Period if Buyer is not
satisfied, in its sole discretion, with the results of its
continuing business, legal, environmental, and accounting due
diligence regarding the Properties, the Companies, the Businesses
or any Governmental Authorization, Permit, Consent, license,
Contract, Company Contract, or any other permit or approval related
to any of the foregoing, or if the Parties fail to execute an
amendment to this Agreement setting forth the Excluded Contracts.
If such notice is given, this Agreement and all rights, duties and
obligations of Buyer and Seller hereunder, except any which
expressly survive termination, shall terminate. If such notice is not given, this Agreement and
all rights, duties and obligations of Buyer and Seller hereunder
(including without limitation their respective obligations to close
the transaction), shall become fully binding; provided
however, notwithstanding
anything to the contrary herein, Buyer shall have no duty or
obligation to consummate the Contemplated Transactions until such
time as Seller has fulfilled all of its obligations set forth
in Section
6.1.

(c) Buyer may terminate
this Agreement by giving written notice to Seller at any time prior
to the Closing if Buyer determines that (i) any Governmental
Authorizations, Permit, Consent, Approvals, licenses, Contracts,
Company Contracts, or any other permits or approvals contemplated
by this Agreement are not in existence, have not been obtained by
the Companies, or the Companies either do not have full right,
title and interest in and to such Governmental Authorizations,
Permits, Consents, Approvals, licenses, Contracts, Company
Contracts, or any other permits or approvals; or such Governmental
Authorizations, Permits, Approvals, Consents, licenses, Contracts,
Company Contracts, or any other permits or approvals cannot be
transferred to or issued directly to and in the name of the
Companies; and/or (ii) such Governmental Authorizations, Permits,
Approvals, Consents, licenses, Contracts, Company Contracts, or any
other permits or approvals cannot be issued, conveyed, assigned or
transferred to the Companies.

(d) Buyer may terminate
this Agreement by giving written notice to Seller at any time prior
to the Closing (i) in the event Seller has Breached any
representation, warranty, or covenant contained in this Agreement
in any respect, Buyer has notified Seller of the Breach, and the
Breach has continued without cure for a period of ten (10) days
after the notice of Breach;

(e) Seller may
terminate this Agreement by giving written notice to Buyer at any
time prior to the Closing (i) in the event Buyer has Breached any
representation, warranty, or covenant contained in this Agreement
in any respect, Seller has notified Buyer of the Breach, and the
Breach has continued without cure for a period of ten (10) days
after the notice of Breach; and

(f) In the event that
Closing has not been completed by January 6, 2017, Buyer or Seller,
so long as such Party is not then in material breach of any
provision of this Agreement or has undertaken any actions or
inactions which shall have delayed the Closing, may terminate this
Agreement upon five (5) Business Days written notice to the other
Party.

If any
Party terminates this Agreement pursuant to this Section 5.11, all rights and
obligations of the Parties hereunder shall terminate without any
liability of any Party to any other Party (except for (i) any
liability of any Party then in Breach, (ii) the obligations of the
Parties pursuant to Section 5.5, and (iii) the
obligations of Buyer pursuant to Section 5.2).

5.12           
Seller Releases.
Save and except for any rights of Seller under this Agreement and
the other Transaction Documents (defined below), effective as of
the Closing Date, Seller, for itself, and its Related
Parties, sole member, managers, officers, directors,
successors, assigns, agents and Representatives (collectively, the
“Seller Releasing
Parties”), hereby finally, unconditionally,
irrevocably and absolutely fully releases, acquits, remises and
forever discharges the Companies and Buyer and any of their Related
Persons, and their respective officers, directors, members,
managers, employees, parent companies, subsidiaries, predecessors,
successors, assigns, agents and Representatives, from any and all
actions, suits, debts, sums of money, interest owed, accounts,
contribution obligations, reckonings, bonds, bills, covenants,
controversies, agreements, guaranties, promises, undertakings,
variances, trespasses, credit memoranda, charges, damages,
judgments, executions, obligations, costs, expenses, fees
(including attorneys’ fees and court costs), counterclaims,
claims, demands, causes of action and Liabilities (the
“Seller
Claims”) existing as of the Closing Date accruing to
Seller and the Seller Releasing Parties in any capacity whatsoever,
including, without limitation, (i) related to or resulting from all
of Seller’s and Seller Releasing Parties’ capacities
with the Companies; (ii) arising under or by virtue of the
Organizational Documents or Company Documents; (iii) relating to or
resulting from the negotiation, preparation, and consummation of
this Agreement and the Contemplated Transactions; or (iv) the
valuation of the Membership Interests or determination of the
Purchase Price, except in the case of fraud or intentional
misconduct by any of Buyer and any of its Related Persons. This
Section 5.12 shall
survive Closing.

 

29

 

5.13 Guaranty. Waste Services
Industries Holdings, LLC, a Delaware limited liability company (the
“Guarantor”), joins in the
execution of this Agreement for the purpose of guaranteeing the
duties and obligations of Seller pursuant to this Agreement,
including without limitations the obligations of Seller pursuant to
Sections 7 and 8 of
this Agreement, in each case subject to the terms of the applicable
Section of this Agreement (collectively, the provisions of this
Section 5.13 are
referred to as the “Guaranty”): Without
limiting the forgoing:

(a) The Guarantor does
hereby absolutely, unconditionally and irrevocably guarantee to
Buyer and the Companies the full payment by Seller of charges,
fees, claims, costs, expenses, damages, Adverse Consequences,
Seller Claims, Current Seller Liabilities, Current Litigation
Matters, the Retained Liabilities, and all other amounts required
to be paid by Seller under this Agreement. Guarantor’s
obligations hereunder shall be primary and not secondary and are
independent of the obligations of Seller. This Section 5.13 shall survive
Closing and any termination or expiration of this
Agreement.

(b) A separate action
or actions may be brought and prosecuted against Guarantor, whether
or not an action is first brought against Seller or whether Seller
shall be joined in any such action or actions. At Buyer’s
option, or any Company if applicable, Guarantor may be joined in
any action or Proceeding commenced by Buyer, or any Company,
against Seller in connection with and based upon any covenants and
obligations of this Agreement, and Guarantor hereby waives any
demand by Buyer, or the Companies, and/or prior action by Buyer, or
the Companies, of any nature whatsoever against Seller. The
Guarantor Consents to forbearance, indulgences and extensions of
time on the part of Buyer, or the Companies, being afforded by
Seller, and/or the waiver from time to time by Buyer, or the
Companies, of any right or remedy on its part as against
Seller.

(c) This Guaranty shall
remain and continue in full force and effect, notwithstanding (i)
any alteration of this Agreement by Buyer and Seller, whether prior
or subsequent to the execution thereof; and/or (ii) any renewal,
extension, modification, amendment or assignment of this Agreement.
The Guarantor does hereby waive notice of any of the foregoing and
agrees that the liability of the Guarantor hereunder shall be based
upon the obligations set forth in this Agreement as the same may be
altered, renewed, extended, modified, amended or assigned.
Guarantor further waives all notice of the acceptance of this
Guaranty and notice of breach, default or nonperformance by Seller
of its obligations under this Agreement. The Guarantor’s
obligations hereunder shall remain fully binding although Buyer, or
any Company as applicable, may have waived one or more defaults by
Seller, extended the time of performance by Seller, released,
returned, or misapplied other collateral given later as additional
security (including other guaranties) and released Seller from the
performance of its obligations under this Agreement. This Guaranty
shall remain in full force and effect notwithstanding the
institution by or against Seller of bankruptcy, reorganization,
readjustment, receivership or insolvency proceedings of any nature,
or the disaffirmance of this Lease in any such proceedings or
otherwise.

5.14 Buyer and Seller
agree and acknowledge that the Purchase Price Shares may not be
sold or transferred unless  (i) such shares are sold pursuant
to an effective registration statement under the Securities Act, or
(ii) the Buyer or its transfer agent shall have been furnished with
an opinion of  counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or
transferred may be sold or transferred pursuant to an exemption
from such registration or (iii) such shares are sold or
transferred pursuant to Rule 144 under the Securities Act (or a
successor rule) (“Rule 144”) or (iv) such shares are
transferred to an “affiliate” (as defined in Rule 144)
of the Seller who agrees to sell or otherwise transfer the shares
only in accordance with this Section 5.14 and who is an
Accredited Investor (as defined in the Securities Act).  Until
such time as the Purchase Price Shares have been registered under
the Securities Act or otherwise may be sold pursuant to Rule 144
without any restriction as to the number of securities as of a
particular date that can then be immediately sold, each certificate
for shares of Common Stock of Buyer that has not been so included
in an effective registration statement or that has not been sold
pursuant to an effective registration statement or an exemption
that permits removal of the legend, shall bear a legend
substantially in the following form, as appropriate:

 

30

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE
SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. 
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”

The
legend set forth above shall be removed and the Buyer shall issue
to the Seller a new certificate for the Purchase Price Shares free
of any transfer legend upon the request of the Seller if the Buyer
or its transfer agent shall have received an opinion of counsel, in
form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that the one (1) year
holding period under Rule 144 has expired, or that a public sale or
transfer of the Purchase Price Shares otherwise may be made without
registration under the Securities Act, which opinion shall be
reasonably accepted by the Buyer so that the sale or transfer is
effected. Any request as described in this paragraph shall be
accompanied by the certificate or certificates representing the
Purchase Price Shares.

For so
long after Closing as such action remains a condition to the
Seller’s ability to sell the Purchase Price Shares, Buyer
shall remain current in its periodic reports and filings under the
Exchange Act.

5.15 Seller’s Right to Pursue Certain
Litigation. Seller
shall have the right to pursue, on its own behalf (including suits
brought as the assignee of claims), litigation to recover damages
in the litigation matter filed in the Circuit Court for the City of
Petersburg, Virginia, Case No.  CL16-207 (the
“Adenauer
Litigation”). At the request of Seller, Buyer will
cause the Companies to assign to Seller all causes of action to
recover damages due to the Adenauer Litigation. All expenses of any
such litigation shall be borne solely by Seller and not by the
Companies or Buyer.

SECTION
6                                 

CONDITIONS TO
OBLIGATION TO CLOSE

6.1 Conditions to Obligation of Buyer to
Close. The obligation of Buyer to consummate the
transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following
conditions:

(a) The representations
and warranties of Seller set forth in Sections 3 and 4 shall be true and correct in
all material respects at and as of the Closing Date, except to the
extent that such representations and warranties are qualified by
terms such as “material” and “Material Adverse
Effect,” in which case such representations and warranties
shall be true and correct in all respects at and as of the Closing
Date. Without limiting generality of the forgoing, all of the
Assets, including all Tangible Personal Property, shall be
collectively in substantially similar condition, use, operation and
repair as of the date of any inspection by Buyer of such Assets and
Tangible Personal Property, normal wear and tear
excepted;

 

31

 

(b) Seller shall have
performed and complied with all of its covenants hereunder in all
material respects through the Closing, except to the extent that
such covenants are qualified by terms such as
“material” and “Material Adverse Effect,”
in which case Seller shall have performed and complied with all of
such covenants in all respects through the Closing;

(c) The Companies
and/or Seller shall have procured all of the third-party Consents
specified in Schedule
3.1(d) and 4.3(b);

(d) No action, suit, or
proceeding shall be pending or threatened before any court or
quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge
would (i) prevent consummation of any of the transactions
contemplated by this Agreement, (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following
consummation, (iii) affect adversely the right of Buyer to own the
Membership Interests and to control the Companies, or (iv) affect
adversely the right of the Companies to own their Assets, including
the Properties, and to operate their Businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be in
effect);

(e) There has not been
made or threatened by any Person a claim asserting that such Person
(i) is the holder of record or the beneficial owner of, or has the
right to acquire or to obtain beneficial ownership of, any
Membership Interests or other interest of the Companies, or any
other voting, equity or ownership interest, in or to the Companies,
(ii) is entitled to all or any portion of the Purchase Price
payable for the Membership Interests as contemplated by this
Agreement or (iii) is entitled to acquire any of the Assets,
including the Properties, owned by the Companies;

(f) The Companies shall
have received, acquired and obtained all nonappealable and
unrestricted Governmental Authorizations, Consents, Permits,
Approvals, licenses, and other permits and approvals, and all
pending applications therefor or renewals thereof, required or
necessary for the ownership, construction, development and
operation of Businesses on the Properties by the Companies and
Buyer, including local zoning approval, any required special use or
conditional use permits, local approval that the operation of the
Business and the Properties is consistent with the local solid
waste management plan, if any, and all permits issued by the
Commonwealth of Virginia, Department of Environmental Quality, for
the ownership, operation, development and construction of the
Businesses on the Properties, such Consents, licenses, Governmental
Authorizations, permits and approvals to be in accordance with all
Legal Requirements and satisfactory to Buyer in its sole
discretion, with respect to airspace requirements, operating
conditions, and any other restrictions or
requirements;

(g) Seller shall have
caused the Companies to terminate, without liability to such
Company or Buyer, all Excluded Contracts, or assign all Excluded
Contracts to Seller or any third party;

(h) On or before the
Closing, Seller shall file for and obtain in the name of the
applicable Company all the necessary Governmental Authorizations
from any Governmental Body (collectively the “Approvals”) having
jurisdiction over the Properties, or the Businesses, in order for
the Permits to be issued to the Company. Seller covenants to use
good faith and due diligence to actively pursue the Approvals.
Seller shall execute any additional agent authorization
documentation and any other document, instrument or certificate
specifically required by any Governmental Body to permit the
Companies to obtain the Permits and Approvals;

(i) Seller shall have
delivered to Buyer a certificate to the effect that each of the
conditions specified above in Section 6.1(a)-(h) is satisfied in all
respects;

 

32

 

(j) Seller shall have
delivered to Buyer a Closing Statement and accompanying loan payoff
statements showing any and all Current Seller Liabilities which
such Current Seller Liabilities shall be paid and satisfied at or
before Closing in accordance with Section 2.4 (the
“Closing
Statement”), and shall have delivered to Buyer the
list of all current Accounts Receivables as contemplated by
Section
4.11(c);

(k) Buyer shall have
received the resignations, effective as of the Closing, of each
officer, director, employee, independent contractor, manager or
member of the Companies whom Buyer shall have specified in writing
five (5) Business Days prior to Closing;

(l) Seller, Guarantor
and certain Related Persons of Seller, including Robert W. Guidry,
Charles A. Wilcox, Timothy Webb, and Jeff Kraus shall have executed
and delivered to Buyer a non-competition,
non-solicitation, and confidentiality agreements that, among other
things, prevents
Seller, certain of its Related Persons, including Robert W. Guidry,
Charles A. Wilcox, Timothy Webb, and Jeff Kraus, and Guarantor from
competing with the Buyer and the Companies or the Businesses of the
Companies and the business of Buyer within a 100 mile radius of
each of the Properties or soliciting customers of the Companies for
a period of five (5) years following the Closing Date or from
disclosing confidential information regarding the Companies for a
period of eight (8) years from the Closing Date. Such agreements
shall be substantially in the forms attached hereto as Schedules
6.1(l)(i), 6.1(l)(ii) and 6.1(iii) respectively (the “Restrictive Covenants
Agreements”);

(m) If applicable,
Seller shall have delivered to Buyer a non-foreign affidavit dated
as of the Closing Date, sworn under penalty of perjury and in form
and substance required under the Treasury Regulations issued
pursuant to Code Section 1445, stating that Seller is not a
“Foreign Person” as defined in Code Section
1445;

(n) Seller shall have
delivered to Buyer (i) a copy of the articles of organization of
the Companies certified on or soon before the Closing Date by the
Clerk of the Virginia State Corporation Commission (or comparable
officer), (ii) a certificate of fact for the Companies issued on or
soon before the Closing Date by the Clerk of the Virginia State
Corporation Commission (or comparable officer) and the Secretary of
State (or comparable officer) of each jurisdiction in which the
Companies are qualified to do business, (iii) limited liability
company records of the Companies and (iv) all other Organizational
Documents;

(o) Seller shall have
delivered to Buyer a certificate of the secretary or an assistant
secretary of the Companies, dated the Closing Date, in form and
substance reasonably satisfactory to Buyer, certifying as to (i) no
amendments to the articles of organization or other Organizational
Documents of the Companies since Effective Date; and (ii) any
resolutions of the members of the Companies relating to this
Agreement and the Contemplated Transactions;

(p) Buyer and Robert W.
Guidry shall have executed and delivered an Employment Agreement
substantially in the form attached hereto as Schedule
6.1(p) (the “Employment
Agreement”);

(q) Buyer shall have
received a commitment for financing in the form and substance
satisfactory to Buyer in its sole discretion;

(r) Seller shall have
executed and delivered to Buyer an Assignment of the Membership
Interests in the form of Exhibit 6.1(r);

(s) Seller shall have
executed and delivered to Buyer a certificate from Seller that the
representations and warranties of Seller set forth herein are true
and correct as of Closing;

(t) Seller shall have
delivered to Buyer an executed landlord’s consent acceptable
to Buyer with respect to each lease agreement identified on
Schedule
6.1(t); and

 

33

 

(u) all actions to be
taken by Seller in connection with Contemplated Transactions and
all certificates, opinions, instruments, and other documents
required to effect the Contemplated Transaction shall be reasonably
satisfactory in form and substance to Buyer.

Buyer
may waive any condition specified in this Section 6.1 if it executes a
writing so stating at or prior to the Closing.

(v) Seller shall have
delivered to Buyer a certificate of the Manager of Seller, dated
the Closing Date, in form and substance reasonably satisfactory to
Buyer, certifying as to any resolutions of the Members and Manager
of the Seller relating to this Agreement and the Contemplated
Transactions.

(w) Seller shall have
delivered to Buyer a complete list of the recurring customers of
the Businesses, whether or not such recurring customers are bound
by a written contract or agreement with the Companies.

(x) CFS Disposal shall
have obtained complete and full release from all claims asserted
against it in the Andenaur Case (as defined in Schedule 4.20) and
an order dismissing all claims against CFS Disposal endorsed by all
parties to the Andenaur Case shall have been filed with the Court
at Closing.

6.2 Conditions to Obligation of Seller to
Close. The obligation of Seller to consummate the
transactions to be performed by them in connection with the Closing
is subject to satisfaction of the following
conditions:

(a) the representations
and warranties of Buyer set forth in Section 3.2 shall be true and
correct in all material respects at and as of the Closing Date,
except to the extent that such representations and warranties are
qualified by terms such as “material” and
“Material Adverse Effect,” in which case such
representations and warranties shall be true and correct in all
respects at and as of the Closing Date;

(b) Buyer shall have
performed and complied with all of its covenants hereunder in all
material respects through the Closing, except to the extent that
such covenants are qualified by terms such as
“material” and “Material Adverse Effect,”
in which case Buyer shall have performed and complied with all of
such covenants in all respects through the Closing;

(c) no action, suit, or
proceeding shall be pending before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (i)
prevent consummation of any of the transactions contemplated by
this Agreement or (ii) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall
be in effect);

(d) Buyer shall have
delivered to Seller a certificate to the effect that each of the
conditions specified above in Section 6.2(a)-(c) is satisfied in all
respects;

(e) Buyer shall have
executed and delivered the Restrictive Covenants
Agreement;

(f) Buyer shall have
delivered to Seller (i) a copy of the articles of incorporation of
the Buyer certified on or soon before the Closing Date by the
Secretary of State (or comparable officer) of the State of New
York, and (ii) a certificate of good standing for Buyer issued on
or soon before the Closing Date by the Secretary of State (or
comparable officer) of the State of New York;

(g) Buyer shall have
delivered to Seller a certificate of the secretary or an assistant
secretary of Buyer, dated the Closing Date, in form and substance
reasonably satisfactory to Seller, certifying as to any resolutions
of the Board of Directors of the Buyer relating to this Agreement
and the Contemplated Transactions;

 

34

 

(h) Buyer shall have
executed and delivered to Seller a certificate from Buyer that the
representations and warranties of Buyer set forth herein are true
and correct as of Closing;

(i) Seller shall have
been able to obtain an executed landlord’s consent and
releases of all guarantees of Seller, Seller’s Related
Persons or any other person in effect on the Effective Date with
respect to each lease agreement identified on Schedule
6.1(t);

(j) Buyer and Robert W.
Guidry shall have executed and delivered the Employment
Agreement;

(k) Seller shall have
been able to obtain releases of all bond and similar surety
obligation guarantees of Seller, Seller’s Related Persons or
any other person in effect on the Effective Date with respect to
the Properties and the Businesses; and

(l) all actions to be
taken by Buyer in connection with consummation of the Contemplated
Transactions and all certificates, opinions, instruments, and other
documents required to effect the Contemplated Transactions will be
reasonably satisfactory in form and substance to
Seller.

Seller
may waive any condition specified in this Section 6.2 if Seller executes
a writing so stating at or prior to the Closing.

SECTION
7                                 

INDEMNIFICATION

7.1 Survival. Subject to the
provisions of this Section
7 and Section
8, all representations, warranties, covenants and
obligations of the Parties contained in this Agreement and in the
agreements, instruments and other documents delivered pursuant to
this Agreement will survive the Closing and the consummation of the
Contemplated Transactions.

7.2 Indemnification by Buyer. Buyer
hereby covenants and agrees that, to the fullest extent permitted
by Legal Requirement, it will defend, indemnify and hold harmless
Seller and its Related Persons and Representatives, and their
respective officers, directors, members, managers, employees,
agents, and Representatives, and all successors and assigns of the
foregoing (collectively, the “Seller Indemnified
Persons”), for, from and against any Adverse
Consequences, arising from or in connection with:

(a) any breach of, or
any inaccuracy in, any representation or warranty made by Buyer (i)
in this Agreement, (ii) the Schedules, (iii) the certificates
delivered pursuant to Section 6 of this Agreement, or
(iv) any other document, writing or instrument delivered by Buyer
pursuant to Section 6 of
this Agreement;

(b) any breach of, or
failure to perform or comply with, any covenant, obligation or
agreement of Buyer in this Agreement or in any other certificate,
document, writing or instrument delivered by Seller pursuant to
Section 6 of this
Agreement; or

(c) any claim by any
Person for any brokerage or finder’s fee, commission or
similar payment based upon any agreement or understanding made, or
alleged to have been made, by any Person with Buyer in connection
with this Agreement or any of the Contemplated
Transactions.

7.3 Indemnification by
Seller.

(a) Seller hereby
covenants and agrees that, to the fullest extent permitted by Legal
Requirement, it will defend, indemnify and hold harmless Buyer, and
its Related Persons and Representatives, and their respective
officers, directors, members, managers, employees, agents, and
Representatives, and all successors and assigns of the foregoing
(collectively, the “Buyer Indemnified
Persons”), for, from and against any Adverse
Consequences arising from or in connection with:

 

35

 

(i)           any
breach of, or any inaccuracy in, any representation or warranty
made by Seller in (A) this Agreement, (B) the Schedules, (C) the
certificates delivered pursuant to this Agreement, (D) any transfer
instrument delivered by Seller pursuant to Section 6 of this Agreement, or
(E) any other certificate, document, writing or instrument
delivered by Seller pursuant to Section 6 of this
Agreement;

(ii)         any
breach of, or failure to perform or comply with, any covenant,
obligation or agreement of Seller in this Agreement or in any other
certificate, document, writing or instrument delivered by Seller
pursuant to Section
6 of this Agreement;

(iii)                   all
Current Seller Liabilities;

(iv)           all
Current Litigation Matters;

 

(v) any Liability of
the Companies resulting from, caused by, or arising in connection
with the termination or assignment of any Excluded
Contract;

(vi) any claim by any
Person for any brokerage or finder’s fee, commission or
similar payment based upon any agreement or understanding alleged
to have been made by such Person with any Seller in connection with
this Agreement or any of the Contemplated
Transactions;

(vii) The Retained
Liabilities;

(viii) any Indebtedness of
the Companies outstanding on the Closing Date and not reflected on
Schedule
2.4; and,

 

(ix)           Adverse
Consequences (including costs of cleanup, containment or other
Remedial Action) arising out of acts or negligence occurring or
conditions existing at or before Closing from or in connection
with:

(1) any Environmental,
Health and Safety Liabilities arising out of or relating to (A) the
conduct of any activity by Seller, the Companies, or their Related
Persons, or any employee, contractor, agent or Representative
thereof, or relating to the Businesses and Assets, including the
Properties, of the Companies; or (B) any Hazardous Materials or
other contaminants that were present on the Properties or Assets at
any time on or prior to the Closing Date; or

(2) any bodily injury
(including illness, disability or death, regardless of when such
bodily injury occurred, was incurred or manifested itself),
personal injury, property damage (including trespass, nuisance,
wrongful eviction and deprivation of the use of real property) or
other damage of or to any Person or any Asset, including the
Properties, in any way arising from or allegedly arising from (A)
any Hazardous Activity conducted by Seller, the Companies or their
Related Persons or any employee, contractor, agent or
Representative thereof; or (B) from any Hazardous Material that was
(1) present on or before the Closing Date on or at the Properties
(or present on any other property, if such Hazardous Material
emanated from any Property and was present on any Property, on or
prior to the Closing Date) or (2) Released by Seller, the Companies
or their Related Persons, or any Person, on or at any of the
Properties or Assets at any time on or prior to the Closing
Date;

provided, however, that Seller shall not
be liable to Buyer under this Section 7.3(ix) if (i) such
Hazardous Activity or Hazardous Material for which the indemnity
claim arises from was not present on any Property on or prior to
the Closing Date; and (ii) that Buyer did not materially
contribute, directly or indirectly, to the presence of such
Hazardous Activity or Hazardous Material on any Property. For
purposes of this Section 7.3(viii) only, the burden and expense in
obtaining the proof necessary to show the Hazardous Activity or
Hazardous Material was present on any Property on or prior to the
Closing Date shall be borne by the Buyer.

 

36

 

 

Buyer,
either directly or through the Companies, will be entitled to
control any Remedial Action, any Proceeding relating to a claim
that any Environmental Law has been violated and any other
Proceeding with respect to which indemnity may be sought under this
Section
7.3(viii).

 

 

7.4 Time
Limitations.

(a) Subject to the
limitations and other provisions of this Agreement, a Buyer
Indemnified Person may only assert a claim for indemnification
under Section 7.3
during the applicable period of time (the “Buyer Claims Period”)
specified as follows:

(i) with respect to any
claim arising out of (A) any breach of, or any inaccuracy in, any
representation or warranty contained in Sections 3.1(a), 3.1(b), 3.1(f), 3.1(g), 4.1, 4.2, 4.4 or 4.6 of this Agreement, (B)
fraud, willful misrepresentation or willful misconduct, (C) any
Current Seller Liability, Retained Liability or any Indebtedness of
the Companies outstanding on the Closing Date and not reflected on
Schedule
2.4, (D) any Liability for any Current Litigation Matter, or
(E) any Liability of the Companies resulting from, caused by, or
arising in connection with any Excluded Contracts, the Buyer Claims
Period will commence on the date of this Agreement and continue
indefinitely;

(ii) with respect to any
claim arising out of any breach of, or any inaccuracy in, any
representation or warranty contained in Sections 4.22 or 4.24, the Buyer Claims Period
will commence on the date of this Agreement and continue for the
full period of all applicable statutes of limitations (giving
effect to any waiver, mitigation or extension thereof) plus 60
days; and

(iii) with respect to any
other indemnification claim (other than any breach of, or failure
to perform or comply with, any covenant, obligation or agreement of
Seller contained in Section 8, which are subject
only to Section 8)
made under Section
7.3, the Buyer Claims Period will commence on the date of
this Agreement and continue until the date that is eighteen (18)
months after the Closing Date;

provided, however, that with respect to
any such indemnification claim made under Section 7.3(a)(ii) regarding
Seller’s breach of, or failure to perform or comply with, any
obligation hereunder or under any related agreement that is
intended to survive and continue after the Closing, the Buyer
Claims Period will continue for as long as such obligation is
outstanding (other than any breach of, or failure to perform or
comply with, any covenant, obligation or agreement of Seller
contained in Section
8, which are subject to Section 8).

(b) Subject to the
limitations and other provisions of this Agreement, a Seller
Indemnified Person may only assert a claim for indemnification
under Section 7.2
during the applicable period of time (the “Seller Claims Period”)
specified as follows:

(i) with respect to any
claim arising out of (A) any breach of, or any inaccuracy in, any
representation or warranty contained in Sections 3.2(a), 3.2(b), 3.1(e), 3.2(g), 3.2(j) or 3.2(k) of this Agreement, or
(B) fraud, willful misrepresentation or willful misconduct, the
Seller Claims Period will commence on the date of this Agreement
and continue indefinitely;

(ii) with respect to any
claim arising out of any breach of, or any inaccuracy in, any
representation or warranty contained in Section 3.2(h), or 3.2(i), the Seller Claims
Period will commence on the date of this Agreement and continue for
the full period of all applicable statutes of limitations (giving
effect to any waiver, mitigation or extension thereof) plus 60
days; and

(iii) with respect to any
other indemnification claim (other than any breach of, or failure
to perform or comply with, any covenant, obligation or agreement of
Seller contained in Section 8, which are subject
only to Section 8)
made under Section
7.2, the Seller Claims Period will commence on the date of
this Agreement and continue until the date that is eighteen (18)
months after the Closing Date;

 

37

 

provided, however, that with respect to
any such indemnification claim made under Section 7.2(b) regarding
Buyer’s breach of, or failure to perform or comply with, any
obligation hereunder or under any related agreement that is
intended to survive and continue after the Closing, the Seller
Claims Period will continue for as long as such obligation is
outstanding (other than any breach of, or failure to perform or
comply with, any covenant, obligation or agreement of Buyer
contained in Section
8, which are subject to Section 8).

Notwithstanding
anything to the contrary in this Section 7.4, if before 5:00
p.m. (eastern time) on the last day of the applicable Buyer Claims
Period or Seller Claims Period, any Party against which an
indemnification claim has been made hereunder has been properly
notified in writing of such claim for indemnity hereunder and the
basis thereof, including with reasonable supporting details for
such claim (to the extent then known), and such claim has not been
finally resolved or disposed of as of such date, then such claim
will continue to survive and will remain a basis for indemnity
hereunder until such claim is finally resolved or disposed of in
accordance with the terms of this Agreement.

7.5 Certain Limitations for Indemnity
Claims. Neither Buyer nor Seller shall be liable for any
claim for indemnification under Section 7.2(a) or Section 7.3(a) until the
claiming party has incurred Adverse Consequences totaling Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00), whereupon
the indemnifying party shall remain liable for all Adverse
Consequences incurred by the claiming party up to and including an
amount equal to ten percent (10.0%) of the Purchase Price (the
“Indemnification
Cap”). The Indemnification Cap shall not apply to any
claim for Adverse Consequences relating to any of the
following:

(a) Seller’s
breach of its representations and warranties set forth Sections 3.1(a), 3.1(b), 3.1(f), 3.1(g), 4.1, 4.2, 4.4, 4.6, 4.22 or 4.24;

(b) Buyer’s
breach of its representations and warranties set forth Sections 3.2(a), 3.2(b), 3.1(e), 3.2(g), 3.2(h), 3.2(i), 3.2(j) or 3.2(k); or

(c) Adverse
Consequences resulting from acts of fraud.

7.6 Payment of Claims. Once an
Adverse Consequence is agreed to by the indemnifying Party or
finally adjudicated to be payable pursuant to this Section 7, the indemnifying
Party shall satisfy its obligations within 15 Business Days of the
date of such agreement or the date of such final, non-appealable
adjudication by wire transfer of immediately available
funds.

7.7 Third-Party
Claims.

(a) No later than ten
(10) Business Days after receipt by a Person entitled to indemnity
under Section 7.2
or 7.3 (an
“Indemnified
Person”) of notice of the assertion of a Third-Party
Claim against it, such Indemnified Person shall give notice to the
Person obligated to indemnify under such section (an
“Indemnifying
Person”) of the assertion of such Third-Party Claim
and a copy of any writing by which, such Third-Party assertion is
made. Such notice by the Indemnified Person shall describe the
Third Party Claim in reasonable detail, shall include copies of all
material written evidence thereof and shall indicate the estimated
amount, if reasonably practicable, of the Adverse Consequence that
has been or may be sustained by the Indemnified Person. The failure
to notify the Indemnifying Person will only relieve the
Indemnifying Person of any liability that it may have to any
Indemnified Person to the extent that the Indemnifying Person
demonstrates that the defense of such Third-Party Claim is
materially prejudiced by the Indemnified Person’s failure to
give such notice.

(b) If an Indemnified
Person gives notice to the Indemnifying Person pursuant to
Section 7.7(a) of
the assertion of a Third-Party Claim, the Indemnifying Person shall
be entitled to participate in the defense of such Third-Party Claim
and, to the extent that it wishes (unless (i) the Indemnifying
Person is also a Person against whom the Third-Party Claim is made
and the Indemnified Person determines in good faith that joint
representation would be inappropriate or (ii) the Indemnifying
Person fails to provide reasonable assurance to the Indemnified
Person of its financial capacity to defend such Third-Party Claim
and provide indemnification with respect to such Third-Party
Claim), to assume the defense of such Third-Party Claim with
counsel reasonably satisfactory to the Indemnified Person
(provided, such
counsel has appropriate experience in the subject matter relating
to the claim). After notice from the Indemnifying Person to the
Indemnified Person of its election to assume the defense of such
Third-Party Claim, the Indemnifying Person shall not, so long as it
diligently conducts such defense, be liable to the Indemnified
Person under this Section
7.7(b) for any fees of other counsel or any other expenses
with respect to the defense of such Third-Party Claim, in each case
subsequently incurred by the Indemnified Person in connection with
the defense of such Third-Party Claim. If the Indemnifying Person
assumes the defense of a Third-Party Claim, no compromise or
settlement of such Third-Party Claims may be effected by the
Indemnifying Person without the Indemnified Person’s Consent
unless: (A) there is no finding or admission of any violation of
Legal Requirement or any violation of the rights of any Person; (B)
the sole relief provided is monetary damages that are paid in full
by the Indemnifying Person; and (C) the Indemnified Person shall
have no liability with respect to any compromise or settlement of
such Third-Party Claims effected without its Consent. If notice is
given to an Indemnifying Person of the assertion of any Third-Party
Claim and the Indemnifying Person does not, within ten (10) days
after the Indemnified Person’s notice is given, give notice
to the Indemnified Person of its election to assume the defense of
such Third-Party Claim, or thereafter fails to diligently prosecute
the defense of such Third-Party Claim, the Indemnifying Person will
be bound by any determination made in such Third-Party Claim or any
compromise or settlement effected by the Indemnified
Person.

 

38

 

(c) Notwithstanding the
foregoing, if an Indemnified Person determines in good faith that
there is a reasonable probability that a Third-Party Claim may
adversely affect it or its Related Persons other than as a result
of monetary damages for which it would be entitled to
indemnification under this Agreement, the Indemnified Person may,
by notice to the Indemnifying Person, assume the exclusive right to
defend, compromise or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of any
Third-Party Claim so defended for the purposes of this Agreement or
any compromise or settlement effected without its Consent (which
may not be unreasonably withheld).

(d) With respect to any
Third-Party Claim subject to indemnification under this
Section 7: (i) both
the Indemnified Person and the Indemnifying Person, as the case may
be, shall keep the other Person fully informed of the status of
such Third-Party Claim and any related Proceedings at all stages
thereof where such Person is not represented by its own counsel;
and (ii) the parties agree (each at its own expense) to render to
each other such assistance as they may reasonably require of each
other and to cooperate in good faith with each other in order to
ensure the proper and adequate defense of any Third-Party
Claim.

(e) With respect to any
Third-Party Claim subject to indemnification under this
Section 7, the
parties agree to cooperate in such a manner as to preserve in full
(to the extent possible) the confidentiality of all Confidential
Information and the attorney-client and work-product privileges. In
connection therewith, each Party agrees that: (i) it will use its
best efforts, in respect of any Third-Party Claim in which it has
assumed or participated in the defense, to avoid production of
Confidential Information (consistent with applicable law and rules
of procedure); and (ii) all communications between any Party hereto
and counsel responsible for or participating in the defense of any
Third-Party Claim shall, to the extent possible, be made so as to
preserve any applicable attorney-client or work-product
privilege.

7.8 Tax Claims. Notwithstanding any
other provision of this Agreement, the control of any claim,
assertion, event or proceeding in respect of Taxes (including, but
not limited to, any such claim in respect of a breach of the
representations and warranties in Section 3.2(e) or 4.15 hereof or any breach or
violation of or failure to fully perform any covenant, agreement,
undertaking or obligation in Section 8 hereof) shall be
governed exclusively by Section 8 hereof.

7.9 Tax Treatment of Indemnification
Payments. All indemnification payments made under this
Agreement shall be treated by the Parties as an adjustment to the
Purchase Price for Tax purposes, unless otherwise required by Legal
Requirement.

7.10 Mitigation. Each of the Parties
hereto agrees to take all reasonable steps to mitigate their
respective Adverse Consequences upon and after becoming aware of
any event or condition which could reasonably be expected to give
rise to any Adverse Consequences that are indemnifiable
hereunder.

 

39

 

7.11 Subrogation. Upon making any
payment to the Indemnified Person for any indemnification claim
pursuant to Section
7, the Indemnifying Person shall be subrogated, to the
extent of such payment, to any rights which the Indemnified Person
may have against any third parties with respect to the subject
matter underlying such indemnification claim and the Indemnified
Person shall assign any such rights to the Indemnifying
Person.

7.12 Escrow. In order to provide a
ready fund for the payment to Buyer of amount(s) due from Seller
pursuant to this Section
7, the parties hereto hereby agree that $600,000 of the
Purchase Price (the “Escrow Amount”) described in
Section 2.2(i) shall be placed in escrow at Closing with a national
or state bank with trust powers to be mutually agreed upon by Buyer
and the Seller prior to Closing (the “Escrow Agent”), which
escrow shall be subject to the terms and conditions substantially
in the form of the escrow agreement attached hereto and made a part
hereof as Exhibit
7.12 (the “Escrow Agreement”). One
Hundred Thousand and no/100ths Dollars ($100,000.00) of the Escrow
Amount (the “Litigation Escrow”) shall be held by the
Escrow Agent and used solely for the purpose of (i) defending
against or prosecuting any of the Current Litigation Matters,
including payment of attorneys’ fees or other expenses of
litigation, or (ii) settling any Current Litigation matter or
paying any judgment which may arise under the Current Litigation
Matters as more particularly described in the Escrow Agreement.
Upon the final resolution of all Current Litigation Matters, any
remaining funds making up the Litigation Escrow, if any, shall be
promptly paid to Seller in accordance with the terms of the Escrow
Agreement.

7.13 Exclusive Remedies. Subject to
Section 5.6 and
Section 9.11 the
Parties acknowledge and agree that their sole and exclusive remedy
with respect to any and all claims (other than claims arising from
fraud on the part of a Party hereto in connection with the
transactions contemplated by this Agreement) for any breach of any
representation, warranty, covenant, agreement or obligation set
forth herein or otherwise relating to the subject matter of this
Agreement, shall be pursuant to the indemnification provisions set
forth in this Section
7 and in Section
8. In furtherance of the foregoing, each Party hereby
waives, to the fullest extent permitted under law, any and all
rights, claims and causes of action for any breach of any
representation, warranty, covenant, agreement or obligation set
forth herein or otherwise relating to the subject matter of this
Agreement it may have against the other Parties hereto and their
Affiliated Groups and each of their respective Representatives
arising under or based upon any Legal Requirement, except pursuant
to the indemnification provisions set forth in this Section 7 and in Section 8. Nothing in this
Section 7.13 shall
limit any Person’s right to seek and obtain any equitable
relief to which any Person shall be entitled or to seek any remedy
on account of any Party’s fraud.

SECTION
8                                 

TAX
MATTERS

The
following provisions shall govern the allocation of responsibility
as between Buyer and Seller for certain tax matters following the
Closing Date:

8.1           Tax
Indemnification. Seller shall indemnify the Companies,
Buyer, and each Related Person of Buyer and hold them harmless from
and against, without duplication, any loss, claim, liability,
expense, or other damage attributable to (a) any breach of, or any
inaccuracy in, any representation or warranty contained in
Sections 4.15, (b)
all Taxes (or the non-payment thereof) of the Companies for all
Taxable periods ending on or before the Closing Date and the
portion of any Straddle Period (as defined below) through the end
of the Closing Date (“Pre-Closing Tax Period”),
and (c) any and all Taxes of any Person (other than the Company)
imposed on the Companies as a transferee or successor, by contract
or pursuant to any law, rule, or regulation, which Taxes relate to
an event or transaction occurring before the Closing.
Notwithstanding the forgoing, Seller shall not be responsible for
indemnification of any loss, claim, liability, expense, or other
damage attributable to a filing, settlement or other action taken
by Buyer without the written Consent of Seller. Seller shall
reimburse Buyer for any Taxes of the Companies which are the
responsibility of Seller or the Companies pursuant to this
Section 8.1 within
fifteen (15) business days after payment of such Taxes by Buyer or
the applicable Company. Buyer shall indemnify Seller and hold it
harmless from and against any loss, claim, liability, expense or
other damage attributable to Buyer’s failure to timely file
complete and accurate Tax Returns pursuant to Section 8.3. Buyer and the
Companies shall indemnify Seller, and each Related Person of Seller
and hold them harmless from and against, without duplication, any
loss, claim, liability, expense, or other damage attributable to
(a) any breach of, or any inaccuracy in, any representation or
warranty contained in Sections 3.2(e), (b) all Taxes
(or the non-payment thereof) of the Companies for all Taxable
periods ending after the Closing Date and the portion of any
Straddle Period following the Closing Date, and (c) any and all
Taxes of any Person (other than the Company) imposed on the
Companies as a transferee or successor, by contract or pursuant to
any law, rule, or regulation, which Taxes relate to an event or
transaction occurring after the Closing.

 

40

 

8.2           Straddle
Period. In the case of any Taxable period that includes (but
does not end on) the Closing Date (a “Straddle Period”), the
amount of any Taxes based on or measured by income or receipts of
the applicable Company for the Pre-Closing Tax Period shall be
determined based on an interim closing of the books as of the close
of business on the Closing Date and the amount of other Taxes of
the applicable Company for a Straddle Period which relate to the
Pre-Closing Tax Period shall be deemed to be the amount of such Tax
for the entire Taxable period multiplied by a fraction the
numerator of which is the number of days in the Taxable period
ending on the Closing Date and the denominator of which is the
number of days in such Straddle Period.

8.3           Responsibility
for Filing Tax Returns. Seller shall prepare or cause to be
prepared at Seller’s cost and file or cause to be filed the
income Tax Returns related to a Pre-Closing Tax Period other than a
Straddle Period, but shall provide a copy of such return to Buyer
at least ten (10) days prior to the filing deadline and give Buyer
an opportunity to provide comments with respect to such Tax
Returns. Buyer shall prepare or caused to be prepared at
Buyer’s cost and file or cause to be filed all other Tax
Returns for the Companies which are filed after the Closing Date.
With respect to Straddle Period returns, Buyer shall provide Seller
a copy in advance of the filing deadline and give Seller an
opportunity to provide comments to such return.

8.4           Cooperation
on Tax Matters.

(a)           Buyer
and its Related Persons and Seller and its Related Persons shall
cooperate fully, as and to the extent reasonably requested by the
other Party, in connection with the filing of Tax Returns pursuant
to Section 8.3 and
any audit, litigation or other proceeding with respect to Taxes.
Such cooperation shall include the retention and (upon the other
Party’s request) the provision of records and information
which are reasonably relevant to any such audit, litigation or
other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation
of any material provided hereunder. Buyer (and Buyer shall cause
the Companies) and Seller agree (i) to retain all books and records
with respect to Tax matters pertinent to the Companies relating to
any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent
notified by Buyer or Seller, any extensions thereof) of the
respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (ii) to give
the other Party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the
other Party so requests, Seller and Buyer shall cause the Companies
to, as the case may be, and shall allow the other Party to take
possession of such books and records.

(b)           Buyer
and Seller further agree, upon request, to use their reasonable
efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to
mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions
contemplated hereby).

8.5           Time
Limitation. Notwithstanding anything in this Agreement to
the contrary, the provisions contained in Section 3.2(e), 4.15 and this Section 8 shall survive for the
full period of all applicable statutes of limitation (giving effect
to any waiver, mitigation or extension thereof) plus 60
days.

8.6           Certain
Taxes and Fees. Except as otherwise provided in this
Agreement, all transfer, documentary, sales, use, stamp, and
registration Taxes, and all conveyance fees, recording charges and
other fees and charges (including any penalties and interest)
incurred in connection with consummation of the transactions
contemplated by this Agreement shall be paid by Seller when due,
and Seller will, at Seller’s own expense, file all necessary
Tax Returns and other documentation with respect to all such Taxes,
fees and charges, and, if required by applicable law, Buyer will,
and will cause its Related Persons to, join in the execution of any
such Tax Returns and other documentation.

 

41

 

8.7           Refunds
and Tax Benefits. Any Tax refunds that are received by Buyer
or the Companies, and any amounts credited against Tax to which the
Buyer or the Companies become entitled, that relate to Pre-Closing
Tax Periods shall be for the account of the Seller, and, so long as
no default or deficiency is then due from Seller to Buyer under
Section 7 and
Section 8, Buyer
shall pay over to Seller any such refund or the amount of any such
credit within fifteen (15) days after receipt or entitlement
thereto.

SECTION
9                                 

MISCELLANEOUS

9.1 Expenses. Each of Buyer and
Seller will bear their own costs and expenses (including legal fees
and expenses) incurred in connection with this Agreement and the
Contemplated Transaction, and Seller shall also bear the costs and
expenses of the Companies (including all of their legal fees and
expenses) in connection with this Agreement and the Contemplated
Transactions. Seller shall also bear the costs and expenses
incurred solely in connection with the transfer of the Membership
Interests to Buyer, if any. Seller shall be responsible for all
federal and state income or similar taxes imposed on Seller as a
result of the Contemplated Transaction hereby.

9.2 Notices. All notices, requests,
demands, claims and other communications permitted or required to
be given hereunder must be in writing and will be deemed duly given
and received (i) if personally delivered, when so delivered,
(ii) if mailed, three (3) Business Days after having been sent
by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below,
(iii) if sent by electronic facsimile, once transmitted to the
fax number specified below and the appropriate telephonic
confirmation is received, provided that a copy of such notice,
request, demand, claim or other communication is promptly
thereafter sent in accordance with the provisions of
clause (ii) or (v) hereof, (iv) if sent by Email, on the date
sent if sent during normal business hours of the recipient, and on
the next Business Day if sent after normal business hours of the
recipient, or (v) if sent through an overnight delivery
service in circumstances to which such service guarantees next day
delivery, the Business Day following being so sent:

 

 

 

 

(a) To
Buyer:

 

Meridian Waste
Solutions, Inc.

12540
Broadwell Road, Suite 2104

Milton,
Georgia 30004

Attn:
Jeffrey Cosman

Email:
jsc@jscosinc.com

Phone:
(724) 799-4305

 

with a
copy (which will not constitute valid delivery to Buyer)
to:

Richard
J. Dreger, Attorney at Law, P.C.

11660
Alpharetta Highway

Building 700, Suite
730

Roswell, Georgia
30076

Attn:
Richard J. Dreger, Esq.

Email:
Rick@rdregerlaw.com

Phone:
(678) 566-6901

 

42

 

 

(b) To
Seller:

Waste
Services Industries, LLC

c/o
LeClairRyan, A Professional Corporation

919
East Main Street

24th
Floor

Richmond, Virginia
23219

Attention: John C.
Selbach, Esquire

Email:
cwilcox@wsillc.com

Phone:
(713) 502-7270

 

with a
copy (which will not constitute valid delivery to Seller)
to:

LeClairRyan, A
Professional Corporation

919
East Main Street

24th
Floor

Richmond, Virginia
23219

Attention: John C.
Selbach, Esquire

Facsimile: (804)
916-7288

Email:
john.selbach@leclairryan.com

and

Peter
T. Roselle

800
East Grand Street

Elizabeth, NJ
07201

Email:
ptroselle@regional-industries.com

Phone:
(908) 436-1966

 

Either
Party may give any notice, request, demand, claim or other
communication hereunder using any other means (including, without
limitation, electronic mail), but no such notice, request, demand,
claim or other communication will be deemed to have been duly given
or received unless and until it actually is received by the Party
for which it is intended and the notifying Party can provide
evidence of such actual receipt. Either Party may change its
address for the receipt of notices, requests, demands, claims and
other communications hereunder by giving the other Party notice of
such change in the manner herein set forth.

9.3 Waiver. Neither any failure nor
any delay by any Party in exercising any right, power or privilege
under this Agreement or any of the documents referred to in this
Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of
such right, power or privilege or the exercise of any other right,
power or privilege. To the maximum extent permitted by Legal
Requirement: (a) no claim or right arising out of this Agreement or
any of the documents referred to in this Agreement can be
discharged by one Party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by
another Party; (b) no waiver that may be given by a Party will be
applicable except in the specific instance for which it is given;
and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of that Party or of the right of the Party
giving such notice or demand to take further action without notice
or demand as provided in this Agreement or the documents referred
to in this Agreement.

9.4 Entire Agreement and
Modification. This Agreement (including the Schedules and
Exhibits hereto and the other agreements and instruments to be
executed and delivered by the Parties pursuant to Section 6 hereto) constitutes
the entire and final agreement among the Parties with respect to
the subject matter hereof, and supersedes and replaces all prior
agreements, understandings, commitments, communications and
representations made among the Parties, whether written or oral,
with respect to the subject matter hereof. This Agreement may not
be amended, supplemented, or otherwise modified except by a written
agreement executed by the Parties.

9.5 Assignments; Successors; No
Third-Party Rights. No Party may assign any of its rights or
delegate or cause to be assumed any of its obligations under this
Agreement without the prior written Consent of each other Party,
except that Buyer may assign any of its rights hereunder to, and
cause all of its obligations hereunder to be assumed by, any
Related Person without the Consent of Seller; provided, however, that in the event of
such an assignment by Buyer, Buyer shall remain responsible for all
of its obligations hereunder. Subject to the preceding sentence,
this Agreement will apply to, be binding in all respects upon and
inure to the benefit of the successors and permitted assigns of the
Parties, including the Guarantors. Nothing expressed or referred to
in this Agreement will be construed to give any Person other than
the Parties any legal or equitable right, remedy or claim under or
with respect to this Agreement or any provision of this Agreement,
except such rights as will inure to a successor or permitted
assignee pursuant to this Section 9.5. Notwithstanding
anything to the contrary in this Section 9.5 or otherwise, Buyer
shall at all times have all rights and remedies granted to Buyer
pursuant to Section
5.13 and the Guarantors shall at all times be bound by the
provisions of Section
5.13.

 

43

 

9.6 Severability. If any provision
of this Agreement, or the application of any such provision to any
Person or circumstance, is held to be unenforceable or invalid by
any Governmental Body or arbitrator or under any Legal Requirement,
the Parties will negotiate an equitable adjustment to the
provisions of this Agreement with the view to effecting, to the
greatest extent possible, the original purpose, intent and
commercial effect of such provision and of this Agreement. In any
event, the invalidity of any provision of this Agreement or portion
of a provision will not affect the validity of any other provision
of this Agreement or the remaining portion of the applicable
provision.

9.7 Dates and Times. Dates and
times set forth in this Agreement for the performance of the
Parties’ respective obligations hereunder or for the exercise
of their rights hereunder will be strictly construed, time being of
the essence of this Agreement. All provisions in this Agreement
which specify or provide a method to compute a number of days for
the performance, delivery, completion or observance by any Party of
any action, covenant, agreement, obligation or notice hereunder
will mean and refer to calendar days, unless otherwise expressly
provided. Except as expressly provided herein, the time for
performance of any obligation or taking any action under this
Agreement will be deemed to expire at 5:00 p.m. (eastern time) on
the last day of the applicable time period provided for herein. If
the date specified or computed under this Agreement for the
performance, delivery, completion or observance of a covenant,
agreement, obligation or notice by any Party, or for the occurrence
of any event provided for herein, is a day other than a Business
Day, then the date for such performance, delivery, completion,
observance or occurrence will automatically be extended to the next
Business Day following such date.

9.8 Governing Law. This Agreement
will be governed by and construed in accordance with the internal
laws of the Commonwealth of Virginia without giving effect to any
choice or conflict of law provision or rule (whether of the
Commonwealth of Virginia or any other jurisdiction).

9.9 Dispute Resolution; Submission to
Jurisdiction; Waiver of Jury Trial.

(a)           Any
dispute or difference between or among any of the Parties arising
out of or in connection with this Agreement or the Contemplated
Transactions, including without limitation any dispute for
indemnification under Section 7 or 8, which such
Parties are unable to resolve themselves shall be submitted to and
resolved by arbitration before a single arbitrator, for amounts in
dispute under Two Hundred Thousand and 00/100 Dollars ($200,000.00)
and otherwise before a panel of three (3) arbitrators, which
arbitration shall be governed by and enforceable under the Federal
Arbitration Act, as supplemented or modified by the provisions of
this Section 9.9.
The arbitrator(s) will consider the dispute at issue in Richmond,
Virginia within one hundred twenty (120) days (or such other period
as may be acceptable to the Parties to the dispute) of the
designation of the arbitrator. The arbitrator(s) will deliver a
written award, including written findings of fact and conclusions
of law, with respect to the dispute to each of the arbitrating
Parties, who will promptly act in accordance therewith. In no event
will the arbitrator(s) have the power to award damages in
connection with any dispute in excess of actual compensatory
damages. In particular, the arbitrator(s) may not multiply actual
damages or award consequential, indirect, special or punitive
damages, including, without limitation, damages for lost profits or
loss of business opportunity. Any award of the arbitrator(s) will
be final, conclusive and binding on the arbitrating Parties;
provided, however, that any such Party may seek the vacating,
modification or correction of the arbitrator(s)’ decision or
award as provided under Section 10 and Section 11 of the Federal
Arbitration Act 9 U.S.C. §1-14. Any Party to an arbitration
proceeding may enforce any award rendered pursuant to the
arbitration provisions of this Section 9.9 by bringing suit in
any court of competent jurisdiction located in the City of
Richmond, Virginia. All costs and expenses attributable to the
arbitrator(s) will be allocated between the Parties to the
arbitration in such manner as the arbitrator(s) determine to be
appropriate under the circumstances. Any Party may file a copy of
this Section 9.9
with any arbitrator or court as written evidence of the knowing,
voluntary and bargained agreement among the Parties with respect to
the subject matter of this Section 9.9.

 

 

44

 

(b)           SUBJECT
TO SECTION 9.9(A) ABOVE, ANY LEGAL SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER DOCUMENTS
DELIVERED IN CONNECTION WITH CLOSING OF THE CONTEMPLATED
TRANSACTIONS (THE “TRANSACTION DOCUMENTS”)
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE
INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
LOCATED IN THE CITY OF RICHMOND, VIRGINIA OR THE COURTS OF THE
COMMONWEALTH OF VIRGINIA LOCATED IN THE CITY OF RICHMOND, VIRGINIA,
AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF
PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH
PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE
OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY
SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY
PROCEEDING IN SUCH COURTS, OR ANY ARBITRATION PROCEEDING CONDUCTED
IN THE CITY OF RICHMOND, VIRGINIA, AND IRREVOCABLY WAIVE AND AGREE
NOT TO PLEAD OR CLAIM IN ANY SUCH COURT OR ARBITRATION PROCEEDING
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT,
OR IN THE CITY OF RICHMOND IN THE CASE OF AN ARBITRATION
PROCEEDING, HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c)           EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH
SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO
THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE
FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.9(c).

9.10 Execution of Agreement. This
Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy and all of which, when
taken together, will be deemed to constitute one and the same
agreement. The exchange of copies of this Agreement and of
signature pages by facsimile transmission or electronic mail in PDF
format will constitute effective execution and delivery of this
Agreement as to the Parties and may be used in lieu of the original
Agreement for all purposes. Signatures of the Parties transmitted
by facsimile or by electronic mail in PDF format will be deemed to
be their original signatures for all purposes.

9.11 Specific Performance. Each
Party acknowledges and agrees that each Party would be damaged
irreparably in the event any provision of this Agreement is not
performed in accordance with its specific terms or otherwise is
breached, so that each Party shall be entitled to injunctive relief
to prevent breaches of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in addition to
any other remedy to which a Party may be entitled, at law or in
equity. In particular, Seller acknowledge that the Businesses of
the Companies are unique and recognize and affirm that in the event
Seller Breaches this Agreement, money damages would be inadequate
and Buyer would have no adequate remedy at law, so that Buyer shall
have the right, in addition to any other rights and remedies
existing in its favor, to enforce its rights and obligations
hereunder not only by action for damages but also by action for
specific performance, injunctive, and/or other equitable
relief.

 

 

45

 

 

(See
following page for execution signatures)

 

 

 

 

	
 

	
	
 

 

46

 

 

 

IN
WITNESS WHEREOF, the Parties hereto have executed this Membership
Interest Purchase Agreement as of the Effective Date, intending to
be legally bound.

 

MERIDIAN WASTE
SOLUTIONS, INC., a New York corporation

 

By:
/s/
Jeffrey S. Cosman

Name:
Jeffrey S.
Cosman

Title:
Chief Executive Officer

 

WASTE
SERVICES INDUSTRIES, LLC, a Delaware limited liability
company

By:
/s/ Charles A.
Wilcox

Name:
Charles A. Wilcox

Title:
President

 

AGREED
AND ACCEPTED AS TO SECTION 5.13:

WASTE
SERVICES INDUSTRIES HOLDINGS, LLC, a Delaware limited

liability
company

 

 

By:
/s/
Charles A. Wilcox

Name:
Charles
A.
Wilcox                                        

Title:
Chief Executive
Officer                                 

 

 [Signature
Page to Membership Interest Purchase Agreement]

	
 

	

                                        

	
 

 

47

 

SCHEDULE
1.1(a)

DEFINED TERMS

“Accounts Receivable”
means (i) all trade and other accounts receivable and other rights
to payment from past or present customers of the Companies, and the
full benefit of all security for such accounts or rights to
payment, including all trade and other accounts receivable
representing amounts receivable in respect of services rendered to
customers of the Businesses, and (ii) any claim, remedy or other
right related to any of the foregoing.

“Accounts Payable” means
all trade and other accounts payable to third parties in connection
with the Business that remain unpaid.

“Adverse Consequences”
means all actions, suits, Proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement or claims, obligations, Taxes, Liens,
losses, interest, expenses (including court costs, reasonable costs
of investigation and defense and reasonable attorneys’ fees
and expenses), whether or not involving a Third-Party
Claim. “Adverse
Consequences” shall not include any incidental, special,
exemplary, multiple (whether of income or any other financial
metric), punitive or consequential damages (including diminutions
in value or loss of profit or revenue) or any equitable equivalent
thereof or substitute therefor, except to the extent actually
awarded to a Governmental Authority or other third
party.

“Affiliated Group” means
any affiliated group within the meaning of Code Section 1504(a) or
any similar group defined under a similar provision of state, local
or foreign law.

“Agreement” has the
meaning set forth in the preface.

“Approvals” has the
meaning set forth in Section 6.1(h).

“Assets” has the meaning
set forth in Section
4.7.

“Basis” means any past or
present fact, situation, circumstance, status, condition, activity,
practice, plan, occurrence, event, incident, action, failure to
act, or transaction that forms or could reasonably be expected to
form the basis for any specified consequence.

“Breach” means any breach
of, or any inaccuracy in, any representation or warranty or any
breach of, or failure to perform or comply with, any covenant,
obligation or agreement, in or of this Agreement or any other
Contract, agreement or instrument (whether or not related to this
Agreement), or in or of any corporate, Company or partnership
organizational document or agreement, any Governmental
Authorization, Order or Legal Requirement, or any other breach of
any written instrument, or any event which with the passing of time
or the giving of notice, or both, would constitute such a breach,
inaccuracy or failure.

“Business” or
“Businesses” has the
meaning set forth in the Background Facts.

“Business Day” means any
day other than a Saturday or Sunday or any other day on which banks
in the Commonwealth of Virginia are permitted or required by Legal
Requirement to be closed.

“Buyer” has the meaning
set forth in the preface.

 

48

 

“Buyer Claims Period” has
the meaning set forth in Section 7.4(a).

“Buyer Indemnified
Persons” has the meaning set forth in Section 7.3.

“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended.

“CFS Disposal” has the
meaning set forth in the Background Facts.

“CFS Group” has the
meaning set forth in the Background Facts.

 “Closing”
and “Closing
Date” has the meaning set forth in Section 2.3.

“Closing Statement” has
the meaning set forth in Section 6.1(j).

“COBRA” means the
requirements of Part 6 of Subtitle B of Title I of ERISA and Code
Section 4980B and of any similar state law.

“Code” means the Internal
Revenue Code of 1986, as amended.

“Company” or
“Companies” has the
meaning set forth in the Background Facts.

“Company Contracts” has
the meaning set forth in Section 4.18(a).

“Company Documents” has
the meaning set forth in Section 5.1.

“Confidential Information”
has the meaning set forth in Section 5.5(a).

“Consent” means any
approval, consent, ratification, waiver or other
authorization.

“Contemplated
Transactions” means all of the transactions
contemplated by this Agreement.

“Contract” means any
agreement, contract, license, lease, consensual obligation, promise
or undertaking (whether written or oral and whether express or
implied), whether or not legally binding.

“Current Litigation
Matters” has the meaning set forth in Section 4.20.

“Current Seller
Liabilities” or “Current Seller Liability”
has the meaning set forth in Section 2.4.

“Disclosure Schedule” has
the meaning set forth in the introductory paragraph to Section 4.

“DuPont Recycle Property”
has the meaning set forth in the Background Facts.

“DuPont Recycling
Business” has the meaning set forth in the Background
Facts.

“Effective Date” has the
meaning set forth in the preface.

“Employee Benefit Plan”
means all “employee benefit plans” as defined by
Section 3(3) of the Employee Retirement Income Security Act of 1974
(“ERISA”), all specified
fringe benefit plans as defined in Section 6039D of the Code, and
all other bonus, incentive-compensation, deferred-compensation,
profit-sharing, stock-option, stock-appreciation-right,
stock-bonus, stock-purchase, employee-stock-ownership, savings,
severance, change-in-control, supplemental-unemployment, layoff,
salary-continuation, retirement, pension, health, life-insurance,
disability, accident, group-insurance, vacation, holiday,
sick-leave, fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice,
commitment, contract or understanding (whether qualified or
nonqualified, currently effective or terminated, written or
unwritten) and any trust, escrow or other agreement related thereto
that (i) is maintained or contributed to by any Company or any
other corporation or trade or business controlled by, controlling
or under common control with Sellers (within the meaning of Section
414 of the Code or Section 4001(a)(14) or 4001(b) of ERISA)
(“ERISA
Affiliate”) or has been maintained or contributed to
in the last six (6) years by any Company or any ERISA Affiliate, or
with respect to which any Company or any ERISA Affiliate has or may
have any liability, and (ii) provides benefits, or describes
policies or procedures applicable to any current or former
director, officer, employee or service provider of any Company or
any ERISA Affiliate, or the dependents of any thereof, regardless
of how (or whether) liabilities for the provision of benefits are
accrued or assets are acquired or dedicated with respect to the
funding thereof.

 

49

 

“Employee Welfare Benefit
Plan” has the meaning set forth in ERISA Section
3(1).

 “Environment”
means soil, land surface or subsurface strata, surface waters,
groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life and any other
environmental medium or natural resource.

“Environmental, Health and Safety
Liabilities” means any and all costs, damages, Adverse
Consequences, expenses, Liabilities and/or other responsibility
arising from or under any Environmental Law or Occupational Safety
and Health Law, including those consisting of or relating to (i)
any environmental, health or safety matter or condition (including
on-site or off-site contamination, and/or occupational safety and
health regulation of any chemical substance or product), (ii) any
fine, penalty, judgment, award, settlement, Proceeding, damages,
Adverse Consequence, loss, claim, demand or response, remedial or
inspection cost or expense arising under any Environmental Law or
Occupational Safety and Health Law, (iii) financial responsibility
under any Environmental Law or Occupational Safety and Health Law
for cleanup costs or corrective action, including any cleanup,
removal, containment or other remediation or response actions
(“Cleanup”) required by any
Environmental Law or Occupational Safety and Health Law (whether or
not such Cleanup has been required or requested by any Governmental
Body or any other Person) and for any natural resource damages,
and/or (iv) any other compliance, corrective or remedial measure
required under any Environmental Law or Occupational Safety and
Health Law. For purposes of this definition, the terms
“removal,” “remedial” and “response
action” include the types of activities covered by the United
States Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA).

“Environmental Law” means
any Legal Requirement that requires or relates to (i) advising
appropriate Governmental Bodies, employees or the public of any
intended Release, actual Release or Threat of Release of pollutants
or Hazardous Materials, violations of discharge limits or other
prohibitions and the commencement of activities, such as resource
extraction or construction, that could have significant impact on
the Environment, (ii) preventing or reducing to acceptable levels
the Release of pollutants or Hazardous Materials into the
Environment, (iii) reducing the quantities, preventing the Release
or minimizing the hazardous characteristics of wastes that are
generated, (iv) assuring that products are designed, formulated,
packaged and used so that they do not present unreasonable risks to
human health or the Environment when used or disposed of, (v)
protecting resources, species or ecological amenities, (vi)
reducing to acceptable levels the risks inherent in the
transportation of pollutants, Hazardous Materials or other
potentially harmful substances, (vii) cleaning up pollutants that
have been Released, preventing the Threat of Release or paying the
costs of such clean up or prevention, (viii) making responsible
Persons pay private parties, or groups of them, for damages done to
their health or the Environment or permitting self-appointed
representatives of the public interest to recover for injuries done
to public assets; or (ix) governing or regulating any Hazardous
Activities.

 

50

 

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means
each entity that is treated as a single employer with any Company
for purposes of Code Section 414.

“Excluded Contracts” has
the meaning set forth in Section 5.2.

“Financial Statements” has
the meaning set forth in Section 4.11(a).

“GAAP” means generally
accepted accounting principles as in effect in the United States of
America, as determined by the Financial Accounting Standards Board
from time to time, applied on a consistent basis as of the date of
any application thereof.

“Governmental
Authorization” means any zoning approvals, permits
(including the Permits), franchise rights, rights-of-way, Consent,
license, permission, registration, permit or other right or
approval issued, granted, given or otherwise made available by or
under the authority of any Governmental Body or pursuant to any
Legal Requirement and all pending applications therefor or renewals
thereof.

“Governmental Body” means
any (i) nation, state, county, city, town, borough, village,
district or other jurisdiction, (ii) federal, state, county, local,
municipal, foreign or other government, (iii) governmental or
quasi-governmental authority of any nature (including any agency,
branch, department, board, commission, court, tribunal or other
entity exercising governmental or quasi-governmental powers), (iv)
body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power, (v) Indian tribal
authority, (vi) multinational organization or body, or (vii)
official of any of the foregoing.

“Guarantor” has the
meaning set forth in Section 5.13.

“Guaranty” has the meaning
set forth in Section
5.13.

“Hauling Company Business”
has the meaning set forth in the Background Facts.

“Hauling Company Property”
has the meaning set forth in the Background Facts.

“Hazardous Activity”
means, with respect to any Person (including any Party or the
Companies or their Related Persons), the distribution, generation,
handling, importing, management, manufacturing, processing,
production, refinement, Release, storage, transfer, transportation,
treatment or use (including any withdrawal or other use of
groundwater) of Hazardous Material in, on, under, about or from any
Property or other facility or real property owned, leased, operated
or otherwise used by such Person or any of its contractors in
connection with the conduct of the business of such Person, or from
any other asset of such Person, into the Environment and any other
act, business, operation or thing that increases the danger, or
risk of danger, or poses an unreasonable risk of harm, to persons
or property, whether on or off the aforementioned Properties,
facilities or other real property, beyond what is authorized by any
Environmental Law relating to the business of such
Person.

“Hazardous Material” means
any substance or material which is or will foreseeably be regulated
by any Governmental Body, including any material or substance which
is defined as a “hazardous waste,” “hazardous
material,” “hazardous substance,”
“extremely hazardous waste,” “restricted
hazardous waste,” “toxic waste” or “toxic
substance” under any provision of Environmental Law, and
including petroleum, petroleum products, asbestos, presumed
asbestos-containing material or asbestos-containing material, urea
formaldehyde and polychlorinated biphenyls.

 

51

 

“Improvements” means all
buildings, structures, fixtures, building systems and equipment,
and all components thereof, including the roof, foundation,
load-bearing walls, and other structural elements thereof, heating,
ventilation, air conditioning, mechanical, electrical, plumbing and
other building systems, environmental control, remediation and
abatement systems, sewer, storm, and waste water systems,
irrigation and other water distribution systems, parking
facilities, fire protection, security and surveillance systems, and
telecommunications, computer, wiring, and cable installations, all
of which are included in the Properties.

“Indebtedness” means (a)
any indebtedness (including all accrued interest) for borrowed
money or issued in substitution for or exchange of indebtedness for
borrowed money, (b) any indebtedness evidenced by any note, bond,
debenture or other debt security, (c) any indebtedness for the
deferred purchase price of property or services with respect to any
Company is liable, contingently or otherwise, as obligor or
otherwise, (d) any commitment by which any Company assures a
creditor against loss (including, without limitation, contingent
reimbursement obligations with respect to letters of credit), (e)
any indebtedness guaranteed in any manner by any Company
(including, without limitation, guarantees in the form of an
agreement to repurchase or reimburse), (f) any obligations under
capitalized leases with respect to which any Company is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or
with respect to which obligations any Company assures a creditor
against loss, (g) any TRAC or synthetic leases; (h) any
indebtedness secured by a Lien on the Assets of any Company, (i)
any unsatisfied obligation for “withdrawal liability”
to a “Multiemployer Plan” as such terms are defined
under ERISA, (j) the deficit or negative balance, if any, in any
Company’s checking account and (k) any credit card
debt.

“Indemnified Person” has
the meaning set forth in Section 7.6.

“Indemnifying Person” has
the meaning set forth in Section 7.6.

“Insolvent” means being
unable to pay debts as they mature, or as obligations become due
and payable.

“Insolvency Laws” means
any bankruptcy, insolvency, reorganization, moratorium or other
similar Legal Requirement affecting the enforcement of
creditors’ rights generally, and general principles of equity
(regardless of whether enforcement is considered in a proceeding in
law or equity).

“IRS” means the United
States Internal Revenue Service and, to the extent relevant, the
United States Department of the Treasury.

“Inspection Period” has
the meaning set forth in Section 5.2.

“Insurance Policies” or
“Insurance
Policy” has the meaning set forth in Section 4.28.

“Intangible Personal
Property” means all intangible property used or held
for use by any Company, of whatever type or description, including
(a) the business as a going concern (b) goodwill of any Company (c)
all files, records and correspondence (d) telephone numbers,
telecopy numbers (e) all rights in Internet web sites and Internet
domain names presently used by Seller or the Companies, and links;
(f) all registered and unregistered copyrights in both published
works and unpublished works, (g) the “The CFS Group”,
“The CFS Group Disposal & Recycling Services”,
“RWG5”, “Container First Services”,
“CFS”, “Tri-City Regional Landfill”,
“TCR”, “Petersburg Landfill”,
“Disposal & Recycling Services of Lunenburg”,
“Lunenburg Landfill” and “Arena Trucking”
names, all assumed fictional business names, trade names,
registered and unregistered trademarks, service marks and
applications, and (h) all know-how, trade secrets, confidential or
proprietary information, customer lists, software, technical
information, data, process technology, plans, drawings and blue
prints; and (f) all right, title and interest in and to all Company
Documents, Company Contracts, and all Permits, Governmental
Authorizations, Approvals, Consents, licenses and other permits and
approvals of the Companies.

 

52

 

“Intellectual Property
Assets” has the meaning set forth in Section 4.27.

“Knowledge”
means

(i)
when used to qualify a representation, warranty or other statement
of Buyer, the actual knowledge that management (consisting of
Buyer’s officers and directors) of the Buyer actually has
with respect to the particular fact or matter that is the subject
of such representation, warranty or other statement, and the
knowledge that the management of the Buyer could reasonably be
expected to have after having conducted a reasonable inquiry or
investigation with respect to the fact or matter that is the
subject of such representation, warranty or other
statement.

(ii)
when used to qualify a representation, warranty or other statement
of Seller or any Company, the actual knowledge Robert W. Guidry,
Charles A. Wilcox, Timothy Webb or Kim Fairbanks has with respect
to the particular fact or matter that is the subject of such
representation, warranty or other statement, and the knowledge that
such individuals could reasonably be expected to have after having
conducted a reasonable inquiry or investigation with respect to the
fact or matter that is the subject of such representation, warranty
or other statement.

“Legal Requirement” means
any federal, state, local, municipal, foreign, international,
multinational or other constitution, law, ordinance, principle of
common law, code, regulation, statute or treaty.

“Liability” means with
respect to any Person (including any Party), any Indebtedness,
liability, penalty, damage, loss, cost or expense, obligation,
claim, deficiency, or guaranty of such Person of any kind,
character or description, whether known or unknown, absolute or
contingent, accrued or unaccrued, disputed or undisputed,
liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined,
determinable or otherwise, and whether or not the same is required
to be accrued on the financial statements of such Person, including
any liability for Taxes.

“Lien” means with respect
to any Person, any mortgage, right of way, easement, encroachment,
any restriction on use, servitude, pledge, lien, charge,
hypothecation, security interest, encumbrance, adverse right,
interest or claim, community or other marital property interest,
condition, equitable interest, encumbrance, license, covenant,
title defect, option, or right of first refusal or offer or similar
restriction, voting right, transfer, receipt of income or exercise
of any other attribute of ownership, except for any liens for taxes
not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been
established and accrued on the financial statements of such Person
in accordance with GAAP.

“Lunenburg Landfill” has
the meaning set forth in the Background Facts.

“Lunenburg Property” has
the meaning set forth in the Background Facts.

 

53

 

“Material Adverse Effect”
or “Material Adverse
Change” means any effect or change that would be
materially adverse to the Businesses, Assets, condition (financial
or otherwise), operating results, or operations of the Companies,
taken as a whole, including the ability for the Companies to own,
construct, operate and develop the Assets and the, the transfer or
issuance to any Company, if applicable, of any Permit, Consent,
Governmental Authorization, license or other permit or approval
contemplated by this Agreement, or on the ability of Seller
consummate timely the Contemplated Transactions (regardless of
whether or not such adverse effect or change can be or has been
cured at any time or whether Buyer has knowledge of such effect or
change on the date hereof), provided, however, that “Material
Adverse Effect” shall not include any event, occurrence,
fact, condition or change, directly or indirectly, arising out of
or attributable to: (i) general economic or political conditions;
(ii) conditions generally affecting the industries in which any of
the Companies operates; (iii) any changes in financial or
securities markets in general; (iv) acts of war (whether or not
declared), armed hostilities or terrorism, or the escalation or
worsening thereof; (v) any action required or permitted by this
Agreement, except pursuant to Section 3.5, Section 4.3 and Section 6.1; (vi) any changes
in applicable Legal Requirements or accounting rules, including
GAAP; or (vii) the public announcement, pendency or completion of
the transactions contemplated by this Agreement; provided further, however, that any event,
occurrence, fact, condition or change referred to in clauses (i)
through (iv) immediately above shall be taken into account in
determining whether a Material Adverse Effect has occurred or could
reasonably be expected to occur to the extent that such event,
occurrence, fact, condition or change has a disproportionate effect
on any Company compared to other participants in the industries in
which such Company conducts its businesses.

“Membership Interests” has
the meaning set forth in Section 2.1.

“Most Recent Financial
Statements” has the meaning set forth in Section 4.11(a).

“Most Recent Fiscal Month
End” has the meaning set forth in Section 4.11(a).

“Most Recent Fiscal Year
End” has the meaning set forth in Section 4.11(a).

“Multiemployer Plan” has
the meaning set forth in ERISA Section 3(37).

“Occupational Safety and Health
Law” means any Legal Requirement designed to provide
safe and healthful working conditions and to reduce occupational
safety and health hazards, including the Occupational Safety and
Health Act, and any program, whether governmental or private (such
as those promulgated or sponsored by industry associations and
insurance companies), designed to provide safe and healthful
working conditions.

 “Order”
means any order, injunction, judgment, decree, ruling, assessment
or arbitration award of any Governmental Body or
arbitrator.

“Ordinary Course of
Business” means an action taken by a Person will be
deemed to have been taken in the ordinary course of business only
if that action (i) is consistent in nature, scope and magnitude
with the past practices of such Person and is taken in the ordinary
course of the normal, day-to-day operations of such Person, (ii)
does not require authorization by the board of directors, owners,
shareholders, interest holders, members or managers of such Person
(or by any Person or group of Persons exercising similar authority)
and does not require any other separate or special authorization of
any nature, and (iii) is similar in nature, scope and magnitude to
actions customarily taken, without any separate or special
authorization, in the ordinary course of the normal, day-to-day
operations of other Persons that are in the same line of business
as such Person).

 

54

 

“Organizational Documents”
means: (i) with respect to a corporation, the certificate or
articles of incorporation and bylaws; (ii) with respect to any
other Person any charter or similar document adopted or filed in
connection with the creation, formation or organization of a
Person; (iii) any operating agreement, partnership agreement,
shareholder agreement or similar agreement and (iv) any amendment
to any of the foregoing.

“Party” or
“Parties” has the meaning
set forth in the preface.

“Permits” has the meaning
set forth in Section
4.12(a).

“Person” means an
individual, a partnership, a corporation, a limited liability
company, an association, a joint stock holding company, a trust, a
joint venture, an unincorporated organization, any other business
entity, joint venture or other entity or Governmental Body (or any
department, agency, or political subdivision thereof).

“Petersburg Landfill” has
the meaning set forth in the Background Facts.

“Petersburg Property” has
the meaning set forth in the Background Facts.

“Pre-Closing Tax Period”
has the meaning set forth in Section 8.1.

“Proceeding” means any
action, arbitration, audit, hearing, investigation, litigation or
suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or
private) commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Body, court, or
arbitrator.

“Property” or
“Properties” has the
meaning set forth in the Background Facts together with all
buildings, structures, Improvements, and fixtures located thereon,
including all electrical, mechanical, plumbing and other building
systems, fire protection, security and surveillance systems,
telecommunications, computer, wiring, and cable installations,
utility installations, water distribution systems, and landscaping,
together with all easements and other rights and interests
appurtenant thereto (including air, oil, gas, mineral, and water
rights together with all Permits).

“Purchase Price” has the
meaning set forth in Section 2.2.

“Real Property Laws” has
the meaning set forth in Section 4.16(c).

“Real Property Lease”
means (i) any long-term lease of land in which most of the rights
and benefits comprising ownership of the land and the Improvements
thereon or to be constructed thereon, if any, are transferred to
the tenant for the term thereof or (ii) any lease or rental
agreement pertaining to the occupancy of any improved space on any
real property.

“Related Person”
means:

(i) with respect to a
particular individual: (A) each other member of such
individual’s Family; (B) any Person that is directly or
indirectly controlled by any one or more members of such
individual’s Family; (C) any Person in which members of such
individual’s Family hold (individually or in the aggregate) a
Material Interest; and (D) any Person with respect to which one or
more members of such individual’s Family serves as a
director, officer, partner, executor or trustee (or in a similar
capacity); and

 

55

 

(ii) with respect to a
specified Person other than an individual: (A) any Person that
directly or indirectly controls, is directly or indirectly
controlled by or is directly or indirectly under common control
with such specified Person; (B) any Person that holds a Material
Interest in such specified Person; (C) each Person that serves as a
director or officer, partner, executor or trustee of such specified
Person (or in a similar capacity); (D) any Person in which such
specified Person holds a Material Interest; and (E) any Person with
respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity).

(iii) For purposes of
this definition, (a) “control” (including
“controlling,” “controlled by,” and
“under common control with”) means the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and shall
be construed as such term is used in the rules promulgated under
the Securities Act; (b) the “Family” of an individual
includes (i) the individual, (ii) the individual’s spouse,
(iii) any other natural person who is related to the individual or
the individual’s spouse within the second degree and (iv) any
other natural person who resides with such individual; and (c)
“Material Interest” means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act of 1934)
of voting securities or other voting interests representing at
least ten percent (10%) of the outstanding voting power of a Person
or equity securities or other equity interests representing at
least ten percent (10%) of the outstanding equity securities or
equity interests in a Person.

“Release” means any
release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal,
leaching or migration on or into the Environment or into or out of
any property.

 

“Remedial Action” means
all actions, including any capital expenditures, required or
voluntarily undertaken (i) to clean up, remove, treat or in any
other way address any Hazardous Material or other substance, (ii)
to prevent the Release or Threat of Release or to minimize the
further Release of any Hazardous Material or other substance so it
does not migrate or endanger or threaten to endanger public health
or welfare or the Environment, (iii) to perform pre-remedial
studies and investigations or post-remedial monitoring and care, or
(iv) to bring the Properties and the operations conducted (or to be
conducted) thereon into compliance with Environmental Laws and
environmental Governmental Authorizations.

“Representative” means
with respect to a particular Person, any director, officer,
manager, employee, agent, consultant, advisor, accountant,
financial advisor, legal counsel or other representative of that
Person.

“Restrictive Covenants
Agreement” has the meaning set forth in Section 6.1(l).

“Retained
Liabilities” has the meaning set forth in Section 2.4.

“RWG5” has the meaning set
forth in the Background Facts.

“Securities Act” means the
Securities Act of 1933, as amended.

“Seller” has the meanings
set forth in the preface.

“Seller Claims” has the
meaning set forth in Section 5.12

“Seller Claims Period” has
the meanings set forth in Section 7.4(b).

 

56

 

“Seller Indemnified
Persons” has the meaning set forth in Section 7.2.

“Seller Releasing Parties”
has the meaning set forth in Section 5.12.

“Straddle Period” has the
meaning set forth in Section 8.2.

“SWDA” has the meaning set
forth in Section
4.25.

“Tangible Personal
Property” means all tangible personal property used or
useful in the Businesses, including all machinery, equipment,
scales, compactors, containers, bailers, tools, spare parts,
furniture, office equipment, computer hardware, supplies,
materials, vehicles, trade fixtures and other items of tangible
personal property of every kind owned or leased by the Companies
(wherever located and whether or not carried on the books of the
Companies or Seller), together with any express or implied warranty
by the manufacturers or lessors of any item or component part
thereof and all maintenance records and other documents relating
thereto.

“Tax” means any income,
gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, property, environmental, windfall
profit, customs, vehicle, airplane, boat, vessel or other title or
registration, capital stock, franchise, employees’ income
withholding, foreign or domestic withholding, social security,
unemployment, disability, real property, personal property, sales,
use, transfer, value added, alternative, add-on minimum and other
tax, fee, assessment, levy, tariff, charge or duty of any kind
whatsoever and any interest, penalty, addition or additional amount
thereon imposed, assessed or collected by or under the authority of
any Governmental Body or payable under any tax-sharing agreement or
any other Contract, whether disputed or not and including any
obligations to indemnify or otherwise assume or succeed to the Tax
liability of any other Person.

“Tax Return” means any
return (including any information return), report, statement,
schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection
with the determination, assessment, collection or payment of any
Tax or in connection with the administration, implementation or
enforcement of or compliance with any Legal Requirement relating to
any Tax.

“Third Party Claim” means
any claim, issuance of any Order or the commencement of any
Proceeding by any Person who is not a Party to this Agreement,
including a Related Person of a Party, any domestic or foreign
court, or Governmental Body.

“Threat of Release” means
a reasonable likelihood of a Release that may require action in
order to prevent or mitigate damage to the Environment that may
result from such Release.

 

“Transfer Station” has the
meaning set forth in the Background Facts.

 

“Transfer Station
Property” has the meaning set forth in the Background
Facts.

 

“WARN” has the meaning set
forth in Section
4.21.

 

 

 

57Exhibit

COMERICA INCORPORATED 
2006 AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
SECTION 1 
PURPOSE  
The purpose of the Comerica Incorporated 2006 Amended and Restated Long-Term Incentive Plan is to align the interests of employees of the Corporation selected to receive awards with those of stockholders by rewarding long term decision-making and actions for the betterment of the Corporation.  Accordingly, Eligible Individuals may receive Awards of Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, Performance Awards and Other Stock-Based Awards.  Equity-based compensation assists in the attraction and retention of qualified employees, and provides them with additional incentive to devote their best efforts to pursue and sustain the Corporation's superior long-term performance.  This enhances the value of the Corporation for the benefit of its stockholders.  
SECTION 2 
DEFINITIONS
A.    "Affiliate" means (i) any corporation, partnership, joint venture or other entity that is controlled by the Corporation, whether directly or indirectly, and (ii) any corporation, partnership, joint venture or other entity in which the Corporation has a significant equity interest, as determined by the Committee; provided, however, that with respect to an Award of an Incentive Stock Option and an Award that is subject to Code Section 409A, the term “Affiliate” shall refer solely to a Subsidiary.
B.    "Aggregated Plan" means all agreements, methods, programs, and other arrangements sponsored by the Corporation that would be aggregated with this Plan under Section 1.409A-1(c) of the Regulations.
C.    "Award" means an Option, a Stock Appreciation Right, a Share of Restricted Stock, a Restricted Stock Unit, a Performance Award, including a Qualified Performance-Based Award, or an Other Stock-Based Award pursuant to the Plan.  Each Award shall be evidenced by an Award Agreement.
D.    "Award Agreement" means a written agreement, in a form approved by the Committee, which sets forth the terms and conditions of an Award, including, but not limited to, the Performance Period and/or Restriction Period, as appropriate.  Agreements shall be subject to the express terms and conditions set forth herein, and to such other terms and conditions not inconsistent with the Plan as the Committee shall deem appropriate.
E.    "Award Recipient" means an Eligible Individual who has been granted an Award under the Plan and has entered into an Award Agreement evidencing the grant of 

1

such Award or otherwise accepted the terms of an Award Agreement, including by electronic acceptance or acknowledgement.
F.    "Beneficiary" means any person(s) designated by an Award Recipient on a beneficiary designation form submitted to the Plan Administrator, or, if no form has been submitted, any person(s) entitled to receive any amounts owing to such Award Recipient under this Plan upon his or her death by reason of having been named in the Award Recipient's will or trust agreement or having qualified as a taker of the Award Recipient's property under the laws of intestacy.  If an Award Recipient authorizes any person, in writing, to exercise such individual's Options or Stock Appreciation Rights following the Award Recipient's death, the term "Beneficiary" shall include any person in whose favor such Options or Stock Appreciation Rights are exercised by the person authorized to exercise the Options or Stock Appreciation Rights.
G.    "Board" means the Board of Directors of the Corporation.
H.    "Cause" means (1) conviction of the Award Recipient for committing a felony under Federal law or the law of the state in which such action occurred, (2) dishonesty in the course of fulfilling the Award Recipient's employment duties, (3) willful and deliberate failure on the part of the Award Recipient to perform his or her employment duties in any material respect, or (4) before a Change of Control, such other events as shall be determined by the Committee.  Before a Change of Control, the Committee shall, unless otherwise provided in an Individual Agreement with the Award Recipient, have the sole discretion to determine whether "Cause" exists, and its determination shall be final.
I.    "Change of Control" shall have the meaning set forth in Exhibit A to this Plan.
J.    "Code" means the Internal Revenue Code of 1986, as amended.
K.    "Committee" means the Governance, Compensation and Nominating Committee of the Board or such other committee of the Board as the Board may from time to time designate, which, with respect to the establishment of Performance Measures, shall be composed solely of not less than two outside directors (as described under Regulations Section 1.162-27(e)(3)), and shall be appointed by and serve at the pleasure of the Board.  
L.    "Corporation" means Comerica Incorporated, a Delaware corporation, and its successors and assigns.
M.    "Date of Grant" means the effective date of an Award granted by the Committee to an Award Recipient.
N.    "Disabled" or "Disability" means "Totally Disabled" (or any derivation of such term) within the meaning of the Long-Term Disability Plan of Comerica Incorporated, or if there is no such plan, "Disability" as determined by the Committee.  However, with respect to the rules relating to Incentive Stock Options, the term "Disabled" shall mean disabled 

2

as that term is utilized in Sections 422 and 22(e)(3) of the Code, or any successor Code provisions relating to ISOs.  Furthermore, with respect to Awards subject to Section 409A of the Code, "Disabled" shall not have either of the prior meanings, but shall mean an Award Recipient's inability to engage in any substantial gainful activity due to a medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
O.    "Disaffiliation" means a Subsidiary's or Affiliate's ceasing to be a Subsidiary or Affiliate for any reason (including, without limitation, as a result of a public offering, or a spinoff or sale by the Corporation, of the stock of the Subsidiary or Affiliate) or a sale of a division of the Corporation and its Affiliates.
P.    "Eligible Individual" means any officers and employees of the Corporation or any of its Subsidiaries or Affiliates, and prospective officers and employees who have accepted offers of employment from the Corporation or its Subsidiaries or Affiliates.  Notwithstanding the foregoing, an Eligible Individual for purposes of receipt of the grant of an ISO shall be limited to those individuals who are eligible to receive ISOs under rules set forth in the Code and applicable Regulations.
Q.    "Exchange Act" means the Securities Exchange Act of 1934, as amended.
R.    "Fair Market Value" means the closing price of a Share on the New York Stock Exchange as reported on the Composite Tape as published in the Wall Street Journal; if, however, there is no trading of Shares on the date in question, then the closing price of the Shares as so reported, on the last preceding trading day shall instead be used to determine Fair Market Value.  If Fair Market Value for any date in question cannot be determined as provided above, Fair Market Value shall be determined by the Committee in its good faith discretion based on a reasonable valuation method in accordance with the Regulations and applicable guidance promulgated under Code Section 409A.
S.    "Incentive Stock Option" or "ISO Award" means an Option granted pursuant to the Plan that is designated in the applicable Award Agreement as an "incentive stock option" within the meaning of Section 422 of the Code, and that in fact so qualifies.
T.    "Nonqualified Stock Option" or "NQSO Award" means an Option granted  pursuant to the Plan that is not intended to be, or does not qualify as, an Incentive Stock Option.
U.    "Option" means a Nonqualified Stock Option or an Incentive Stock Option granted pursuant to Section 6(A) of the Plan.
V.    "Other Stock-Based Award" means any right granted under Section 6(F) of the Plan.
W.    "Performance Award" means any Award, including a Qualified Performance-Based Award, granted pursuant to Section 6(E) of the Plan.

3

X.    "Performance Measures" means the performance goals established by the Committee and relating to a Performance Period in connection with the grant of an Award. In the case of any Qualified Performance-Based Award, such goals shall be (i) based on the attainment of specified levels of one or more of the following measures (a) earnings per share, (b) return measures (including, but not limited to, return on assets, equity or sales), (c) net income (before or after taxes), (d) cash flow (including, but not limited to, operating cash flow and free cash flow), (e) cash flow return on investments, which equals net cash flows divided by owner's equity, (f) earnings before or after taxes, interest, depreciation and/or amortization, (g) internal rate of return or increase in net present value, (h) gross revenues, (i) gross margins, (j) capital measures or (k) stock price (including, but not limited to, growth measures and total stockholder return) and (ii) set by the Committee within the time period prescribed by Section 162(m) of the Code.  Performance Measures may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated and may be based on or adjusted for any other objective goals, events, or occurrences established by the Committee for a Performance Period.  Such Performance Measures may be particular to a line of business, Subsidiary or other unit or may be based on the performance of the Corporation generally.  Such Performance Measures may cover the Performance Period(s) as specified by the Committee.  Performance Measures may be adjusted by the Committee in its sole discretion to eliminate the unbudgeted effects of charges for restructurings, charges for discontinued operations, charges for extraordinary items and other unusual or non-recurring items of loss or expense, merger related charges, cumulative effect of accounting changes, the unbudgeted financial impact of any acquisition or divestiture made during the applicable Performance Period, and any direct or indirect change in the Federal corporate tax rate affecting the Performance Period, each as defined by generally accepted accounting principles and identified in the audited financial statements, notes to the audited financial statements, management's discussion and analysis or other Corporation filings with the Securities and Exchange Commission
Y.    "Performance Period" means the period designated by the Committee during which the Performance Measures applicable to an Award shall be measured.  The Performance Period shall be established at or before the time of the grant of the Award, and the length of any Performance Period shall be within the discretion of the Committee.
Z.    "Plan" means the Comerica Incorporated 2006 Amended and Restated Long-Term Incentive Plan, as may be amended from time to time.
AA.    "Qualified Performance-Based Award" means an Award intended to qualify for the Section 162(m) Exemption, as provided in Section 7.
BB.    "Regulations" means the Treasury Regulations promulgated under the Code.
CC.    "Restriction Period" means the period designated by the Committee during which Shares of a Restricted Stock Award remain forfeitable or a Restricted Stock Unit Award is subject to vesting requirements.

4

DD.    "Restricted Stock" or "Restricted Stock Award" means an award of Shares pursuant to Section 6(C) of the Plan subject to the terms, conditions and such restrictions as may be determined by the Committee and set forth in the applicable Award Agreement.  Shares of Restricted Stock shall constitute issued and outstanding Shares for all corporate purposes.
EE.    "Restricted Stock Units" or "Restricted Stock Unit Award" means an Award granted pursuant to Section 6(D) of the Plan denominated in Shares subject to the terms, conditions and restrictions determined by the Committee and set forth in the applicable Award Agreement.
FF.    "Retirement" means, unless otherwise provided in an Award Agreement or determined by the Committee, an Award Recipient's Termination of Employment (or with respect to Awards subject to Code Section 409A, an Award Recipient's Separation from Service) at or after age 65 or after attainment of both age 55 and ten (10) years of service with the Corporation and Affiliates.  
GG.    "Section 162(m) Exemption" means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code. 
HH.    "Separation from Service" means, with respect to any Award that is subject to Code Section 409A, the date on which the Corporation and the Award Recipient reasonably anticipate a permanent reduction in the level of bona fide services performed by the Award Recipient for the Corporation or any Affiliate to 20% or less of the average level of bona fide services performed by the Award Recipient for the Corporation or any Affiliate (whether as an employee or an independent contractor) in the immediately preceding thirty-six (36) months (or the full period of service to the Corporation and any Affiliate if the Award Recipient has been providing services to the Corporation and its Affiliates for less than thirty-six (36) months).  The determination of whether a Separation from Service has occurred shall be made by the Plan Administrator in accordance with the provisions of Code Section 409A and the Regulations promulgated thereunder.
II.    "Share" means a share of common stock, $5.00 par value, of the Corporation or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 3(D) of the Plan.
JJ.    "Specified Employee" means a key employee of the Corporation as defined in Code Section 416(i) without regard to paragraph (5) thereof.  The determination of whether an Award Recipient is a Specified Employee shall be made by the Committee as of the specified employee identification date adopted by the Corporation in accordance with the provisions of Code Section 409A and the Regulations promulgated thereunder.
KK.    "Stock Appreciation Right" or "SAR Award" means a right granted under Section 6(B) of the Plan.

5

LL.    "Subsidiary" means any entity (other than the Corporation) in an unbroken chain of entities beginning with the Corporation, provided each entity (other than the last entity) in the unbroken chain owns, at the time of the determination, ownership interests possessing fifty percent (50%) or more of the total combined voting power of all classes of ownership interests in one of the other entities in such chain; provided, however, with respect to any Award that is an Incentive Stock Option, the term "Subsidiary" shall refer solely to an entity that is taxed under Federal tax law as a corporation.  
MM.    "Tax Withholding Date" shall mean the earliest date the obligation to withhold tax with respect to an Award arises.
NN.    "Term" means the maximum period during which an Option or Stock Appreciation Right may remain outstanding (subject to earlier termination upon Termination of Employment or otherwise) as specified in the applicable Award Agreement or, to the extent not specified in the Award Agreement, as provided in the Plan.
OO.    "Termination of Employment" means the termination of the applicable Award Recipient's employment with the Corporation and any of its Affiliates.  An Award Recipient employed by an Affiliate or a division of the Corporation or any of its Affiliates shall be deemed to incur a Termination of Employment if, as a result of a Disaffiliation, such Affiliate or division ceases to be an Affiliate or division, as the case may be, and the Award Recipient does not immediately thereafter become an employee of the Corporation or an Affiliate.  Neither a temporary absence from employment because of illness, vacation or leave of absence nor a transfer among the Corporation and its Affiliates shall be considered a Termination of Employment.  
SECTION 3
STOCK SUBJECT TO THE PLAN
A.    Plan Maximums.  The maximum number of Shares that may be delivered pursuant to Awards under the Plan shall be the sum of (i) seventeen million three hundred fifty thousand (17,350,000), (ii) any Shares available for future awards under the Amended and Restated Comerica Incorporated 1997 Long-Term Incentive Plan (the "Prior Plan") as of the Effective Date, and (iii) any Shares that are represented by awards granted under the Prior Plan which are forfeited, expire or are cancelled without delivery of Shares or which result in the forfeiture of Shares back to the Corporation.  No additional Shares will be granted pursuant to the terms of the Prior Plan as of the Effective Date of the Plan.  The maximum number of Shares that may be delivered pursuant to Options intended to be Incentive Stock Options shall be one million (1,000,000) Shares.  No more than eight million five hundred fifty thousand (8,550,000) Shares may be issued during the term of the Plan pursuant to Awards other than Options and Stock Appreciation Rights.  Shares subject to an Award under the Plan may be authorized and unissued Shares or treasury Shares.  
B.    Individual Limits.  No Award Recipient may be granted Awards with respect to more than 350,000 Shares in any calendar year, and the maximum number of Shares 

6

underlying Awards of Options and Stock Appreciation Rights that may be granted to an Award Recipient in any calendar year is 350,000.
C.    Rules for Calculating Shares Delivered.  Any Shares covered by an Award that has been granted shall be counted as used under the Plan as of the Date of Grant.  To the extent that any Award is forfeited, or any Option or Stock Appreciation Right terminates, expires or lapses without being exercised, the Shares subject to such Awards not delivered as a result thereof shall again be available for Awards under the Plan.  The following Shares, however, may not again be made available for issuance in respect of Awards under this Plan: (i) Shares not issued or delivered as a result of the net settlement of an outstanding Stock Appreciation Right; (ii) Shares used to pay the exercise price or withholding taxes related to an outstanding Award; or (iii) Shares repurchased by the Corporation on the open market with the proceeds of an Option exercise price to settle an Option.
D.    Adjustment Provision.  In the event of (i) a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event affecting the capital structure of the Corporation (each, a "Share Change"), or (ii) a merger, consolidation, acquisition of property or shares, separation, spinoff, reorganization, stock rights offering, liquidation, Disaffiliation, or similar event affecting the Corporation or any of its Subsidiaries (each, a "Corporate Transaction"), the Committee or the Board shall make such substitutions or adjustments as it deems appropriate and equitable, if any, to (A) the aggregate number and kind of Shares or other securities reserved for issuance and delivery under the Plan, (B) the various maximum limitations set forth in Sections 3(A) and 3(B) upon certain types of Awards and upon the grants to individuals of certain types of Awards, (C) the number and kind of Shares or other securities subject to outstanding Awards, and (D) the exercise price of outstanding Options and Stock Appreciation Rights, provided that the aggregate exercise price or aggregate grant price of the Options or Stock Appreciation Rights is not less than the aggregate exercise price or aggregate grant price before the Corporate Transaction.  In the case of Corporate Transactions, such adjustments may include, without limitation, (1) the cancellation of outstanding Awards in exchange for payments of cash, property or a combination thereof having an aggregate value equal to the value of such Awards, as determined by the Committee or the Board in its sole discretion (it being understood that in the case of a Corporate Transaction with respect to which stockholders of Common Stock receive consideration other than publicly traded equity securities of the ultimate surviving entity, any such determination by the Committee that the value of an Option or Stock Appreciation Right shall for this purpose be deemed to equal the excess, if any, of the value of the consideration being paid for each Share pursuant to such Corporate Transaction over the exercise price of such Option or Stock Appreciation Right shall conclusively be deemed valid); (2) the substitution of other property (including, without limitation, cash or other securities of the Corporation and securities of entities other than the Corporation) for the Shares subject to outstanding Awards; and (3) in connection with any Disaffiliation, arranging for the assumption of Awards, or replacement of Awards with new awards based on other property or other securities (including, without limitation, other securities of the Corporation and securities of entities other than the Corporation), 

7

by the affected Subsidiary, Affiliate, or division or by the entity that controls such Subsidiary, Affiliate, or division following such Disaffiliation (as well as any corresponding adjustments to Awards that remain based upon Corporation securities).  Any such adjustments shall be made in a manner that (i) with respect to Awards that are not considered to be deferred compensation within the meaning of Section 409A of the Code immediately prior to such adjustment, would not cause such Awards to become deferred compensation subject to Section 409A of the Code and (ii) with respect to Awards that are considered deferred compensation within the meaning of Section 409A of the Code, would not cause such Awards to be non-compliant with the requirements of Section 409A of the Code.
SECTION 4 
ADMINISTRATION
A.    Committee.  The Plan shall be administered by the Committee.  In addition to any implied powers and duties that may be needed to carry out the provisions of the Plan, the Committee shall have all the powers vested in it by the terms of the Plan, including exclusive authority to:  select Eligible Individuals; to make Awards; to determine the type, size, terms and timing of Awards (which need not be uniform); to accelerate the vesting of Awards, including upon the occurrence of a Change of Control of the Corporation or an Award Recipient's Termination of Employment; to prescribe the form of the Award Agreement; to modify, amend or adjust the terms and conditions of any Award, subject to Sections 7 and 10; to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto); make any other determinations it believes necessary or advisable in connection with the administration of the Plan; correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award Agreement; establish any "blackout" period that the Committee in its sole discretion deems necessary or advisable; and to otherwise administer the Plan.
B.    Procedures.  Determinations of the Committee shall be made by a majority vote of its members at a meeting at which a quorum is present or pursuant to a unanimous written consent of its members.  A majority of the members of the Committee shall constitute a quorum.   Subject to Section 7(D), any authority granted to the Committee may also be exercised by the full Board.  To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action shall control.  The Committee may authorize any one or more of its members, or any officer of the Corporation, to execute and deliver documents on behalf of the Committee.  
Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may (i) allocate all or any portion of its responsibilities and powers to any one or more of its members and/or (ii) delegate all or any part of its responsibilities and powers to any person or persons selected by it, provided that, the Committee may not delegate its responsibilities and powers if such delegation would cause an Award made to an individual subject to Section 16 of the Exchange Act not to qualify for an exemption 

8

from Section 16(b) of the Exchange Act or cause an Award intended to be a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption.  Any such allocation or delegation may be revoked by the Committee at any time.  
All decisions made by the Committee (or any person or persons to whom the Committee has allocated or delegated all or any portion of its responsibilities and powers in accordance with this Plan) shall be final and binding on all persons, including the Corporation, its Affiliates, Subsidiaries, stockholders, Eligible Individuals, Award Recipients, Beneficiaries and other interested parties.   
C.    Discretion of the Committee.  Subject to Section 1(G), any determination made by the Committee or by an appropriately delegated officer pursuant to delegated authority under the provisions of the Plan with respect to any Award shall be made in the sole discretion of the Committee or such delegate at the time of the grant of the Award or, unless in contravention of any express term of the Plan, at any time thereafter.  All decisions made by the Committee or any appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding on all persons, including the Corporation, Award Recipients and Eligible Individuals.  
D.    Cancellation or Suspension of Awards.  The Committee may cancel all or any portion of any Award, whether or not vested or deferred, as set forth below.  Upon cancellation, the Award Recipient shall forfeit the Award and any benefits attributable to such canceled Award or portion thereof.  The Committee may cancel an Award if, in its sole discretion, the Committee determines in good faith that the Award Recipient has done any of the following:  (i) committed a felony; (ii) committed fraud; (iii) embezzled; (iv) disclosed confidential information or trade secrets; (v) was terminated for Cause; (vi) engaged in any activity in competition with the business of the Corporation or any Subsidiary or Affiliate of the Corporation; or (vii) engaged in conduct that adversely affected the Corporation.  The Executive Vice President — Director of Human Resources, or such other person designated from time to time by the Chief Executive Officer of the Corporation (the "Delegate"), shall have the power and authority to suspend all or any portion of any Award if the Delegate makes in good faith the determination described in the preceding sentence.  Any such suspension of an Award shall remain in effect until the suspension shall be presented to and acted on by the Committee at its next meeting.  This Section 4(D) shall have no application for a two year period following a Change of Control of the Corporation.
SECTION 5 
ELIGIBILITY
Awards may only be made to Eligible Individuals. 

9

SECTION 6
AWARDS
A.    Options.  The Committee may grant Options to Eligible Individuals in accordance with the provisions of this subsection subject to such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine to be appropriate.
1.    Exercise Price.  The exercise price per Share of an Option shall be determined by the Committee; provided, however, that such exercise price shall not be less than 100% of the Fair Market Value of a Share on the Date of Grant of such Option, and such exercise price may not be decreased during the Term of the Option except pursuant to an adjustment in accordance with Section 3(D).
2.    Option Term.  The Term of each Option shall be fixed by the Committee and the maximum Term of each Option shall be ten (10) years.
3.    Time and Manner of Exercise.  The Committee shall determine the time or times at which an Option may be exercised, and the manner in which (including, without limitation, cash, Shares, other securities, other Awards or other property, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price) payment of the exercise price with respect thereto may be made, or deemed to have been made.  The Committee may authorize the use of any form of "cashless" exercise of an Option that is legally permissible.
4.    Employment Status.  Except as provided in paragraphs (a) through (d) below or as may otherwise be provided by the Committee (either at the time of grant of an Option or thereafter), an Award Recipient's Options and Stock Appreciation Rights shall be immediately forfeited upon his or her Termination of Employment.
a.    Retirement.  An Award Recipient's Retirement shall not affect any Option outstanding as of the Termination of Employment due to Retirement other than those granted in the calendar year of Retirement.  All Options outstanding as of the Termination of Employment due to Retirement other than those granted in the calendar year of such Termination of Employment shall continue to vest pursuant to the vesting schedule applicable to such Options, and any vested Options outstanding as of the Termination of Employment due to Retirement (including any ISO held by an Award Recipient who is not Disabled) shall continue in full force and effect for the remainder of the Term of the Option.  All Options granted in the calendar year of Termination of Employment due to Retirement that have not otherwise vested as of such termination shall terminate upon the date of Retirement.

10

b.    Disability.  Upon the cessation of the Award Recipient's employment due to Disability, any Option held by such individual that was exercisable immediately before the Termination of Employment due to Disability shall continue to be exercisable until the earlier of (i) the third anniversary of the Award Recipient's Termination of Employment (or, in the case of any ISO held by an Award Recipient who is Disabled, the first anniversary of the Award Recipient's Termination of Employment) and (ii) the expiration of the Term of the Option.
c.    Death.  Upon the Award Recipient's death (whether during his or her employment with the Corporation or an Affiliate or during any otherwise applicable post-termination exercise period, which in the case of an ISO, shall not exceed three (3) months), any Option held by such individual that was exercisable immediately before the Termination of Employment shall continue to be exercisable by the Beneficiary(ies) of the decedent, until the earlier of (i) the first anniversary of the date of the Award Recipient's death and (ii) the expiration of the Term of the Option.
d.    Other Terminations of Employment.  Upon the Award Recipient's Termination of Employment for any reason other than Retirement, Disability, death or for Cause, any Option held by such individual that was exercisable immediately before the Termination of Employment shall continue to be exercisable until the earlier of (i) the expiration of the three-month period following the Award Recipient's Termination of Employment and (ii) the expiration of the Term of the Option.
e.    Extension or Reduction of Exercise Period.  In any of the foregoing circumstances, subject to Section 8, the Committee may extend or shorten the exercise period, but may not extend any such period beyond the Term of the Option as originally established (or, insofar as this paragraph relates to Stock Appreciation Rights, the Term of the SAR Award as originally established).  Further, with respect to ISOs, as a condition of any such extension, the holder shall be required to deliver to the Corporation a release which provides that such individual will hold the Corporation and/or Affiliates harmless with respect to any adverse tax consequences the individual may suffer by reason of any such extension.
B.    Stock Appreciation Right Awards.  The Committee may grant Stock Appreciation Rights to Eligible Individuals in accordance with the provisions of this subsection subject to such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine to be appropriate.  The Term of each SAR Award shall be fixed by the Committee and the maximum Term of each SAR Award shall be ten (10) years.  A Stock Appreciation Right granted under the Plan shall confer on the Award Recipient a right to receive upon exercise thereof the excess (if any) of (i) the Fair Market Value of one Share on the date of exercise over (ii) the grant price of 

11

the Stock Appreciation Right Award as specified by the Committee, which price shall not be less than 100% of the Fair Market Value of one Share on the Date of Grant of the Stock Appreciation Right.  Subject to the terms of the Plan, the Committee shall determine the grant price, Term, manner of exercise, dates of exercise, methods of settlement (cash, Shares or a combination thereof) and any other terms and conditions of any SAR Award.  The Committee may impose such conditions or restrictions on the exercise of any SAR Award as it may deem appropriate.  Except as otherwise provided by the Committee or in an Award Agreement, any SAR Award must be exercised during the period of the Award Recipient's employment with the Corporation or Affiliate, provided that the provisions of Section 6(A)(4)(a)-(e) hereof shall apply for purposes of determining the exercise period in the event of the Award Recipient's Retirement, Disability, death or other Termination of Employment.
C.    Restricted Stock Awards.  The Committee may make Restricted Stock Awards to Eligible Individuals in accordance with the provisions of this subsection subject to such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine to be appropriate.
1.    Nature of Restrictions.  Restricted Stock Awards shall be subject to such restrictions, including Performance Measures, as the Committee may impose (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right or property with respect thereto), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate.  Subject to the Committee's authority under Section 6(C)(3) below, the minimum Restriction Period with respect to a Restricted Stock Award that is subject to restrictions that are Performance Measures shall be one (1) year, and the minimum Restriction Period with respect to a Restricted Stock Award that is subject to restrictions that are not Performance Measures shall be three (3) years.  The Committee may, as of the Date of Grant, designate an Award of Restricted Stock that is subject to Performance Measures as a Qualified Performance-Based Award.  
2.    Stock Certificates.  Restricted Stock Awards granted under the Plan shall be evidenced by the issuance of a stock certificate(s), which shall be held by the Corporation.  Such certificate(s) shall be registered in the name of the Award Recipient and shall bear an appropriate legend which refers to the restrictions applicable to such Restricted Stock Award.  Alternatively, shares of Restricted Stock under the Plan may be recorded in book entry form.
3.    Forfeiture; Delivery of Shares.  Except as may be otherwise provided in an Award Agreement, upon an Award Recipient's Termination of Employment (as determined under criteria established by the Committee) during the applicable Restriction Period, all Shares of Restricted Stock shall be immediately forfeited and revert to the Corporation; provided, however, that the Committee may waive, in whole or in part, any or all remaining restrictions applicable to the Restricted Stock 

12

Award.  Shares comprising any Restricted Stock Award held by the Corporation that are no longer subject to restrictions shall be delivered to the Award Recipient (or his or her Beneficiary) promptly after the applicable restrictions lapse or are waived.
D.    Restricted Stock Unit Awards.  The Committee may grant Awards of Restricted Stock Units to Eligible Individuals, subject to Section 8 hereof and such other terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine to be appropriate.  A Restricted Stock Unit shall represent an unfunded, unsecured right to receive one Share or cash equal to the Fair Market Value of a Share. 
1.    Nature of Restrictions.  Restricted Stock Unit Awards shall be subject to such restrictions, including Performance Measures, as the Committee may impose, which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise as the Committee may deem appropriate.  Subject to the Committee's authority under Section 6(D)(3) below, the minimum Restriction Period with respect to a Restricted Stock Unit Award that is subject to restrictions that are Performance Measures shall be one (1) year, and the minimum Restriction Period with respect to a Restricted Stock Unit Award that is subject to restrictions that are not Performance Measures shall be three (3) years.  The Committee may, as of the Date of Grant, designate an Award of Restricted Stock as a Qualified Performance-Based Award.  
2.    Rights as a Stockholder.  An Eligible Individual to whom Restricted Stock Units are granted shall not have any rights of a stockholder of the Corporation with respect to the Share represented by the Restricted Stock Unit Award.  If so determined by the Committee, in its sole and absolute discretion, Restricted Stock Units may include a dividend equivalent right, pursuant to which the Award Recipient will either receive cash amounts (either paid currently or on a contingent basis) equivalent to the dividends and other distributions payable with respect to the number of Shares represented by the Restricted Stock Units, or additional Restricted Stock Units with a Fair Market Value equal to such dividends and other distributions, as specified in the Award Agreement.  Dividend equivalent rights that the Committee determines are subject to Section 409A of the Code shall be paid or settled in accordance with Section 8 hereof.
3.    Forfeiture/Settlement.  Except as may be otherwise provided in an Award Agreement, upon an Award Recipient's Termination of Employment (as determined under criteria established by the Committee) during the applicable Restriction Period, all Restricted Stock Units shall be immediately forfeited; provided, however, that the Committee may waive, in whole or in part, any or all remaining vesting requirements or restrictions applicable to the Restricted Stock Unit Award.  Subject to Section 11(D) hereof, an Award of Restricted Stock Units shall be settled in Shares as and when the Restricted Stock Units vest or at a later 

13

time permitted under Section 8 hereof and specified by the Committee in the Award Agreement.
E.    Performance Awards.  The Committee may grant Performance Awards (designated as Qualified Performance-Based Awards or not) to Eligible Individuals in accordance with the provisions of this Section 6(E), subject to Section 8 hereof and such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine to be appropriate.  A Performance Award granted under the Plan (i) may be denominated or payable in cash, Shares (including, without limitation, Restricted Shares), other securities, other Awards, or other property, and (ii) shall confer on the Award Recipient the right to receive a dollar amount or number of Shares upon the attainment of Performance Measures during any Performance Period, as established by the Committee.  Subject to the terms of the Plan and any applicable Award Agreement, the Performance Measures to be achieved during any Performance Period, the length of any Performance Period and the amount of any payment or number of Shares in respect of a Performance Award shall be determined by the Committee.  
F.    Other Stock-Based Awards.  The Committee may grant Other Stock-Based Awards to Eligible Individuals in accordance with the provisions of this Section 6(F), subject to Section 8 hereof and such other additional terms and conditions, including Performance Measures, not inconsistent with the provisions of the Plan, as the Committee shall determine.  Other Stock-Based Awards may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purpose of the Plan.
G.    General.  Except as otherwise specified in the Plan or an applicable Award Agreement, the following provisions shall apply to Awards granted under the Plan:
1.    Consideration for Awards.  Other than the payment of the exercise price or grant price in connection with the exercise of an Option or Stock Appreciation Right, Awards shall be made without monetary consideration or for such minimal monetary consideration as may be required by applicable law.  
2.    Forms of Payment under Awards.  Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers of Shares to be made by the Corporation or an Affiliate upon the grant, exercise or satisfaction of an Award may be made in such form or forms as the Committee shall determine (including, without limitation, cash, Shares, other securities, other Awards or other property or any combination thereof), and may be made in a single payment or transfer, or in installments, and may be made upon vesting or such later date permitted under Section 8 hereof and specified in the applicable Award Agreement, and, in each case, in accordance with rules and procedures established by the Committee.  Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments.

14

3.    Limits on Transfer of Awards.  No Award and no right under any such Award shall be transferable by an Award Recipient otherwise than by will or by the laws of intestacy; provided, however, that, an Award Recipient may, in the manner established by the Committee, designate a Beneficiary to exercise the rights of the Award Recipient and to receive any property distributable with respect to any Award upon the death of the Award Recipient.  Each Award or right under any Award shall be exercisable during the Award Recipient's lifetime only by the Award Recipient or, if permissible under applicable law, by the Award Recipient's guardian or legal representative.  No Award or right under any such Award may be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Corporation or any Affiliate.
4.    Term of Awards.  Subject to any specific provisions of the Plan, the term of each Award shall be for such period as may be determined by the Committee.
5.    Securities Law Restrictions.  All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such restrictions as the Committee may deem advisable under the Plan, or the rules, regulations and other requirements of the Securities and Exchange Commission, the New York Stock Exchange, any other exchange on which Shares may be eligible to be traded or any applicable federal or state securities laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions.
6.    Deferring Awards.  Under no circumstances may an Award Recipient elect to defer, until a time or times later than the exercise of an Option or a Stock Appreciation Right or the settlement or distribution of Shares or cash in respect of other Awards, receipt of all or a portion of the Shares or cash subject to such Award, or dividends and dividend equivalents payable thereon.
H.    Prohibition on Option and Stock Appreciation Right Repricing.  Other than pursuant to Section 3(D), in no event may any Option or Stock Appreciation Right granted under this Plan (1) be amended to decrease the exercise or grant price thereof; (2) be cancelled in conjunction with (i) the grant of any new Option or Stock Appreciation Right with a lower exercise or grant price in exchange for the cancelled Option or Stock Appreciation Right or (ii) the grant of any other type of Award in exchange for the cancelled Option or Stock Appreciation Right; or (3) otherwise be subject to any action that would be treated, for accounting purposes, as a "repricing" of such Option or Stock Appreciation Right, unless such amendment, cancellation, or action is approved by the Corporation's stockholders.  Further, except as provided in Section 3(D) hereof, the Committee may not, without prior approval of the Corporation’s stockholders, seek to effect any repricing of any previously granted “underwater” Option or Stock Appreciation Right by repurchasing the underwater Option or Stock Appreciation Right with cash. An Option or Stock Appreciation Right will be deemed to be “underwater” at any time when the Fair Market Value of the 

15

Shares covered by such Option or Stock Appreciation Right is less than the exercise price of the Option or Stock Appreciation Right.
SECTION 7
QUALIFIED PERFORMANCE-BASED AWARDS
A.    Section 162(m) Exemption.  The provisions of this Plan are intended to ensure that all Options and Stock Appreciation Rights granted hereunder to any Award Recipient who is or may be a "covered employee" (within the meaning of Section 162(m)(3) of the Code) or otherwise subject to Section 162(m) in the tax year in which such Option or Stock Appreciation Right is expected to be deductible to the Corporation qualify for the Section 162(m) Exemption, and all such Awards shall therefore be considered Qualified Performance-Based Awards and this Plan shall be interpreted and operated consistent with that intention (including, without limitation, to require that all such Awards be granted by a committee composed solely of members who satisfy the requirements for being "outside directors" for purposes of the Section 162(m) Exemption ("Outside Directors")).  When granting any Award other than an Option or Stock Appreciation Right, the Committee may designate such Award as a Qualified Performance-Based Award, based upon a determination that (i) the recipient is or may be a "covered employee" (within the meaning of Section 162(m)(3) of the Code) or otherwise subject to Section 162(m) with respect to such Award, and (ii) the Committee wishes such Award to qualify for the Section 162(m) Exemption, and the terms of any such Award (and of the grant thereof) shall be consistent with such designation (including, without limitation, that all such Awards be granted by a committee composed solely of Outside Directors).  
B.    Limitation on Amendment.  Each Qualified Performance-Based Award (other than an Option or Stock Appreciation Right) shall be earned, vested and payable (as applicable) only upon the achievement of one or more Performance Measures, together with the satisfaction of any other conditions, such as continued employment, as the Committee may determine to be appropriate, and no Qualified Performance-Based Award may be amended, nor may the Committee exercise any discretionary authority it may otherwise have under this Plan with respect to a Qualified Performance-Based Award, in any manner that would cause the Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption; provided, however, that (i) the Committee may provide, either in connection with the grant of the applicable Award or by amendment thereafter, that achievement of such Performance Measure will be waived upon the death or Disability of the Award Recipient (or under any other circumstance with respect to which the existence of such possible waiver will not cause the Award to fail to qualify for the Section 162(m) Exemption), and (ii) any rights to vesting or accelerated payment on a Change of Control shall apply notwithstanding this Section 7(B).  
C.    Maximum Cash Award.  For purposes of the Section 162(m) Exemption, the maximum amount of compensation payable with respect to an Award granted under the Plan to any Award Recipient who is a "covered employee" (as defined in Section 162(m) 

16

of the Code) that is denominated as a dollar amount will not exceed $5,000,000 for any calendar year.
D.    Limitation on Action by the Full Board.  The full Board shall not be permitted to exercise authority granted to the Committee to the extent that the grant or exercise of such authority would cause an Award designated as a Qualified Performance-Based Award not to qualify for, or to cease to qualify for, the Section 162(m) Exemption.
SECTION 8 
SECTION 409A OF THE CODE
It is the intention of the Corporation that no Award shall be "deferred compensation" subject to Section 409A of the Code, unless and to the extent that the Committee specifically determines otherwise, and the Plan and the terms and conditions of all Awards shall be interpreted accordingly.  If the Committee determines that an Award is subject to Section 409A of the Code, then the Award shall be paid or settled only upon the Award Recipient's death, Disability, or Separation from Service, or upon a Change of Control, or upon such date(s) or pursuant to a schedule designated by the Committee, as specified in the applicable Award Agreement, subject to the following provisions:  
1.    Delay for Specified Employees.  Notwithstanding any provision of this Plan or the terms of an Award Agreement to the contrary, an Award that is granted to a Specified Employee and that is to be paid or settled upon such Specified Employee's Separation from Service shall not be paid or settled prior to the earlier of (i) the first business date following six months after the date of such Specified Employee's Separation from Service or (ii) the Specified Employee's death.
2.    Distribution in the Event of Income Inclusion Under Code Section 409A.  If an Award fails to meet the requirements of Section 409A of the Code, the Award Recipient may receive payment in connection with the Award before the Award would otherwise be paid, provided, however, that the amount paid to the Award Recipient shall not exceed the lesser of: (i) the amount payable under such Award, or (ii) the amount to be reported pursuant to Section 409A of the Code on the applicable Form W-2 (or Form 1099) as taxable income to the Award Recipient.
3.    Distribution Necessary to Satisfy Applicable Tax Withholding.  If the Corporation is required to withhold amounts to pay the Award Recipient’s portion of the Federal Insurance Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a) or 3121(v)(2) with respect to an amount that is or will be paid to the Award Recipient under the Award before the amount otherwise would be paid, the Committee may withhold an amount equal to the lesser of: (i) the amount payable under such Award, or (ii) the aggregate of the FICA taxes imposed and the income tax withholding related to such amount.
4.    Delay in Payments Subject to Code Section 162(m).  In the event the Corporation reasonably anticipates that the payment of benefits under an Award 

17

would result in the loss of the Corporation's Federal income tax deduction with respect to such payment due to the application of Code Section 162(m), the Committee may delay the payment of all such benefits under the Award until (i) the first taxable year in which the Corporation reasonably anticipates, or should reasonably anticipate, that if the payment were made during such year, the deduction of such payment would not be barred by application of Code Section 162(m) or (ii) during the period beginning with the date of the Award Recipient's Separation from Service (or, for Specified Employees, the date which is six (6) months after the date of the Award Recipient's Separation from Service) and ending on the later of (A) the last day of the taxable year of the Corporation which includes such date or (B) the 15th day of the third month following the date of the Award Recipient's Separation from Service (or, for Specified Employees, the date which is six (6) months after the date of the Award Recipient's Separation from Service).  
5.    Delay for Payments in Violation of Federal Securities Laws or Other Applicable Law.  In the event the Corporation reasonably anticipates that the payment of benefits under an Award would violate Federal securities laws or other applicable law, the Committee may delay the payment until the earliest date at which the Corporation reasonably anticipates that making of such payment would not cause such violation.  
6.    Delay for Insolvency or Compelling Business Reasons.  In the event the Corporation determines that the making of any payment of benefits on the date specified under an Award would jeopardize the ability of the Corporation to continue as a going concern, the Committee may delay the payment of benefits until the first calendar year in which the Corporation notifies the Committee that the payment of benefits would not have such effect.
7.    Administrative Delay in Payment.  In the case of administrative necessity, the payment of benefits under an Award may be delayed up to the later of the last day of the calendar year in which payment would otherwise be made or the 15th day of the third calendar month following the date on which payment would otherwise be made.  Further, if, as a result of events beyond the control of the Award Recipient (or following the Award Recipient's death, the Award Recipient's Beneficiary), it is not administratively practicable to calculate the amount of benefits due to the Award Recipient as of the date on which payment would otherwise be made, the payment may be delayed until the first calendar year in which calculation of the amount is administratively practicable.  
8.    No Award Recipient Election.  Notwithstanding the foregoing provisions, if the period during which payment of benefits under an Award will be made occurs, or will occur, in two calendar years, the Award Recipient shall not be permitted to elect the calendar year in which the payment shall be made.

18

SECTION 9 
WITHHOLDING OF TAXES
The Corporation will, as permitted by applicable law, withhold an amount no less than the minimum and no more than the maximum statutory Federal, state and/or local withholding taxes (or such lesser amount as is necessary to avoid adverse accounting treatment for the Corporation) no later than the date as of which an amount first becomes includible in the gross income of an Award Recipient for Federal, state, local or foreign income or employment or other tax.  Unless otherwise provided in the applicable Award Agreement, each Award Recipient may satisfy any such tax withholding obligation by any of the following means, or by a combination of such means:  (i) a cash payment; (ii) by delivery to the Corporation of already-owned Shares which have been held by the individual for at least six (6) months having a Fair Market Value, as of the Tax Withholding Date, sufficient to satisfy the amount of the withholding tax obligation arising from an exercise or vesting of an Award; (iii) by authorizing the Corporation to withhold from the Shares otherwise issuable to the individual pursuant to the exercise or vesting of an Award, a number of shares having a Fair Market Value, as of the Tax Withholding Date, which will satisfy the amount of the withholding tax obligation; or (iv) by a combination of such methods of payment.  If the amount requested is not paid, the Corporation may refuse to satisfy the Award.  The obligations of the Corporation under the Plan shall be conditional on such payment or arrangements, and the Corporation and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to such Award Recipient.  The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for the settlement of withholding obligations with Shares.

SECTION 10
AMENDMENT AND TERMINATION
A.    Amendments to and Termination of the Plan.  The Committee or the Board may amend, alter, or discontinue the Plan at any time by written resolution, but no amendment, alteration or discontinuation shall be made which would materially impair the rights of the Award Recipients with respect to a previously granted Award without such Award Recipient's consent, except such an amendment made to comply with applicable law, including without limitation Section 409A of the Code, stock exchange rules or accounting rules.  In addition, no such amendment shall be made without the approval of the Corporation's stockholders to the extent such approval is required by applicable law (including Section 422 of the Code) or the listing standards of the applicable stock exchange.
B.    Amendments to Awards.  Subject to Section 6(H), the Committee may unilaterally amend the terms of any Award theretofore granted, but no such amendment shall cause a Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption or, without the Award Recipient's consent, materially impair the rights of any Award Recipient with respect to an Award, except such an amendment made to cause 

19

the Plan or Award to comply with applicable law, stock exchange rules or accounting rules.  Furthermore, no amendment may be made to a NQSO Award or a SAR Award which would cause the exercise price or the grant price (as applicable) to be less than 100% of the Fair Market Value of one Share as of the Date of Grant except as provided in Section 3(D). 
C.    Payment of Benefits Upon Termination of Plan.  Upon termination of the Plan, the Corporation may settle any outstanding Award that is not subject to Code Section 409A as soon as is practicable following such termination and may settle any outstanding Award that is subject to Code Section 409A in accordance with one of the following:
1.    the termination and liquidation of the Plan within twelve (12)  months of a complete dissolution of the Corporation taxed under Section 331 of the Code or with the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A); provided that the amounts deferred under this Plan are included in the Participants' gross incomes in the latest of the following years (or, if earlier, the taxable year in which the amount is actually or constructively received): (i) the calendar year in which the Plan is terminated; (ii) the first calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.  

2.    the termination and liquidation of the Plan pursuant to irrevocable action taken by the Committee or the Corporation within the thirty (30) days preceding or the twelve (12) months following a Change of Control; provided that all Aggregated Plans are terminated and liquidated with respect to each Participant that experienced the Change of Control, so that under the terms of the termination and liquidation, all such Participants are required to receive all amounts of deferred compensation under this Plan and any other Aggregated Plans within twelve (12) months of the date the Committee or the Corporation irrevocably takes all necessary action to terminate and liquidate this Plan and the Committee or the Corporation, as the case may be, takes all necessary action to terminate and liquidate such other Aggregated Plans;
3.    the termination and liquidation of the Plan, provided that: (i) the termination and liquidation does not occur proximate to a downturn in the Corporation's financial health; (2) the Committee or the Corporation, as the case may be, terminates and liquidates all Aggregated Plans; (3) no payments in liquidation of this Plan are made within twelve (12) months of the date the Committee or the Corporation irrevocably takes all necessary action to terminate and liquidate this Plan, other than payments that would be payable under the terms of this Plan if the action to terminate and liquidate this Plan had not occurred; (4) all payments are made within twenty four (24) months of the date on which the Committee or the Corporation irrevocably takes all action necessary to terminate and liquidate this Plan; and (5) the Corporation does not adopt a new Aggregated Plan at any time within three (3) years following the date on which the Committee or the Corporation irrevocably takes all action necessary to terminate and liquidate the Plan.

20

SECTION 11
MISCELLANEOUS PROVISIONS
A.    Conditions for Issuance.  The Committee may require each person purchasing or receiving Shares pursuant to an Award to represent to and agree with the Corporation in writing that such person is acquiring the Shares without a view to the distribution thereof.  The certificates for such Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer.  Notwithstanding any other provision of the Plan or Award Agreements made pursuant thereto, with respect to any Award other than an Award that is subject to Code Section 409A, the Corporation shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to fulfillment of all of the following conditions:  (i) listing or approval for listing upon notice of issuance, of such Shares on the applicable stock exchange; (ii) any registration or other qualification of such Shares of the Corporation under any state or Federal law or regulation, or the maintaining in effect of any such registration or other qualification which the Committee shall, in its absolute discretion upon the advice of counsel, deem necessary or advisable; and (iii) obtaining any other consent, approval, or permit from any state or Federal governmental agency which the Committee shall, in its absolute discretion after receiving the advice of counsel, determine to be necessary or advisable, and, with respect to any Award that is subject to Code Section 409A, the Corporation shall not be required to issue or deliver any certificate or certificates for Shares under the Plan if the Corporation reasonably anticipates that such issuance or delivery would violate applicable Federal securities laws or other applicable law, provided the Corporation issues or delivers the Shares at the earliest date on which the Corporation reasonably anticipates that such issuance or delivery would not cause such violation.
B.    Additional Compensation Arrangements.  Nothing contained in the Plan shall prevent the Corporation or any Subsidiary or Affiliate from adopting other or additional compensation arrangements for its employees.  Participation in the Plan shall not affect an individual's eligibility to participate in any other benefit or incentive plan of the Corporation.
C.    No Contract of Employment or Rights to Awards.  The Plan shall not constitute a contract of employment, and adoption of the Plan shall not confer upon any employee any right to continued employment, nor shall it interfere in any way with the right of the Corporation or any Subsidiary or Affiliate to terminate the employment of any employee at any time. No employee or other person shall have any claim or right to receive an Award under the Plan.  Receipt of an Award shall not confer upon the Award Recipient any rights of a stockholder with respect to any Shares subject to such Award except as specifically provided in the Agreement relating to the Award.
D.    Limitation on Dividend Reinvestment and Dividend Equivalents.  Reinvestment of dividends in additional Restricted Stock at the time of any dividend payment, and the reinvestment of dividend equivalent rights in additional Restricted Stock 

21

Units payable in Shares shall only be permissible if sufficient Shares are available under Section 3 for such reinvestment or payment (taking into account then outstanding Awards).  In the event that sufficient Shares are not available, such reinvestment of dividends and dividend equivalent rights shall be made in the form of a grant of Restricted Stock Units equal in number to the Shares that would have been obtained by such reinvestment and the terms of which Restricted Stock Units shall provide for settlement in cash.
E.    Subsidiary Employees.  In the case of a grant of an Award to any employee of a Subsidiary of the Corporation, the Corporation may, if the Committee so directs, issue or transfer the Shares, if any, covered by the Award to the Subsidiary, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Subsidiary will transfer the Shares to the employee in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan.  All Shares underlying Awards that are forfeited or canceled shall revert to the Corporation.
F.    Governing Law and Interpretation.  The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws, except to the extent preempted by Federal law.  To the extent that any Award is subject to Code Section 409A, the terms of the Award Agreement and this Plan shall be construed and interpreted in accordance with Code Section 409A and the Regulations and interpretative guidance promulgated thereunder.  The captions of this Plan are not part of the provisions hereof and shall have no force or effect.  
G.    Foreign Employees and Foreign Law Considerations.  The Committee may grant Awards to Eligible Individuals who are foreign nationals, who are located outside the United States or who are not compensated from a payroll maintained in the United States, or who are otherwise subject to (or could cause the Corporation to be subject to) legal or regulatory provisions of countries or jurisdictions outside the United States, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, or subplans as may be necessary or advisable to comply with such legal or regulatory provisions.
H.    Expenses.  The expenses of the Plan shall be borne by the Corporation.
I.    Acceptance of Terms.  By accepting an Award under the Plan or payment pursuant to any Award, each Award Recipient, legal representative and Beneficiary shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Committee or the Corporation.  A breach by any Award Recipient, his or her Beneficiary(ies), or legal representative, of any restrictions, terms or conditions contained in the Plan, any Award Agreement, or otherwise established by the Committee with respect to any Award will, unless waived in whole or in part by the Committee, cause a forfeiture of such Award.

22

J.    Vesting.  Subject to Section 4(A) of this Plan, and except as otherwise required by applicable law or the applicable rules of a stock exchange, full value equity awards under this Plan that are based on time vesting shall have a minimum vesting period of three years, and full value equity awards under this Plan that are based on performance vesting shall have a minimum vesting period of one year; provided, however, that this Section 11(J) shall have no applicability to equity awards granted prior to February 22, 2011.
SECTION 12
EFFECTIVE AND TERMINATION
The Comerica Incorporated 2006 Amended and Restated Long-Term Incentive Plan was originally adopted by the Board on March 28, 2006 and was effective on May 16, 2006, the date of stockholder approval.  It was subsequently amended and restated effective November 14, 2006, December 31, 2008, April 27, 2010 and February 22, 2011.  This Comerica Incorporated 2006 Amended and Restated Long-Term Incentive Plan was adopted by the Board and approved by the Governance, Compensation and Nominating Committee on February 26, 2013, as an amendment and restatement of the prior version of the Plan, and will be effective on the date that it is approved by at least a majority of the shares of the Corporation present and entitled to vote, at a meeting of the Corporation’s stockholders at which there is a quorum (the "Effective Date").  The Plan will terminate on the tenth (10th) anniversary of the Effective Date, unless earlier terminated in accordance with Section 10.  Awards outstanding as of the date of termination of the Plan shall not be affected or impaired by the termination of the Plan.
Prior Plan Versions:
Compensation Committee/Governance, Compensation and Nominating Committee Approved:  February 22, 2006 (Original Plan); Prior Amendments and Restatements were Approved November 14, 2006; November 18, 2008 (effective December 31, 2008); February 16, 2010 (2010 Amendment and Restatement) (effective April 27, 2010); and February 22, 2011.

Board Approved:  March 28, 2006 (Original Plan); Prior Amendments and Restatements were Approved November 14, 2006; November 18, 2008 (effective December 31, 2008); February 16, 2010 (2010 Amendment and Restatement) (effective April 27, 2010); and February 22, 2011.

Stockholders Approved:  May 16, 2006 (Original Plan) and April 27, 2010 (2010 Amendment and Restatement).

2013 Amendment and Restatement:
Governance, Compensation and Nominating Committee Approved:  February 26, 2013; Further Amendment and Restatement was Approved January 18, 2017.
Board Approved:  February 26, 2013.

23

Stockholders Approved:  April 23, 2013. 

24

EXHIBIT A
 
CHANGE OF CONTROL

A.    For the purpose of this Plan, a "Change of Control" shall mean:
		
	1.
	The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Corporation (the "Outstanding Corporation Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Corporation Voting Securities"); provided, however, that for purposes of this subsection 1, the following acquisitions shall not constitute a Change of Control:  (i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection A.3. of this Exhibit A; or

		
	2.
	Individuals who, as of the date hereof, constitute the Corporation's Board of Directors (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporation's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

		
	3.
	Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the Corporation's assets (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to 

25

vote generally in the election of directors, as the case may be, of the company resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Corporation Common Stock and Outstanding Corporation Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the company resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the company resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
		
	4.
	Approval by the Corporation's stockholders of a complete liquidation or dissolution of the Corporation.

		
	B.
	With respect to any Award subject to Section 409A of the Code, the above definition of "Change of Control" shall mean: 

		
	1.
	any one person, or more than one person acting as a group, acquires ownership of stock of the Corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Corporation; 

		
	2.
	any one person, or more than one person acting as a group, acquires (or has acquired during any twelve (12) month period) ownership of stock of the Corporation possessing 30% or more of the total voting power of the stock of the Corporation;

		
	3.
	a majority of the members of the Board is replaced during any twelve (12) month period by directors whose appointment is not endorsed by a majority of the members of the Board before the date of the appointment or election; or

		
	4.
	any one person, or more than one person acting as a group, acquires (or has acquired during any twelve (12) month period) assets from the Corporation that have a total gross fair market value equal to or more than 

26

40% of the total gross fair market value of all of the assets of the Corporation immediately before such acquisition or acquisitions.
The determination of whether a Change of Control has occurred under this Section B of Exhibit A shall be made by the Committee in accordance with the provisions of Code Section 409A and the Regulations promulgated thereunder.

27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00266-of-00352.parquet"}]]