-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HP1KY7oDDwsC5FDfeSDXMZG1rI+nJVPmzSk3bacK2FcsZ7T+0xs5Wth9Vsn4yg83 nLnS6KbXK5v/EoR4ZrFwFQ== 0000950162-06-000849.txt : 20060807 0000950162-06-000849.hdr.sgml : 20060807 20060807165857 ACCESSION NUMBER: 0000950162-06-000849 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20060807 DATE AS OF CHANGE: 20060807 GROUP MEMBERS: ACOF MANAGEMENT II, L.P. GROUP MEMBERS: ACOF OPERATING MANAGER II, L.P. GROUP MEMBERS: ARES CORPORATE OPPORTUNITIES FUND II, L.P. GROUP MEMBERS: ARES PARTNERS MANAGEMENT COMPANY LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WCA WASTE CORP CENTRAL INDEX KEY: 0001282398 STANDARD INDUSTRIAL CLASSIFICATION: REFUSE SYSTEMS [4953] IRS NUMBER: 200829917 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-79924 FILM NUMBER: 061009603 BUSINESS ADDRESS: STREET 1: ONE RIVERWAY STREET 2: SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7132922400 MAIL ADDRESS: STREET 1: ONE RIVERWAY STREET 2: SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77056 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ARES MANAGEMENT INC CENTRAL INDEX KEY: 0001259314 IRS NUMBER: 010605573 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D MAIL ADDRESS: STREET 1: 1999 AVENUE OF THE STARS STREET 2: SUITE 1900 CITY: LOS ANGELES STATE: CA ZIP: 90067 SC 13D 1 areswca13d_080406.htm ARES/WCA SCHEDULE 13D - 08/04/06 ARES/WCA Schedule 13D - 08/04/06
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
 
Under the Securities Exchange Act of 1934
(Amendment No. ________)*
 
WCA Waste Corporation
(Name of Issuer)
 
Common Stock, $0.01 par value
(Title of Class of Securities)
 
9296K103
(CUSIP Number)
 
Gary A. Brooks, Esq.
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10024
(212) 701-3000
 
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 
August 4, 2006
(Date of Event which Requires Filing of this Statement)
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [  ].
 
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent.
 
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
 
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 

Page 1of 16


CUSIP No. 9296K103
  
(1)
Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
 
Ares Management, Inc.
(2)
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  [   ]
(b)  [X]
(3)
SEC Use Only
(4)
Source of Funds (See Instructions)
OO
(5)
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [   ]
(6)
Citizenship or Place of Organization
Delaware
Number of
Shares
(7)
Sole Voting Power
0
Beneficially Owned
(8)
Shared Voting Power
7,812,500 (See Item 5(c))
by Each
Reporting
(9)
Sole Dispositive Power
0
Person With
(10)
Shared Dispositive Power
7,812,500 (See Item 5(c))
(11)
Aggregate Amount Beneficially Owned by Each Reporting Person
7,812,500 (See Item 5)
(12)
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [   ]
(13)
Percent of Class Represented by Amount in Row (11)
31.9%
(14)
Type of Reporting Person (See Instructions)
CO


Page 2of 16


CUSIP No. 9296K103
  
(1)
Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
 
Ares Partners Management Company LLC
(2)
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  [   ]
(b)  [X]
(3)
SEC Use Only
(4)
Source of Funds (See Instructions)
OO
(5)
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [   ]
(6)
Citizenship or Place of Organization
Delaware
Number of
Shares
(7)
Sole Voting Power
0
Beneficially Owned
(8)
Shared Voting Power
7,812,500 (See Item 5(c))
by Each
Reporting
(9)
Sole Dispositive Power
0
Person With
(10)
Shared Dispositive Power
7,812,500 (See Item 5(c))
(11)
Aggregate Amount Beneficially Owned by Each Reporting Person
7,812,500 (See Item 5)
(12)
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [   ]
(13)
Percent of Class Represented by Amount in Row (11)
31.9%
(14)
Type of Reporting Person (See Instructions)
OO (Limited Liability Company)


Page 3of 16


CUSIP No. 9296K103
  
(1)
Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
 
Ares Corporate Opportunities Fund II, L.P.
(2)
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  [   ]
(b)  [X]
(3)
SEC Use Only
(4)
Source of Funds (See Instructions)
OO
(5)
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [   ]
(6)
Citizenship or Place of Organization
Delaware
Number of
Shares
(7)
Sole Voting Power
0
Beneficially Owned
(8)
Shared Voting Power
7,812,500 (See Item 5(c))
by Each
Reporting
(9)
Sole Dispositive Power
0
Person With
(10)
Shared Dispositive Power
7,812,500 (See Item 5(c))
(11)
Aggregate Amount Beneficially Owned by Each Reporting Person
7,812,500 (See Item 5)
(12)
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [   ]
(13)
Percent of Class Represented by Amount in Row (11)
31.9%
(14)
Type of Reporting Person (See Instructions)
PN


Page 4of 16


CUSIP No. 9296K103
  
(1)
Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
 
ACOF Management II, L.P.
(2)
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  [   ]
(b)  [X]
(3)
SEC Use Only
(4)
Source of Funds (See Instructions)
OO
(5)
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [   ]
(6)
Citizenship or Place of Organization
Delaware
Number of
Shares
(7)
Sole Voting Power
0
Beneficially Owned
(8)
Shared Voting Power
7,812,500 (See Item 5(c))
by Each
Reporting
(9)
Sole Dispositive Power
0
Person With
(10)
Shared Dispositive Power
7,812,500 (See Item 5(c))
(11)
Aggregate Amount Beneficially Owned by Each Reporting Person
7,812,500 (See Item 5)
(12)
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [   ]
(13)
Percent of Class Represented by Amount in Row (11)
31.9%
(14)
Type of Reporting Person (See Instructions)
PN

Page 5of 16


CUSIP No. 9296K103
  
(1)
Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only)
 
ACOF Operating Manager II, L.P.
(2)
Check the Appropriate Box if a Member of a Group (See Instructions)
(a)  [   ]
(b)  [X]
(3)
SEC Use Only
(4)
Source of Funds (See Instructions)
OO
(5)
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [   ]
(6)
Citizenship or Place of Organization
Delaware
Number of
Shares
(7)
Sole Voting Power
0
Beneficially Owned
(8)
Shared Voting Power
7,812,500 (See Item 5(c))
by Each
Reporting
(9)
Sole Dispositive Power
0
Person With
(10)
Shared Dispositive Power
7,812,500 (See Item 5(c))
(11)
Aggregate Amount Beneficially Owned by Each Reporting Person
7,812,500 (See Item 5)
(12)
Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [   ]
(13)
Percent of Class Represented by Amount in Row (11)
31.9%
(14)
Type of Reporting Person (See Instructions)
PN


Page 6of 16


Item 1. Security and Issuer.
 
This Statement on Schedule 13D relates to the Common Stock, $0.01 par value (the “Common Stock”), of WCA Waste Corporation (the “Issuer”), a Delaware corporation whose principal offices are located at One Riverway, Suite 1600, Houston, Texas 77056.
 
Item 2. Identity and Background.
 
This Schedule 13D is being filed jointly by Ares Corporate Opportunities Fund II, L.P. (“ACOF II”), ACOF Management II, L.P. (“ACOF Management”), ACOF Operating Manager II, L.P. (“ACOF Operating”), Ares Management, Inc., Ares Partners Management Company LLC (“Ares Partners” and, together with ACOF II, ACOF Management, ACOF Operating and Ares Management, Inc., the “Reporting Persons”). The address of the principal business office of each of the Reporting Persons is c/o Ares Management, Inc., 1999 Avenue of the Stars, Suite 1900, Los Angeles, California 90067. The Reporting Persons are organized in Delaware.
 
ACOF II is the record owner of 750,000 shares of the Issuer’s Series A Convertible Pay-In-Kind Preferred Stock (the “Preferred Stock”), which is convertible into 7,812,500 shares of Common Stock.
 
The principal business of each of the Reporting Persons other than ACOF II is investment management. ACOF II is principally engaged in the business of investing in securities. ACOF Management is the general partner of ACOF II. ACOF Operating is the general partner of ACOF Management and the manager of ACOF II. Ares Management, Inc. is the general partner of ACOF Operating. Ares Partners is the sole stockholder of Ares Management, Inc. The names of the executive officers and directors of Ares Management, Inc. are set forth in Appendix A to Item 2, which is incorporated herein by reference.
 
Antony P. Ressler is the manager of Ares Partners, and Mr. Ressler, Michael Arougheti, Seth Brufsky, David B. Kaplan, John Kissick, Bennett Rosenthal and David Sachs are members of Ares Partners.  Each of the members of Ares Partners has the right to receive dividends from, or proceeds from, the sale of investments by the Reporting Persons, including the shares of Common Stock, in accordance with their membership interests in Ares Partners.  Under applicable law, certain of these individuals and their respective spouses may be deemed to be beneficial owners having indirect ownership of the securities owned of record by ACOF II by virtue of such status.  Each of the Reporting Persons (other than ACOF II), and Messrs. Ressler, Arougheti, Brufsky, Kaplan, Kissick, Rosenthal and Sachs and their respective spouses, disclaim ownership of all shares reported herein, and the filing of this Schedule 13D shall not be deemed an admission that any such person or entity is the beneficial owner of, or has any pecuniary interest in, such securities for purposes of Section 13 of the Securities Exchange Act of 1934 or for any other purposes.
 
During the five years prior to the date hereof, none of the Reporting Persons nor any of the persons referred to in Appendix A has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding ending in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.
 
Pursuant to the Preferred Stock Purchase Agreement, dated as of June 12, 2006, a copy of which is attached hereto as Exhibit 1 and incorporated herein by reference (the “Purchase Agreement”), among ACOF II and the Issuer, ACOF II purchased an aggregate of 750,000 shares of the Preferred Stock for an aggregate purchase price of $75,000,000.  The purchase of the Preferred Stock was financed with cash on hand from contributions of partners of ACOF II.  All such contributions were in the ordinary course and pursuant to investor commitments to ACOF II. 
 

Page 7of 16


 
Item 4. Purpose of the Transaction.
 
ACOF II purchased 750,000 shares of Preferred Stock for investment purposes.
 
Purchase Agreement
 
On June 12, 2006, the Issuer entered into the privately negotiated Purchase Agreement with ACOF II, which provided for the Issuer to issue and sell 750,000 shares Preferred Stock to ACOF II. The purchase price per share of Preferred Stock was $100.00, for an aggregate purchase price of $75,000,000. The Preferred Stock is convertible into the Issuer’s Common Stock at a price of $9.60 per share and carries a 5% “payment-in-kind” (or “PIK”) dividend payable semi-annually.
 
Certificate of Designations
 
In connection with the Purchase Agreement and the transactions contemplated thereby, on July 27, 2006, the Issuer filed the certificate of designations attached hereto as Exhibit 2 (the “Certificate of Designations”) with the Delaware Secretary of State, stating the designation and number of shares, and fixing the relative designations and the powers, preferences and rights, and the qualifications, limitations and restrictions of the Preferred Stock.
 
As set forth in the Certificate of Designations, the Preferred Stock has the following features:
 
Price and Conversion.  The Preferred Stock is convertible into the Issuer’s Common Stock at a price of $9.60 per share and carries a 5% PIK dividend payable semi-annually. The Preferred Shares are immediately convertible at ACOF II’s discretion into 7,812,500 shares of the Issuer’s Common Stock, which would currently represent approximately 31.9% of the outstanding Common Stock on a post-conversion basis. Dividends are PIK for the first five years, meaning that they are payable solely by adding the amount of dividends to the stated value of each share. At the end of five years of PIK dividends, such Preferred Stock would be convertible into approximately 10,000,661 shares of Common Stock (representing an effective price of approximately $7.50 per share (before expenses of the issuance) if such Preferred Stock is converted). Based on the currently outstanding shares, 10,000,661 shares of Common Stock would represent approximately 37.5% of the post-conversion shares outstanding.
 
In the event that one of the “acceleration events” (as described below) were to occur prior to the end of the fifth year, five years of PIK dividends would accelerate at that time and the Preferred Stock would be immediately convertible into 10,000,661 shares, or 37.5% of outstanding as of the Record Date.
 
Dividends.  Shares of the Preferred Stock pay cumulative dividends of 5.00% per annum, payable semi-annually. As indicated above, for the first five years the dividends are PIK, and after the fifth anniversary, dividends are payable in kind or in cash at the Issuer’s election (subject to any applicable covenants in any of our credit or other agreements). All dividends that would otherwise be payable through the fifth anniversary of issuance shall automatically be accelerated and paid in kind immediately prior to the occurrence of any of the following acceleration events: (a) liquidation, (b) bankruptcy, (c) closing of a public offering of Common Stock pursuant to an effective registration statement (except for Form S-4, solely for sales by third parties, or pursuant to ACOF II’s own registration rights agreement), (d) the average of the closing price of the Common Stock for each of 20 consecutive trading days exceeds $14.40 per share, or (e) fundamental transaction, including a “group” (defined in the Securities Exchange Act) acquiring more than 35% of outstanding voting rights; replacement of more than one-half of the Issuer’s directors without approval of the existing Board; a merger, consolidation, sale of substantially all assets, going-private transaction, tender offer, reclassification, or other transaction that results in the transfer of a majority of voting rights;
 
Conversion. ACOF II can convert the Preferred Stock into Common Stock at any time at a conversion price of $9.60 per share, with conversion being calculated by taking the stated value (initially
 

Page 8of 16

$100.00 per share) plus any amount added to stated value by way of dividends, then dividing by $9.60 to produce the number of shares of Common Stock issuable. The Issuer can force a conversion into Common Stock following either (i) the average of the closing price of the Common Stock for each of 20 consecutive trading days exceeding $14.40 per share or (ii) a fundamental transaction that ACOF II does not treat as a liquidation. After the fifth anniversary of issuance, the Issuer can redeem for cash equal to the liquidation preference. Upon a liquidation, prior to any holder of Common Stock or other junior securities, ACOF II shall receive in cash the greater of (i) the stated value plus any amount added by way of dividends (accelerated to include a full five years) or (ii) the amount it would receive if all Preferred Stock held by it were converted into Common Stock (calculated to include dividends accelerated to include a full five years). ACOF II can elect to treat any fundamental transaction (defined in the certificate of designations) as a liquidation and receive its liquidation preference as described in the preceding sentence. However, if common shares of another company are issued as consideration in a fundamental transaction, the Issuer has the option of requiring ACOF II to accept such common shares to satisfy the liquidation preference if (i) the shares are then quoted on the Nasdaq Stock Market or listed on the New York Stock Exchange, (ii) the value of such shares at such time is determined at 98% of the closing price on the trading day preceding the transaction and (iii) the shares are freely transferable without legal or contractual restrictions.
 
Voting Rights. The Preferred Stock voting as a separate class elects (i) two directors to the Board for so long as ACOF II continues to hold Preferred Stock representing at least 20% of “post-conversion equity” (the Issuer’s outstanding Common Stock assuming conversions into common shares of all securities, including the Preferred Stock and assuming Preferred Stock dividends accelerated to include a full five years), (ii) one director for so long as it continues to hold at least 10% of post-conversion equity, and (iii) no directors below 10%. The Preferred Stock does not vote with respect to directors elected by the holders of Common Stock. The Preferred Stock voting as a separate class must approve (i) any alteration in its powers, preferences or rights, or in the certificate of designation, (ii) creation of any class of stock senior or pari passu with it, (iii) any increase in the authorized shares of Preferred Stock, and (iv) any dividends or distribution to Common Stock or any junior securities, except for pro rata dividends on Common Stock paid in Common Stock. These protective rights terminate on the first date on which there are outstanding less than 20% of the number of shares of Preferred Stock outstanding on the date the Preferred Stock is first issued. Except for the election of directors and special approvals described above, the Preferred Stock votes on all matters and with the Common Stock on an as-converted basis.
 
Stockholder’s Agreement
 
In connection with the consummation of the Preferred Stock Purchase, ACOF II and the Issuer entered into a Stockholder’s Agreement (the “Stockholder’s Agreement”). The Stockholder’s Agreement is attached hereto as Exhibit 3, and any description thereof is qualified in its entirety by reference thereto.
 
Standstill. Until the earliest of the seventh anniversary of issuance of the Preferred Stock or 180 days after ACOF II owns less than 10% of post-conversion equity (the “Standstill Period”), ACOF II agreed to numerous “standstill” restrictions, including acquiring additional voting securities, proposing or encouraging any fundamental transaction, participating in a “group,” soliciting proxies, attempting to change the size of the Board or its composition, entering into a voting agreement, transferring any of its voting securities (except in compliance with the stockholder’s agreement), or discussing or encouraging any of the foregoing.
 
Director Elections and Restrictions. As the holder of all of the outstanding Preferred Stock, ACOF II will be entitled to elect as a separate class (i) two directors to the Board for so long as it continues to hold Preferred Stock representing at least 20% of “post-conversion equity” (the Issuer’s outstanding Common Stock assuming conversions into common shares of all securities, including the Preferred Stock and assuming Preferred Stock dividends accelerated to include a full five years), (ii) one director for so long as it continues to hold at least 10% of post-conversion equity, and (iii) no directors below 10%. The Preferred Stock does not vote with respect to directors elected by the holders of Common Stock. In connection with its right to elect directors,
 

Page 9of 16

ACOF II will also agree to certain limits on the qualifications of such directors, and it will receive rights to director insurance and indemnification and observer rights on committees.
 
Voting Restrictions. During the Standstill Period, ACOF II will vote its shares of Preferred Stock or Common Stock at any stockholder meeting in the following manner: (a) in favor of director nominees put forth by the Board (as long as ACOF II continues to have the right to elect at least one director as a holder of Preferred Stock); (b) in the manner recommended by the Board, if the vote is in connection with any fundamental transaction; (c) in its own discretion, if the vote relates to an amendment of the certificate of designation for the Preferred Stock or is not inconsistent with the stockholder’s agreement; and (d) in the manner recommended by the Board, if the vote is not otherwise covered above.
 
Transfer Restrictions. During the Standstill Period, ACOF II will not transfer any shares of Preferred Stock or Common Stock to any other person except: (a) pursuant to the registration rights agreement; (b) in accordance with Rule 144 under the Securities Act; (c) after the second anniversary of the Preferred Stock issuance, transfers of common stock issued upon conversion of the Preferred Stock may be made to persons that are not “related persons” to ACOF II or affiliates of the Issuer that, in any 12 month period, do not, in the aggregate, exceed 7.5% of the outstanding voting securities of the Issuer; however, such transfers may not be made to a person (or its affiliates or to a group in which such person or an affiliate is a member) that, after giving effect to such transfer, would beneficially own voting securities representing more than 7.5% of the total voting power of the Issuer’s securities; (d) pursuant to a merger or other reorganization approved by the Board; or (e) in any event as allowed above (except for pursuant to a merger or reorganization), without the transferee executing an agreement similar to the Stockholder’s Agreement.
 
Any of these restrictions may be waived by a majority vote of the members of our Board of Directors who are not affiliated with ACOF II.
 
Senior Notes
 
In addition to the foregoing, the Reporting Persons, together with their respective affiliates, beneficially own $7.5 million aggregate principal amount of 9.25% senior notes due 2014 of the Issuer (the “Senior Notes”). The Senior Notes were issued on July 5, 2006, pay interest semi-annually in arrears to the holders thereof, and will mature on June 15, 2014.
 
Investment Purposes
 
The Reporting Persons consider the shares of Common Stock and the Senior Notes that each beneficially owns an investment made in the ordinary course of their respective businesses.  Except as set forth in this Schedule 13D, none of the Reporting Persons, nor, to the best of their knowledge, any of the other persons identified in response to Item 2, presently has any plans or proposals that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.  The Reporting Persons will review on a continuing basis the investment in the Issuer.  Based on such review, and subject to the limitations and restrictions set forth in the Purchase Agreement, Certificate of Designations and Stockholder’s Agreement, one or more of the Reporting Persons may acquire, or cause to be acquired, additional securities of the Issuer, dispose of, or cause to be disposed, such securities at any time or formulate other purposes, plans or proposals regarding the Issuer or any of its securities, to the extent deemed advisable in light of general investment and trading policies of the Reporting Persons, the Issuer’s business, financial condition and operating results, general market and industry conditions or other factors.
 
The foregoing summary of the Purchase Agreement, the Certificate of Designations and the Stockholder’s Agreement and the agreements and transactions contemplated thereby is qualified in its entirety by reference to the Purchase Agreement, the Certificate of Designations and the Stockholder’s Agreement, listed as Exhibits 1, 2 and 3 hereto, respectively, and incorporated herein by reference.
 

Page 10of 16


 
Item 5. Interest in Securities of Issuer.
 
(a). See Items 11 and 13 of the cover pages to, and Item 2 of, this Schedule 13D, for the aggregate number of shares of Common Stock and the percentage of Common Stock beneficially owned by each of the Reporting Persons.
 
(b). See Items 7 through 10 of the cover pages to, and Item 2 of, this Schedule 13D, for the number of shares of Common Stock beneficially owned by each of the Reporting Persons as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote and sole or shared power to dispose or to direct the disposition.
 
(c). Pursuant to the terms of the Purchase Agreement, on July 27, 2006 ACOF II purchased 750,000 shares of Preferred Stock from the Issuer for a total purchase price of $75 million.  Such Preferred Stock is immediately convertible at ACOF II’s discretion into 7,812,500 shares of the Issuer’s Common Stock, which would currently represent approximately 31.9% of the outstanding Common Stock on a post-conversion basis. Dividends are PIK for the first five years, meaning that they are payable solely by adding the amount of dividends to the stated value of each share. At the end of five years of PIK dividends, the Preferred Stock would be convertible into approximately 10,000,661 shares of Common Stock (representing an effective price of approximately $7.50 per share (before expenses of the issuance) if such Preferred Stock is converted). Based on the currently outstanding shares, 10,000,661 shares of Common Stock would represent approximately 37.5% of the post-conversion shares outstanding.
 
(d).  Each of the members of Ares Partners have the right to receive dividends from, or the proceeds from the sale of, investments by the Reporting Persons including the shares of Common Stock reported herein, in accordance with their membership interests in Ares Partners.
 
(e).  Not applicable.
 
Item 6. Contracts, Arrangements, Understandings or Relationships
 
with Respect to Securities of the Issuer.
 
The information set forth in Items 2, 3 and 4 above of this Schedule 13D are hereby incorporated by reference.
 
In connection with the Purchase Agreement, the Issuer and ACOF II have entered into a Registration Rights Agreement, dated as of July 27, 2006, and attached hereto as Exhibit 4 to allow for the registered resale by ACOF II of the Common Stock following conversion of the Preferred Stock held by ACOF II. After conversion of ACOF II’s Preferred Stock and upon a request from ACOF II, the Issuer will file a shelf registration statement for the resale of the Common Stock within 30 days of such request and will use its commercially reasonable efforts to cause the shelf registration statement to become or be declared effective by the SEC within 120 days after the request. In addition, ACOF II shall have two demand registration requests and unlimited piggyback registration rights. The Issuer has agreed to pay the expenses of any registration except for underwriting discounts.


Item 7. Material to Be Filed as Exhibits.
 
Exhibit 1:                 Preferred Stock Purchase Agreement, by and between WCA Waste Corporation and Ares Corporate Opportunities Fund II, L.P., dated as of June 12, 2006 (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K for the Issuer, filed on June 16, 2006).
 
Exhibit 2:                 Certificate of Designations, dated as of July 27, 2006.
 
Exhibit 3:                 Stockholder’s Agreement, between WCA Waste Corporation and Ares Corporate Opportunities Fund II, L.P., dated as of July 27, 2006.

Page 11of 16

 

 
Exhibit 4:                 Registration Rights Agreement, between WCA Waste Corporation and Ares Corporate Opportunities Fund II, L.P., dated as of July 27, 2006.
 
Exhibit 5:                 Joint Filing Agreement, among the Reporting Persons, dated as of August 4, 2006.
 


Page 12of 16

SIGNATURE
 
After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.
 
Dated: August 4, 2006
 
ARES CORPORATE OPPORTUNITIES FUND II, L.P.
 
By:      ACOF MANAGEMENT II, L.P.,
         Its General Partner
 
By:     ACOF OPERATING MANAGER II, L.P.,
           Its General Partner
 
By:     ARES MANAGEMENT, INC.,
           Its General Partner

 
By: /s/ Antony P. Ressler                    
Name: Antony P. Ressler
 

Dated: August 4, 2006
 
ACOF MANAGEMENT II, L.P.
 
By:     ACOF OPERATING MANAGER II, L.P.,
           Its General Partner
 
        By:     ARES MANAGEMENT, INC.,
   
      Its General Partner
 
           By:     /s/ Antony P. Ressler                
              Name: Antony P. Ressler
 

Dated: August 4, 2006
 
ACOF OPERATING MANAGER II, L.P.
 
By:     ARES MANAGEMENT, INC.,
           Its General Partner
 
By:     /s/ Antony P. Ressler                    
   Name: Antony P. Ressler

Page 13of 16

 

Dated: August 4, 2006
 
ARES MANAGEMENT, INC.
 
By: /s/ Antony P. Ressler                
Name: Antony P. Ressler
 

Dated: August 4, 2006
 
ARES PARTNERS MANAGEMENT COMPANY LLC
 
By: /s/ Antony P. Ressler                    
Name: Antony P. Ressler
 

 


Page 14of 16


APPENDIX A
 
The name and present principal occupation of each director and executive officer of Ares Management, Inc. is set forth below.  The principal business of each of the Reporting Persons other than ACOF II is investment management.  ACOF II is principally engaged in the business of investing in securities.  To the knowledge of the Reporting Persons, all the directors and executive officers listed on this Appendix A are United States citizens.
 
Name (and Title at Ares Management, Inc.)
 
Principal Occupation
 
 
 
Antony P. Ressler (Director and President)
 
Manager of Ares Partners Management Company LLC
John H. Kissick (Vice President)
 
Member of Ares Partners Management Company LLC
David Sachs (Director and Vice President)
 
Member of Ares Partners Management Company LLC
Seth Brufsky (Vice President)
 
Member of Ares Partners Management Company LLC
Bennett Rosenthal (Vice President)
 
Member of Ares Partners Management Company LLC
David Kaplan (Vice President)
 
Member of Ares Partners Management Company LLC
Jeff Serota (Vice President)
 
Member in the Private Equity Group of the Reporting Persons
Kevin Frankel (Vice President, General Counsel and Secretary)
 
General Counsel of Ares Management LLC
Daniel F. Nguyen (Vice President and Chief Financial Officer)
 
Chief Financial Officer of Ares Management LLC
Jeffrey Schwartz (Vice President)
 
Vice President in the Private Equity Group of the Reporting Persons
Adam Stein (Vice President)
 
Vice President in the Private Equity Group of the Reporting Persons
Matt Cwiertnia (Vice President)
 
Vice President in the Private Equity Group of the Reporting Persons
Nav Rahemtulla (Vice President)
 
Vice President in the Private Equity Group of the Reporting Persons
 


Page 15of 16


 
EXHIBIT INDEX
 

Exhibit 1:
Preferred Stock Purchase Agreement, by and between WCA Waste Corporation and Ares Corporate Opportunities Fund II, L.P., dated as of June 12, 2006 (incorporated by reference to Exhibit 10.1 of the current report on Form 8-K for the Issuer, filed on June 16, 2006).
 
Exhibit 2:
 
Certificate of Designations, dated as of July 27, 2006.
 
Exhibit 3:
 
Stockholder’s Agreement, between WCA Waste Corporation and Ares Corporate Opportunities Fund II, L.P., dated as of July 27, 2006.
 
Exhibit 4:
 
Registration Rights Agreement, between WCA Waste Corporation and Ares Corporate Opportunities Fund II, L.P., dated as of July 27, 2006.
 
Exhibit 5:
 
Joint Filing Agreement, among the Reporting Persons, dated as of August 4, 2006.
   
 

 
 
Page 16 of 16
 EX-2 2 ex2.htm EXHIBIT 2 Unassociated Document
Exhibit 2

 
WCA WASTE CORPORATION
 
_______________
 
CERTIFICATE OF DESIGNATIONS
 
OF
 
SERIES A CONVERTIBLE PAY-IN-KIND PREFERRED STOCK
 
(Pursuant to Section 151 of the Delaware General Corporation Law)
 
_______________
 
WCA Waste Corporation, a Delaware corporation (the “Corporation”), in accordance with the provisions of Section 103 of the Delaware General Corporation Law (the “DGCL”) does hereby certify that, in accordance with Section 141(c) of the DGCL, the following resolution was duly adopted by the board of directors of the Corporation as of June 12, 2006:
 
RESOLVED, that the board of directors of the Corporation pursuant to authority expressly vested in it by the provisions of the Certificate of Incorporation of the Corporation, hereby authorizes the issuance of one series of Preferred Stock designated as the Series A Convertible Pay-In-Kind Preferred Stock, par value $0.01 per share, of the Corporation and hereby fixes the designation, number of shares, powers, preferences, rights, qualifications, limitations and restrictions thereof (in addition to any provisions set forth in the Certificate of Incorporation of the Corporation which are applicable to the Preferred Stock of all classes and series) as follows:
 
SERIES A CONVERTIBLE PREFERRED STOCK
 
1.  Designation, Amount and Par Value. The following series of preferred stock shall be designated as the Corporation’s Series A Convertible Pay-In-Kind Preferred Stock (the “Series A Preferred Stock”), and the number of shares so designated shall be 750,000. Each share of Series A Preferred Stock shall have a par value of $0.01 per share. The “Stated Value” for each share of Series A Preferred Stock equals the sum of (i) $100 plus (ii) any amount added to the Stated Value pursuant to Section 3 hereof. The Series A Preferred Stock is to be issued only pursuant to the terms of the Purchase Agreement (as hereinafter defined).
 
2.  Definitions. In addition to the terms defined elsewhere in this Certificate of Designations the following terms have the meanings indicated:
 
“Acceleration Event” means the occurrence of any one or more of the following events: (i) a Liquidation Event; (ii) a Bankruptcy Event; (iii) the Corporation shall consummate a public offering of shares of Common Stock pursuant to an effective registration statement under the Securities Act (other than (x) a registration relating to a transact-
 

 
 
 

tion covered by Form S-4 (or successor form) adopted by the Securities and Exchange Commission, including a transaction covered by Rule 145 (or successor rule) adopted by the Securities and Exchange Commission, (y) a registration statement solely relating to Common Stock held by third parties (including Common Stock to be held by or issued pursuant to an employee benefit or stock ownership plan) and (z) pursuant to the Registration Rights Agreement); (iv) (a) the average of the Closing Price for each day during any period of twenty (20) consecutive Trading Days exceeds $14.40 per share on the twentieth (20th) Trading Day of such period or (b) if not sooner, immediately prior to a conversion pursuant to Section 7(b) hereof; or (v) any other Fundamental Transaction.
 
“Bankruptcy Event” means any of the following events: (a) the Corporation or a Subsidiary of the Corporation commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Corporation or any Subsidiary thereof; (b) there is commenced against the Corporation or any Subsidiary any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Corporation or any Subsidiary is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Corporation or any Subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) the Corporation or any Subsidiary makes a general assignment for the benefit of creditors; (f) the Corporation or any Subsidiary fails to pay, or states that it is unable to pay or is unable to pay, its debts generally as they become due; (g) the Corporation or any Subsidiary calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (h) the Corporation or any Subsidiary, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
 
“Business Day” means any day except Saturday, Sunday and any day on which banking institutions in New York City are authorized or required by law or other governmental action to close.
 
“Closing Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on the Trading Market, the closing price per Common Share for such date (or the nearest preceding date) on the Trading Market or exchange on which the Common Shares are then listed or quoted; or (b) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by a majority in interest of the purchasers.
 
“Common Stock” means the common stock of the Corporation, par value $0.01 per share, and any securities into which such common stock may hereafter be reclassified or exchanged or converted.
 
“Conversion Price” means $9.60 per share (as adjusted for stock dividends, stock splits, stock combinations or other similar events pursuant to Section 13 hereof occurring after the Original Issue Date).
 

 
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“Equity Conditions” means, with respect to a specified issuance of Common Stock, that each of the following conditions is satisfied: (i) the number of authorized but unissued and otherwise unreserved shares of Common Stock is sufficient for such issuance; (ii) the Common Stock is listed or quoted (and is not suspended from trading) on the Trading Market and such shares of Common Stock are approved for listing upon issuance; (iii) no Bankruptcy Event has occurred; and (iv) the Corporation is not in default with respect to any material obligation hereunder or under any other Transaction Document.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Fundamental Transaction” means the occurrence of any of the following in one or a series of related transactions: (i) an acquisition after the date of the Purchase Agreement by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act) of more than 35% of the voting rights or voting equity interests in the Corporation; (ii) a replacement of more than one-half of the members of the Corporation’s board of directors with members that are not approved by those individuals who are members of the board of directors on the date of the Purchase Agreement (or other Persons approved by such members to be directors (or their successors so appointed) or appointed pursuant to the terms of the Stockholder’s Agreement; (iii) a merger or consolidation of the Corporation or any Subsidiary or a sale of all or substantially all of the assets of the Corporation in one or a series of related transactions, unless following such transaction or series of transactions, the holders of the Corporation’s securities prior to the first such transaction continue to hold a majority of the voting rights or voting equity interests in of the surviving entity or acquirer of such assets; (iv) a recapitalization, reorganization or other transaction involving the Corporation or any Subsidiary that constitutes or results in a transfer of a majority of the voting rights or voting equity interests in the Corporation; (v) consummation of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act with respect to the Corporation; (vi) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property and as a result thereof the holders of a majority of the shares of Common Stock prior to the offer do not hold securities representing a majority of the voting rights or voting equity interests in the Corporation; (vii) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities that do not represent a majority of the voting rights or voting equity interests of the Corporation, cash or property; or (viii) the execution by the Corporation of an agreement directly or indirectly providing for any of the foregoing events; provided that none of items (i) through (viii) shall be deemed a Fundamental Transaction if it involves Purchaser (as such term is defined in the Purchase Agreement) or its Related Persons (as such term is defined in the Stockholder’s Agreement).
 
“Holder” means any holder of Series A Preferred Stock.
 
“Junior Securities” means the Common Stock and all other equity or equity equivalent securities of the Corporation.
 

 
-3-
 


 
“Liquidation Event” means any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary.
 
“Original Issue Date” means the date of the first issuance of any shares of Series A Preferred Stock, regardless of the number of transfers of any particular shares of Series A Preferred Stock and regardless of the number of certificates that may be issued to evidence shares of Series A Preferred Stock.
 
“Person” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
 
“Post-Conversion Equity” means as of the date of determination that number of shares of Common Stock that are then outstanding or would be outstanding upon the exercise of all rights, options, and warrants (to the extent then exercisable and vested) and conversion of all other securities (including the Series A Preferred Stock) that are convertible into shares of Common Stock, including (if the date of determination is on or before the fifth anniversary of the Original Issue Date) the number of shares of Common Stock into which the Series A Preferred Stock could be converted if an Acceleration Event had occurred immediately prior to such determination.
 
“Purchase Agreement” means the Preferred Stock Purchase Agreement, dated as of June 12, 2006, among the Corporation and the original purchaser of the Series A Preferred Stock, as the same may be amended or modified in accordance with its terms.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, to be entered into among the Corporation and the Holders upon the Closing Date.
 
“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such Rule.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Stockholder’s Agreement” means the Stockholder’s Agreement, dated as of July 27, 2006, among the Corporation and the original purchaser of the Series A Preferred Stock.
 
“Subsidiary” means any significant subsidiary of the Corporation as defined in Rule 1-02(w) of Regulation S-X promulgated by the Securities and Exchange Commission.
 
“Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on the Trading Market, or (b) if the Common Stock is not then listed or quoted and traded on the Trading Market, then any Business Day.
 

 
-4-
 


 
“Trading Market” means The Nasdaq Stock Market (the “NASDAQ”) or, at any time the Common Stock is not listed for trading on the NASDAQ, any national securities exchange upon which the Common Stock is then primarily listed or quoted.
 
“Transaction Documents” means the Purchase Agreement, the Registration Rights Agreement, the Stockholder’s Agreement, this Certificate of Designations and any other documents or agreements executed or delivered in connection with the transactions contemplated under the Purchase Agreement and thereunder.
 
“Underlying Shares” means the shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock.
 
3.  Dividends.
 
(a)  Each Holder shall be entitled to receive, and the Corporation shall pay, cumulative dividends on the Series A Preferred Stock at the rate per share (as a percentage of the Stated Value per share) of 5.00% per annum, payable semi-annually in arrears commencing on December 31, 2006 and thereafter on each June 30 and December 31, except if such date is not a Trading Day, in which case such dividend shall be payable on the next succeeding Trading Day (each, a “Dividend Payment Date”). Dividends on the Series A Preferred Stock shall be calculated on the basis of a 360-day year, shall accrue daily commencing on the Original Issue Date for the applicable Series A Preferred Stock, and shall be deemed to accrue from such date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. Dividends shall be payable by the Corporation solely by adding the amount of deferred dividends per share of Series A Preferred Stock to the Stated Value of that share; provided that after the fifth anniversary of the Closing Date, the Corporation may, at its option, pay dividends in cash. No dividend or other distribution (other than (y) a dividend or distribution payable solely in Common Stock or (z) a cash dividend or distribution with respect to which holders of shares of Series A Preferred Stock receive a pro rata portion of such dividend or distribution on an as-converted basis) shall be paid on or set apart for payment on Common Stock or any other Junior Securities unless all accrued and unpaid dividends on the Series A Preferred Stock (but not amounts previously added to Stated Value pursuant to this Section 3) have been paid in accordance with this Certificate of Designations.
 
(b)  Immediately prior to the occurrence of any Acceleration Event prior to the fifth anniversary of the Original Issue Date, the Stated Value of each share of Series A Preferred Stock shall immediately and automatically be increased by an amount per share equal to all dividends that would otherwise be payable on a share of Series A Preferred Stock on each Dividend Payment Date on and after the occurrence of such Acceleration Event and prior to and including the fifth anniversary of such Original Issue Date (the “Acceleration Period”). The accelerated payment of dividends pursuant to this Section 3(b) shall be in lieu of, and not in addition to, the dividends that would otherwise be payable on each Dividend Payment Date during the Acceleration Period. For the purpose of clarity, and only in the event that the Corporation has not elected to require conversion under Section 7(b), each Holder shall be entitled to receive, and the Corporation shall pay, all dividends payable in accordance with Section 3(a) above on each Dividend Payment Date after the fifth anniversary of the Original Issue Date.
 

 
-5-
 


 
(c)  All accrued but unpaid dividends shall be payable upon,
 
(i) a Liquidation Event in cash;
 
(ii) a Fundamental Transaction that the Holders elect to treat as a Liquidation Event pursuant to Section 6(c) in cash or in other securities or property as specified in Section 6(c); or;
 
(iii) conversion of the Series A Preferred Stock,
 
(1) during the Acceleration Period and prior to an Acceleration Event, in additional Underlying Shares as provided in Section 8(a); and
 
(2) otherwise, at the option of the Company, either (A) in cash or (B) in additional Underlying Shares as provided in Section 8(a).
 
For the purposes of this Section 3(c), accrued but unpaid dividends shall include any amounts added to Stated Value as a result of deferred dividends or accelerated dividends as provided in Section 3(a), provided, however, that to avoid double counting accrued but unpaid dividends shall not be counted both for the purposes of this Section 3(c) and in determining Stated Value.
 
4.  Registration of Issuance and Ownership of Series A Preferred Stock. The Corporation shall register the issuance and ownership of shares of the Series A Preferred Stock, upon records to be maintained by the Corporation for that purpose (the “Series A Preferred Stock Register”), in the name of the record Holders thereof from time to time. The Corporation may deem and treat the registered Holder of shares of Series A Preferred Stock as the absolute owner thereof for the purpose of any conversion hereof or any distribution to such Holder, and for all other purposes, absent actual notice to the contrary.
 
5.  Registration of Transfers. Subject to the terms of the Stockholder’s Agreement, the Corporation shall register the transfer of any shares of Series A Preferred Stock in the Series A Preferred Stock Register, upon surrender of certificates evidencing such Shares to the Corporation at its address specified herein. Upon any such registration or transfer, a new certificate evidencing the shares of Series A Preferred Stock so transferred shall be issued to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder.
 
6.  Liquidation.
 
(a)  In the event of any Liquidation Event, the Holders of Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the holders of Junior Securities by reason of their ownership thereof, an amount per share in cash equal to the greater of (i) the Stated Value for each share of Series A Preferred Stock then held by them (as adjusted for any stock split, stock dividend, stock combination or other similar transactions with respect to the Series A Preferred Stock), plus all accrued but unpaid dividends (including, without duplication, dividends added to
 

 
-6-
 

Stated Value as provided in Section 3 above) on such Series A Preferred Stock as of the date of such event, and (ii) the amount per share that would be payable to a holder of Series A Preferred Stock had all shares of Series A Preferred Stock been converted to Underlying Shares immediately prior to such Liquidation Event (and taking into account Section 3(b), if applicable) (the “Series A Stock Liquidation Preference”). If, upon the occurrence of a Liquidation Event, the assets and funds thus distributed among the holders of the Series A Preferred Stock shall be insufficient to permit the payment to such Holders of the full Series A Stock Liquidation Preference, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the Holders of the Series A Preferred Stock in proportion to the aggregate Series A Stock Liquidation Preference that would otherwise be payable to each of such Holders.
 
(b)  In the event of a Liquidation Event, following completion of the distributions required by the first sentence of paragraph (a) of this Section 6, if assets or surplus funds remain in the Corporation, the holders of the Common Stock and other Junior Securities shall share in all remaining assets of the Corporation.
 
(c)  The Corporation shall provide written notice of any Liquidation Event or Fundamental Transaction to each record Holder not less than 45 days prior to the payment date or effective date thereof; provided that such information shall be made known to the public prior to or in connection with such notice being provided to the Holders. At the request of any Holder, which must be delivered prior to the effective date of a Fundamental Transaction (or, if later, within five (5) Trading Days after such Holder receives notice of such Fundamental Transaction from the Corporation), such Fundamental Transaction will be treated as a Liquidation Event with respect to such Holder for the purposes of this Section 6; provided, however, that if the consideration to be paid to the holders of the Common Stock is not to be paid in cash, but rather in securities or other property, then at the option of the Corporation, the amount payable to the Holders pursuant to this Section 6(c) shall be either (i) in cash or (ii) in the same securities or other property as is to be paid to the holders of Common Stock so long as (a) such securities or other property consist exclusively of common equity interests quoted on the Nasdaq Stock Market or listed on the New York Stock Exchange, (b) the value of such common equity interests shall be determined as 98% of the closing price of such common equity interests on the Nasdaq Stock Market or the New York Stock Exchange, as the case may be, on the Trading Day immediately preceding the consummation of such Fundamental Transaction and (c) such common equity interests shall be freely transferable by the Holders, without legal or contractual restrictions. At the request of the original purchaser under the Purchase Agreement, prior to the issuance of any common equity interests referred to in the preceding sentence, counsel to the issuer of such common equity interests familiar with United States federal securities laws shall provide the Purchaser with a legal opinion to the effect that such common equity interests are transferable without legal restriction under United States federal securities laws.
 
(d)  In the event that, immediately prior to the closing of a Liquidation Event the cash distributions required by subsection 6(a) have not been made, the Corporation shall forthwith either: (i) cause such closing to be postponed until such time as such cash distributions have been made, or (ii) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Series A Preferred Stock shall revert to and be the same as such rights,
 

 
-7-
 

preferences and privileges existing immediately prior to the date of the first notice by the Corporation required under subsection 6(c).
 
7.  Conversion; Redemption
 
(a)  Conversion at Option of Holder. At the option of any Holder, any shares of Series A Preferred Stock may be converted into Common Stock based on the Conversion Price then in effect for the Series A Preferred Stock; provided that if less than 20% of the number of shares of Preferred Stock outstanding on the date the Preferred Stock is first issued by the Corporation would remain outstanding after any such conversion, then all shares must be converted at that time. A Holder may convert shares of Series A Preferred Stock into Common Stock pursuant to this paragraph at any time and from time to time after the Original Issue Date, by delivering to the Corporation a conversion notice (the “Conversion Notice”), in the form attached hereto as Exhibit A, appropriately completed and duly signed, and the date any such Conversion Notice is delivered to the Corporation (as determined in accordance with the notice provisions hereof) is a “Conversion Date.”
 
(b)  Conversion at Option of Corporation. At any time that (i) the average Closing Price for the 20 Trading Day period ending on the date of the Conversion Notice (as defined below) equal to or exceeds $14.40 per share or (ii) a Fundamental Transaction occurs that the Holders do not elect to treat as a Liquidation Event, the Corporation may elect to require the Holders to convert all shares of the Series A Preferred Stock into Common Stock based on the Conversion Price by delivering an irrevocable written notice of such election to the Holders (the “Conversion Notice”). The tenth (10th) Trading Day after the delivery of such notice will be the “Conversion Date” for such required conversion. Notwithstanding the foregoing, (x) in the event of a conversion at the option of the Corporation predicated on clause (i) of the first sentence of this Section 7(b), the Corporation may not require any conversion under this paragraph (and any notice thereof will be void), unless from the beginning of such ten Trading Day period through the Conversion Date, the Closing Price for each such Trading Day is equal to or exceeds $14.40 per share and (y) in the event of a conversion at the option of the Corporation predicated on clause (i) or (ii) of the first sentence of this Section 7(b), the Corporation may not require any conversion under this paragraph (and any notice thereof will be void), unless the Equity Conditions are satisfied (or waived in writing by the applicable Holder) on each Trading Day with respect to all of the Underlying Shares then issuable upon conversion in full of all outstanding Series A Preferred Stock.
 
(c)  Redemption. On or after the fifth anniversary of the Closing Date, the Corporation may, at its option, redeem any of the Series A Preferred Stock owned by the Holders, for a cash purchase price equal to the Series A Stock Liquidation Preference; provided that if less than 20% of the number of shares of Preferred Stock outstanding on the date the Preferred Stock is first issued by the Corporation would remain outstanding after any such redemption, then all shares must be redeemed at that time.
 
8.  Mechanics of Conversion.
 
(a)  The number of Underlying Shares issuable upon any conversion of shares of Series A Preferred Stock hereunder shall equal (A) the sum of (i) the Stated Value of such
 

 
-8-
 

shares of Series A Preferred Stock to be converted plus (ii) the accrued and unpaid dividends on such shares of Series A Preferred Stock that have not been added to the Stated Value on the Conversion Date, divided by (B) the applicable Conversion Price on the Conversion Date.
 
(b)  Upon conversion of any shares of Series A Preferred Stock, the Corporation shall promptly issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate a certificate for the Underlying Shares issuable upon such conversion, free of restrictive legends unless such Underlying Shares are still required to bear a restrictive legend; the Corporation shall use its commercially reasonable efforts to cause the transfer agent to issue such certificates on or before the sixth Trading Day after the Conversion Date. The Holder shall be deemed to have become holder of record of such Underlying Shares as of the Conversion Date. If the shares are then not required to bear a restrictive legend, the Corporation shall, upon request of the Holder, deliver Underlying Shares hereunder electronically through The Depository Trust Corporation (“DTC”) or another established clearing corporation performing similar functions, and shall credit the number of shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission System (“DWAC”).
 
(c)  A Holder shall deliver the original certificate(s) evidencing the Series A Preferred Stock being converted in connection with the conversion of such Series A Preferred Stock. Upon surrender of a certificate following one or more partial conversions, the Corporation shall promptly deliver to the Holder a new certificate representing the remaining shares of Series A Preferred Stock.
 
(d)  The Corporation’s obligations to issue and deliver Underlying Shares upon conversion of Series A Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by any Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by any Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by any Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to any Holder in connection with the issuance of such Underlying Shares.
 
9.  Voting Rights; Director Designation.
 
(a)  Except as otherwise provided in this Section 9(a) or in Section 9(b) or as required by applicable law and subject to the Stockholder’s Agreement, the Holders of the Series A Preferred Stock shall be entitled to vote on all matters on which holders of Common Stock are entitled to vote. For such purposes, each Holder shall be entitled to a number of votes in respect of the shares of Series A Preferred Stock owned of record by it equal to the number of shares of Common Stock into which such shares of Series A Preferred Stock are convertible by the Holders as of the record date for the determination of stockholders entitled to vote on such matter, or if no record date is established, at the date such vote is taken or any written consent of stockholders is solicited. Except as otherwise provided in this Section 9(a) or in Section 9(b), in any relevant agreement or as required by applicable law, the holders of the Series A Preferred Stock
 

 
-9-
 

and Common Stock shall vote together as a single class on all matters submitted to a vote or consent of stockholders; provided that so long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the shares of Series A Preferred Stock then outstanding, voting together as a separate class,
 
(i) alter or change the powers, preferences or rights given to the Series A Preferred Stock or alter or amend this Certificate of Designation (whether by amendment of this Certificate of Designations or the Company’s certificate of incorporation or other charter documents or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action) or avoid or seek to avoid the observance or performance of any or the terms to be observed or performed hereunder by the Corporation;
 
(ii) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a Liquidation Event or Fundamental Transaction senior to or otherwise pari passu with the Series A Preferred Stock;
 
(iii) increase the authorized number of shares of Series A Preferred Stock;
 
(iv) pay or declare any dividend or make any distribution on any Junior Securities, except pro rata stock dividends on the Common Stock payable in additional shares of Common Stock; or
 
(v) enter into any agreement with respect to the foregoing.
 
The protective rights set forth in (i) through (v) inclusive will terminate and cease to apply on the first date on which there are outstanding less than 20% of the number of shares of Series A Preferred Stock outstanding on the date the Series A Preferred Stock is first issued by the Corporation.
 
(b)  The Holders of the Series A Preferred Stock shall not be entitled nor have the right or power to vote in any election or removal, with or without cause, of directors of the Corporation elected or removed generally by the holders of the Common Stock (and any capital stock entitled to vote in the election or removal of directors with the holders of the Common Stock) but shall instead have the special voting rights set forth in this Section 9(b). Until such time as the original purchaser under the Purchase Agreement, together with its Affiliates, owns shares of Series A Preferred Stock that collectively represent less than (y) 20% of the Post-Conversion Equity, the Series A Preferred Stock voting together as a separate class shall be entitled to elect two directors to the Corporation’s board of directors and (z)10% of the Post-Conversion Equity, the Series A Preferred Stock voting together as a separate class shall be entitled to elect one director to the Corporation’s board of directors. The original purchaser of the Series A Preferred Stock may remove any director elected pursuant to this Section 9(b) at any time and from time to time, without cause (subject to the Bylaws of the Corporation and any requirements of law), in its sole discretion. In the event a director elected by the Series A Preferred Stock is removed, the vacancy in the board of directors shall be filled by the original purchaser of Series A Preferred Stock, and such action shall be taken only by vote or written consent
 

 
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in lieu of a meeting of the holders of the Series A Preferred Stock or by any remaining director or directors elected by the holders of Series A Preferred Stock pursuant to this Section 9(b). On the date that the original purchaser under the Purchase Agreement, together with its Affiliates, owns shares of Series A Preferred Stock that collectively represent less than 10% of the Post-Conversion Equity, then (i) the term of office of all directors elected pursuant to the special voting rights set forth in this Section 9(b) shall be deemed to terminate automatically and (ii) the rights set forth in this section will terminate and cease to apply.
 
10.  Charges, Taxes and Expenses. Issuance of certificates for shares of Series A Preferred Stock and for Underlying Shares issued on conversion of (or otherwise in respect of) the Series A Preferred Stock shall be made without charge to the Holders for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Corporation. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring the Series A Preferred Stock or receiving Underlying Shares in respect of the Series A Preferred Stock.
 
11.  Replacement Certificates. If any certificate evidencing Series A Preferred Stock or Underlying Shares is mutilated, lost, stolen or destroyed, or a Holder fails to deliver such certificate as may otherwise be provided herein, the Corporation shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution for such certificate, a new certificate, but only upon receipt of evidence reasonably satisfactory to the Corporation of such loss, theft or destruction (in such case) and, in each case, customary and reasonable indemnity, if requested. Applicants for a new certificate under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Corporation may prescribe.
 
12.  Reservation of Underlying Shares. The Corporation covenants that it shall at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Underlying Shares as required hereunder, the number of Underlying Shares which are then issuable and deliverable upon the conversion of (and otherwise in respect of) all outstanding Series A Preferred Stock (taking into account the adjustments of Section 13), free from preemptive rights or any other contingent purchase rights of persons other than the Holder. The Corporation covenants that all Underlying Shares so issuable and deliverable shall, upon issuance in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Corporation covenants that it shall use its best efforts to satisfy each of the Equity Conditions.
 
13.  Certain Adjustments. The Conversion Price is subject to adjustment from time to time as set forth in this Section 13. Such adjustments shall be made as the Conversion Price for all shares of Series A Preferred Stock from and after the Original Issue Date.
 
(a)  Stock Dividends and Splits. If the Corporation, at any time while Series A Preferred Stock is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the
 

 
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applicable Conversion Price for Series A Preferred Stock shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
 
(b)  Pro Rata Distributions. If the Corporation, at any time while Series A Preferred Stock is outstanding, distributes or pays as a dividend to holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase any security, or (iv) any other asset (including, without limitation, cash) (in each case, “Distributed Property”), then in each such case the Corporation shall simultaneously deliver to each Holder the Distributed Property that each such Holder would have been entitled to receive in respect the number of Underlying Shares then issuable pursuant to Section 7(a) above had the Holder been the record holder of such Underlying Shares immediately prior to the applicable record or payment date.
 
(c)  Fundamental Transactions. If the Corporation, at any time while Series A Preferred Stock is outstanding, effects any Fundamental Transaction, then upon any subsequent conversion of Series A Preferred Stock, each Holder shall have the right to receive, for each Underlying Share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it could have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”). For purposes of any such conversion, the determination of the applicable Conversion Prices for the Series A Preferred Stock shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then each Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of Series A Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall issue to the Holder a new series of preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (c) and insuring that the Series A Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
 
(d)  Calculations. All calculations under this Section 13 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common
 

 
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Stock outstanding at any given time shall not include shares owned or held by or for the account of the Corporation, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
 
(e)  Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 13, the Corporation at its expense will promptly compute such adjustment in accordance with the terms hereof and prepare a certificate describing in reasonable detail such adjustment and the transactions giving rise thereto, including all facts upon which such adjustment is based. Upon written request, the Corporation will promptly deliver a copy of each such certificate to each Holder and to the Corporation’s Transfer Agent.
 
(f)  Notice of Corporate Events. If the Corporation (i) declares a dividend (other than a dividend pursuant to Section 3 above) or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Corporation or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Corporation, then the Corporation shall deliver to each Holder a notice describing the material terms and conditions of such transaction, at least 20 calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction.
 
14.  Fractional Shares. The Corporation shall not be required to issue or cause to be issued fractional Underlying Shares on conversion of Series A Preferred Stock.
 
15.  Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Conversion Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 4:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 4:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be: (i) if to the Corporation, to One Riverway, Suite 1400, Houston, Texas 77056, facsimile: 713-292-2455, Attention: Corporate Secretary, or (ii) if to a Holder, to the address or facsimile number appearing on the Corporation’s stockholder records or such other address or facsimile number as such Holder may provide to the Corporation in accordance with this Section.
 
16.  Miscellaneous.
 
(a)  The headings herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.
 

 
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(b)  Any of the rights of the Holders of Series A Preferred Stock set forth herein, including any Equity Conditions or any other similar conditions for the Holders’ benefit, may be waived by the affirmative vote of Holders of at least a majority of the shares of Series A Preferred Stock then outstanding. No waiver of any default with respect to any provision, condition or requirement of this Certificate of Designations shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.
 

 
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IN WITNESS WHEREOF, WCA Waste Corporation has caused this Certificate of Designations to be duly executed as of this 27th day of July, 2006.
 
 
WCA WASTE CORPORATION
 
 
By: __________________________
Name:
Title:

 

 
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EXHIBIT A
 
FORM OF CONVERSION NOTICE
 
(To be executed by the registered Holder
 
in order to convert shares of Series A Preferred Stock)
 
The undersigned hereby elects to convert the number of shares of Series A Convertible Preferred Stock indicated below into shares of common stock, par value $0.01 per share (the “Common Stock”), of WCA Waste Corporation, a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written below.
 

 
Date to Effect Conversion
 
 
Number of shares of Series A Preferred Stock owned
prior to Conversion
 
Number of shares of Series A Preferred Stock to be
Converted
 
Stated Value of shares of Series A Preferred Stock to be Converted
 
Number of shares of Common Stock to be Issued
 
Applicable Conversion Price
 
Number of shares of Series A Preferred Stock subsequent to Conversion
 
Name of Holder
 
 
By:
Name:
Title:
 
 
 EX-3 3 ex3.htm EXHIBIT 3 Unassociated Document
Exhibit 3
 
STOCKHOLDER’S AGREEMENT
 
This Stockholder’s Agreement, dated as of July 27, 2006 (this “Agreement”), by and between WCA Waste Corporation, a Delaware corporation (the “Company”) and ARES CORPORATE OPPORTUNITY FUND II, L.P. (together with it the Related Transferees pursuant to Section 4.1(e) collectively and singly the “Stockholder”).
 
WHEREAS, on June 12, 2006, the Company and the Stockholder entered into (i) a Preferred Stock Purchase Agreement (the “Stock Purchase Agreement”) pursuant to which the Stockholder purchased an aggregate of 750,000 shares of Senior Convertible Preferred Stock, par value $.01 per share, of the Company (“Preferred Stock”), which is convertible into shares of Common Stock, and (ii) a Registration Rights Agreement (the “Registration Rights Agreement”) granting certain registration rights;
 
WHEREAS, in connection with the transactions contemplated by the Stock Purchase Agreement and the Registration Rights Agreement, the Stockholder has agreed to certain terms and conditions on its stock ownership as set forth herein.
 
NOW, THEREFORE, in consideration of the issuance of the Preferred Stock pursuant to the Stock Purchase Agreement and the other promises contained therein, and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
 
ARTICLE 1
DEFINITIONS; REPRESENTATIONS AND WARRANTIES
 
Section 1.1  Definitions. Unless otherwise specified all references to “days” shall be deemed to be references to calendar days. For purposes of this Agreement, the following terms shall have the following meanings:
 
“Affiliate” of a Person shall have the meaning set forth in Rule 12b-2 of the Exchange Act as in effect on the date of this Agreement, but shall not include (i) any investment fund in which a Person has invested if the Person (as the Affiliates alone or with others) does not otherwise control the investment fund or have, directly or indirectly, voting or dispositive power over any securities owned by such fund or (ii) any investor or limited partner of any Person who does not (alone or with others) otherwise have voting or dispositive power over securities owned by that Person and is not controlled by that Person. It is expressly intended that any Person who now or hereafter controls, directly or indirectly, the Stockholder (other than in its capacity as Exempt Affiliate) shall be subject to the restrictions of Section 2.1 and the provisions of Articles 3 and 4 as if it were the Stockholder, including (without limitation) any management company, advisory, and/or general partner of the Stockholder.
 
“Beneficial Ownership” by a Person of any Voting Securities shall be determined in accordance with the term “beneficial ownership” as defined in Rule 13d-3 under the Exchange Act as in effect on the date of this Agreement and, in addition, “beneficial ownership” shall include securities which such Person has the right to acquire (irrespective of whether such right
 

 
 
 

is exercisable immediately or only after the passage of time, including the passage of time in excess of sixty (60) days) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise. For purposes of this Agreement, the Stockholder shall be deemed to beneficially own any Voting Securities Beneficially owned by its Affiliates or any Group of which the Stockholder or any such Affiliate is a member.
 
“Board of Directors” shall mean the Board of Directors of the Company.
 
“Certificate of Designations” shall mean the Certificate of Designations pursuant to which the Preferred Stock has been created, as amended in accordance with its terms.
 
“Commission” shall mean the Securities and Exchange Commission.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
 
“Group” shall mean a “group” as such term is used in Section 13(d)(3) of the Exchange Act (as in effect, and based on legal interpretations thereof existing, on the date hereof).
 
“Laws” shall mean all applicable foreign, federal, state and local laws, statutes, rules, regulations, codes and ordinances.
 
“Majority Vote” shall mean (i) the affirmative vote of a majority of the entire Board of Directors, including the affirmative vote of a majority of all of the Unaffiliated Directors, voting separately or (ii) as regards matters within the authority of any committee of the Board of Directors consisting entirely of Unaffiliated Directors, the affirmative vote of such committee (including for purposes of clauses (i) and (ii), an action by unanimous written consent).
 
“Person” shall mean any individual, Group, corporation, general or limited partnership, limited liability company, governmental entity, joint venture, estate, trust, association, organization or other entity of any kind or nature.
 
“Related Person” means, with respect to any Person, (i) any Affiliate of such Person, (ii) any investment manager, investment advisor or partner of such Person or an Affiliate of such Person or such investment manager, investment advisor or partner, (iii) any investment fund, investment account or investment entity whose investment manager, investment advisor or general partner is such Person or a Related Person of such Person, and (iv) to the extent not covered by the foregoing, as to the Stockholder, a partner, employee, director, officer, affiliate or associate (as defined in Rule 12b-2 under the Exchange Act) of the Stockholder or any affiliate of the Stockholder or as to which the Stockholder or its Affiliates own at least ten percent of the voting equity securities.
 
“Reorganization Transaction” means: (i) any merger, consolidation, recapitalization, liquidation or other business combination transaction involving the Company; (ii) any tender offer or exchange offer for any securities of the Company; or (iii) any sale or other disposition of assets of the Company or any of its Subsidiaries in a single transaction or in a series of related transactions in each of the foregoing cases constituting individually or in the aggregate 10% or more of the assets or Voting Securities (as applicable) of the Company.
 

 
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“Securities Act” shall mean the Securities Act of 1933, as amended.
 
“Shares” means the 750,000 shares of Preferred Stock to be issued to the Stockholder pursuant to the Stock Purchase Agreement and any shares of Common Stock issuable upon the conversion of such Preferred Stock.
 
“Standstill Period” shall mean the period beginning as of the first closing under the Purchase Agreement and ending on the Standstill Termination Date.
 
“Stockholder Designee” shall mean a person designated for election to the Board of Directors by the Stockholder in accordance with the Certificate of Designations and in accordance with Section 3.1.
 
“Total Voting Power” shall mean the total combined Voting Power, on a fully diluted basis, of all the Voting Securities then outstanding.
 
“Transfer” shall mean, whether or not capitalized and including such correlative terms as “Transferring” or “Transferred,” means with respect to the Voting Securities or any portion thereof, (i) a transaction by which the Stockholder or its Related Person sells, assigns, grants, gives, pledges, grants an option with respect to, encumbers, hypothecates, mortgages, exchanges, distributes, disposes or transfers to another Person, entity or group Voting Securities or any legal or beneficial, or direct or indirect, right or interest therein or with respect thereto (including, without limitation, proxy, voting right, participation, cash flow, derivative, option, or hedge), (ii) a Change in Control of the Stockholder or Related Person that, prior to the Change of Control Beneficially Owned Voting Securities or (iii) entry into an agreement or understanding with respect to the foregoing.
 
“Unaffiliated Directors” shall mean those Persons who are elected as directors of the Board of Directors (i) who are not the Stockholder Designees and or affiliated with the Stockholder or its Related Persons (including an officer or an employee, consultant or advisor (financial, legal or other) of the Stockholder or any Related Person of the Stockholder, or any person who shall have served in any such capacity within the three-year period immediately preceding the date such determination is made) and (ii) who do not otherwise have a personal or conflicting interest in the particular matter or proposal in question.
 
“Voting Power” shall mean, as of the date of determination, the voting power in the general election of directors of the Company, and shall be calculated for each Voting Security by reference to the maximum number of votes such Voting Security is or would be entitled to cast in the general election of directors, and, in the case of convertible (or exercisable or exchangeable) securities, by reference to the maximum number of votes such Voting Security would be entitled to cast in unconverted or converted (or exercised, unexercised, exchanged or unexchanged) status. For purposes of determining Voting Power under this Agreement, a Voting Security which is convertible into or exchangeable for a Voting Security shall be counted as having the greater of (i) the number of votes to which such Voting Security is entitled prior to conversion or exchange and (ii) the number of votes to which the Voting Security into which such Voting Security is convertible or exchangeable is entitled.
 

 
-3-
 

 
“Voting Securities” shall mean (i) any securities entitled, or which may be entitled, to vote generally in the election of directors of the Company (including, when issued, shares of Common Stock issued upon conversion of the Preferred Stock), (ii) any securities convertible or exercisable into or exchangeable for such securities (whether or not the right to convert, exercise or exchange is subject to the passage of time or contingencies or both), or (iii) any direct or indirect rights or options to acquire any such securities; provided that unexercised options granted pursuant to any employment benefit or similar plan and rights issued pursuant to any stockholder rights plan shall be deemed not to be “Voting Securities” (or to have Voting Power).
 
Section 1.2  Representations and Warranties of the Company and Stockholders. The representations and warranties of the Company and Stockholders, respectively, with respect to this Agreement and the transactions contemplated hereby are set forth in the Stock Purchase Agreement.
 
ARTICLE 2
STANDSTILL
 
Section 2.1  Section 2.1 Standstill.
 
(a)  As of the date of this Agreement, neither the Stockholder nor its Related Persons Beneficially Own any Voting Securities except the Shares. Until the earliest to occur of (A) the seventh anniversary of the Stock Purchase Agreement, (B) 180 days after the date on which the Stockholder, its Affiliates and Related Persons collectively own Voting Securities representing less than 10% of the Total Voting Power (as long as on such date and at all times during such 180 day period, the Stockholder, its Affiliates and Related Persons collectively owned Voting Securities representing less than 10% of the Total Voting Power) (the “Standstill Termination Date”), unless otherwise specifically approved by a Majority Vote of the Board of Directors (after full disclosure by the Stockholder), the Stockholder will not, and will cause each of its Related Persons not to, directly or indirectly:
 
(i)  acquire, offer to acquire, or agree to acquire, by purchase or otherwise, any Voting Securities or voting rights or direct or indirect rights or options to acquire any Voting Securities of the Company or any of its Affiliates other than (A) an acquisition as a result of a stock split, stock dividend or similar recapitalization, (B) the acquisition of shares of Common Stock upon the conversion of the Preferred Stock, (C) stock options or similar rights granted by the Company to an Affiliate of the Stockholder as compensation for performance as a director or officer of the Company or its subsidiaries (and any shares issuable upon exercise thereof), (D) transfers between Stockholder and Related Transferees as permitted under Section 4.1(f); or (E) any rights which are granted to all Stockholders of the Company (and any shares issuable upon exercise thereof); provided, however, that the Stockholder may purchase up to an aggregate of 1,000,000 shares of Common Stock from the Company upon approval by Majority Vote.
 
 
(ii)  make or cause to be made any proposal for a Reorganization Transaction; provided that the foregoing shall not prevent a Transfer in accordance with Article 4;

 
 
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(iii)  take any action (including, without limitation, by forming, joining or in any way participating) that would result in being deemed part of a Group with respect to any securities of the Company or its Affiliates;
 
(iv)  acquire any proxy with respect to any Voting Securities (other than the Shares) or make, or in any way cause or participate in, any “solicitation” of “proxies” to vote (as those terms are defined in Regulation 14A under the Exchange Act) with respect to the Company or its Affiliates, or communicate with, seek to advise, encourage or influence any Person, in any manner, with respect to the voting of, securities of the Company or its Affiliates, or become a “participant” in any “election contest” (as those terms are defined or used in Rule 14a-11 under the Exchange Act) with respect to the Company or its Affiliates; provided that the Stockholder will not be precluded by the foregoing provision from (y) making non-public communications with its Affiliates and Related Persons that would not require public disclosure by any Person and would not make the Stockholder a participant in an election contest as long as the Stockholder does not take any action that would be inconsistent with Section 3.1 and (z) soliciting proxies in support of the election of all of the Stockholder Designees, Management Directors and Unaffiliated Directors nominated by the Board of Directors in accordance with Section 3.1 hereof in circumstances in which a third party is soliciting parties for the election of nominees not nominated by the Board of Directors);
 
(v)  take action that would have the effect of increasing the number of directors except as approved by a Majority Vote and except as to insure that a majority of the Board of Directors consist of Unaffiliated Directors; initiate, propose or, except with the prior approval of a Majority Vote, otherwise solicit stockholders for the approval of one or more stockholder proposals with respect to the Company or its Affiliates or induce or attempt to induce any other Person to initiate any stockholder proposal; take any action that would have the effect of placing, or otherwise to seek election to or seek to place, any Person on the Board of Directors of the Company (or its Affiliates) that is an Affiliate or Related Person of, or otherwise is a representative of or is affiliated with, the Stockholders, its Affiliates, or Related Persons; or seek the removal of any member of the Board of Directors of the Company or its Affiliates; provided however, that the last two clauses of this paragraph (v) shall not preclude the Stockholder from designating the Stockholder Designees (and replacing such designees) in accordance with the Certificate of Designations and Section 3.1 of this Agreement;
 
(vi)  in any manner agree, attempt, seek or propose to deposit any securities of the Company or its Affiliates in any voting trust or similar arrangement or subject any securities of the company or its Affiliates to any other voting or proxy agreement, arrangement or understanding;
 
(vii)  offer, sell or otherwise Transfer any Voting Securities or rights to receive Voting Securities except for Transfers in accordance with Article 4;
 
(viii)  disclose any intention, plan or arrangement, or make any public announcement, or induce any other Person to take any action, inconsistent with the foregoing;
 
 

 
-5-
 
 
(ix)  enter into any negotiations, arrangements or understandings with any third party with respect to any of the foregoing;
 
(x)  advise, assist or encourage or finance (or assist or arrange financing to or for) any other Person in connection with any of the foregoing;
 
(xi)  otherwise act in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company or its Affiliates; provided, that the foregoing paragraph (xi) shall not prevent the Stockholder Designees from acting in their capacity as directors of the Company and shall not prevent the Stockholder from exercising its voting rights to the extent provided in the Certificate of Designations and provided in this Agreement; or
 
(xii)  request a waiver of any of the provisions of any of paragraphs (i) through (xii) of this Section 2.1.
 
ARTICLE 3
BOARD REPRESENTATION, VOTING AND TRANSACTIONAL APPROVALS
 
Section 3.1  Board Matters.
 
(a)  Pursuant to Section 9(b) of the Certificate of Designations creating the Preferred Stock, the Stockholder is entitled to elect up to two directors in certain circumstances (the “Stockholder Designees” whether one or more) and for the period specified therein (the “Stockholder Designee Period”). The Company agrees to take such actions as may be necessary or appropriate to permit such election to be made to the extent provided in the Certificate of Designations, subject to the provisions set forth in this Section 3.1. Otherwise, the Company shall have no obligation to take any action to cause a designee or representative of the Stockholder (or its Related Persons) to become a member of the Board of Directors. Upon termination of the Stockholder Designee Period, the terms of the Stockholder Designees will cease and the Stockholder shall cause the Stockholder Designees to offer to resign immediately from any committees thereof, whether as observer or otherwise, (which offer to resign may be accepted or declined in the sole and absolute discretion of the Board of Directors) and the Company’s obligations under this Section 3.1 shall terminate.
 
Notwithstanding the provisions of this Section 3.1(a) or Section 9(b) of the Certificate of Designation, the Stockholder agrees that
 
(i)  the Stockholder will give the Company at least ten (10) days prior written notice of the identity its Stockholder Designees prior to the election thereof pursuant to Section 9(b) of the Certificate of Designations and provide the Company with such information concerning the background of such Stockholder Designees as the Nominating Committee may reasonably request;
 
(ii)  subject to (iii) below, it will elect Antony P. Ressler as the Stockholder Designee (or one of the Stockholder Designees when the Stockholder is entitled to designate more than one Stockholder Designee) for as long as Mr. Ressler remains affiliated with the Ares Management, Inc. or its Related Persons;
 

 
-6-
 
 
(iii)  it will not elect (and it agrees to withdraw the nomination of or cause the removal of) any Person to the Company’s Board of Directors that the Nominating Committee determines in good faith that the proposed Stockholder Designee does not meet the qualification requirements imposed with respect to other directors or determines (upon written opinion of its outside counsel) that a proposed Stockholder Designee would not be qualified under any applicable law, rule or regulation (including under any exchange or Nasdaq rules) to serve as a director of the Company or if the Company objects to a Stockholder Designee because such Stockholder Designee has been involved in any of the events enumerated in Item 2(d) or (e) of Schedule 13D or such Person is currently the target of an investigation by any governmental authority or agency relating to felonious criminal activity or is subject to any order, decree, or judgment of any court or agency prohibiting service as a director of any public company or providing investment or financial advisory services. In such an event, the Stockholder shall withdraw the designation of such proposed Stockholder Designee and designate a replacement therefor (which replacement Stockholder Designee shall also be subject to the requirements of this Section). The Company shall use its reasonable best efforts to notify the Stockholder of any objection to a Stockholder Designee sufficiently in advance of the date on which proxy materials are mailed by the Company in connection with such election of directors to enable the Stockholder to propose a replacement Stockholder Designee in accordance with the terms of this Agreement.
 
(iv)  The Stockholder also agrees that none of its Stockholder Designees shall be a director, executive officer, or consultant to any solid waste company and that it shall cause each such Stockholder Designee to resign from or terminate any such affiliation prior to designation.
 
(b)  The parties intend that the Company’s Common Stock continue to meet the qualification requirements applicable to Nasdaq National Market securities, or if the Company’s Voting Securities become listed on the New York Stock Exchange, the listing requirements of the New York Stock Exchange. The Board of Directors will be comprised according to such requirements.
 
(c)  Subject to any requirements described in (b) above, the parties agree that the Unaffiliated Directors will have the exclusive power to nominate directors on behalf of the Board of Directors (other than with respect to Stockholder Designees appointed pursuant to the Certificate of Designations and in accordance with the provisions hereof). In such capacity, the Unaffiliated Directors may be referred to herein as the “Nominating Committee” regardless of whether a formal committee is formed.
 
(d)  Each Stockholder Designee serving on the Board of Directors shall be entitled to all insurance, indemnification, compensation, stock incentives granted to directors who are not employees of the Company on the same terms provided to, and subject to the same limitations applicable to, such directors. 
 
(e)  The Company shall use its reasonable best efforts to ensure that

 
-7-
 

 
(i)  one of the Stockholder Designees is appointed as an observer to each committee of the Board of Directors other than a special committee appointed to consider any matter involving the Stockholder or its Related Persons. The observer will not be a member of such committee or entitled to vote on any matter acted upon, but will be entitled to all notices of and to attend and participate in meetings thereof, subject to the power of the committee chair to conduct executive sessions of only the full members of the committee.
 
(ii)  meetings of the Board of Directors are held at least four times each year.
 
Section 3.2  Voting.
 
(a)  The Stockholder agrees that during the Standstill Period the Stockholder shall, and shall cause its Related Persons and any Person which is a member of any Group of which the Stockholder or any of its Related Persons is a member to, be present, in person or represented by proxy, at all meetings of stockholders of the Company so that all Voting Securities Beneficially Owned by the Stockholder and its Related Persons shall be counted for the purpose of determining the presence of a quorum at such meetings. The Stockholder agrees on behalf of itself and each of its Related Persons that during the Standstill Period:
 
(i)  For so long as the Stockholder shall have the right to appoint at least one director under Section 9(b) of the Certificate of Designations in connection with the election of directors of the Company, to vote or cause to be voted all Voting Securities Beneficially Owned by them to elect those Persons nominated in accordance with the provisions of Section 3.1.
 
(ii)  In connection with any proposal for a Reorganization Transaction, Stockholder shall vote or cause to be voted, or consent with respect to, all Voting Securities beneficially owned by the Stockholder in the manner recommended by a Majority Vote.
 
(iii)  In connection with other proposals submitted to stockholders of the Company,
 
(A) if the proposal relates to an amendment of the Certificate of Designations, or if the proposal is otherwise not inconsistent with, and does not relate to matters covered by, the provisions in this Agreement (including Articles 2 and 3), the Stockholder shall be free to vote or cause
 
to be voted, or consent with respect to, all Voting Securities beneficially owned by the Stockholder in its discretion; and
 
(B) in all other cases not covered by (i), (ii) or (iii)(A), Stockholder shall vote or cause to be voted, or consent with respect to, all Voting Securities beneficially owned by the Stockholder in the manner recommended by a Majority Vote.
 
Section 3.3  Management of the Business. 

 
-8-
 

 
Following the Closing and except as provided in this Agreement, management of the Company will continue to have full authority to operate the day-to-day business affairs of the Company to the same extent as prior to the Closing. In this regard, the Chief Executive Officer of the Company shall continue to be in charge of all matters within his authority on the date hereof, subject, as required by Delaware law, to the requirement that the business and affairs of the Company shall be managed by or under the direction of the Board of Directors.
 
ARTICLE 4
TRANSFER RESTRICTIONS
 

Section 4.1  Section 4.1 Restrictions on Transfers. During the Standstill Period, Stockholder shall not, and shall cause its Related Persons not to, directly or indirectly (including, without limitation, through the disposition or transfer of control of another Person) Transfer any of the Voting Securities, except as provided in this Section 4.1. Without limiting the generality of the foregoing, any sale of securities held by Stockholder or any of its Related Persons which is currently (or following the passage of time, the occurrence of any event or the giving of notice), directly or indirectly, exchangeable or exercisable for, or convertible into, any Voting Securities shall constitute a Transfer of such Voting Securities. Transfers may be effected by Stockholder during the Standstill Period as follows:
 
(a)  With respect to shares of Common Stock acquired upon conversion of the Preferred Stock, Transfers may be made at any time in compliance with the Registration Rights Agreement.
 
(b)  With respect to shares of Common Stock acquired upon conversion of the Preferred Stock, Transfers may be made pursuant to sales effected in accordance with Rule 144 under the Securities Act (a “Rule 144 Sale”).
 
(c)  Transfers of Common Stock upon conversion thereof, made two years after the date of this Agreement by the Stockholder to Persons who are not Related Persons of the Stockholder or any Affiliates of the Company that, in any 12 month period, do not, in the aggregate, exceed 7.5% of the outstanding Voting Securities; provided that no such Transfers may be made to any Person (including such Person's Affiliates and any Person or entities which are part of any Group which includes such transferee or any of its Affiliates) that, after giving effect to such Transfer, would Beneficially Own Voting Securities representing more than 7.5% of the Total Voting Power.
 
(d)  Transfers of Common Stock or Preferred Stock may be made pursuant to a Reorganization Transaction (on the same terms as are available to the holders of Common Stock and subject to the terms of the Certificate of Designations) which is recommended to the Stockholders of the Company by a Majority Vote that includes the affirmative approval of at least a majority of the Unaffiliated Directors.
 
(e)  Except as provided in subsection (d) above, no Transfers of the Preferred Stock may be made, except that Transfers of the Preferred Stock or Common Stock acquired upon conversion thereof may be made by Stockholder to any Related Person of the Stockholder

 
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that executes an instrument in form and substance satisfactory to the Company in which it makes the representations and warranties set forth in the Purchase Agreement as of the date of the execution of such instrument and agrees to be bound by the terms of this Agreement as if an original signatory to this Agreement (such transferee, a “Related Transferee”), in which case each of the Stockholder and each such Related Transferee shall thereafter be a “Stockholder” and collectively the “Stockholders” for all purposes of this Agreement.
 
ARTICLE 5
MISCELLANEOUS
 
Section 5.1  Notices. All notices, requests, demands and other communications required or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, fax or air courier guaranteeing delivery:
 

If to the Company:
 
WCA WASTE CORPORATION
1 Riverway, Suite 1400
Houston, TX 77056
Attn: Tom J. Fatjo, III
Phone: (713) 292-2400
Fax: (713) 292-2455
   
With a copy to:
ANDREWS KURTH LLP
 
600 Travis
 
Suite 4200
 
Houston, Texas 77002
 
Attn: Jeff C. Dodd, Esq. and
 
John Clutterbuck, Esq.
 
Phone:  (713) 292-2400
 
Fax:  (713) 292-2455

or to such other person or address as the Company shall furnish to Stockholder in writing;
 
 

 
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If to the Stockholder:
 
Ares Corporate Opportunities Fund II, L.P.
C/O Ares Management, Inc.
1999 Avenue of the Stars
Suite 1900
Los Angeles, California 90067
Attn: Jeff Serota
Phone: (310) 201.4100
Fax: (310) 201.4157
   
With a copy to:
 
Cahill Gordon & Reindel LLP
90 Pine Street
New York, NY 10005
Attn: Jonathan Schaffzin, Esq. and
Gary A. Brooks, Esq.
Phone: (212) 701-3380/3186
Fax: (212) 269-5420
 
or to such other person or address as Stockholder shall furnish to the Company in writing. If there shall be more than one Stockholder in accordance with this Agreement, then the notice to the Stockholder named above shall be deemed notice to such Stockholder itself and to such Stockholder as Representative.
 
All such notices, requests, demands and other communications shall be deemed to have been duly given: at the time of delivery by hand, if personally delivered; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed domestically in the United States (and seven (7) Business Days if mailed internationally); when answered back, if telexed; when receipt acknowledged, if telecopied; and on the Business Day for which delivery is guaranteed, if timely delivered to an air courier guaranteeing such delivery.
 
Section 5.2  Legends.
 
(a)  If requested in writing by the Company, a Stockholder shall present or cause to be presented promptly all certificates representing Voting Securities beneficially owned by such Stockholder or any of its Affiliates, for the placement thereon of a legend substantially to the following effect, which legend will remain thereon so long as such legend is required under applicable securities laws:
 
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. SUCH SHARES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH A REGISTRATION THEREUNDER OTHER THAN PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS AND DELIVERY TO WCA WASTE CORPORATION OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THOSE LAWS.”
 
(b)  Each Stockholder shall present or cause to be presented promptly all certificates representing Voting Securities beneficially owned by such Stockholder or any of its Affiliates, for the placement thereon of a legend substantially to the following effect, which legend will remain thereon during the Standstill Period as long as such Voting Securities are beneficially owned by any Stockholder or an Affiliate of any Stockholder:
 
“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A STOCKHOLDERS AGREEMENT, DATED AS OF _________,
 

 
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BETWEEN WCA WASTE CORPORATION AND CERTAIN STOCKHOLDERS OF WCA WASTE CORPORATION NAMED THEREIN AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE THEREWITH. A COPY OF SAID AGREEMENT IS ON FILE AT THE OFFICE OF THE CORPORATE SECRETARY OF WCA WASTE CORPORATION.”
 
(c)  The Company may enter a stop transfer order with the transfer agent or agents of Voting Securities against any Disposition not in compliance with the provisions of this Agreement.
 
Section 5.3  Enforcement. Stockholders, on the one hand, and the Company, on the other hand, acknowledge and agree that irreparable injury to the other party would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable in damages. It is accordingly agreed that, in addition to any other remedies which may be available at law or in equity, each party hereto (the “Moving Party”) shall be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms of this Agreement, and the other parties hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. The parties further agree that no bond shall be required as a condition to the granting of any such relief.
 
Section 5.4  Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the transactions contemplated hereby. This Agreement may be amended only by a written instrument duly executed by the parties or their respective successors or assigns; provided, however, that any amendment or waiver by the Company shall be made only with the prior approval of a majority of the directors of the Company other than Stockholder Designees.
 
Section 5.5  Severability. Whenever possible, each provision or portion of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law, rule or regulation in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision shall have been replaced with a provision which shall, to the maximum extent permissible under such applicable law, rule or regulation, give effect to the intention of the parties as expressed in such invalid, illegal or unenforceable provision.
 
Section 5.6  Headings. Descriptive headings contained in the Agreement are for convenience only and will not control or affect the meaning or construction of any provision of this Agreement.
 
Section 5.7  Counterparts. For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties, and each such executed counterpart will be an original instrument.
 

 
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Section 5.8  No Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
 
Section 5.9  Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Company and Stockholders, and to their respective successors and assigns other than, in the case of Stockholders, transferees that are not Related Transferees, including any successors to the Company or Stockholders or their businesses or assets as the result of any merger, consolidation, reorganization, transfer of assets or otherwise, and any subsequent successor thereto, without the execution or filing of any instrument or the performance of any act; provided that no party may assign this Agreement without the other party’s prior written consent, except by the Stockholders to a Stockholder or a Related Transferee as expressly provided in this Agreement (and that nothing herein restricts the transfer of any of the rights of Stockholders under the Registration Rights Agreement in accordance the terms of the Registration Rights Agreement).
 
Section 5.10  Governing Law. This Agreement will be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without giving effect to the conflict of laws principles thereof.
 
Section 5.11  Further Assurances. From time to time on and after the date of this Agreement, the Company and Stockholders, as the case may be, shall deliver or cause to be delivered to the other party hereto such further documents and instruments and shall do and cause to be done such further acts as the other parties hereto shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure that it is protected in acting hereunder.
 
Section 5.12  Consent to Jurisdiction and Service of Process. Any legal action or proceeding with respect to this Agreement or any matters arising out of or in connection with this Agreement, and any action for enforcement of any judgment in respect thereof shall be brought exclusively in the state or federal courts located in the State of Delaware, and, by execution and delivery of this Agreement, the Company and Stockholders each irrevocably consent to service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized international express carrier or delivery service, to the Company or Stockholders at their respective addresses referred to in this Agreement. The Company and Stockholders each hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement brought in the courts referred to above and hereby further irrevocably waives and agrees, to the extent permitted by applicable law, not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. Nothing in this Agreement shall affect the right of any party hereto to serve process in any other manner permitted by law.
 
 
 
-13-
 
 
Section 5.13  Stockholder Action. If and when there is more than one Stockholder in accordance with the provisions of this Agreement, the Company shall be entitled to rely upon any written notice, designation, or instruction signed by Ares Corporate Opportunity Fund II, L.P. (the “Representative”) as a notice, designation or instruction of all Stockholders and the Company shall not be liable to any Stockholder if the Company acts in accordance with and relies upon such writing. Each of the Stockholders acknowledges that the Representative has full power and authority to act on their behalf.
 

 

 
-14-
 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first referred to above.
 
WCA WASTE CORPORATION
 
By: _____________________________
Name:   __________________________
Title:  ___________________________
 
 
ARES CORPORATE OPPORTUNITIES FUND II, L.P.
 
ACOF MANAGEMENT II, L.P.,
Its General Partner
 
By: ACOF OPERATING MANAGER II, L.P.,
Its General Partner
 
By: ARES MANAGEMENT, INC.,
Its General Partner
 
By: _____________________________
Name:   __________________________
Title:  ___________________________

 
 
 
-15-
 EX-4 4 ex4.htm EXHIBIT 4 Unassociated Document
Exhibit 4
 
REGISTRATION RIGHTS AGREEMENT
 
This Registration Rights Agreement (this “Agreement”) is made and entered into as of July 27, 2006, among WCA Waste Corporation, a Delaware corporation (the “Company”), and Ares Corporate Opportunities Fund II, L.P. (the “Purchaser”).
 
WHEREAS, the parties have agreed to enter into this Agreement in connection with, and as a condition to the Closing under, the Preferred Stock Purchase Agreement, dated as of June 12, 2006, between the Company and the Purchaser (the “Purchase Agreement”) and the related documents entered into in connection therewith (the “Transaction Documents”); and
 
WHEREAS, pursuant to the Purchase Agreement and concurrently with the execution of this Agreement, the Purchaser is acquiring from the Company shares of the Company’s Series A Convertible Preferred Stock, par value $0.01 per share (“Preferred Stock”), that are convertible into shares of the Company’s common stock, par value $0.01 per share (“Common Stock”).
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:
 
1.  Definitions. In addition to the terms defined elsewhere in this Agreement, (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement, and (b) the following terms have the meanings indicated:
 
“Demand Registration Statement” means a Registration Statement filed or to be filed pursuant to a written Purchaser Request pursuant to either Section 2 or Section 3.
 
“Holder” means a holder of Registrable Securities acquired in accordance with the Stockholder’s Agreement; provided that with respect to the inclusion of Registrable Securities in a Registration Statement, “Holders” shall only include those holders of Registrable Securities designated by the Purchaser.
 
“Piggy-Back Registration Statement” means a Registration Statement filed or to be filed pursuant to which the Company has received one or more written requests to participate pursuant to Section 4.
 
“Purchaser Request” means a request from the Purchaser, either on its behalf or on behalf of Holders that in the aggregate possess a majority of the Registrable Securities outstanding as of the date of such request.
 
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rules 430A, 430B or 430C promulgated under the Securities Act of 1933, as amended (the “Securities Act”)), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable
 

 
 
 

Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
 
“Registrable Securities” means any Common Stock into which the Preferred Stock issued pursuant to the Transaction Documents has been converted, together with any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided that such shares will cease to be “Registrable Securities” (i) when they have been sold to or through a broker or dealer or underwriter in a distribution to the public or otherwise on or through the facilities of the national securities exchange, national securities association or automated quotation system on which the Company’s capital stock is listed, (ii) when a registration statement with respect to the sale of such shares has become effective under the Securities Act , and such shares have been disposed of in accordance with such registration statement, or (iii) at such time as the Holder of Registrable Securities is entitled to sell all of its Registrable Securities within three (3) months under Rule 144(k) of the Securities Act without restriction.
 
“Registration Statement” shall mean any registration statement to be filed under the Exchange Act, which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included therein, all amendments and supplements to such Registration Statement, including pre- and post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statement.
 
“Rule 144,” “Rule 415,” “Rule 424” and “Rule 461” means Rule 144, Rule 415, Rule 424 and Rule 461, respectively, promulgated by the Commission pursuant to the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
 
“Shelf Registration Statement” means a Registration Statement filed or to be filed pursuant to a written Purchaser Request pursuant to Section 2.
 
“Stockholder’s Agreement” means the Stockholder’s Agreement of even date herewith by and between the Company and the Purchaser.
 
2.  Shelf Registration. If the Preferred Stock shall have previously been converted into Registrable Securities, then the Company shall, within ten (10) days of the receipt thereof, give written notice of such request to all Holders and, subject to the limitations of Section 2(b) below, shall prepare and file (as expeditiously as practicable, and in any event within thirty (30) days of the receipt of any other such request) with the Commission a “Shelf” Registration Statement covering the resale of all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. Such Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith as the Designated Holders may consent) and shall contain (except if otherwise directed
 

 
2
 

by the Designated Holders) the “Plan of Distribution” attached hereto as Annex A. The Company shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, and in any event within sixty (60) days of the Purchaser Request (or one hundred twenty (120) days in the event the SEC has determined to review the applicable Registration Statement) and shall, subject to notice from the Company under Section 9(f), use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act for the period that such Registration Statement may be kept effective under applicable SEC regulations until the earlier of (i) the date on which all Registrable Securities are eligible for sale under paragraph (k) of Rule 144 without any volume, manner of sale or other restrictions and (ii) when all Registrable Securities covered by such Registration Statement have been sold (the “Effectiveness Period”). The Company shall notify each Holder in writing promptly (and in any event within one Trading Day) after receiving notification from the Commission that a Registration Statement has been declared effective.
 
Notwithstanding the foregoing, the Company shall not be obligated to file a Registration Statement pursuant to this Section 2 (i) during the 90 day period commencing on the effective date of any other registration statement filed by the Company relating to the public offering of its Common Stock or securities convertible into Common Stock (other than on Forms S-4 or S-8 or any successor thereto) or (ii) if the Company shall furnish to the Holders a certificate signed by the chief executive officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, the Board has determined to file a registration statement relating to the public offering of its Common Stock or securities convertible into Common Stock (other than on Forms S-4 or S-8 or any successor thereto) within 30 days of the Purchaser Request, during the period commencing on the date of such notice and ending upon the earliest of (i) effectiveness of such registration statement , (ii) a decision by the Company not to pursue effectiveness of such registration statement or (iii) 90 days after the filing of such registration statement; provided, however, that in the case of clause (ii) the Company may not utilize this right more than once in any twelve (12) month period; provided, further, that, for the avoidance of doubt, this clause (ii) shall be incremental to, and not in lieu of, the Company’s relief from its shelf registration obligation under clause (i) above.
 
Notwithstanding the foregoing, if the Company shall furnish to the Holders a certificate signed by the chief executive officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, maintaining a Registration Statement’s effectiveness would be materially detrimental to the Company and its stockholders for such Registration Statement to remain effective by reason of a material pending or imminently prospective transaction or development and it is therefore essential to suspend such Registration Statement’s effectiveness, the Company shall have the right to suspend such effectiveness for a period of not more than sixty (60) days in aggregate after receipt of the Purchaser Request; provided, however, that the Company may not utilize this right more than twice in any twelve (12) month period.
 
3.  Demand Registration.
 
(a)  If at any time the Company shall receive a written Purchaser Request that the Company file a Registration Statement under the Securities Act, then the Company shall,
 

 
3
 

within ten (10) days of the receipt thereof, give written notice of such request to all Holders and, subject to the limitations of Section 3(b) below, shall file (as expeditiously as practicable, and in any event within thirty (30) days of the receipt of such request) and use its commercially reasonable commercially reasonable efforts to have declared effective, a Registration Statement under the Securities Act with respect to all Registrable Securities which the Holders request to be registered within ten (10) days of the mailing of such notice by the Company in accordance with Section 8(g) below.
 
(b)  If the Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 3 and the Company shall include such information in the written notice referred to in Section 3(a). In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Holders participating in the underwriting and such Holder) to the extent provided herein. A majority in interest of the Holders of Registrable Securities participating in the underwriting, in consultation with the Company, shall select the managing underwriter or underwriters in such underwriting. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 5(l)) enter into an underwriting agreement in customary form with the underwriter or underwriters so selected for such underwriting by a majority in interest of such Holders; provided, however, that no Holder (or any of their assignees) shall be required to make any representations, warranties or indemnities except as they relate to such Holder’s ownership of shares and authority to enter into the underwriting agreement and to such Holder’s intended method of distribution, and the liability of such Holder shall be limited to an amount equal to the net proceeds from the offering received by such Holder. Notwithstanding any other provision of this Section 3, if the underwriter advises a Holder that marketing factors require a limitation of the number of shares to be underwritten, then the Holder shall so advise the Company and the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting shall be allocated as follows: (i) first, among holders of Registrable Securities that have elected to participate in such underwritten offering, in proportion (as nearly as practicable) to the aggregate amount of Registrable Securities held by all such holders, until such holders have included in the underwriting all shares requested by such holders to be included, and (ii) thereafter, among all other holders of Common Stock, if any, that have the right and have elected to participate in such underwritten offering, in proportion (as nearly as practicable) to the amount of shares of Common Stock owned by such holders. Without the consent of a majority in interest of the Holders of Registrable Securities participating in a registration referred to in Section 3(a), no securities other than Registrable Securities shall be covered by such registration if the inclusion of such other securities would result in a reduction of the number of Registrable Securities covered by such registration or included in any underwriting or if, in the opinion of the managing underwriter, the inclusion of such other securities would adversely impact the marketing of such offering.
 
(c)  The Company shall be obligated to effect only two (2) registrations (and only if such registration would include Registrable Securities with an aggregate value of at least ten million dollars ($10,000,000), calculated using the closing price of the Company’s Common
 

 
4
 

Shares on the Trading Market on the date preceding the date of the Purchaser Request) pursuant to Purchaser Requests under this Section 3 (an offering which is not consummated shall not be counted for this purpose).
 
(d)  Notwithstanding the foregoing, the Company shall not be obligated to file a Registration Statement pursuant to this Section 3 (i) during the 90 day period commencing on the effective date of any other registration statement filed by the Company relating to the public offering of its Common Stock or securities convertible into Common Stock (other than on Forms S-4 or S-8 or any successor thereto) or (ii) if the Company shall furnish to the Holders a certificate signed by the chief executive officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, the Board has determined to file a registration statement relating to the public offering of its Common Stock or securities convertible into Common Stock (other than on Forms S-4 or S-8 or any successor thereto) within 30 days of the Purchaser Request, during the period commencing on the date of such notice and ending upon the earliest of (i) effectiveness of such registration statement , (ii) a decision by the Company not to pursue effectiveness of such registration statement or (iii) 90 days after the filing of such registration statement; provided, however, that in the case of clause (ii) the Company may not utilize this right more than once in any twelve (12) month period; provided, further, that, for the avoidance of doubt, this clause (ii) shall be incremental to, and not in lieu of, the Company’s relief from its demand registration obligation under clause (i) above.
 
(e)  Notwithstanding the foregoing, if the Company shall furnish to the Holders a certificate signed by the chief executive officer of the Company stating that, in the good faith judgment of the Board of Directors of the Company, maintaining a Registration Statement’s effectiveness would be materially detrimental to the Company and its stockholders for such Registration Statement to remain effective by reason of a material pending or imminently prospective transaction or development and it is therefore essential to suspend such Registration Statement’s effectiveness, the Company shall have the right to suspend such effectiveness for a period of not more than sixty (60) days in aggregate after receipt of the Purchaser Request; provided, however, that the Company may not utilize this right more than twice in any twelve (12) month period.
 
4.  Piggy-Back Registrations.
 
(a)  If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Purchaser and its affiliates) any of its Common Shares under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration on Form S-8 (or similar or successor form) relating solely to the sale of securities to participants in a Company stock plan or to other compensatory arrangements to the extent includable on Form S-8 (or similar or successor form), or a registration on Form S-4 (or similar or successor form)), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder received by the Company within ten (10) Trading Days after mailing of such notice by the Company in accordance with Section 9(f), the Company shall use its commercially reasonable efforts to cause to be registered under the Securities Act all of the Registrable Securities that each such Holder (the “Electing Holders”) has requested to be registered ; provided that (i) if such registration involves an underwritten offering to the public,
 

 
5
 

all holders of Registrable Securities requesting to be included in the Company's registration must sell their Registrable Securities to the underwriters selected by the Company on the same terms and conditions as apply to the Company or other selling stockholders; and (ii) if, at any time after giving notice of the Company's intention to register any securities pursuant to this Section 4 and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register such securities, the Company shall give written notice to all holders of Registrable Securities and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of holders under Section 3. The Company shall have no obligation under this Section 4 to make any offering of its securities, or to complete an offering of its securities that it proposes to make.
 
(b)  If such registration involves an underwritten offering to the public, if the managing underwriter of the underwritten offering shall inform the Company by letter of the underwriter's opinion that the number of Registrable Securities requested to be included in such registration would, in its opinion, materially adversely affect such offering, including the price at which such securities can be sold, and the Company has so advised the requesting Holders in writing, then the Company shall include in such registration, to the extent of the number that the Company is so advised can be sold in (or during the time of) such offering, (i) first, all securities proposed by the Company to be sold for its own account, then (ii) to the extent that the number of shares of Common Stock proposed to be sold by the Company or the other holders pursuant to Section 4(a) is less than the number of shares of Common Stock that the Company has been advised can be sold in such offering without having the material adverse effect referred to above, such Registrable Securities requested to be included in such registration pursuant to this Section 4 and such other securities covered by registration rights, allocated pro rata among such requesting Holders and the holders of such other rights in proportion, as nearly as practicable, to the respective amounts of such securities requested to be included in such registration. All other stockholders of the Company shall be excluded from the proposed offering before any requesting Holder or holder of other registration rights is required to reduce his, hers or its shares being offered under the registration statement.
 
5.  Demand Registration Procedures. In connection with the Company’s registration obligations hereunder with respect to a Demand Registration Statement, the Company shall:
 
(a)  Not less than three Trading Days prior to the filing of each Demand Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall (i) furnish to the Holders and to one counsel to the Holders (“Purchaser Counsel”) copies of all such documents proposed to be filed, which documents will be subject to the review of such Holders and Purchaser Counsel, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file such Demand Registration Statement or any related Prospectus, amendments or supplements thereto to which the Holders of a majority of the Registrable Securities and Purchaser Counsel shall reasonably object.
 

 
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(b)  (i) Prepare and file with the Commission such amendments, including post-effective amendments, to each Demand Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Demand Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period in the case of a Shelf Registration Statement, and until the end of the related offering in the case of any other Demand Registration Statement, and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible, and in any event within ten (10) Trading Days, to any comments received from the Commission with respect to any Registration Statement or any amendment thereto and as promptly as reasonably possible provide the Holders and Purchaser Counsel true and complete copies of all correspondence from and to the Commission relating to a Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Demand Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the applicable Demand Registration Statement as so amended or in such Prospectus as so supplemented.
 
(c)  Notify the Holders of Registrable Securities to be sold pursuant to a Demand Registration Statement and Purchaser Counsel as promptly as reasonably possible, and (if requested by any such Person) confirm such notice in writing no later than one Trading Day thereafter, of any of the following events: (i) the Commission notifies the Company whether there will be a “review” of any Demand Registration Statement; (ii) the Commission comments in writing on any Demand Registration Statement (in which case the Company shall deliver to each Holder a copy of such comments and of all written responses thereto); (iii) any Demand Registration Statement or any post-effective amendment thereto is declared effective; (iv) the Commission or any other Federal or state governmental authority requests any amendment or supplement to a Demand Registration Statement or Prospectus or requests additional information related thereto; (v) the Commission issues any stop order suspending the effectiveness of any Demand Registration Statement or initiates any Proceedings for that purpose; (vi) the Company receives notice of any suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or threat of any Proceeding for such purpose; or (vii) the financial statements included in any Demand Registration Statement become ineligible for inclusion therein or any statement made in any Demand Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference is untrue in any material respect or any revision to a Demand Registration Statement, related Prospectus or other document is required so that it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
 
(d)  Use its commercially reasonable efforts to avoid the issuance of or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of any Demand Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
 

 
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(e)  Furnish to each Holder and Purchaser Counsel, without charge, at least one conformed copy of each Demand Registration Statement and each amendment thereto, including financial statements and schedules, and all exhibits to the extent requested by such Person (excluding those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission.
 
(f)  Promptly deliver to each Holder and Purchaser Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) related to a Demand Registration Statement and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.
 
(g)  In the time and manner required by each Trading Market, if at all, prepare and file with such Trading Market an additional shares listing application covering all of the Registrable Securities; (ii) take all steps necessary to cause such Registrable Securities to be approved for listing on each Trading Market as soon as reasonably practicable thereafter; (iii) to the extent available to the Company, provide to the Purchaser evidence of such listing; and (iv) maintain the listing of such Registrable Securities on each such Trading Market.
 
(h)  Prior to any public offering of Registrable Securities pursuant to a Demand Registration Statement, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders and Purchaser Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period in the case of a Shelf Registration Statement, and until the offering is completed in the case of any other Demand Registration Statement, and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Demand Registration Statement.
 
(i)  Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Demand Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request.
 
(j)  Upon the occurrence of any event described in Section 5(c)(vii), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to such a Demand Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither such Demand Registration Statement nor its related Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
 

 
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(k)  Cooperate with any due diligence investigation undertaken by the Holders in connection with the sale of Registrable Securities pursuant to a Demand Registration Statement, including without limitation by making available any documents and information.
 
(l)  If Holders of a majority of the Registrable Securities being offered pursuant to a Demand Registration Statement select underwriters for the offering, the Company shall enter into and perform its obligations under an underwriting agreement, in usual and customary form, including, without limitation, by providing customary legal opinions, comfort letters and indemnification and contribution obligations.
 
(m)  In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering.
 
(n)  Comply with all applicable rules and regulations of the Commission.
 
(o)  The Company shall not be required to deliver any document pursuant to any provision of this Section 5 to any Holder that is not selling Registrable Securities under the applicable Demand Registration Statement. The Company shall also not be required to deliver any document pursuant to any provision of this Section 5, other than Section 5(f), to any Holder that proposes to sell Registrable Securities with less than $500,000 in aggregate offering price to the public under the Demand Registration Statement (based on the last sale price per Common Share on the Trading Market on the Trading Day preceding the date of the Purchaser Request).
 
6.  Piggy-Back Registration Procedures. In connection with the Company’s registration obligations hereunder with respect to a Piggy-Back Registration Statement, the Company shall:
 
(a)  Not less than three Trading Days prior to the filing of each Piggy-Back Registration Statement or any related Prospectus or any amendment or supplement thereto (i) furnish to the Electing Holders and Purchaser Counsel copies of all such documents proposed to be filed, and (ii) cause its officers and directors, counsel and independent certified public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act.
 
(b)  (i) Cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (ii) as promptly as reasonably possible provide the Electing Holders and Purchaser Counsel true and complete copies of all correspondence from and to the Commission relating to a Piggy-Back Registration Statement; and (iii) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Piggy-Back Registration Statement during the offering.
 
(c)  Notify the Electing Holders and Purchaser Counsel as promptly as reasonably possible, and (if requested by any such Person) confirm such notice in writing no later than one Trading Day thereafter, of any of the following events: (i) the Commission notifies the Company whether there will be a “review” of any Piggy-Back Registration Statement; (ii) the
 

 
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Commission comments in writing on any Piggy-Back Registration Statement (in which case the Company shall deliver to each Electing Holder a copy of such comments and of all written responses thereto); (iii) any Piggy-Back Registration Statement or any post-effective amendment is declared effective; (iv) the Commission or any other Federal or state governmental authority requests any amendment or supplement to a Piggy-Back Registration Statement or related Prospectus or requests additional information related thereto; (v) the Commission issues any stop order suspending the effectiveness of any Piggy-Back Registration Statement or initiates any Proceedings for that purpose; (vi) the Company receives notice of any suspension of the qualification or exemption from qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or threat of any Proceeding for such purpose; or (vii) the financial statements included in any Piggy-Back Registration Statement become ineligible for inclusion therein or any statement made in any Piggy-Back Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference is untrue in any material respect or any revision to a Piggy-Back Registration Statement, related Prospectus or other document is required so that it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
 
(d)  Furnish to each Electing Holder and Purchaser Counsel, without charge, at least one conformed copy of each Piggy-Back Registration Statement and each amendment thereto, including financial statements and schedules, and all exhibits to the extent requested by such Person (excluding those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission.
 
(e)  Promptly deliver to each Electing Holder and Purchaser Counsel, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Electing Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.
 
(f)  Cooperate with the Electing Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Piggy-Back Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Electing Holders may request.
 
(g)  Comply with all applicable rules and regulations of the Commission.
 
(h)  The Company shall not be required to deliver any document pursuant to any provision of this Section 6, other than Section 6(e), to any Electing Holder that proposes to sell Registrable Securities with less than $500,000 in aggregate offering price to the public under the Piggy-Back Registration Statement (based on the last sale price per Common Share on the Trading Market on the Trading Day preceding the date of the written request sent by such Electing Holder under Section 4).
 

 
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(i)  Upon the occurrence of any event described in Section 6(c)(vii), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to such a Piggy-Back Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither such Piggy-Back Registration Statement nor its related Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
 
7.  Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include (a) all registration and filing fees (including, without limitation, fees and expenses (i) with respect to filings required to be made with any Trading Market, and (ii) in compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders )), (b) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses requested by the Holders), (c) messenger, telephone and delivery expenses incurred by the Company, (d) fees and disbursements of counsel for the Company, and (e) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. The fees and expenses referred to in the first sentence shall exclude (x) all underwriting discounts, selling commissions and stock transfer or documentary stamp taxes, if any, applicable to any Registrable Securities registered and sold by such holder, (y) all fees and disbursements of any counsel for such holder, including Purchaser Counsel and (z) all expenses incurred by the Purchaser or Holders without first receiving the consent of the Company.
 
8.  Indemnification
 
(a)  Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, partners, members, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all Losses, as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such
 

 
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Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 5(c)(v)-(vii), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 9(f). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement.
 
(b)  Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses (as determined by a court of competent jurisdiction in a final judgment not subject to appeal or review) arising solely out of any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.
 
(c)  Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.
 
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a
 

 
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conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
 
All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).
 
(d)  Contribution. If a claim for indemnification under Section 7(a) or 7(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 8(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.
 
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 8(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged
 

 
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omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
 
(e)  Other. To the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the indemnification provisions of this Agreement, the provisions of the underwriting agreement will control.
 
The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
 
9.  Miscellaneous
 
(a)  Remedies. In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.
 
(b)  Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least two-thirds of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.
 
(c)  No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except as and to the extent specified in the applicable schedule to the Purchase Agreement, neither the Company nor any Subsidiary has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.
 
(d)  No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Demand Registration Statement other than the Registrable Securities unless
 

 
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required to do so by currently existing agreements, and the Company shall not after the date hereof enter into any agreement providing any such right to any of its security holders.
 
(e)  Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.
 
(f)  Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 5(c)(v), 5(c)(vi), or 5(c)(vii), or Sections 6(c)(v), 6(c)(vi), or 6(c)(vii), as applicable, which notice may be given by the Company regardless of whether a registration has been effected pursuant to Section 2, 3, or 4, such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until such Holder’s receipt of the copies of any supplemented Prospectus and/or amended Registration Statement (if required pursuant to Section 5(j) or 6(i)), or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.
 
(g)  Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 4:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Agreement on a day that is not a Trading Day or later than 4:30 p.m. (New York City time) and earlier than 11:59 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth in the Purchase Agreement.
 
(h)  Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. A Holder that is a Stockholder (as defined in the Stockholder’s Agreement) may assign its rights and obligations hereunder to a Related Transferee (as defined in the Stockholder’s Agreement) in the manner and to the extent permitted under the Transaction Documents.
 
(i)  Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.
 

 
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(J)  GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, STOCKHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE AND U.S. FEDERAL COURTS SITTING IN THE STATE OF DELAWARE. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND U.S. FEDERAL COURTS SITTING IN THE STATE OF DELAWARE FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THIS AGREEMENT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. IF EITHER PARTY SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS OF THIS AGREEMENT , THEN THE PREVAILING PARTY IN SUCH ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE ATTORNEYS FEES AND OTHER REASONABLE COSTS AND EXPENSES INCURRED WITH THE INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR PROCEEDING.
 
(k)  Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.
 
(l)  Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to
 

 
16
 

achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
 
(m)  Market Standoff. Each of the Purchaser and each other holder of Registrable Securities shall, if requested by the managing underwriter or underwriters in an underwritten offering, agree not to effect any public sale or distribution of securities of the Company of the same class as the securities included in a Registration Statement relating to such offering, including a sale pursuant to Rule 144 under the Securities Act, except as part of such underwritten registration, during the 15-day period prior to, and during a period ("Lock-Up Period") ending on the earlier of (a) such time as the Company and the managing underwriter shall agree and (b) 90 days after the effective date of, each underwritten offering made pursuant to such Registration Statement.
 
(n)  Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
 

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SIGNATURE PAGES TO FOLLOW]

 
17
 

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
 

 
WCA WASTE CORPORATION


By:  _______________________________________________
Name:
Title:

 
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SIGNATURE PAGES OF PURCHASERS TO FOLLOW]

 
18
 


ARES CORPORATE OPPORTUNITIES FUND II, L.P.

By: ACOF MANAGEMENT II, L.P.,
Its General Partner

By: ACOF OPERATING MANAGER II, L.P.,
Its General Partner

By: ARES MANAGEMENT, INC.,
Its General Partner

By: ______________________________
Name:
Title:


Address for Notice:

Ares Corporate Opportunities Fund II, L.P.
C/O Ares Management, Inc.
1999 Avenue of the Stars
Suite 1900
Los Angeles, California 90067
Phone: (310) 201.4100
Fax: (310) 201.4157
Attention: Jeffrey Serota

With a copy to:

Cahill Gordon & Reindel llp
80 Pine Street
New York, NY 10005
Facsimile No.: (212) 269-5420
Attn: Jonathan A. Schaffzin, Esq. and Gary A. Brooks, Esq.



 
19
 


Annex A
 

 
Plan of Distribution
 
The selling stockholders may, from time to time, sell any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares:
 
·  
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
 
·  
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
 
·  
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
 
·  
an exchange distribution in accordance with the rules of the applicable exchange;
 
·  
privately negotiated transactions;
 
·  
short sales;
 
·  
broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
 
·  
a combination of any such methods of sale; and
 
·  
any other method permitted pursuant to applicable law.
 
The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.
 
The selling stockholders may also engage in short sales against the box, puts and calls and other transactions in our securities or derivatives of our securities and may sell or deliver shares in connection with these trades.
 
Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. Any profits on the resale of shares of common stock by a broker-dealer acting as principal might
 

 
 
 

be deemed to be underwriting discounts or commissions under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, attributable to the sale of shares will be borne by a selling stockholder. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares if liabilities are imposed on that person under the Securities Act.
 
The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
 
The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus and may sell the shares of common stock from time to time under this prospectus after we have filed an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.
 
The selling stockholders and any broker-dealers or agents that are involved in selling the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
 
We are required to pay all fees and expenses incident to the registration of the shares of common stock, including the fees and disbursements of counsel to the selling stockholders. We have agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
 
The selling stockholders have advised us that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their shares of common stock, nor is there an underwriter or coordinating broker acting in connection with a proposed sale of shares of common stock by any selling stockholder. If we are notified by any selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares of common stock, if required, we will file a supplement to this prospectus. If the selling stockholders use this prospectus for any sale of the shares of common stock, they will be subject to the prospectus delivery requirements of the Securities Act.
 
The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934 may apply to sales of our common stock and activities of the selling stockholders.
 


 EX-5 5 ex5.htm EXHIBIT 5 Unassociated Document
Exhibit 5
 
Joint Filing Agreement
 
In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned each hereby agrees to the joint filing on behalf of each of them of a Statement on Schedule 13D, including amendments thereto (the “Schedule 13D”) with respect to shares of common stock, par value $0.01 per share, of WCA Waste Corporation, a Delaware corporation, and further agrees that this Joint Filing Agreement be included as an exhibit to the Schedule 13D provided that, as contemplated by Section 13d-1(k)(1)(ii), no person shall be responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate. This Joint Filing Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument.


ARES CORPORATE OPPORTUNITIES FUND II, L.P.
 
By: ACOF MANAGEMENT II, L.P.,
      Its General Partner
 
      By: ACOF OPERATING MANAGER II, L.P.,
            Its General Partner
 
      By: ARES MANAGEMENT, INC.,
            Its General Partner

 
By: /s/ Antony P. Ressler
Name: Antony P. Ressler
 

ACOF MANAGEMENT II, L.P.
 
By: ACOF OPERATING MANAGER II, L.P.,
      Its General Partner
 
      By: ARES MANAGEMENT, INC.,
   
Its General Partner
 
By: /s/ Antony P. Ressler
Name: Antony P. Ressler

ACOF OPERATING MANAGER II, L.P.
 
By: ARES MANAGEMENT, INC.,
      Its General Partner
 
By: /s/ Antony P. Ressler
     Name: Antony P. Ressler
 

ARES MANAGEMENT, INC.
 
By: /s/ Antony P. Ressler
Name: Antony P. Ressler

ARES PARTNERS MANAGEMENT COMPANY LLC
 
By: /s/ Antony P. Ressler
Name: Antony P. Ressler
 


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