EXHIBIT 10.1
NOTE AGREEMENT
THIS AGREEMENT is made as of the 29th day of February, 1996, by and
among EMCON, a California corporation ("EMCON"), Organic Waste Technologies,
Inc., a Delaware corporation, ("OWT"), and the undersigned holders of common
stock ("Common Shares") of OWT and holders of options to purchase the common
stock of OWT ("Options") listed on the signature pages hereto (collectively, the
holders thereof being the "Management Stakeholders").
WHEREAS, the Management Stakeholders are parties to that certain Stock
Purchase Agreement dated January 30, 1996, among the Management Stakeholders,
EMCON, OWT and certain other holders of common and preferred stock of OWT and of
options to purchase common stock of OWT (the "Stock Purchase Agreement");
WHEREAS, pursuant to the Stock Purchase Agreement each Management
Stakeholder has agreed to exchange the Common Shares and/or Options held by him
at the closing of the sale and purchase contemplated by the Stock Purchase
Agreement (the "Closing") for a convertible note made by OWT (collectively, the
"Notes");
WHEREAS, in connection therewith, the parties hereto desire to enter
into additional agreements regarding the Notes;
WHEREAS, EMCON desires to lend each Management Stakeholder an amount
equal to the additional federal, state and local income taxes (the "Tax
Liability") required to be paid by him as a result of the exchange of the
Options and Common Shares owned by him for a Note (the "Loan Amount").
NOW, THEREFORE, in consideration of the foregoing and the agreements
set forth below, the parties agree with each other as follows:
1. Loan. Upon the date on which amounts are withheld by OWT or EMCON
for each Management Stakeholder's Tax Liability or paid directly by such
Management Stakeholder to the appropriate taxing authority, EMCON shall pay to
such Management Stakeholder an amount equal to such withholding or Tax
Liability, by cashier's check or wire transfer, and such Management Stakeholder
shall execute a note in the principal amount of the Loan Amount, in the form of
Exhibit A hereto (the "Loan Note").
2. (a) Exchange Right. In the event that the Note has not been
converted into OWT Common Stock in accordance with its terms prior to the fifth
anniversary of the date hereof, each Management Stakeholder shall have the
right, for a period of ninety (90) days prior to the fifth anniversary of the
date hereof, to exchange the Note payable to him for fully paid and
nonassessable shares of Common Stock, no par value, of EMCON as such stock
exists on the date of issuance of the Note payable to him, or any shares of
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capital stock of EMCON into which such stock shall hereafter be changed or
reclassified (the "EMCON Common Stock") at the exchange price determined as
provided herein (the "EMCON Exchange Price"). Upon the surrender of the Note,
accompanied by a Notice of Exchange of Convertible Note in the form attached
hereto as Exhibit B, properly completed and duly executed by the Management
Stakeholder (an "Exchange Notice"), EMCON shall issue and deliver to or upon the
order of the Management Stakeholder that number of shares of EMCON Common Stock
for which the Principal (as defined in the Note) shall be exchanged, as
determined in accordance herewith. Upon such exchange, any accrued but unpaid
interest on the Notes shall be immediately due and payable.
The number of shares of EMCON Common Stock to be issued upon exchange
of each Note shall be determined by dividing the Principal thereof by the EMCON
Exchange Price in effect on the date the Exchange Notice is delivered to EMCON
by the Management Stakeholder.
(b) Exchange Price. The EMCON Exchange Price shall
initially be $6.50.
(i) Subdivisions. In case EMCON shall at any
time subdivide the outstanding shares of EMCON Common Stock, the EMCON Exchange
Price in effect immediately prior to such subdivision shall be proportionately
decreased, and in case the Company shall at any time combine the outstanding
shares of EMCON Common Stock, the Exchange Price in effect immediately prior to
such combination shall be proportionately increased, effective at the close of
business on the date of such subdivision or combination, as the case may be.
(ii) Stock Dividends. In case EMCON shall at
any time pay a dividend with respect to EMCON Common Stock payable in EMCON
Common Stock, then the EMCON Exchange Price in effect immediately prior to the
record date for distribution of such dividend shall be adjusted to that price
determined by multiplying the EMCON Exchange Price in effect immediately prior
to such record date by a fraction (i) the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to such dividend
and (ii) the denominator of which shall be the total number of shares of EMCON
Common Stock outstanding immediately after such dividend.
(iii) Reclassification or Merger. In case of any
reclassification, change or conversion of the EMCON Common Stock (other than as
a result of a subdivision or combination described above and other than upon any
Acceleration Event, as defined below), each Management Stakeholder shall have
the right to receive, upon exchange of the Note owned by him the kind and amount
of shares of stock, other securities, money and property receivable upon such
reclassification, change or conversion by a holder of the number of shares of
EMCON Common Stock into which his Note could then be exchanged. The provisions
of this subparagraph (iii) shall similarly apply to successive
reclassifications, changes, and conversions.
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(c) Authorized Shares. EMCON covenants that during the period
the exchange right set forth in this Section 2 exists, EMCON will reserve from
the authorized and unissued EMCON Common Stock a sufficient number of shares to
provide for the issuance of EMCON Common Stock upon the full exchange of the
Notes. EMCON represents that upon issuance, such shares will be duly and validly
issued, fully paid and non-assessable.
(d) Method of Exchange. Except as otherwise provided in the
Note or agreed by the Management Stakeholder, the Note held by him may be
exchanged by the Management Stakeholder in whole by (i) submitting to EMCON an
Exchange Notice and (ii) surrendering the Note held by him at the principal
office of EMCON.
(e) Restrictions Concerning the Shares. The shares of EMCON
Common Stock to be held by Management Stakeholders pursuant to the exercise of
the exchange rights set forth in Section 2 may not be sold or transferred unless
either (i) such shares first shall have been registered under the Securities Act
of 1933 (the "Act") and applicable state securities laws or (ii) EMCON shall
have been furnished with an opinion of legal counsel to the effect that such
sale or transfer is exempt from the registration requirements of the Act and all
applicable state securities laws. Each certificate for shares of EMCON Common
Stock to be held by the Management Stakeholders that have not been so registered
and that have not been sold pursuant to an exemption that permits removal of the
legend, shall bear a legend substantially in the following form, as appropriate:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN OPINION OF COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Upon the request a Management Stakeholder, EMCON shall remove the foregoing
legend from the certificate representing the EMCON Common Stock held by such
Management Stakeholder upon exercise of the exchange rights pursuant to Section
2 or issue to such Management Stakeholder a new certificate therefor free of any
transfer legend, if, with such request, EMCON shall have received either (i) an
opinion of counsel to the effect that any such legend may be removed from such
certificate, or (ii) if the present paragraph (k) of Rule 144 or a substantially
similar successor rule remains in force and effect, satisfactory representations
from the Management Stakeholder that such Management Stakeholder is not then,
and has not been during the preceding three (3) months, an affiliate of EMCON,
and that a period of at least three (3) years has elapsed since the later of the
date the securities were acquired (as determined under Rule 144) from EMCON or
an affiliate of EMCON.
(f) Acceleration of Exchange Rights. Notwithstanding anything
to the contrary herein, in the event that any of the following events set forth
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in paragraphs (i) through (v) of this Section 2(f) (each, an "Acceleration
Event") shall occur, then the exchange rights set forth in Section 2(a) shall,
at the option of each Management Stakeholder, be immediately exercisable:
(i) by any Management Stakeholder upon a
consolidation or merger of EMCON with or into any other corporation or
corporations (other than a wholly-owned subsidiary of EMCON and other than a
merger in which EMCON is the surviving corporation), or the sale, transfer or
other disposition of all or substantially all of the assets of EMCON;
(ii) by any Management Stakeholder after the
Closing, upon a change in ownership of Fifty Percent (50%) or more, in a single
transaction, of the stock of OWT, other than to an affiliate or affiliates of
EMCON which does not materially alter EMCON's direct or indirect ownership of
OWT;
(iii) by any Management Stakeholder, upon a
change in ownership of Fifty Percent (50%) or more, in a series of two (2) or
more transactions occurring after the Closing, of the outstanding stock of OWT,
other than to an affiliate or affiliates of OWT and a substantial diminution in
the responsibilities of ▇▇▇▇ ▇. ▇▇▇▇▇▇ with respect to OWT in his capacity as an
employee of EMCON;
(iv) (A) upon a change in ownership of Thirty-
Five Percent (35%) or more of the stock of EMCON to a single buyer or an
affiliated group of buyers, resulting in a change in the majority of the board
of directors of EMCON from the board of directors as it existed immediately
prior to such change in ownership, or (B) upon a change in ownership of Fifty
Percent (50%) or more, in a single transaction, of the stock of EMCON;
(v) by any Management Stakeholder, upon the
liquidation, dissolution or winding up of OWT or the consolidation or merger of
OWT with and into another corporation (other than a merger in which OWT is the
surviving corporation);
(vi) by any Management Stakeholder, upon the
occurrence of any transaction, without the consent of ▇▇▇▇ ▇. ▇▇▇▇▇▇, in which
Twenty Percent (20%) or more of the outstanding common stock of OWT becomes
owned by persons other than EMCON or an affiliate or affiliates of EMCON;
(vii) by any Management Stakeholder upon his death
or the termination of his employment by OWT other than a Termination for Cause,
the "Termination for Cause" is intended to embrace intentionally or grossly
negligent conduct on the part of the Maker which is materially detrimental to
the operations and/or reputation of OWT or the Holder. By way of illustration
such actions would include (but would not be limited to) a material breach of
Maker's obligations under any employment agreement between the Maker and OWT
and/or the Holder, and/or conviction of a crime (other than minor infractions
such as parking or similar traffic violations), moral turpitude and revocation
by the applicable licensing authority of professional licenses (if any) material
to the Maker's ability to perform the Maker's employment obligations; or
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(viii) by any Management Stakeholder upon a
fundamental change in EMCON's current strategy of focussing a material amount of
EMCON's resources on services relating to the design, construction, ownership,
operation and maintenance of infrastructure.
3. Request for Registration.
(a) Upon the receipt by EMCON of Exchange Notices from
Management Stakeholders holding Notes, the aggregate Principal of which may be
exchanged for EMCON Common Stock with an aggregate value, based on the closing
price of the EMCON Common Stock on the principal market on which such stock is
traded on the date of such Exchange Notices, $1,000,000 or more, EMCON will:
(i) promptly file a registration statement with
the Securities and Exchange Commission (the "Commission") and effect all such
registrations, qualifications and compliances (including, without limitation,
the execution of an undertaking to file post-effective amendments, appropriate
qualifications under the applicable blue sky or other state securities laws and
appropriate compliance with exemptive regulations issued under the Securities
Act of 1933, as amended (the "Securities Act"), and any other governmental
requirements or regulations) as would permit or facilitate the sale and
distribution of all of the EMCON Common Stock issuable upon the full exchange of
the Notes by the Management Stakeholders (the "Management Shares"); provided,
however, that EMCON shall not be obligated to effect such registration,
qualification or compliance pursuant to this Section 3(a)(i)(A) in any
particular jurisdiction in which EMCON would be required to execute a general
consent to service of process unless EMCON is already subject to service in such
jurisdiction and except as required by the Securities Act and (B) after EMCON
has already effected one such registration, qualification or compliance;
(ii) promptly give notice to all Management
Stakeholders of the expected registration of the Management Shares;
(iii) use its best efforts to cause such
registration to be declared effective by the Commission;
(iv) keep such registration statement effective
for a period of one year or until the Management Stakeholders have completed the
distribution described in the registration statement, whichever first occurs;
(v) prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities offered by such registration statement;
(vi) furnish such number of prospectuses and
other documents incident thereto, including any amendment of or supplement to
the prospectus, as a Management Stakeholder from time to time may reasonably
request;
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(vii) notify each Management Stakeholder selling
EMCON Common Stock covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or incomplete in the
light of the circumstances then existing, and at the request of any such
Management Stakeholder, prepare and furnish to such Management Stakeholder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include 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 not misleading or incomplete
in the light of the circumstances then existing;
(viii) cause all such EMCON Common Stock
registered pursuant hereunder to be listed on each securities exchange, if any,
on which similar securities issued by EMCON are then listed;
(ix) otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission; and
(x) in connection with any underwritten
offering pursuant to a registration statement filed pursuant to this Section,
enter into an underwriting agreement reasonably necessary to effect the offer
and sale of EMCON Common Stock, provided such underwriting agreement contains
customary underwriting provisions and provided further that if the underwriter
so requests the underwriting agreement will contain customary contribution
provisions.
(b) During the period that EMCON's registration statement is
effective pursuant to this Section 3, the Management Stakeholders shall comply
with all applicable EMCON policies regarding trading of securities by insiders
and members of management, including the observance of "window period" and other
restrictions.
4. EMCON Registration.
(a) If, at any time after the registration statement described
in Section 3 is no longer effective, EMCON shall determine to register any of
its securities either for its own account or the account of a security holder or
holders, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a Rule 145 transaction, or a registration on
any registration form that does not permit secondary sales, EMCON will:
(i) promptly give to each Management Stakeholder
written notice thereof;
(ii) use its best efforts to include in such
registration (and any related qualification under blue sky laws or other
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compliance), except as set forth in Section 4(b) below, and in any underwriting
involved therein, all the Management Shares specified in a written request or
requests, made by any Management Stakeholder and received by EMCON within twenty
(20) days after the written notice from EMCON described in clause (i) above is
mailed or delivered by EMCON. Such written request may specify all or a part of
a Management Stakeholder's Management Shares;
(iii) furnish such number of prospectuses and
other documents incident thereto, including any amendment of or supplement to
the prospectus, as a Management Stakeholder from time to time may reasonably
request;
(iv) cause all such EMCON Common Stock
registered pursuant hereunder to be listed on each securities exchange on which
similar securities issued by EMCON are then listed; and
(v) otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission.
(b) If the registration of which EMCON gives notice is for a
registered public offering involving an underwriting, EMCON shall so advise the
Management Stakeholders as a part of the written notice given pursuant to
Section 4(a)(i). In such event, the right of any Management Stakeholder to
registration pursuant to this Section 4 shall be conditioned upon such
Management Stakeholder's participation in such underwriting and the inclusion of
such Management Stakeholder's Management Shares in the underwriting to the
extent provided herein. All Management Stakeholders proposing to distribute
their securities through such underwriting shall (together with EMCON and the
other holders of securities of EMCON with registration rights to participate
therein distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by EMCON.
(c) Notwithstanding any other provision of this Section 4, if
the representative of the underwriters advises EMCON in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
representative may (subject to the limitations set forth below) exclude all the
Management Stakeholders from, or limit the number of the Management Shares to be
included in, the registration and underwriting. EMCON shall so advise the
Management Stakeholders and all other holders of EMCON securities (the "Other
Shares") requesting registration and the number of Management Shares and Other
Shares that may be included shall be allocated among the Management Stakeholders
and other selling stockholders requesting inclusion of shares pro rata on the
basis of the number of Management Shares and Other Shares that are requested to
be registered.
(d) EMCON's obligations pursuant to this Section 4 shall
expire as to each Management Stakeholder at such time as such Management
Stakeholder may sell all shares of EMCON Common Stock issued upon exchange for
such Management Stakeholder's Note during any successive two quarter period
pursuant to Rule 144 under the Securities Act.
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5. Expenses of Registration. All Registration Expenses (as hereinafter
defined) incurred in connection with any registration, qualification or
compliance pursuant to Section 3 and 4 hereof shall be borne by EMCON. All
Selling Expenses (as hereinafter defined) relating to securities so registered
shall be borne by the Management Stakeholders who own such Management Shares pro
rata on the basis of the number of Management Shares so registered on their
behalf. For purposes of this Section 5, Registration Expenses shall mean all
expenses incurred in effecting any registration pursuant to this Agreement,
including, without limitation, all registration, qualification, and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for EMCON,
blue sky fees and expenses, and expenses of any regular or special audits
incident to or required by any such registration, but shall not include Selling
Expenses and fees and disbursements of counsel for the Management Stakeholders.
For purposes of this Section 5. Selling Expenses shall mean all underwriting
discounts and selling commissions applicable to the sale of the Management
Shares and fees and disbursements of counsel for any Management Stakeholder
(other than the fees and disbursements of counsel included in Registration
Expenses).
6. Indemnification.
(a) EMCON will indemnify each Management Stakeholder with
respect to which registration, qualification, or compliance has been effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls within the meaning of Section 15 of the Securities Act, any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
EMCON of the Securities Act or any rule or regulation thereunder applicable to
EMCON and relating to action or inaction required of EMCON in connection with
any such registration, qualification, or compliance, and will reimburse each
such Management Stakeholder, each such underwriter, and each person who controls
any such underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating and defending or settling any such claim, loss,
damage, liability or action, provided that EMCON will not be liable in any such
case to the extent that any such claim, loss, damage, liability, or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to EMCON by such Management Stakeholder or underwriter and
stated to be specifically for use therein. It is agreed that the indemnity
agreement contained in this Section 6 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of EMCON (which consent has not been
unreasonably withheld).
(b) Each Management Stakeholder will, if Management Shares
held by him or her are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify EMCON, each of its
directors, officers, partners, legal counsel, and accountants and each
underwriter, if any, of EMCON's securities covered by such a registration
statement, each person who controls EMCON or such underwriter within the meaning
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of Section 15 of the Securities Act, and each other Management Stakeholder
against all claims, losses, damages any liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular, or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
EMCON and such Management Stakeholders, directors, officers, partners, legal
counsel, and accountants, persons, underwriters or control persons for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability, or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular, or other document in reliance upon and
in conformity with written information furnished to EMCON by such Management
Stakeholder and stated to be specifically for use therein provided, however,
that the obligations of such Management Stakeholder hereunder shall not apply to
amounts paid in settlement of any such claims, losses, damages, or liabilities
(or actions in respect thereof) if such settlement is effected without the
consent of such Management Stakeholder (which consent shall not be unreasonably
withheld).
(c) Each party entitled to indemnification under this Section
6 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability with respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the Indemnification provided for in this Section 6 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expenses as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
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Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provision in the underwriting
agreement shall control.
7. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of
restricted securities to the public without registration, EMCON agrees to use
its best efforts to:
(a) Make and keep public information regarding EMCON
available as those terms are understood and defined in Rule 144 under the
Securities Act;
(b) File with the Commission in a timely manner all reports
and other documents required of EMCON under the Securities Act and the
Securities Exchange Act of 1934, as amended; and
(c) So long as a Management Stakeholder owns any restricted
securities, furnish to the Management Stakeholder forthwith upon written request
a written statement by EMCON as to its compliance with the reporting
requirements of Rule 144; and of the Securities Act and the Exchange Act.
8. OWT'S Registration Rights Obligations. In the event that OWT shall
be required to register shares of its stock pursuant to Section 2.3 of the
Notes, then the provisions of Sections 4 to 7 hereof shall apply with respect to
such registration.
9. Miscellaneous.
(a) Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed within three (3) business days by registered
mail, return receipt requested, (c) when received by the addressee, if sent by a
nationally recognized overnight delivery service (receipt requested), or (d)
three (3) business days after being sent by registered or certified mail, return
receipt requested, in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Management Stakeholders: To each Management Stakeholder at the
address set forth on Schedule 1
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EMCON: EMCON
▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
(b) Entire Agreement. This Agreement constitutes the
entire agreement of the parties with respect to the matters contemplated herein.
This Agreement supersedes any and all prior understandings as to the subject
matter of this Agreement.
(c) Amendments, Waivers and Consents. Any provision in this
Agreement to the contrary notwithstanding, changes in or additions to this
Agreement may be made, and compliance with any covenant or provision herein set
forth may be omitted or waived, if agreed to by EMCON and Management
Stakeholders holding Notes representing in aggregate in excess of Fifty Percent
(50%) of the aggregate amount due under all of the Notes.
(d) Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the personal representatives and
successors of the respective parties hereto, except that no Management
Stakeholder shall have the right to assign its rights hereunder or any interest
herein without obtaining the prior written consent of EMCON. Notwithstanding the
foregoing, each Management Stakeholder may assign his rights hereunder
(i) to his spouse, parents, grandparents,
children or grandchildren or other family members (including relatives by
marriage), or to a custodian, trustee or other fiduciary for his account or the
account of a member of his family, or
(ii) by way of bequest or inheritance upon death.
(e) General. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. In this Agreement the singular includes the
plural, the plural the singular.
(f) Severability. If any provision of this Agreement shall be
found by any court of competent jurisdiction to be invalid or unenforceable, the
parties hereby waive such provision to the extent that it is found to be invalid
or unenforceable. Such provision shall, to the maximum extent allowable by law,
be modified by such court so that it becomes enforceable, and, as modified,
shall be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
(g) Counterparts. This Agreement may be execute in
counterparts, all of which together shall constitute one and the same
instrument.
(h) Governing Law. This Agreement shall be governed by
the internal laws of the State of Delaware without regard to the principles of
conflict of laws.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
EMCON
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Title: President & Chief Executive Officer
ORGANIC WASTE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------
Title: President
MANAGEMENT STAKEHOLDERS
/s/
----------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/
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88