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Exhibit 10.154
[Letterhead of Xxxxxx & Xxxxxx, Washington D.C.]
February 25, 1997
VIA FACSIMILE - (000) 000-0000
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Xxxxx X. Xxxxxxxxx, Esq.
XXXXXXXX, LOOP & XXXXXXXX, LLP
0000 Xxxxxxx
Xxxxxx, Xxxx 00000-1573
Re: Xxxxxxx v. N-Viro Settlement
Dear Xxxxx:
As we discussed, this letter sets out the mutually-agreed terms for
restructuring the Xxxxxxx v. N-Viro Settlement Agreement as amended (the
"Settlement Agreement"). We understand that you will prepare a definitive
agreement according to the terms below, but also including the stock
registration details.
1. N-Viro will pay the sum of $60,000 to Xx. Xxxxxxx no later than
February 25, 1997(1).
2. N-Viro will pay the sum of $100,000 to Xx. Xxxxxxx no later than March
10, 1997; and N-Viro will pay the additional sum of $40,000 to Xx.
Xxxxxxx no later than March 25, 1997.
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(1) This payment, as well as any other payment under this restructuring,
is to be wired to Xxxxxx & Xxxxxx'x escrow account as specified in the
Settlement Agreement.
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Xxxxx X. Xxxxxxxxx, Esq.
February 25, 1997
Page 2 of 4
3. N-Viro will transfer 100,000 shares of its Common Stock into an escrow
account no later than March 10,1997 (the "Escrowed Stock"), to be used as
hereinafter described.
4. N-Viro will issue 150,000 shares of its Common Stock (the "Issued
Stock") jointly to Xxxxx Xxxxxxx and Xxxxxx & Xxxxxx no later than February
25, 1997.
5. Subject to the Issued Stock and Escrowed Stock being registered for
resale under the Securities Act of 1933, as amended, and a registration
statement being in effect at the time of resale, each month beginning May,
1997 and continuing through July, 1997, Xx. Xxxxxxx; shall be permitted to
sell, at his discretion, as many shares of Issued Stock as are necessary to
generate $60,000 in net proceeds (i.e., exclusive of brokerage fees,
commissions, or other transaction costs), but in no event more than 30,000
shares during any one month period. In the event that the net proceeds from
any monthly sales are less than $60,000, or in the event that Xx. Xxxxxxx
is unable to sell shares of the Issued Stock for any reason, the short-fall
shall be paid, at N-Viro's option, from either a cash payment by N-Viro
and/or from resale of any portion of the Escrowed Stock. Any such
short-fall shall be paid to Xx. Xxxxxxx within three business days of Xx.
Xxxxxxx providing notice to N-Viro of the amount of net proceeds generated
from any monthly sales.
6. If and when N-Viro receives a settlement from the City of Honolulu, the
first $200,000 of such settlement (the "Escrowed Funds") will be placed in
the escrow account. From and after that date, in the event that the net
proceeds from any monthly sales referred to in paragraph 5 above are less
than $60,000, the short-fall shall be paid, at N-Viro's option, from either
the Escrowed Funds and/or from resale of any portion of the Escrowed
Stock. In the event that the Escrowed Funds and Escrowed Stock are
insufficient to satisfy the short-fall, N-Viro shall make up the difference
with a cash payment to Xx. Xxxxxxx. Again, any such short-fall shall be
paid to Xx. Xxxxxxx within three business days of Xx. Xxxxxxx providing
notice to N-Viro of the amount of net proceeds generated from any monthly
sales.
7. In August, 1997, Xx. Xxxxxxx will make a good-faith effort to sell all
remaining shares of Issued Stock. If the net proceeds of such sale are
insufficient to fully satisfy N-Viro's obligation to Xx. Xxxxxxx (i.e., the
total
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Xxxxx X. Xxxxxxxxx, Esq.
February 25, 1997
Page 3 of 4
amount now owed under the Settlement Agreement minus any subsequent
receipts by Xx. Xxxxxxx), than the short-fall shall be paid, at N-Viro's
option, from either the Escrowed Funds and/or from resale of my portion of
the Escrowed Stock. If the Escrowed Funds and Escrowed Stock are
insufficient to fully satisfy N-Viro's obligation to Xx. Xxxxxxx, N-Viro
shall make a lump sum payment in the full amount of the short-fall no later
than September 5, 1997. Upon payment of such short-fall, any unsold shares
of Issued Stock will be transferred to N-Viro. Likewise, and any remaining
Escrowed Funds and Escrowed Stock shall be returned to N-Viro.
8. Upon full satisfaction of N-Viro's obligation to Xx. Xxxxxxx, and for a
period of sixty days thereafter, Xx. Xxxxxxx shall have an option to
purchase up to 100,000 shares of N-Viro's common stock at the price of
$2.50 per share (the "Option Stock"). In the event Xx. Xxxxxxx exercises
this purchase option, Xx. Xxxxxxx shall have the further option of selling
some or all of the Option Stock back to N-Viro at the price of $3.00 per
share, with such resale option to be held open for a period of forty eight
hours from Xx. Xxxxxxx'x exercise of the purchase option. Xx. Xxxxxxx may,
at the time of exercising the purchase option, inform N-Viro that he is
also exercising the resale option as to some or all of the Option Stock, in
which case Xx. Xxxxxxx will not be obligated to transfer payment for the
resold stock. Any Option Stock retained by Xx. Xxxxxxx shall be free of any
and all restrictions as to its future disposition.
9. The payment terms set out above are intended to supersede the payment
terms of the Settlement Agreement, including N-Viro's obligation to make
monthly lump sum payments of $60,000 to Xx. Xxxxxxx.
10. This agreement shall not be deemed a waiver of any rights or remedies
under the existing Xxxxxxx v. N-Viro Settlement Agreement (as previously
amended). Should N-Viro fail to comply with any of the above terms,
including those set out in paragraph 8 above, such failure shall be deemed
a Default under the Settlement Agreement, and all of the remedies specified
in the Settlement Agreement shall be available to Xx. Xxxxxxx, including
acceleration of the full debt owed by N-Viro (i.e., $1,800,000 minus
receipts to date of default).
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Xxxxx X. Xxxxxxxxx, Esq.
February 25, 1997
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The signatures of Messrs. Xxxxxxx and Xxxxxxxxx below shall evidence the
respective parties agreement to the foregoing terms.
Sincerely,
XXXXXX & XXXXXX
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx
/s/ Xxxxx Xxxxxxx, Xx.
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Xxxxx Xxxxxxx, Xx.
/s/ X. Xxxxxxx Xxxxxxxxx
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X. Xxxxxxx Xxxxxxxxx
For N-Viro Energy Systems, Ltd.;
N-Viro International Corporation; N-Viro Energy
Systems, Inc. and American N-Viro Resources, Inc.
