EXHIBIT 10.19
NEW NOTE AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of
November, 1996, by and among EMCON, a California corporation
("EMCON"), Organic Waste Technologies, Inc., a Delaware corporation,
("OWT"), and the undersigned holders of common stock ("Shares at
Issue") of OWT and holders of options to purchase the common stock of
OWT ("Options at Issue") listed on the signature pages hereto
(collectively, the holders thereof being the "Management
Stakeholders").
WHEREAS, the Management Stakeholders are parties to that
certain Rescission and Reformation Agreement dated as of November 1,
1996 by and among the Management Stakeholders, OWT and EMCON (the
"Rescission Agreement");
WHEREAS, pursuant to the Rescission Agreement, each
Management Stakeholder has agreed to the cancellation of the Options
at Issue held by him in exchange for an unfunded, unsecured promise of
OWT to pay certain sums, and the exchange of Shares at Issue held by
him for a new 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 any additional federal, state and local income taxes
(the "Tax Liability") paid by him as a result of the cancellation of
the Options in exchange for an unfunded, unsecured promise to pay
certain sums and the exchange of the Shares at Issue 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 any 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 or the Option Base
Amount (as defined in the Rescission Agreement) 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 and the date of the Rescission Agreement, 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 with respect to both the amount due under the Note and the
Option Base Amount, 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 sum of the Principal (as defined in the Note) and the Option Base
Amount 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 conversion
of each Note and Option Base Amount shall be determined by dividing the sum of
the Principal of such Note and the Option Base Amount of such Management
Stakeholder 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 and satisfaction of
the promise to pay the Option Base Amount 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 the number of EMCON Common Shares into which his Note and his
respecting Option Base Amount could then be exchanged. The provisions of this
subparagraph (iii) shall similarly apply to successive reclassifications,
changes, and conversions.
(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 and the Option Base Amounts. EMCON represents that upon issuance, such
shares will be duly and validly issued, fully paid and non-assessable.
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(d) METHOD OF EXCHANGE. Except as otherwise provided in the Note or
the Rescission Agreement, or agreed by the Management Stakeholder, the Note held
by him and his respective Option Base Amount 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 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;
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(ii) by any Management Stakeholder, 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, of
the outstanding stock of OWT, other than to an affiliate or affiliates of OWT
and a substantial diminution in the responsibilities of Xxxx X. Xxxxxx 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 Xxxx X. Xxxxxx, 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
(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 together with the
Option Base Amounts owed to such Management Stakeholders, may be exchanged for
EMCON Common Stock with an aggregate value, based on the closing price of the
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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 and the cancellation of (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;
(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;
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(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 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.
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(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.
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,
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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
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
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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
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.
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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
EMCON: EMCON
000 X. Xx Xxxxxx Xxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: R. Xxxxxxx Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
(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
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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
/s/ R. Xxxxxxx Xxxxxxxxx
----------------------------------
By: R. XXXXXXX XXXXXXXXX
Title: CFO and VP Legal
ORGANIC WASTE TECHNOLOGIES, INC.
/s/ Xxxxxxx X. Xxxxxxxxx
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By: XXXXXXX X. XXXXXXXXX
Title: Secretary
MANAGEMENT STAKEHOLDERS
/s/Xxxx X. Xxxxxx
----------------------------------
XXXX X. XXXXXX
/s/Xxxxxxx X. Xxxxxxxxx
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XXXXXXX X. XXXXXXXXX
/s/Xxxxx Xxxxxxx
----------------------------------
XXXXX XXXXXXX
/s/Xxxxxxx X. Xxxxxxxx
----------------------------------
XXXXXXX X. XXXXXXXX
/s/Xxxxxxx Xxxxxxxxxxx
----------------------------------
XXXXXXX XXXXXXXXXXX
/s/Xxxxxxx X. Xxxxxxx
----------------------------------
XXXXXXX X. XXXXXXX
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