EXHIBIT 99.2
Consulting Agreement By and Between
Xxxxxxxx Partners, LLC and Compost America Holding Company, Inc.
effective June 29, 0000
XXXXXXX XXXXXXX HOLDING COMPANY
June 29, 2000
Xxxxxxxx Partners, LLC
000 Xxxxxx Xxxxxx Xxxxx 0
Xxxxxxxx, Xxx Xxxxxx 00000
Consulting Agreement
--------------------
Dear Xx. Xxxxxxx:
This is to confirm that Compost America Holding Company, Inc.
(the "Company") desires to engage in a consulting relationship with Xxxxxxxx
Partners, LLC (the "Contractor") to provide the exclusive services of
Xxxxxxxxxxx X. Xxxxxxx (the "Consultant"). The following sets forth the
agreement among the Company, the Consultant and the Contractor regarding the
terms of this consulting arrangement with the Company (the "Agreement").
1. Term. The term of the consulting arrangement with the
Company pursuant to this Agreement will commence on the date hereof (the
"Effective Date") and will end on the third anniversary thereof unless
terminated earlier in accordance with the provisions of Section 5 below (the
"Consulting Period"). The Consulting Period will be automatically renewed for
additional 30 day periods unless either party elects not to renew the Agreement
by giving written notice to the other party of such intention not to renew.
2. Responsibilities. (a) During the Consulting Period, the
Contractor will provide the consulting services of the Consultant and the
Consultant will devote a majority of his attention and time during normal
business hours performing such consulting services as the Board of Directors of
the Company (the "Board") reasonably requests regarding the implementation of
the "Business Plan" submitted by the Consultant and approved by the Board on
March 6, 2000, including, but not limited to, the development of the proposed
facilities for the Newark Recycling & Composting Company, the Miami Recycling &
Compost Company and American Marine Rail, LLC and, from time to time certain
general managerial and administrative responsibilities.
(b) During the Consulting Period, the Consultant will be a
member of the "Office of the President" of the Company or such other executive
committee that may replace the Office of President at any future date.
(c) During the Consulting Period, the Consultant will attend
all meetings of the Board and at each such meeting will present a report to the
Board of his activities, concerns and any other matters that the Consultant
xxxxx xxx be of interest to the Board, or that the Board may request.
(d) The Contractor will not be obligated to provide the
services of the Consultant for such period or periods of time during the year as
the Company may approve, which will constitute vacation for the Consultant;
provided, that such period or periods will not exceed four weeks per year.
3. Consulting Fee and Stock Options. (a) During the Consulting
Period, as payment for the services rendered to the Company by the Consultant,
the Company will pay the Contractor a fee (the "Fee") of $20,000 per month
payable in advance on the first day of each month in immediately available
funds.
(b) On the Effective Date the Contractor will be granted stock
options (the "Commitment Options") to purchase 1,200,000 shares of Company
common stock, no par value (the "Common Stock") and during the Consulting Period
upon the attainment of certain levels of per share Market Price for the Company
Common Stock as more fully defined and described in the Option Agreement
(defined below), the Contractor will be granted stock options to purchase up to
an aggregate of 2,000,000 shares of Common Stock ( the "Retention Options" and
collectively with the Commitment Options, the "Options"). Such Options shall be
subject to the terms and conditions of a separate stock option agreement (the
"Option Agreement") attached hereto as Exhibit A.
4. Expenses. The Company will reimburse the Contractor for the
reasonable expenses incurred by the Consultant in connection with the
performance of the consulting obligations to the Company hereunder, in
accordance with the normal practice of the Company and upon compliance with the
Company's generally applicable reimbursement practice.
5. Termination of Consulting Period.
(a) General. Subject to the provisions of this Agreement, the
Contractor and the Company will have the right to terminate the Consulting
Period, for any reason or for no stated reason. For purposes of this Agreement
the "Date of Termination" will mean the date on which the Consulting Period is
terminated either by the Contractor, the Consultant, the Company or by mutual
agreement of the parties.
(b) Termination by the Company With Cause. The Consulting
Period may be terminated at any time by the Company for Cause (as defined
below). Upon such termination, (i) the Company will have no obligation under
this Agreement other than the payment to the Contractor of any accrued but
unpaid Fee and any unreimbursed expenses and (ii) all Retention Options whether
or not vested and exercisable will terminate as of the Date of Termination. For
purposes of this Agreement the term "Cause" will mean any of the following:
1. A willful failure of the Consultant to perform his
duties under this Agreement, which failure has not been cured (to the
extent susceptible to cure) within 30 days following written notice
from the Board detailing such failure;
2. Any willful misconduct by the Consultant relating,
directly or indirectly, to the Company, which breach has not been cured
(to the extent susceptible to cure) within 30 days following written
notice from the Board detailing such breach;
3. Any material breach by the Consultant of this
Agreement, including, without limitation, Section 6 hereof, which
breach has not been cured (to the extent susceptible to cure) within 30
days following written notice from the Board detailing such breach; or
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4. The Consultant's commission of a common law fraud
or conviction of a felony.
(c) Termination Without Cause. The Consulting Period may be
terminated at any time by the Company without Cause. In the event of the
termination of the Consulting Period by the Company without Cause, the Company
will pay the Contractor a lump sum cash payment within thirty days following the
Date of Termination in an amount equal to (i) any accrued but unpaid Fee and any
unreimbursed expenses incurred through the Date of Termination and (ii) a
settlement fee of $120,000, provided the Contractor and the Consultant execute a
release in favor of the Company in a form satisfactory to the Company. Such
release shall release the Company and its officers and directors from all claims
arising under applicable federal, state or local law (including claims arising
out of the Age Discrimination in Employment Act of 1967) arising out of your
consulting relationship with the Company, the terms of this Agreement, the
termination of your services as consultant, and such other matters as the
parties shall mutually agree. All Options granted pursuant to the Option
Agreement that were vested as of the Date of Termination will remain exercisable
for a period of three years.
(d) Termination by the Contractor or the Consultant. In the
event of the termination of the Consulting Period by the Contractor or the
Consultant, the Company will have no obligation under this Agreement other than
the payment to the Contractor of any accrued but unpaid Fee and any unreimbursed
expenses. All Options granted pursuant to the Option Agreement that were vested
as of the Date of Termination will remain exercisable for a period of 180 days.
6. Protective and Restrictive Covenants. In addition to the
following protective and restrictive covenants, the Contractor and the
Consultant acknowledge that the Company is bound to the Covenant Not To Compete
Agreement between Synagro Technologies, Inc. and the Company dated June 14, 2000
and during the Consulting Period both the Contractor and the Consultant will
honor the terms of such agreement.
(a) Restrictions on Competitive Engagements. Beginning on the
Effective Date and continuing until the first anniversary of the Date of
Termination, neither the Contractor nor the Consultant will, directly or
indirectly, as a sole proprietor, member of a partnership, stockholder or
investor (other than a stockholder or investor owning not more than a 1%
interest of a publicly traded company), officer or director of a corporation, or
as an employee, associate, consultant or agent of any person, partnership,
corporation or other business organization or entity, other than the Company or
any parent, subsidiary or affiliate of the Company (together, the "Company
Group"), in the areas of Dade County and Broward County in the State of Florida
and the areas of Essex, Bergen, Morris, Hudson, Union and Passaic counties in
the State of New Jersey and Nassau County and Westchester County and the
counties encompassing the boroughs of Manhattan, Queens, Brooklyn, Bronx and
Staten Island in the State of New York, render any service to or in any way be
affiliated with a competitor (or any person or entity that is reasonably
anticipated to become a competitor) of the Company Group.
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(b) Non-Solicitation. Beginning on the Effective Date and
continuing until the second anniversary of the Date of Termination, neither
Contractor nor the Consultant will, directly or indirectly, without the prior
written consent of the Company:
(i) solicit business from, entice away from, accept orders
involving or otherwise interfere with the relationships of the Company
Group with any client, or any person or entity which was reasonably
anticipated or indentified by the Company to become a client (including
any person or entity who, during the most recent twelve months, was a
client of any member of the Company Group); or
(ii) solicit the services of any individual who is employed by
any member of the Company Group (or who was employed by any member of
the Company Group during the then most recent twelve-month period) or
who is retained by any member of the Company Group as an independent
contractor or consultant (or who was retained by any member of the
Company Group in such capacity in the most recent twelve-month period),
or take any action that results, or might reasonably result, in any
employee, independent contractor or consultant ceasing to perform
services for any member of the Company Group.
(c) Non-Disclosure. Neither the Contractor nor the Consultant
will at any time during the Consulting Period or for a period of five years
thereafter, directly or indirectly, other than in the performance of the duties
described in this Agreement on behalf of the Company or with the prior written
consent of the Company:
(i) disclose any confidential or other proprietary information
pertaining to the client accounts of the Company Group, including, but
not limited to, contracts, client lists, systems, procedures, manuals,
confidential reports and financial information concerning the Company
Group's services, products or businesses; or
(ii) use any confidential or other proprietary information
pertaining to the clients of any member of the Company Group
(including, but not limited to, client lists, client contacts, client
profiles and statistical or demographic analysis of any member of the
Company Group's clients) in order to contact, solicit, accept or refer
business from, or otherwise do business or deal with, any client of any
member of the Company Group (including any person or entity who, during
the most recent twelve months, was a client of any member of the
Company Group) in connection with the provision of any product or
service similar to any provided by the Company Group.
(d) Return of Company Property. Upon the termination of the
Consulting Period, the Contractor and the Consultant will immediately destroy
personal material; return all Company property and material in the Contractor's
possession or the Consultant's possession that belongs or relates to the Company
(the "Company Property") unless the Company expressly agrees in writing that the
Contractor or the Consultant may retain possession of any such property or
material. Company Property will include all originals and copies of files,
writings, reports, memoranda, diaries, notebooks, notes of meetings or
presentations, data, computer software and hardware, diskettes, drawings charts,
photographs, slides, patents, or an other form of record which contains
information created or produced for or at the direction of any member of the
Company Group, or any employee or agent thereof. All Company Property will be
returned undamaged and intact.
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(e) Application of Covenants. The activities described in this
Section 6 (a), (b) and (c) will be prohibited regardless of whether undertaken
by the Contractor or the Consultant in an individual or representative capacity,
and regardless of whether performed for the Contractor's or the Consultant's own
account or for the account of any other individual, partnership, firm,
corporation or other business organization (other than the Company).
(f) Injunctive Relief. Without limiting the remedies available
to the Company, the Contractor and the Consultant acknowledge that a breach of
any of the covenants contained in this Section 6 may result in material
irreparable injury to the Company for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of such a breach or threat thereof, the Company will be
entitled to obtain a temporary restraining order or a preliminary or permanent
injunction restraining the Contractor and/or the Consultant from engaging in
activities prohibited by this Section 6 or such other relief as may be required
to specifically enforce any of the covenants in this Section 6.
(g) Violation and Remedy. If the Company reasonably, after due
consideration, determines that the Contractor or the Consultant have breached
any of the provisions of clause (a), (b), (c) or (d) of this Section 6, in
addition to any other remedies available to the Company in law or equity, the
Company will be entitled (i) to immediately suspend as of the date of such
breach any payments or benefits under this Agreement and (ii) to declare
forfeited the Retention Options granted by the Company to the Contractor,
whether or not such Retention Options have vested or been exercised. The parties
further agree that upon forfeiture, the Company is entitled to recover, and the
Contractor will disgorge to the Company, any profits or proceeds acquired from
the Retention Option within the twelve months preceding such forfeiture. The
forfeiture and disgorgement provisions will survive the termination of any such
agreement and thereafter expire concurrently with the expiration date of the
covenants in this Section 6. Prior to the suspension of payment or benefits or
the forfeiture of Retention Options, the Company agrees to provide both the
Contractor and the Consultant with written notice of the breach and a reasonable
explanation therefore, and the Contractor and the Consultant will have an
opportunity within 5 days to respond to such. Notwithstanding the foregoing, at
the end of such response period the Company reserves the right to enforce the
remedies as set forth above in this clause (g).
(h) Third-Party Beneficiary. The parties hereto acknowledge
and agree that the subsidiary and parent companies of the Company are
third-party beneficiaries to the terms of this Section 6 and may enforce the
terms of this Agreement as they pertain to Section 6 to the full extent
permitted by law and equity.
7. Notice. For purposes of this Agreement, notices and all
other communications provided for in this Agreement will be in writing and will
be deemed to have been duly given when delivered or mailed by United States
registered mail or certified return receipt requested, postage prepaid, if to
the Company, to its offices at Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxx
Xxxxxx 00000, attention: General Counsel and if to the Contractor or the
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Consultant at the Contractor's last address of record, or to such other address
as any party may have furnished to the other parties hereto in writing in
accordance herewith, except that notice of change of address will be effective
only upon receipt.
8. Binding Arbitration. Except for the relief provided for in
Section 6(f), any controversy or claim arising out of or relating to this
Agreement, whether arising under federal, state, or local law and whether in
contract or in tort and including any discrimination or common law claims, will
be settled by arbitration under the auspices of the American Arbitration
Association ("AAA") in New York, New York. The dispute will be submitted to a
single arbitrator to be mutually agreed upon by the parties. If the parties
cannot agree on a single arbitrator, each party will appoint one arbitrator who
will then jointly appoint a single arbitrator. The arbitrator will give effect
to applicable statutes of limitations. Any controversy concerning whether an
issue is arbitrable will be determined by the arbitrator. Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
prevailing party in any arbitration proceeding, as determined by the arbitrator,
or in any proceeding with respect thereto as determined by the person presiding,
will be entitled to receive from the non-prevailing party reasonable attorneys'
fees and costs incurred by such prevailing party in connection therewith. In the
event that there is no prevailing party, reasonable attorneys' fees and costs
incurred by the parties will be allocated between them by the arbitrator.
9. Miscellaneous.
(a) Amendments, Waivers, Etc. No provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing by the Company and the Contractor. No waiver
by any party hereto at any time of any breach by the other party hereto of, or
of compliance with, any condition or provision of this Agreement to be performed
by such other party will be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by any party which are not expressly set
forth in this Agreement and this Agreement will supersede all prior agreements,
negotiations, correspondence, undertakings and communications of the parties,
oral or written, with respect to the subject matter hereof and will supercede
all prior agreements, negotiations, correspondence, undertakings and
communications, oral or written, with respect to the subject matter hereof.
(b) Validity. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect. The parties intend that any offending provision will be enforced to the
fullest extent to which it is enforceable, that any unenforceable portion
thereof be severed from this Agreement, and that this Agreement, as modified to
sever any such unenforceable portion, will be enforced to the fullest extent
permitted by law.
(c) Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
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(d) Independent Contractor Status. The parties hereto
acknowledge and agree that the Contractor and the Consultant will be independent
contractors and not employees of the Company and that the amounts paid to the
Contractor hereunder are not subject to federal, state or local tax
withholdings. The Contractor will be responsible for all taxes incurred by the
Contractor and the Consultant as a result of this Agreement and the Contractor
and the Consultant will be responsible for and will maintain adequate records of
expenses it will incur in the course of performing services hereunder and will
be solely responsible for and will file, on a timely basis, tax returns and
payments required to be filed with or made to any federal or state or local tax
authority with respect to the performance of services hereunder. The Contractor
and the Consultant agree to indemnify and hold the Company harmless from all
liabilities, costs and expenses (including, but not limited to, attorney's fees)
incurred by the Company as a result of the failure of the Contractor or the
Consultant to be treated as an independent contractor by the Internal Revenue
Service, the United States Department of Labor, or any other governmental
authority.
(e) Headings. The headings contained in this Agreement are
intended solely for convenience of reference and will not affect the rights of
the parties to this Agreement.
(f) Governing Law. The validity, interpretation, construction,
and performance of this Agreement will be governed by the laws of the State of
New Jersey applicable to contracts entered into and performed in such State
without regard to the choice of law provisions thereof.
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
COMPOST AMERICA HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and
General Counsel
ACCEPTED AND AGREED:
XXXXXXXX PARTNERS, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: President
ACCEPTED AND AGREED:
/s/ Xxxxxxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxx, XX 00000
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STOCK OPTION AGREEMENT dated as of June 29, 2000 (the
"Agreement") among COMPOST AMERICA HOLDING COMPANY, INC., a Delaware corporation
(the "Company"), XXXXXXXX PARTNERS, LLC (the "Contractor") and the other party
signatory hereto (the "Consultant").
WHEREAS, Section 3 of the Consulting Agreement dated as of
June 29, 2000 (the "Consulting Agreement") between the Company and the
Contractor, provides for the granting to the Contractor of nonqualified stock
options to purchase 3,200,000 shares of common stock, no par value, of the
Company (the "Common Stock") upon the terms and conditions hereinafter set forth
and set forth in the Consulting Agreement, and
WHEREAS, the Company intends that such options comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and Section 162(m) of the Internal Revenue Code of 1986,
as amended;
NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto agree as follows:
1. Confirmation of Grant of Options; Effectiveness. Pursuant
to a determination by the Board of Directors of the Company (the "Board"), the
Company hereby agrees to grant the Contractor, subject to the terms and
conditions of this Agreement and the Consulting Agreement, the number of
Commitment Options (as defined below) and Retention Options (as defined below)
(the Commitment Options together with the Retention Options the "Options")
specified in Section 3 of this Agreement. Each such Option shall entitle the
Contractor to purchase, upon payment of the exercise price of each Option (the
"Option Price") as set forth below, one share of Common Stock.
2. Certain Restrictions. None of the Options may be sold,
transferred, assigned, pledged, or otherwise encumbered or disposed of. Any
attempt to sell, transfer, assign, pledge or otherwise encumber or dispose of
any Option contrary to the provisions of this Agreement, and any levy,
attachment or similar process upon any Option shall be null and void and without
effect, and the Board may, in its discretion, upon the happening of any such
event, terminate the Options as of the date of such event.
3. Terms and Conditions of Options. The Options shall be
granted in the following manner:
(a) Commitment Options. Effective as of the date hereof, the
Company grants to the Contractor Options to purchase 1,200,000 shares of Common
Stock (the "Commitment Options") at an Option Price of $ .01 per share. The
Commitment Options are fully vested upon the date of grant.
(b) Retention Options. The Company shall grant to the
Contractor additional Options to purchase 2,000,000 shares of Common Stock (the
"Retention Options") in accordance with the following schedule:
(i) 500,000 Retention Options shall be granted to the
Contractor at an Option Price of $.25 per share within 30 days after
the date the Per Share Market Price (as defined below) of the Common
Stock is equal to $.50 per share.
(ii) 500,000 Retention Options shall be granted to
the Contractor at an Option Price of $.40 per share within 30 days
after the date the Per Share Market Price of the Common Stock is equal
to $.75 per share.
(iii) 1,000,000 Retention Options shall be granted to
the Contractor at an Option Price of $.80 per share within 30 days
after the date the Per Share Market Price of the Common Stock is equal
to $1.00 per share.
The Retention Options shall be vested upon the date of grant. For purposes of
this Agreement "Per Share Market Price" shall mean the market price for a share
of Common Stock determined based on a 10-day average closing price per share as
reported on the O.T.C. Bulletin Board or other national market where the Common
Stock is currently traded.
(c) Termination of Consultant's Services.
(i) In the event that the Consultant's services for
the Company and its subsidiaries are terminated by the Company without
Cause (as defined in the Consulting Agreement), Options that were
vested as of the Date of Termination (as defined in the Consulting
Agreement) will remain exercisable for a period of three years from
such date.
(ii) In the event that the Consultant's services for
the Company and its subsidiaries are terminated by the Contractor or
Consultant, Options that were vested as of the Date of Termination will
remain exercisable for a period of 180 days from such date.
(iii) In the event that the Consultant's services for
the Company and its subsidiaries are terminated by the Company with
Cause, all Retention Options whether or not vested and exercisable will
terminate as of the Date of Termination.
(d) Retention Option Forfeiture. In the event of any breach of
the provisions of clause (a), (b), (c) or (d) of Section 6 of the Consulting
Agreement the Company may declare forfeited all unexercised Retention Options
granted by the Company to the Contractor, whether or not such Retention Options
have been vested. The Company is entitled to recover, and the Contractor will
disgorge to the Company, any profits or proceeds acquired from Retention Options
exercised within the twelve months preceding such breach.
(e) Notice of Exercise. Subject to Sections 3(f), 3(h) and
5(b) hereof, the Contractor may exercise any or all Options (to the extent not
forfeited) by giving written notice to the General Counsel of the Company at its
principal business office. The date of exercise of a Vested Option shall be the
later of (i) the date on which the General Counsel of the Company receives such
written notice or (ii) the date on which the conditions provided in Sections
3(f), 3(h) and 5(b) hereof are satisfied.
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(f) Payment. Prior to the issuance of a certificate pursuant
to Section 3(i) hereof evidencing shares of Common Stock, the Contractor shall
have paid to the Company the Option Price of all Common Stock purchased pursuant
to exercise of such Options, in cash or by certified or official bank check, and
all applicable tax withholding obligations shall have been satisfied as provided
in Section 5(b) of this Agreement.
(g) Shareholder Rights. Neither the Contractor nor the
Consultant shall have rights as a shareholder with respect to any Common Stock
issuable upon the exercise of an Option until a certificate or certificates
evidencing such shares shall have been issued to the Contractor, and no
adjustment shall be made for dividends or distributions or other rights in
respect of any share for which the record date is prior to the date upon which
the Contractor or the Consultant shall become the holder of record thereof.
(h) Limitation on Exercise.
(i) The Common Stock issued upon exercise of the
Options shall be issued only to the Contractor. Each share certificate
representing Common Stock purchased upon exercise of the Options shall
bear a legend stating that the Common Stock evidenced thereby may not
be sold or transferred except in compliance with the Securities Act of
1933, as amended (the "1933 Act") and the provisions of this Agreement.
In the event of a transfer that is inconsistent with the restrictions
on such legend, the certificate(s) may be made subject to a stop
transfer order placed with the Company's transfer agent.
(ii) The Options shall not be exercisable unless and
until (A) a registration statement under the 1933 Act has been duly
filed and declared effective pertaining to the Common Stock subject to
such Options and such Common Stock shall have been qualified under
applicable state "blue sky" laws, or (B) the Board in its sole
discretion determines that such registration and qualification is not
required as a result of the availability of an exemption from such
registration and qualification under such laws. The Company shall use
all reasonable efforts to file a registration statement with the
Securities and Exchange Commission (the "SEC") on Form S-8 with respect
to the Common Stock subject to an Option on or prior to the date on
which such Option becomes exercisable; provided, however, the Company
shall be under no obligation to file a registration statement with the
SEC with respect to such Common Stock subject to the Options unless and
until the Company files a registration statement with the SEC with
respect to the common stock of the Company owned by X-X Associates,
LLC, a Delaware limited liability company. In the event the Company is
unable to file a registration statement with respect to all of the
common stock of the Company owned by X-X Associates, LLC and the Common
Stock subject to the Options, the Company shall file a registration
statement to register an amount of common stock of the Company owned by
X-X Associates, LLC and the Common Stock subject to the Options in
proportion to the fully diluted common stock share ownership of X-X
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Associates, LLC, Bentley King Associates and Xxxxxxxx Partners, LLC in
the Company at the time of the filing of such registration statement.
The Company shall have no obligation to issue any Common Stock pursuant
to the exercise of an Option if the Company reasonably determines at
the time of such exercise that the issuance of Common Stock at such
time would violate applicable securities laws or violate then existing
policies of the Company applicable to consultants of the Company or its
Subsidiaries holding options to purchase Common Stock.
(i) Issuance of Certificate. As soon as practicable, but in no
event later than 30 days following the exercise of any Options, a certificate
evidencing the number of shares of Common Stock issued in connection with such
exercise shall be issued in the name of, and delivered to, the Contractor.
4. Representations and Warranties. The Contractor and the
Consultant are aware of and familiar with the restrictions imposed on the
transfer of any Options. The Contractor and the Consultant represent that this
Agreement has been duly executed and delivered to the Contractor and constitutes
a legal, valid and binding agreement of the Contractor and the Consultant,
enforceable against the Contractor and the Consultant in accordance with its
terms, except as limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
and by general principles of equity. It shall be a further condition to the
Company's obligation to issue and deliver to the Contractor certificates for
Common Stock upon exercise of an Option that the Contractor deliver to the
Company in writing a representation that the Contractor is exercising such
Option for its own account and, unless the shares of Common Stock are then
registered under the 1933 Act, for investment only and not with a view to
distribution and that the Contractor will not make any sale, transfer or other
disposition of any shares of Common Stock purchased except (i) pursuant to the
registration thereof under the 1933 Act, (ii) pursuant to an opinion of counsel
satisfactory in form and substance to the Company that the sale, transfer or
other disposition may be made without registration, or (iii) pursuant to a
"no-action" letter from the SEC. The Contractor and the Consultant have been
advised and understand that the Common Stock must be held indefinitely unless
the resale complies with provisions of the securities laws.
5. Miscellaneous.
(a) No Rights to Grants or Continued Status. Neither this
Agreement nor any action taken or omitted to be taken hereunder or thereunder
shall be deemed to create or confer on the Contractor or the Consultant any
right to be retained in the service of the Company or any of its subsidiaries or
affiliates, or to interfere with or to limit in any way the right of the Company
or any of its subsidiaries or affiliates to terminate the services of the
Contractor or the Consultant at any time. Any right to be retained in the
services of the Company is set forth in the Consulting Agreement. The Contractor
and the Consultant shall have no rights to the benefits conferred by the Options
or to any Common Stock except to the extent the Options are exercised or such
benefits are otherwise conferred by the terms of this Agreement. Termination of
the Retention Options by reason of cessation of services shall not give rise to
any claim for damages by the Contractor or the Consultant under this Agreement
or the Consulting Agreement and shall be without prejudice to any rights or
remedies which the Company or any of its subsidiaries or affiliates may have
against the Contractor or the Consultant.
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(b) Tax Withholding. The Company and its subsidiaries shall
have the right to require the Contractor to remit to the Company, prior to the
delivery of any certificates evidencing Common Stock pursuant to the exercise of
an Option, any amount sufficient to satisfy any federal, state or local tax
withholding requirements. With the consent of the Company in its sole
discretion, prior to the Company's determination of such withholding liability,
the Contractor may make an irrevocable election to satisfy, in whole or in part,
such obligation to remit taxes by directing the Company to withhold Common Stock
that would otherwise be received by the Contractor. Such election may be denied
by the Company in its sole discretion, or may be made subject to certain
conditions specified by the Company, including, without limitation, conditions
intended to avoid the imposition of liability against the Contractor under
Section 16(b) of the Exchange Act.
(c) No Restriction on Right of Company to Effect Corporate
Changes. This Agreement shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the capital structure or
business of the Company, or any merger or consolidation of the Company, or any
issue of stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of the assets or business of the
Company, or any other corporate act or proceeding, whether of a similar
character or otherwise.
(d) Notice of Intent to Exercise. Notwithstanding any other
provision of this Agreement, the Company may, from time to time, require up to
30 days notice of the Contractor's intent to exercise all or a portion of the
Options in order for the Company to comply with any applicable securities laws.
The Company shall not be liable for any adverse change in the market value of
the Common Stock during any such notice period.
6. Adjustment.
(a) The number of shares and price per share of Common Stock
covered by any Option, and any other rights under any Option, shall be
appropriately adjusted, as deemed appropriate by the Board (whose good faith
determination shall be absolute and binding on the Contractor), to reflect any
subdivision (stock split) or consolidation (reverse split) of the issued Common
Stock, or any other recapitalization of the Company, or any business combination
or other transaction involving the Company, which shall substantially affect the
rights of holders of Common Stock. The Board shall provide for appropriate
adjustment of the Options in the event of stock dividends or distributions of
assets or securities of other companies owned by the Company to stockholders
relating to Common Stock for which the record date is prior to the date the
Common Stock purchased by exercise of the Options are issued or transferred,
except that no such adjustment shall be made for stock dividends of 10% or less
(cumulatively, in the aggregate) or for cash dividends.
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(b) In the event of a change in the presently authorized
Common Stock which is limited to a change of all of its presently authorized
Common Stock into the same number of shares without par value, or any change of
all of the then authorized Common Stock with par value into the same number of
shares with a different par value, the shares resulting from any such change
shall be deemed to be Common Stock for purposes hereof, and no change in the
number of Common Stock covered by the Options or in the Option Price shall take
place.
7. Survival; Assignment.
(a) All agreements, representations and warranties made herein
and in any certificates delivered pursuant hereto shall survive the issuance to
the Contractor of the Options and the Common Stock and shall continue in full
force and effect.
(b) The Company shall have the right to assign to any of its
affiliates any of its rights, or to delegate to any of its affiliates any of its
obligations, under this Agreement.
8. Notices. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or sent by certified
or registered mail, return receipt requested, postage prepaid, addressed, if to
the Contractor, to the most recent mailing address that the Company has on
record and, if to the Company, to its offices at Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxx Xxxxxx 00000, attention: General Counsel. All such notices shall be
conclusively deemed to be received and shall be effective, if sent by hand
delivery, upon receipt, or if sent by registered or certified mail, on the fifth
day after the day on which such notice is mailed.
9. Option Term. The term of the Options shall be ten years
beginning on the date of grant and no Option shall be exercisable following the
expiration of its term.
10. Waiver. The waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.
11. Source of Rights. This Agreement and the Consulting
Agreement shall be the sole and exclusive source of any and all rights which the
Contractor and the Consultant may have in respect of the Options as granted
hereunder. In the event of any conflict between the provisions of the Consulting
Agreement and of this Agreement, the provisions of the Consulting Agreement
shall prevail.
12. Captions. The captions contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
13. Interpretation and Construction. The good faith
interpretation and construction by the Board of any provision of this Agreement
or any provision of the Consulting Agreement relating to the Options shall be
final and conclusive and binding on the parties hereto.
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14. Entire Agreement; Governing Law. This Agreement and the
Consulting Agreement set forth the entire agreement and understanding between
the parties hereto and supersede all prior agreements and understandings
relating to the subject matter hereof. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement. The headings
of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of this
Agreement. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New Jersey without reference to the choice of law
provisions of New Jersey law.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Contractor and the Consultant
have executed this Agreement, both as of the day and year first above written.
COMPOST AMERICA HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and General Counsel
XXXXXXXX PARTNERS, LLC
By /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: President
CONSULTANT
/s/ Xxxxxxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxxxx XX, 00000
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