1
EXHIBIT #2
SHARE EXCHANGE AGREEMENT
------------------------
This Share Exchange Agreement (this "Agreement") is made and entered
into as of the 30th day of June, 1997 by and between N-Viro International
Corporation, a Delaware Corporation, (the "Company") and N-Viro Energy Systems,
Limited, an Ohio limited partnership ("Purchaser").
RECITALS.
---------
Whereas, the Company presently is indebted to Purchaser for obligations
arising in the ordinary course of business in an amount equal to One Hundred
Seventy-Six Thousand Five Hundred Dollars ($176,500.00) (the "Company's Existing
Obligation");
Whereas, the Company's Existing Obligation presently is evidenced by
(i) a $100,000.00 Promissory Note dated June 7, 1996 issued by the Company in
favor of Purchaser (ii) a $68,000.00 Promissory Note dated September 20, 1996
issued by the Company in favor of Purchaser and (iii) a $23,500.00 Promissory
Note dated November 1, 1996 issued by the Company in favor of Purchaser
(collectively, the "Old Notes").
Whereas, the Company has offered to satisfy the Existing Obligation
through the Company's delivery to Purchaser of Fifty Thousand (50,000) shares
("Shares") of the Company's voting common stock, with par value $.01 per share
(the "Common Stock") and (ii) a Promissory Note in the original principal amount
of Twenty Six Thousand Five Hundred Dollars ($26,500.00) (the "New Note"); and
Whereas, Purchaser has agreed to accept delivery of the Shares and the
New Note in complete satisfaction of the Company's Existing obligation.
Now, therefore, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. EXCHANGE. The Company hereby offers the Shares and the New
Note to Purchaser in complete satisfaction of the Company' s Existing
Obligation. Purchaser hereby accepts the Company' s offer, and, upon the
Company's delivery to Purchaser of stock certificates representing the Shares
and the New Note. Purchaser agrees that the Company's Existing Obligation shall
be fully and forever discharged and Purchaser shall have no continuing claim
against the Company with respect thereto. Purchaser further covenants and
agrees that, upon execution of this Agreement, Purchaser shall cancel the Old
Notes and return the same to the Company.
2. UNREGISTERED OFFERING. Purchaser acknowledges and agrees that
Purchaser's acceptance of the Shares and the New Note in exchange for releasing
the Company from the Company's Existing obligation constitutes the sale of
securities under and pursuant to the Securities Act of 1933 and the rules and
regulations promulgated thereunder, as amended from time to time (the 111933
Act"). Purchaser further acknowledges Purchaser's understanding that no aspect
of the transactions contemplated in this Agreement has been, prior to the date
of this Agreement, or will be, prior to the date of delivery of stock
certificates representing the Shares and the New Note, registered with or
reviewed by the Securities and Exchange Commission (the "SEC") under the 1933
Act, or with or by any state securities law administrator, and no federal or
state securities law administrator has approved any disclosure or other
material concerning the Company or the Shares or the New Note or made any
recommendation with respect thereto.
3. REPRESENTATIONS AND COVENANTS. To induce the Company to enter
into this Agreement, Purchaser represents, warrants, covenants and agrees that:
(a) ACCESS. Purchaser has investigated and will continue to
investigate the merits and risks of accepting the Shares in exchange for the
discharge of the Company's Existing Obligation. Purchaser has been provided
with the Annual Report on Form 10-K of the Company for the year ended March 31,
1996, a quarterly
2
report on form 10-Q for the period ending March 31, 1997, the Proxy Statement
relating to the 1997 Annual Stockholders' Meeting, the 1997 Annual Report to
Stockholders and all subsequent reports filed by the Company with the SEC
pursuant to the requirements of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, as amended from time to time, and
has had the opportunity to ask questions of, and receive answers from, members
of the Board of Directors and management of the Company. Purchaser has had the
opportunity to and will continue to avail himself of his rights to ask
questions of the management of the Company relating to the Company, the Shares,
and related matters. Purchaser also has had and shall continue to avail himself
of his rights to obtain additional information necessary to verify the accuracy
of information provided to him and to continue to evaluate the merits and risks
of the transactions contemplated by this Agreement.
(b) Investment Intent: State of Residence. Purchaser is
acquiring the Shares and the New Note for its own account for investment,
within the meaning of the 1933 Act. Purchaser's principal place of business and
domicile is and shall continue to be at the time of delivery of the Shares the
State of Ohio.
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(c) AFFILIATE STATUS. Purchaser is an affiliate of the
Company within the meaning of the 1934 Act by virtue of the fact that Purchaser
owns, both beneficially and of record, in excess of ten percent (10%) of the
aggregate number of issued and outstanding shares of Common Stock.
(d) RESALES. Purchaser agrees that it shall not resell or
transfer in any way the Shares acquired hereunder to any U.S. Person as
described in Regulation S under the 1933 Act or in the United States without an
applicable exemption from registration under the 1933 Act or upon registration
of the Shares pursuant to the 1933 Act. All certificates representing the
Shares shall contain the following legend:
"The Shares represented by this certificate have not been registered
pursuant to the Securities Act of 1933 and therefore may not be
transferred or sold in the United States or to a U.S. Person without
either an effective registration statement pursuant to the Securities
Act of 1933 or an opinion of counsel satisfactory to N-Viro
International Corporation that registration is not required under the
Securities Act of 1933.11
(e) Purchaser has knowledge and experience in financial and
business matters so is to be capable of evaluating the merits and risks of an
investment in the Shares and the New Note. Purchaser is willing and able to
bear the economic risk of an investment in the Shares indefinitely. In making
the foregoing statement, consideration has been given to whether Purchaser has
adequate means of providing for its current financial needs and business
contingencies, whether it could afford to hold the Shares indefinitely, and
whether, at this time, it could afford a significant or complete loss of its
investment. Purchaser is acquiring the Shares for Purchaser's own account, as
principal, for investment and not with a view to the resale or distribution of
all or any part of the Shares.
4. RELEASE. Upon the Company's delivery of the Shares and the New
Note to Purchaser, the Company shall be fully and forever released from the
requirement that it pay Purchaser the amount of the Company's Existing
Obligation. This discharge shall be effective without any further action on the
part of Purchaser.
5. DELIVERY OF STOCK CERTIFICATES AND NEW NOTE. A certificate or
certificates evidencing the Shares registered in the name of Purchaser shall be
executed, issued and delivered to Purchaser by the Company within fifteen (15)
business days from the
- 3 -
date of execution of this Agreement. The New Note shall be delivered upon
execution hereof.
3
6. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their respective heirs, personal
representatives, successors and assigns.
7. AMENDMENTS. No amendment or variations of the terms and
conditions of this Agreement shall be valid unless the same is in writing and
signed by the parties hereto. All such amendments shall specifically refer to
this Agreement.
8. HEADINGS. The paragraph headings contained herein are for
convenience only and shall not, in any way, effect the interpretation or
enforceability of any provisions of this Agreement.
9. GOVERNING LAW. This Agreement shall be construed and enforced
under and pursuant to the internal laws of the state of Ohio.
10. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between the parties hereto with respect to the transactions
contemplated herein. This Agreement supersedes all prior oral and written
understandings and agreements with respect to the subject matter referred to
herein.
11. CERTAIN TERMS. Unless the context otherwise requires a
different meaning, words of a masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders, words importing
the singular numbers shall include the plural number and vice versa, and the
terms "hereof," "hereby," "hereto," "hereunder," and "herein" as well as
similar terms refer to this Agreement.
12. ASSIGNMENT. None of the parties hereto may assign, transfer
or otherwise dispose of any of their rights or obligations under this
Agreement.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one document.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of
the date first above written.
N-VIRO INTERNATIONAL CORPORATION
By: /s/ James K. McHugh
--------------------------
James K. McHugh
Chief Financial Officer
N-VIRO ENERGY SYSTEMS, LIMITED
By: N-Viro Energy Systems, Inc.
General Partner
By: /s/ J. Patrick Nicholson
--------------------------
J. Patrick Nicholson
President
-5-
4
SHARE EXCHANGE AGREEMENT
------------------------
This Share Exchange Agreement (this "Agreement") is made and entered
into as of the 30th day of June, 1997 by and between N-Viro International
Corporation, a Delaware Corporation, (the "Company") and J. Patrick Nicholson,
an individual ("Purchaser") .
RECITALS.
---------
Whereas, the Company presently is indebted to Purchaser for obligations
arising in the ordinary course of business in an amount equal to Forty-Eight
Thousand Dollars ($48,000.00) (the "Company' s Existing Obligation");
Whereas, the Company has offered to satisfy this obligation to Purchase
through the Company's delivery to Purchaser of Sixteen Thousand (16,000) shares
("Shares") of the Company' s voting common stock, with par value $.01 per share
(the "Common Stock",); and
Whereas, Purchaser has agreed to accept delivery of the Shares in
complete satisfaction of the Company's Existing Obligation.
Now, therefore, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. EXCHANGE. The Company hereby offers the Shares to Purchaser IN
complete satisfaction of the Company's Existing obligation. Purchaser hereby
accepts the Company's offer, and, upon the Company's delivery to Purchaser of
stock certificates representing the Shares, Purchaser agrees that the Company's
Existing Obligation shall be fully and forever discharged and Purchaser shall
have no continuing claim against the Company with respect thereto.
2. UNREGISTERED OFFERING. Purchaser acknowledges and agrees that
Purchaser's acceptance of the Shares in exchange for releasing the Company from
the Company's Existing Obligation constitutes the sale of securities under and
pursuant to the Securities Act of 1933 and the rules and regulations
promulgated thereunder, as amended from time to time (the 111933 Act") .
Purchaser further acknowledges Purchaser's understanding that no aspect of the
transactions contemplated in this Agreement has been, prior to the date of this
Agreement, or will be, prior to the date of delivery of stock certificates
representing the Shares, registered with or reviewed by the Securities and
Exchange Commission (the "SEC") under the 1933 Act, or with or by any state
securities law administrator, and no federal or state securities
law administrator has approved any disclosure or other material concerning the
Company or the Shares or made any recommendation with respect thereto.
3. REPRESENTATIONS AND COVENANTS. To induce the Company to enter
into this Agreement, Purchaser represents, warrants, covenants and agrees that:
(a) ACCESS. Purchaser has investigated and will continue to
investigate the merits and risks of accepting the Shares in exchange for the
discharge of the Company's Existing Obligation. Purchaser has been provided
with the Annual Report on Form 10-K of the Company for the year ended March 31,
1996, a quarterly report on form 10-Q for the period ending March 31, 1997, the
Proxy Statement relating to the 1997 Annual Stockholders' Meeting, the 1997
Annual Report to Stockholders and all subsequent reports filed by the Company
with the SEC pursuant to the requirements of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder, as amended from time
to time, and has had the opportunity to ask questions of, and receive answers
from, members of the Board of Directors and management of the Company.
Purchaser has had the opportunity to and will continue to avail himself of his
rights to ask questions of the management of the Company
5
relating to the Company, the Shares, and related matters. Purchaser also has
had and shall continue to avail himself of his rights to obtain additional
information necessary to verify the accuracy of information provided to him and
to continue to evaluate the merits and risks of the transactions contemplated
by this Agreement.
(b) INVESTMENT INTENT: STATE OF RESIDENCE. Purchaser is
acquiring the Shares for its own account for investment, within the meaning of
the 1933 Act. Purchaser's principal place of business and domicile is and shall
continue to be at the time of delivery of the Shares the State of Ohio.
(c) AFFILIATE STATUS. Purchaser is an affiliate of the
Company within the meaning of the 1934 Act by virtue of the fact that Purchaser
is an officer and member of the Board of Directors of the Company.
(d) RESALES. Purchaser agrees that it shall not resell or
transfer in any way the Shares acquired hereunder to any U.S. Person as
described in Regulation S under the 1933 Act or in the United States without an
applicable exemption from registration under the 1933 Act or upon registration
of the Shares pursuant to the 1933 Act. All certificates representing the
Shares shall contain the following legend:
-2-
"The Shares represented by this certificate have not been registered
pursuant to the Securities Act of 1933 and therefore may not be
transferred or sold in the United States or to a U.S. Person without
either an effective registration statement pursuant to the
Securities Act of 1933 or an opinion of counsel satisfactory to
N-Viro International Corporation that registration is not required
under the Securities Act of 1933.11
(e) Purchaser has knowledge and experience in financial and
business matters so is to be capable of evaluating the merits and risks of an
investment in the Shares. Purchaser is willing and able to bear the economic
risk of an investment in the Shares indefinitely. In making the foregoing
statement, consideration has been given to whether Purchaser has adequate means
of providing for its current financial needs and business contingencies,
whether it could afford to hold the Shares indefinitely, and whether, at this
time, it could afford a significant or complete loss of his investment.
Purchaser is acquiring the Shares for Purchaser's own account, as principal,
for investment and not with a view to the resale or distribution of all or any
part of the Shares.
4. RELEASE. Upon the Company's delivery of the Shares to
Purchaser, the Company shall be fully and forever released from the requirement
that it pay Purchaser the amount of the Company's Existing Obligation. This
discharge shall be effective without any further action on the part of
Purchaser.
5. DELIVERY OF STOCK CERTIFICATES. A certificate or certificates
evidencing the Shares registered in the name of Purchaser shall be executed,
issued and delivered to Purchaser by the Company within fifteen (15) business
days from the date of execution of this Agreement.
6. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their respective heirs, personal
representatives, successors and assigns.
7. AMENDMENTS. No amendment or variations of the terms and
conditions of this Agreement shall be valid unless the same is in writing and
signed by the parties hereto. All such amendments shall specifically refer to
this Agreement.
8. HEADINGS. The paragraph headings contained herein are for
convenience only and shall not, in any way, effect the interpretation or
enforceability of any provisions of this Agreement.
-3 -
6
9. GOVERNING LAW. This Agreement shall be construed and enforced
under and pursuant to the internal laws of the state of Ohio.
10. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between the parties hereto with respect to the transactions
contemplated herein. This Agreement supersedes all prior oral and written
understandings and agreements with respect to the subject matter referred to
herein.
11. CERTAIN TERMS. Unless the context otherwise requires a
different meaning, words of a masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders, words importing
the singular numbers shall include the plural number and vice versa, and the
terms "hereby," "hereto," "hereunder," and "herein" as well as similar terms
refer to this Agreement.
12. ASSIGNMENT. None of the parties hereto may assign, transfer
or otherwise dispose of any of their rights or obligations under this
Agreement.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one document.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first above written.
N-VIRO INTERNATIONAL CORPORATION
By: /s/ James K. McHugh
-----------------------
James K. McHugh
Chief Financial Officer
/s/ J. Patrick Nicholson
- ---------------------------
J. Patrick Nicholson
-4-
7
SHARE EXCHANGE AGREEMENT
------------------------
This Share Exchange Agreement (this "Agreement") is made and entered
into as of the 30th day of June, 1997 by and between N-Viro International
Corporation, a Delaware Corporation, (the "Company") and Frederick Kurtz, an
individual ("Purchaser").
RECITALS.
---------
Whereas, the Company presently is indebted to Purchaser for obligations
arising in the ordinary course of business in an amount equal to Sixty-One
Thousand-Five Hundred Dollars ($61,500.00) (the "Company's Existing
Obligation");
Whereas, the Company has offered to satisfy this obligation to Purchase
through the Company's delivery to Purchaser of Twenty Thousand Five Hundred
(20,500) shares ("Shares") of the Company's voting common stock, with par value
$.01 per share (the "Common Stock"); and
Whereas, Purchaser has agreed to accept delivery of the Shares in
complete satisfaction of the Company's Existing Obligation.
Now, therefore, the parties hereto, intending to be legally bound hereby, agree
as follows:
1. EXCHANGE. The Company hereby offers the Shares to Purchaser in
complete satisfaction of the Company's Existing obligation. Purchaser hereby
accepts the Company's offer, and, upon the Company's delivery to Purchaser of
stock certificates representing the Shares, Purchaser agrees that the Company's
Existing Obligation shall be fully and forever discharged and Purchaser shall
have no continuing claim against the Company with respect thereto.
2. UNREGISTERED OFFERING. Purchaser acknowledges and agrees that Purchaser's
acceptance of the Shares in exchange for releasing the Company from the
Company's Existing Obligation constitutes the sale of securities under and
pursuant to the Securities Act of 1933 and the rules and regulations promulgated
thereunder, as amended from time to time (the "1933 Act") . Purchaser further
acknowledges Purchaser's understanding that no aspect of the transactions
contemplated in this Agreement has been, prior to the date of this Agreement, or
will be, prior to the date of delivery of stock certificates representing the
Shares, registered with or reviewed by the Securities and Exchange Commission
(the "SEC") under the 1933 Act, or with or by any state securities law
administrator, and no federal or state securities law administrator has approved
any disclosure or other material concerning the Company or the Shares or made
any recommendation with respect thereto.
3. REPRESENTATIONS AND COVENANTS. To induce the Company to enter
into this Agreement, Purchaser represents, warrants, covenants and agrees that:
(a) ACCESS. Purchaser has investigated and will continue to
investigate the merits and risks of accepting the Shares in exchange for the
discharge of the Company's Existing Obligation. Purchaser has been provided
with the Annual Report on Form 10-K of the Company for the year ended March 31,
1996, a quarterly report on form 10-Q for the period ending March 31, 1997, the
Proxy Statement relating to the 1997 Annual Stockholders' Meeting, the 1997
Annual Report to Stockholders and all subsequent reports filed by the Company
with the SEC pursuant to the requirements of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder, as amended from time
to time, and has had the opportunity to ask questions of, and receive answers
from, members of the Board of Directors and management of the Company.
Purchaser has had the opportunity to and will continue to avail himself of his
rights to ask questions of the management of the Company relating to the
Company, the Shares, and related matters. Purchaser also has had and shall
continue to avail himself of his rights to obtain additional information
necessary to verify the accuracy of information provided to him and to continue
to evaluate the merits and risks of the transactions contemplated by this
Agreement.
8
(b) INVESTMENT INTENT: STATE OF RESIDENCE. Purchaser is
acquiring the Shares for his own account for investment, within the meaning of
the 1933 Act. Purchaser's state of residence is and shall continue to be at the
time of delivery of the Shares the state of New Jersey.
(c) AFFILIATE STATUS. Purchaser is an affiliate of the
Company within the meaning of the 1934 Act by virtue of the fact that Purchaser
is a member of the Board of Directors of the Company.
(d) RESALES. Purchaser agrees that he shall not resell or
transfer in any way the Shares acquired hereunder to any U.S. Person as
described in Regulation S under the 1933 Act or in the United States without an
applicable exemption from registration under the 1933 Act or upon registration
of the Shares pursuant to the 1933 Act. All certificates representing the
Shares shall contain the following legend:
-2 -
"The Shares represented by this certificate have not been registered
pursuant to the Securities Act of 1933 and therefore may not be
transferred or sold in the United States or to a U.S. Person without
either an effective registration statement pursuant to the Securities
Act of 1933 or an opinion of counsel satisfactory to N-Viro
International Corporation that registration is not required under the
Securities Act of 1933."
(e) Purchaser has knowledge and experience in financial and
business matters so is to be capable of evaluating the merits and risks of an
investment in the Shares. Purchaser is willing and able to bear the economic
risk of an investment in the Shares indefinitely. In making the foregoing
statement, consideration has been given to whether he has adequate means of
providing for his current financial needs and personal contingencies, whether
he could afford to hold the Shares indefinitely, and whether, at this time, he
could afford a significant or complete loss of his investment. Purchaser is
acquiring the Shares for Purchaser's own account, as principal, for investment
and not with a view to the resale or distribution of all or any part of the
Shares.
4. RELEASE. Upon the Company's delivery of the Shares to
Purchaser, the Company shall be fully and forever released from the requirement
that it pay Purchaser the amount of the Company's Existing Obligation. This
discharge shall be effective without any further action on the part of
Purchaser.
5. DELIVERY OF STOCK CERTIFICATES. A certificate or certificates
evidencing the Shares registered in the name of Purchaser shall be executed,
issued and delivered to Purchaser by the Company within fifteen (15) business
days from the date of execution of this Agreement.
6. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their respective heirs, personal
representatives, successors and assigns.
7. AMENDMENTS. No amendment or variations of the terms and
conditions of this Agreement shall be valid unless the same is in writing and
signed by the parties hereto. All such amendments shall specifically refer to
this Agreement.
8. HEADINGS. The paragraph headings contained herein are for
convenience only and shall not, in any way, effect the interpretation or
enforceability of any provisions of this Agreement.
-3 -
9. GOVERNING LAW. This Agreement shall be construed and enforced
under and pursuant to the internal laws of the state of Ohio.
9
10. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between the parties hereto with respect to the transactions
contemplated herein. This Agreement supersedes all prior oral and written
understandings and agreements with respect to the subject matter referred to
herein.
11. CERTAIN TERMS. Unless the context otherwise requires a
different meaning, words of a masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders, words importing
the singular numbers shall include the plural number and vice versa, and the
terms "hereby," "hereto," "hereunder," and "herein" as well as similar terms
refer to this Agreement.
12. ASSIGNMENT. None of the parties hereto may assign, transfer
or otherwise dispose of any of their rights or obligations under this
Agreement.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one document.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first above written.
N-VIRO INTERNATIONAL CORPORATION
By: /s/ J. Patrick Nicholson
-----------------------------
J. Patrick Nicholson
Chairman of the Board & President
/s/ Frederick Kurtz
- -----------------------
Frederick Kurtz
-4 -
10
SHARE EXCHANGE AGREEMENT
------------------------
This Share Exchange Agreement (this "Agreement") is made and entered
into as of the 30th day of June, 1997 by and between N-Viro International
Corporation, a Delaware Corporation, (the "Company") and Bobby B. Carroll, an
individual ("Purchaser").
RECITALS.
---------
Whereas, the Company presently is indebted to Purchaser for obligations
arising in the ordinary course of business in an amount equal to One Hundred
Fifty Thousand Dollars ($150,000.00) (the "Company's Existing Obligation");
Whereas, the Company has offered to satisfy this obligation to Purchase
through the Company's delivery to Purchaser of Fifty Thousand (50,000) shares
("Shares") of the Company's voting common stock, with par value $.01 per share
(the "Common Stock,,); and
Whereas, Purchaser has agreed to accept delivery of the Shares in
complete satisfaction of the Company's Existing Obligation.
Now, therefore, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. EXCHANGE. The Company hereby offers the Shares to Purchaser in
complete satisfaction of the Company's Existing obligation. Purchaser hereby
accepts the Company's offer, and, upon the Company's delivery to Purchaser of
stock certificates representing the Shares, Purchaser agrees that the Company's
Existing Obligation shall be fully and forever discharged and Purchaser shall
have no continuing claim against the Company with respect thereto.
2. UNREGISTERED OFFERING. Purchaser acknowledges and agrees that
Purchaser's acceptance of the Shares in exchange for releasing the Company from
the Company's Existing Obligation constitutes the sale of securities under and
pursuant to the Securities Act of 1933 and the rules and regulations
promulgated thereunder, as amended from time to time (the 111933 Act") .
Purchaser further acknowledges Purchaser's understanding that no aspect of the
transactions contemplated in this Agreement has been, prior to the date of this
Agreement, or will be, prior to the date of delivery of stock certificates
representing the Shares, registered with or reviewed by the Securities and
Exchange Commission (the "SEC") under the 1933 Act, or with or by any state
securities law administrator, and no federal or state securities law
administrator has approved any disclosure or other material
concerning the Company or the Shares or made any recommendation with respect
thereto.
3. REPRESENTATIONS AND COVENANTS. To induce the Company to enter
into this Agreement, Purchaser represents, warrants, covenants and agrees that:
(a) ACCESS. Purchaser has investigated and will continue to
investigate the merits and risks of accepting the Shares in exchange for the
discharge of the Company's Existing Obligation. Purchaser has been provided
with the Annual Report on Form 10-K of the Company for the year ended March 31,
1996, a quarterly report on form 10-Q for the period ending March 31, 1997, the
Proxy Statement relating to the 1997 Annual Stockholders' Meeting, the 1997
Annual Report to Stockholders and all subsequent reports filed by the Company
with the SEC pursuant to the requirements of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder, as amended from time
to time, and has had the opportunity to ask questions of, and receive answers
from, members of the Board of Directors and management of the Company.
Purchaser has had the opportunity to and will continue to avail himself of his
rights to ask questions of the management of the Company relating to the
Company, the Shares, and
11
related matters. Purchaser also has had and shall continue to avail himself of
his rights to obtain additional information necessary to verify the accuracy of
information provided to him and to continue to evaluate the merits and risks of
the transactions contemplated by this Agreement.
(b) INVESTMENT INTENT: STATE OF RESIDENCE. Purchaser is
acquiring the Shares for his own account for investment, within the meaning of
the 1933 Act. Purchaser's state of residence is and shall continue to be at the
time of delivery of the Shares the state of Tennessee.
(c) AFFILIATE STATUS. Purchaser is an affiliate of the
Company within the meaning of the 1934 Act by virtue of the fact that Purchaser
is a member of the Board of Directors of the Company.
(d) RESALES. Purchaser agrees that he shall not resell or
transfer in any way the Shares acquired hereunder to any U.S. Person as
described in Regulation S under the 1933 Act or in the United States without an
applicable exemption from registration under the 1933 Act or upon registration
of the Shares pursuant to the 1933 Act. All certificates representing the
Shares shall contain the following legend:
-2 -
"The Shares represented by this certificate have not been registered
pursuant to the Securities Act of 1933 and therefore may not be
transferred or sold in the United States or to a U.S. Person without
either an effective registration statement pursuant to the Securities
Act of 1933 or an opinion of counsel satisfactory to N-Viro
International Corporation that registration is not required under the
Securities Act of 1933.11
(e) Purchaser has knowledge and experience in financial and
business matters so is to be capable of evaluating the merits and risks of an
investment in the Shares. Purchaser is willing and able to bear the economic
risk of an investment in the Shares indefinitely. In making the foregoing
statement, consideration has been given to whether he has adequate means of
providing for his current financial needs and personal contingencies, whether
he could afford to hold the Shares indefinitely, and whether, at this time, he
could afford a significant or complete loss of his investment. Purchaser is
acquiring the Shares for Purchaser's own account, as principal, for investment
and not with a view to the resale or distribution of all or any part of the
Shares.
4. RELEASE. Upon the Company's delivery of the Shares to
Purchaser, the Company shall be fully and forever released from the requirement
that it pay Purchaser the amount of the Company's Existing Obligation. This
discharge shall be effective without any further action on the part of
Purchaser.
5. DELIVERY OF STOCK CERTIFICATES. A certificate or certificates
evidencing the Shares registered in the name of Purchaser shall be executed,
issued and delivered to Purchaser by the Company within fifteen (15) business
days from the date of execution of this Agreement.
6. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their respective heirs, personal
representatives, successors and assigns.
7. AMENDMENTS. No amendment or variations of the terms and
conditions of this Agreement shall be valid unless the same is in writing and
signed by the parties hereto. All such amendments shall specifically refer to
this Agreement.
8. HEADINGS. The paragraph headings contained herein are for
convenience only and shall not, in any way, effect the interpretation or
enforceability of any provisions of this Agreement.
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9 GOVERNING LAW. This Agreement shall be construed and enforced
under and pursuant to the internal laws of the state of Ohio.
10. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between the parties hereto with respect to the transactions
contemplated herein. This Agreement supersedes all prior oral and written
understandings and agreements with respect to the subject matter referred to
herein.
11. CERTAIN TERMS. Unless the context otherwise requires a
different meaning, words of a masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders, words importing
the singular numbers shall include the plural number and vice versa, and the
terms "hereby," "hereto," "hereunder," and "herein" as well as similar terms
refer to this Agreement.
12. ASSIGNMENT. None of the parties hereto may assign, transfer
or otherwise dispose of any of their rights or obligations under this
Agreement.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one document.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first above written.
N-VIRO INTERNATIONAL CORPORATION
By: /s/ J. Patrick Nicholson
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J. Patrick Nicholson
Chairman of the Board & President
/s/ Bobby B. Carroll
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Bobby B. Carroll
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