Document:

exv10w12

Exhibit 10.12

[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as amended.

WATERFRONT MEDIA, INC.

45 Main Street, #800

Brooklyn, NY 11201

February 12, 2008

SBD/Waterfront Media Limited Partnership

c/o William Morris Agency, LLC

1325 Avenue of the Americas

New York, NY 10019

Attn: Eric Zohn

Rodale Inc.

733 Third Avenue, 15th Floor

New York, NY 10017

Attn: Andrew Gelman

     Re: “South Beach Diet” Online Diet and Weight Loss Service

Dear Gentlepeople:

     This letter agreement (“Agreement”) sets forth the terms of the agreement among Waterfront
Media, Inc. (“Waterfront”), SBD/Waterfront Media Limited Partnership (“SBD/WM LP”) and Rodale Inc.
(“Rodale”) regarding Waterfront’s development, distribution, marketing and exploitation of an
online subscription and/or advertising supported diet and weight loss service related to any and
all “South Beach Diet” book(s) written by Dr. Arthur Agatston (“Agatston”) and published in offline
print form by Rodale prior to and during the Term (“SBD Books”). A list of currently existing SBD
Books is attached hereto as Schedule A.

     The parties acknowledge that the agreement among Agora Media, Inc. (predecessor in interest to
Waterfront), SBD, LLC (predecessor in interest to SBD/WM LP) and Rodale dated May 9, 2003 (the
“Previous Agreement”) is, as of the date of this letter, currently in effect and will remain in
effect, pursuant to its terms, until its expiration on May 9, 2008. This Agreement does not amend
or supersede the Previous Agreement which continues in accordance with its terms until its
expiration. This Agreement is intended to address the parties’ relationship only upon expiration of
the Previous Agreement, and shall apply at such time notwithstanding any contrary term in the
Previous Agreement.

1. Grant of Rights:

     (a) During the Term [ * ], SBD/WM LP and Rodale grant to Waterfront the non-exclusive
worldwide license and right to reproduce, develop, distribute, publicly perform, publicly display,
translate into all languages, modify, and adapt on the Internet (all with SBD/WM LP’s pre-approval
as set forth in Paragraph 5 below), (i) the content contained in the SBD Books (“SBD Book
Content”), provided such content from any SBD Book is not displayed in its entirety or as a
so-called e-book, (ii) existing content (other than SBD Book Content) provided by SBD/WM LP to
Waterfront relating to the South Beach Diet, which shall include the material listed in Schedule B
attached hereto (the “Existing SBD Material”) and (iii) New Content (as defined in Paragraph 11(a)
below) that has been approved by SBD/WM LP pursuant to Paragraph 5 (collectively the “SBD
Materials”) in the form of an online

 

 

subscription and/or advertising supported diet and weight loss service [ * ] now known or
hereafter invented (the “Service”). Notwithstanding the foregoing, Waterfront shall obtain the
approval of SBD/WM LP, in accordance with Paragraph 5 below, for the licensing of any content from
the Service to any third party, which approval may be withheld for any reason, whether Waterfront
considers such decision reasonable or not. Furthermore, notwithstanding the foregoing, the parties
acknowledge and agree that the [ * ].

     (b) Subject to the provisions of Paragraph 14 below, during the Term [ * ]: (i) other than
pursuant to this Agreement, SBD/WM LP (including Agatston) and Rodale will not sell, license or
otherwise exploit (whether through an affiliate or other third party) any [ * ] using the SBD
Materials, or any other South Beach Diet branded content created or authorized by SBD/WM LP or
Agatston in the form of [ * ] and (ii) except in connection with customary promotional and
publicity activities by SBD/WM LP and/or Agatston, and/or Rodale and/or their respective related
entities, publishers or licensees for any book or periodical materials created by SBD/WM LP or
Agatston or any other SBD Brand product or service, including promotion of the SBD Brand and SBD
Books through Prevention.com, SBD/WM LP (including Agatston) and Rodale will not sell, license or
otherwise exploit the SBD Materials, or content using the SBD Brand, or Agatston’s name and
likeness in connection with [ * ]. Notwithstanding the foregoing restrictions and the terms and
conditions of this Agreement or anything else to the contrary herein, (i) Rodale shall not be
limited in any way from conducting other subscription-based and/or advertising-supported online
products or services within the health and diet category that do not use the SBD Materials or any
other content using the SBD Brand or otherwise violate any express restrictions on its activities
described hereunder, (ii) Rodale, SBD/WM LP and Agatston shall not be limited in any way from
exploiting the online rights to academic and professional intellectual properties or
non-health/medical related properties, and (iii) Rodale, SBD/WM LP, and Agatston shall not be
limited in any way from exploiting new health programs not using the SBD Brand or the SBD Materials
or any other South Beach Diet branded content created or authorized by SBD/WM LP or Agatston, a
paid subscription print newsletter or any activities of any kind that do not otherwise violate any
restrictions on the activities hereunder.

     (c) Anything to the contrary notwithstanding, no material changes to the current business
model of the Service during the Term (e.g. removing the paid subscription wall) may be made at any
time without the prior written approval of SBD/WM LP and Rodale.

2. Term:

     The term of this Agreement (the “Term”) shall commence immediately upon expiration of the
Previous Agreement on May 9, 2008, and, subject to earlier termination as herein provided, shall
continue for five (5) years (hereinafter each successive year of the Term shall be “Year 1”, “Year
2”, “Year 3”, “Year 4” and “Year 5”) [ * ]. Upon termination of this Agreement other than
termination due to a breach of this Agreement by Waterfront pursuant to Paragraph 13(a), (b) or
(c), [ * ]. Notwithstanding the foregoing, Waterfront shall have [ * ].

3. Development and Marketing of the Service; Certain Definitions:

     Waterfront shall at its sole expense (and with SBD/WM LP’s approvals, as applicable pursuant
to Paragraph 5 below), develop, market, distribute and exploit the Service. Waterfront agrees to
(i) [ * ] and (ii) [ * ].

     [ * ].

     As used in this Agreement, the following terms have the following meanings:

     [ * ].

     “Advertising Revenues” means all [ * ].

     “Subscription Revenues” means all [ * ].

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

2

 

     “Gross Revenues” means the sum of Advertising Revenues and Subscription Revenues.

4. SBD Materials:

     (a) SBD/WM LP shall, at its expense, furnish to Waterfront copies of the SBD Materials, and,
if updated, thereafter on a regular and timely basis, and provide Waterfront with reasonable access
to and copies of any other content related to the SBD Brand owned and controlled by SBD/WM LP
and/or Rodale. If necessary, SBD/WM LP shall update on a regular and timely basis all factual
material provided by SBD/WM LP and incorporated in the Service. Once updated materials are provided
to Waterfront, Waterfront shall modify the Service as promptly as reasonably possible to reflect
such changes.

     (b) SBD/WM LP shall provide the services of Agatston (or the services of a substitute mutually
agreed upon by SBD/WM LP and Waterfront (such agreement not to be unreasonably withheld by
Waterfront) it being understood that Sari Agatston is pre-approved as a substitute for Agatston)
(i) to consult regularly (no more then [ * ] except as expressly agreed to in writing by SBD/WM LP
and Waterfront) with Waterfront regarding the development and on-going production of the Service
and (ii) to actively participate in bulletin boards and online chats as and to the extent agreed to
by Agatston in his sole discretion and provide weekly content for question & answer articles in
connection with the Service during the Term as reasonably requested by Waterfront. The parties
acknowledge that consultation may be done by telephone, fax and/or e-mail.

     (c) During the Term [ * ] SBD/WM LP shall continue to maintain and make available to
Waterfront the “www.southbeachdiet.com” URL as a home page for the Service. As among the
parties, it is agreed that the aforementioned URL shall be owned by SBD/WM LP, or an affiliate, and
its use shall be governed by the terms set forth in this Agreement.

5. Approvals:

     Prior to any advertising for the Service that has not already been approved by SBD/WM LP or
any material updates or modifications of the content of the Service, Waterfront shall provide
SBD/WM LP, at Waterfront’s expense, access to the Service and such advertisements and/or updates or
modifications for the purpose of SBD/WM LP’s right to approve in writing of all aspects of the
Service and such advertisements, updates and/or modifications. SBD/WM LP’s approval of same shall
not be unreasonably withheld and any disapproval by SBD/WM LP shall be in writing to Waterfront.
SBD/WM LP’s failure to approve the Service or such advertising, updates and/or modifications within
five (5) business days after SBD/WM LP is provided access thereto, or receives such materials at
the address set forth in Paragraph 22 below if provided by mail, e-mail or fax, shall be deemed
approved by SBD/WM LP. Waterfront shall not, without SBD/WM LP’s written consent (which shall not
be unreasonably withheld), depart from the quality, form or content previously approved by SBD/WM
LP. Any approvals pursuant to this Paragraph 5 may be made by mail, email or fax to the addresses
set forth in Paragraph 22 below.

6. Use of Names and Marks:

     During the Term [ * ], SBD/WM LP grants Waterfront the worldwide, limited, non-exclusive right
to use, publish and broadcast, and to authorize others under Waterfront’s direction and control to
do so, Agatston’s name, voice and likeness and any and all of the Marks (as defined in Paragraph
14(c) below) relating to the South Beach Diet brand owned by SBD/WM LP or any of its related
entities (collectively, the “SBD Brand”) solely in connection with the Service and/or Waterfront
and the advertising and promotion thereof. Any such use, publication or broadcast by Waterfront
shall be subject to the approvals of SBD/WM LP set forth in Paragraph 5 above and shall otherwise
be consistent with SBD/WM LP’s reasonable written guidelines, provided in advance to Waterfront,
governing the quality, form and content of use of SBD/WM LP marks and services, it being
acknowledged by

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

3

 

SBD/WM LP and Rodale that any uses approved under Paragraph 5 shall be deemed to be consistent
with SBD/WM LP’s guidelines. Waterfront and Rodale agree to coordinate any such uses with Rodale’s
SBD Brand book-related promotional activities. All uses of the SBD Brand shall be subject to SBD/WM
LP’s prior approval as set forth in Paragraph 5. Waterfront’s license to use the SBD Brand shall
expire upon the expiration or earlier termination of this Agreement, [ * ], in accordance with the
provisions of Paragraph 2 above. Waterfront shall not modify, alter or obfuscate the SBD Brand or
use them in a manner that disparages SBD/WM LP, Agatston or Rodale or their respective products or
services or in an otherwise improper or deceitful manner such as an unauthorized URL re-direct, it
being acknowledged by SBD/WM LP and Rodale (only with respect to clause (ii) below, to the extent
approved by Rodale in writing) that any uses approved under Paragraph 5 above shall be deemed not
to be (i) a modification, alteration or obfuscation of the SBD Brand, (ii) disparaging of SBD/WM
LP, the SBD Brand or Rodale or their respective brands, products or services, or (iii) an otherwise
improper or deceitful manner of use. Presentation of the SBD Brand shall at all times be such that
the ownership of any particular trademark by SBD/WM LP is clearly stated and all trademarks shall
bear the “®” or “TM” symbols where applicable. Waterfront hereby renounces ownership of and assigns
to SBD/WM LP any goodwill which accrues as the result of Waterfront’s use of the SBD Brand.

7. [ * ]Royalties:

     (a) [ * ] — Waterfront shall pay SBD/WM LP and Rodale (collectively “SBD/Rodale”) [ * ] of the
Advertising Royalties, SBD/Rodale Traffic Royalties and the Subscription Royalties, as defined and
set forth below (and collectively referred to as “Royalties”), due to SBD/Rodale. [ * ]:

[ * ]

[ * ]

[ * ]

[ * ]

[ * ]

All Royalties payable to [ * ].

     (b) [ * ]

     (c) Waterfront will pay a royalty (the “Subscription Royalty”) to SBD/Rodale calculated on [ *
] in the amount of the greater of: (i) [ * ] of the Subscription Revenues and (ii) [ * ] of
Subscription Revenues [ * ] in the relevant [ * ].

     (d) Waterfront will pay a royalty (the “SBD/Rodale Traffic Royalty”) to SBD/Rodale calculated
on [ * ] in the amount of [ * ] of Subscription Revenues [ * ].

     (e) Waterfront will pay SBD/Rodale a royalty (the “Advertising Royalty”) of [ * ] of
Waterfront’s Advertising Revenues, as calculated on [ * ]. All such advertising on the Service
shall be approved in advance by SBD/WM LP in writing in accordance with Paragraph 10 below.

     (f) Waterfront’s obligations to pay any Royalties accrued to SBD/Rodale during the Term shall
survive termination of this Agreement. Any Royalties payable under this Agreement shall be paid
within 45 days after the end of the [ * ] in which they accrue.

     (g) As between SBD/WM LP and Waterfront, SBD/WM LP will [ * ] to [ * ] by the Service such as
[ * ] on [ * ] and [ * ] for use in the Service [ * ] without any [ * ] in connection with [ * ] of
such [ * ] (including without limitation in [ * ] and other [ * ]) subject to the provisions of
Paragraph 14(e) below.

8. Accounting and Audit:

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

4

 

     Waterfront shall provide SBD/WM LP and Rodale with [ * ] statements of account (including,
without limitation, a report in the form attached hereto as Schedule C, accompanied by payment of
any Royalties then due to SBD/WM LP and Rodale. Upon reasonable prior written notice to Waterfront
and no more frequently than once each Year during the Term, SBD/WM LP and Rodale shall have the
right, at their expense and through a third party auditor appointed by SBD/WM LP and Rodale, to
examine the books and records (including those in computer form) of Waterfront solely to the extent
related to statements provided to SBD/WM LP and/or Rodale by Waterfront pursuant to this Paragraph
8. Any such audit shall be conducted only during the business hours of Waterfront and shall not be
unreasonably disruptive of Waterfront’s business or operations. The auditor must agree to
confidentiality and security terms reasonably imposed by Waterfront with respect to such
examination and audit. In the event a discrepancy of [ * ] or more in favor of SBD/WM LP and/or
Rodale is discovered, Waterfront shall also pay the reasonable cost of such inspection up to the
amount of any discrepancy. Upon signature of this Agreement, Waterfront will provide SBD/WM LP and
Rodale with dates and times sufficient for an audit of Waterfront’s books and records with respect
to accountings and payments made pursuant to the Previous Agreement.

9. Ownership of User Data:

     (a) Subject to Paragraph 9(b) below, [ * ] consumer data (whether or not paid subscriber
data) generated in connection with the Service (the “SBD Consumer Data”).

     (b) Waterfront may [ * ] Waterfront product or service) for the [ * ] promoting and
operating the Service [ * ] (including without limitation, [ * ] except as permitted under
Paragraph 10 below, provided that Waterfront [ * ] during the Term hereof. Notwithstanding the
foregoing, Waterfront shall have the ability to passively track consumers that signed up for the
Service but did not sign up for any other Waterfront product or service for the purpose of serving
appropriate or targeted display advertisements to such consumers. Waterfront will not allow any
third party to use such exclusive SBD Consumer Data. [ * ] The restrictions of this Paragraph 9
will survive the termination or expiration of this Agreement. It is expressly agreed that
Waterfront is not restricted in any way from using for any purpose any consumer data (which is not
exclusive SBD Consumer Data as defined above) generated from Waterfront’s products or services
other than the Service (“Separate Waterfront Consumer Data”). No rights of any kind are granted to
SBD/WM LP or Rodale relating to any such Separate Waterfront Consumer Data, nor shall any royalties
or other fees be owed to SBD/WM LP or Rodale for Waterfront’s exploitation of the Separate
Waterfront Consumer Data. The parties acknowledge and agree that the SBD Consumer Data referenced
in this paragraph [ * ].

     (c) Waterfront shall continue to use the DART tracking software or another third party
tracking software mutually agreed upon in writing by the parties to reflect sources of customer
acquisition for the Service and other reasonable tracking devices with respect to the Service that
are deemed advisable by the parties hereto. All information secured from such tracking software and
devices shall be deemed SBD Consumer Data hereunder.

     (d) All SBD Consumer Data shall be provided to SBD/WM LP and Rodale on a quarterly basis in a
format agreed upon by the parties but if no format is agreed, then it shall be sent in a clean
Microsoft Excel (PC) file. Upon signature of this Agreement, Waterfront shall provide SBD/WM LP and
Rodale with all paid subscriber data to be supplied pursuant to the Previous Agreement for use in
accordance therewith.

10. Advertising:

     All advertisers and advertising included in or for the Service (including, without limitation,
for cross-marketing, through opt-in registration, of Waterfront’s newsletters within the Service)
must be approved in writing by SBD/WM LP, and it is agreed that no such advertising shall be
furnished to products or services that are competitive with the Service or the SBD Brand or for
alcohol, tobacco, firearms or weight loss products. In addition, advertising or sponsorship for
food, beverages, pharmaceuticals, nutriceuticals and OTC drugs shall be accepted only following
prior written approval of the specific product by SBD/WM LP. Notwithstanding the foregoing, the
parties acknowledge and agree that Waterfront’s cross-marketing, through opt-in registration, of
the following newsletters (or newsletters substantially similar in nature in the event the title of
such newsletter changes)

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

5

 

shall be permitted and deemed to be approved by SBD/WM LP provided that such newsletters, upon
delivery to individuals that signed up for such newsletters through the Service, [ * ].

11. New Content:

     (a) The parties acknowledge that users will supply Consumer Generated Material. In addition,
SBD/WM LP and Waterfront will each create new content in response to such Consumer Generated
Material as well as other new content for the Service, including without limitation the content to
be provided pursuant to Paragraph 4(a) above (collectively, the Consumer Generated Material as well
as new content supplied by SBD/WM LP, Rodale or Waterfront are referred to as “New Content”).

     (b) [ * ]

     (c) Any new content (other than the SBD Materials) not using the SBD Brand provided by Rodale
shall not be covered by this Agreement. It is agreed that any new content (other than the SBD
Materials) desired by Waterfront for the Service shall be the responsibility of Waterfront to
provide at its sole expense. It is agreed that any recipes requested by Waterfront and provided by
Rodale from its database of recipes shall be paid by Waterfront at [ * ] for the Term [ * ],
excluding recipes covered in Schedule A. Any reasonable staff and freelance time charges and out of
pocket expenses incurred by Rodale in connection with the testing of recipes shall be invoiced by
Rodale to Waterfront and paid by Waterfront within ninety (90) days of each such invoice.

12. Promotional Activities:

     During the Term, SBD/WM LP shall furnish Agatston (or a substitute supplied by SBD/WM LP who
is mutually agreed in writing by SBD/WM LP and Waterfront for up to [ * ] of such appearances) for
at least [ * ], for public appearances, publicity events and other marketing efforts as reasonably
agreed in writing between SBD/WM LP and Waterfront, and subject to Agatston’s other bona fide
professional obligations. SBD/WM LP will make reasonable efforts to promote the Service in all
personal and media appearances made by Agatston or any other SBD/WM LP representative.

13. Termination / Force Majeure:

     (a) Any of the parties shall have the right to terminate this Agreement in the event that
another party purports to transfer this Agreement or its rights hereunder in violation of Paragraph
21. The failure of a party hereto to perform its obligations on account of an event beyond its
reasonable control, including, without limitation, strikes, labor disputes, war, terrorism, natural
disaster, civil disturbance, or actions or decrees of governmental bodies or agencies (each, a
“force majeure event”) shall not constitute a breach of this Agreement by such party, it being
understood, however, that such party shall make all reasonable efforts to cure such failure upon
the cessation of such force majeure event. Notwithstanding the forgoing, if such force majeure
event lasts for more than six consecutive months or nine months in the aggregate, then any of the
parties hereto shall have the right to terminate this Agreement.

     (b) This Agreement may be terminated by any party upon [ * ] written notice to the other party
of a breach of a material provision of this Agreement by any other party, and the failure of the
breaching party to cure such breach within said [ * ] period, assuming such breach is subject to
being cured, otherwise, it will automatically terminate [ * ] after such written notice.
Notwithstanding the foregoing, in the event that either Rodale or SBD/WM LP is the breaching party
pursuant to the preceding sentence, the Agreement shall not be terminated unless Waterfront is the
party that provides written notice of breach in accordance with the preceding sentence.

     (c) In the event any party hereto files a petition in bankruptcy or is adjudicated as bankrupt
or insolvent,

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

6

 

or makes an assignment for the benefit of creditors, or an arrangement pursuant to any
bankruptcy law, or has a receiver appointed for its business and such receiver is not discharged
within thirty (30) days, then the other parties shall have the right to terminate this Agreement
immediately upon written notice.

     (d) (i) In the event Agatston is convicted or pleads nolo contendere to any crime
involving moral turpitude during the first four years of the Term which, in the exercise of
reasonable judgment, would likely significantly undermine his credibility in promoting the South
Beach Diet, Waterfront shall thereupon have the right to elect, by written notice to SBD/WM LP and
Rodale, to terminate [ * ] set forth in this Agreement.

     (ii) Waterfront shall use its best efforts to secure a life insurance policy (the “Life
Insurance Policy”) on the life of Agatston during the first four years of the Term with a coverage
limit of [ * ] during the first year of the Term, [ * ] during the second year of the Term, [ * ]
during the third year of the Term and [ * ] during the fourth year of the Term (the “Approved Death
Benefits”). SBD/WM LP shall ensure the reasonable cooperation of Agatston to assist Waterfront with
obtaining such life insurance coverage (including customary medical testing required by the
insurer, it being understood that Agatston shall be entitled to have his own physician present at
any and all medical examinations).

     Waterfront shall fund the aggregate premiums for such Life Insurance Policy up to the amount
of [ * ] (the “Cap”) in total over the first four years of the Term. In the event that the
aggregate premiums of such Life Insurance Policy due during the first four years of the Term exceed
the Cap in order to secure the Approved Death Benefits, the parties will mutually agree upon the
nature and extent of the death benefits payable under the Life Insurance Policy for a total premium
of [ * ] over the first four years of the Term and SBD/WM LP and Rodale acting jointly [ * ] or
acting severally shall have the option to pay the insurer on behalf of Waterfront all or a portion
of the aggregate premiums due which exceed the Cap in order to secure full death benefits in an
amount equal to the Approved Death Benefits.

     In the event that Agatston dies during the first four years of the Term and benefits are paid
to Waterfront under the Life Insurance Policy (the “Benefits”), Waterfront shall immediately assign
and disburse to SBD/Rodale such Benefits [ * ] (the “Assigned Benefits”) and such payments of
Assigned Benefits shall be [ * ]. In such event, Waterfront shall thereupon have the right to
elect, by written notice to SBD/WM LP and Rodale, to terminate [ * ].

     In the event that Agatston dies during the first four years of the Term and (A) Waterfront has
been unable to secure a Life Insurance Policy on Agatston’s life or (B) Waterfront had secured a
Life Insurance Policy on Agatston’s life but SBD/WM LP and Rodale, acting jointly [ * ] or acting
severally declined to pay the insurer on behalf of Waterfront the portion of aggregate premiums due
which exceed the Cap and consequently the Life Insurance Policy is no longer in effect upon
Agatston’s death, Waterfront shall thereupon have the right to elect, by written notice to SBD/WM
LP and Rodale, to terminate [ * ] set forth in this Agreement.

     (iii) If Agatston suffers from a disability which renders him unable to provide his services
hereunder or generally promote the South Beach Diet for a period of [ * ] during the first four
years of the Term, Waterfront shall thereupon have the right to elect, by written notice to SBD/WM
LP and Rodale, to terminate [ * ] of the [ * ] set forth in this Agreement.

     (iv) If (A) Agatston has a heart attack during the first four years of the Term resulting
from Confirmed Heart Disease as defined below (an “Agatston Heart Attack”), (B) such Agatston Heart
Attack becomes known to the general public and (C) the number of subscribers to the Service at the
expiration of the 60-day period immediately following initial general public knowledge of such
Agatston Heart Attack (“First Public Knowledge”) is less than 80% of the number of subscribers to
the Service Waterfront had previously budgeted for such period (taking into account and adjusting
for any customary seasonal reduction); it being agreed that Waterfront shall not, during such 60
day period, materially change its marketing activities on behalf of the Service, Waterfront shall

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

7

 

thereupon have the right to elect, by written notice to SBD/WM LP and Rodale, to terminate [ *
] set forth in this Agreement. Notwithstanding the foregoing, the event set forth in clause “(B)”
above shall not deemed to have occurred if Waterfront is the source or cause of such First Public
Knowledge, unless the public disclosure of such Agatston Heart Attack was otherwise inevitable. For
the purposes of this Agreement, “Confirmed Heart Disease” shall be defined to mean a clinical
presentation consistent with an acute coronary syndrome and either new abnormal Q waves in two or
more electrocardiographic leads or positive results in cardiac biomarkers (CPK, MD fraction> 8.8
and Troponin I> 0.4) as confirmed by two independent board certified cardiologists.

     (v) In the event that Waterfront elects, pursuant to Paragraph 13(d) (i), (ii), (iii) or
(iv) above, to terminate [ * ] set forth in this Agreement, [ * ] by Waterfront prior to the
effective date of such [ * ] termination and Waterfront’s remaining obligations hereunder [ * ] and
to pay Royalties pursuant to this Agreement) shall remain in full force and effect pursuant to the
terms set forth in this Agreement. Notwithstanding the foregoing, in the event that Waterfront’s [
* ] terminates in accordance with the provisions of Paragraph 13(d) (i), (ii), (iii) or (iv) above,
Rodale and SBD/WM LP acting jointly shall have the option to terminate this Agreement upon [ * ]
written notice to Waterfront.

     (e) [ * ]

14. Reservation of Rights:

     (a) All rights in the SBD Materials [ * ], except those specifically granted to
Waterfront hereunder, are retained by and reserved to SBD/WM LP or Rodale, as applicable.

     (b) SBD/WM LP and Rodale acknowledge that Waterfront shall have the right to include
Waterfront branding as part of the Service as approved by SBD/WM LP and Rodale in writing;
provided, however, Waterfront is pre-approved to include an industry-standard “Powered by
Waterfront Media” and/or an “Everyday Health Network” credit logo, in the form attached hereto as
Schedule D, which shall not link to any other Web site or location.

     (c) Each party acknowledges and agrees that: (i) the logos, trade names, trademarks, URLs and
service marks (collectively, the “Marks”) of each party are and shall remain the sole property of
that party; (ii) nothing in this Agreement shall confer on any party any right of ownership in the
other parties’ respective Marks; and (iii) the validity of the Marks of any party shall not now or
in the future be contested by the other parties.

     (d) SBD/WM LP and Rodale acknowledge and agree that Waterfront presently engages in the
development, distribution and marketing of online newsletters and community application products
other than the Service and that Waterfront shall be permitted to continue to do so separate and
apart from this Agreement. Waterfront agrees that the Service will have segregated and dedicated
editorial and brand management teams who shall not share proprietary information or business plans
for the Service or the SBD Brand with any other Waterfront editorial or brand management personnel.

     (e) Notwithstanding anything set forth in this Agreement (including, without limitation,
Paragraph 1 above) but subject to any other agreements between Rodale and SBD/WM LP, Agatston or
their related entities with respect to the SBD Materials:

          The right to maintain (i) any websites promoting, advertising or selling SBD Books in
connection with Rodale and any 3rd party licensees of SBD/WM LP and its related entities, and (ii)
any websites servicing, promoting, advertising or selling any prepared SBD Brand food-related home
delivery business, are expressly reserved to SBD/WM LP; provided, however, that the rights reserved
in this paragraph 14(c) shall not apply in the event that any such website’s primary source of
revenue is from the sale of advertising or the sale of access

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

8

 

(through subscription or otherwise) to SBD Materials or SBD branded content available through
the Internet.

15. Confidentiality:

     The parties hereto shall keep the terms and conditions of this Agreement confidential, as well
as the timing and amounts of any payments made by any party to another party pursuant to this
Agreement.

16. Representations and Warranties:

     (a) SBD/WM LP represents and warrants that: (i) SBD/WM LP has the right and authority to enter
into this Agreement and to make the grant of rights in conjunction with Rodale to Waterfront as set
forth herein, and (ii) all rights assigned and/or granted to Waterfront under this Agreement are,
in conjunction with Rodale, solely and exclusively owned by SBD/WM LP or under exclusive license to
SBD/WM LP throughout the world and Waterfront’s incorporation of such material into the Service
shall not violate or infringe upon the copyright, trademark, rights of privacy or any other rights
whatsoever of any third parties, and (iii) SBD/WM LP is not aware of any third party claim for
personal injury, including death, against SBD/WM LP and/or Agatston arising from or relating to use
of the SBD Materials.

     (b) Rodale represents and warrants that Rodale has the right and authority to enter into this
Agreement and, only to the extent such rights are not controlled by SBD/WM LP, Agatston or their
respective related entities, to make the grant of rights to Waterfront as set forth herein.

     (c) SBD/WM LP shall defend, indemnify and hold Waterfront harmless from any and all claims,
damages, liabilities, costs or expenses, including reasonable outside attorneys’ fees, incurred by
or imposed on Waterfront by reason of (i) any breach of the foregoing warranties and
representations in Paragraph 16(a), or (ii) any third party claim for personal injury, including
death, arising from or relating to use of the SBD Materials. Rodale shall defend, indemnify and
hold Waterfront harmless from any and all claims, damages, liabilities, costs or expenses,
including reasonable outside attorneys’ fees, incurred by or imposed on Waterfront by reason of any
breach of its warranties and representations in Paragraph 16(b).

     (d) Waterfront represents and warrants that: (i) Waterfront has the right and authority
to enter into this Agreement, and (ii) all materials incorporated into the Service by Waterfront
which do not originate with SBD/WM LP, Rodale, Agatston or Service users, shall not violate or
infringe upon the copyright, trademark, rights of privacy or any other rights whatsoever of any
third parties. Waterfront shall defend, indemnify and hold SBD/WM LP and Rodale harmless from any
and all claims, damages, liabilities, costs or expenses, including reasonable outside attorneys’
fees, incurred by SBD/WM LP and/or Rodale by reason of any breach of the foregoing warranties and
representations of Waterfront.

17. Disclaimer of Warranties: EXCEPT FOR THE LIMITED WARRANTIES UNDER THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS, IMPLIED OR STATUTORY WITH RESPECT TO THE SERVICE OR
THE DISTRIBUTION THEREOF.

18. Loss of Data/Interruption of Distribution: NO PARTY SHALL BE LIABLE FOR ANY LOSS OF
DATA OR INTERRUPTION OF ITS DISTRIBUTION OF THE SERVICE FOR ANY REASON BEYOND ITS REASONABLE
CONTROL, AND SUCH LOSS OF DATA OR INTERRUPTION OF ITS DISTRIBUTION OF THE SERVICE SHALL NOT BE
DEEMED A BREACH OF THIS AGREEMENT.

19. Arbitration:

     Intentionally Deleted

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

9

 

20. Bankruptcy: In addition to any rights or remedies SBD/WM LP and Rodale may have under
Paragraph 13(c), in the event that Waterfront files any proceeding for relief from its creditors
under the bankruptcy laws of the United States or any similar proceeding under the laws of any
state and Waterfront does not meet its obligations to SBD/WM LP under the terms of this Agreement,
then all rights to be exercised by Waterfront under this Agreement in the future shall be
terminated (it being understood that Waterfront shall nevertheless remain liable for [ * ],
Royalties and any other sums due SBD/WM LP or Rodale hereunder) and any rights that Waterfront has
to the SBD Materials shall automatically revert to SBD/WM LP and/or Rodale, as their interests
apply.

21. General:

     This Agreement contains the entire understanding of the parties with respect to the subject
matter hereof, and supercedes any and all prior agreements, understandings, promises and
representations made by a party to the other parties concerning the subject matter hereof and the
terms applicable hereto. It may not be changed orally, but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification, extension or discharge
is sought. No delay on the part of any party hereto in exercising any right hereunder or under
applicable laws, shall operate of a waiver of such right. If any provision of this Agreement is
held to be invalid or unenforceable, the remaining provisions hereof shall not be affected.
Regardless of its place of physical execution or performance, the Agreement shall be construed and
enforced in accordance with the laws of the State of New York and without regard to the principles
of conflicts of law. No party may assign or transfer this Agreement or any of its rights or duties
hereunder without the prior written consent of the other parties, which shall not be unreasonably
withheld, except that (a) SBD/WM LP and Rodale may separately assign this Agreement and all of
their rights and duties hereunder to entities owned or controlled by them, and (b) any party may
assign or transfer this Agreement by merger, or acquisition or in connection with a sale of all or
substantially all of the party’s assets, provided that in the event of such assignment, transfer or
sale by Waterfront, [ * ] and provided further that the assignee, transferee or purchaser has the
requisite financial capacity and the requisite technical capacity, editorial experience and
personnel to fully perform the terms and conditions of this Agreement after the effective date of
such assignment, transfer or sale. The parties acknowledge and agree that any assignee, transferee
or purchaser shall be deemed to have the requisite editorial experience and personnel to fully
perform the terms and conditions of this Agreement after the effective date of such assignment,
transfer or sale if such assignee, transferee or purchaser has entered into employment agreements
for at least the remainder of the Term hereof with the key Waterfront personnel who were primarily
responsible for the performance of Waterfront’s obligations and duties hereunder prior to the
effective date of such assignment, transfer or sale. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument. A copy of an executed facsimile page shall be binding upon
a party for all purposes. This Agreement is binding upon and inures to the benefit of the parties
and their respective successors, licensees and assigns.

22. Notices:

     All notices hereunder shall be made in writing to the other parties at their designated
addresses below (or such other addresses as a party may update upon notice to the other parties in
accordance with this Paragraph 22), and either (a) delivered personally, (b) sent by certified mail
(when properly addressed and bearing proper postage), return receipt requested, (c) sent by
facsimile so long as proof of confirmation is maintained, or (d) only in the case of approval
requests and notices pursuant to Paragraph 5 above, by confirmed electronic mail. Notices sent via
certified mail shall be deemed given (i) three (3) days after deposit in the mail, (ii) upon
receipt when delivered personally, or (iii) upon transmission when delivered by facsimile or by
email.

Notices to Waterfront shall be sent to:

Waterfront Media, Inc.

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

10

 

45 Main Street, #800

Brooklyn, NY 11201

Attention: Alan Shapiro, Senior Vice President & General Counsel

Fax: (718) 797-1676

Email: ashapiro@waterfrontmedia.com

Notices to SBD/WM LP shall be sent to:

SBD/Waterfront Media Limited Partnership

1691 Michigan Avenue, Suite 500

Miami Beach, FL 33139

Attn: Sari Agatston

Fax: (305) 538-1979

Email: sari.agatston@southbeachdietlp.com

With courtesy copies to:

William Morris Agency, LLC

1325 Avenue of the Americas

New York, NY 10019

Attn: Eric Zohn

Fax: 212-632-1223

Email:ezohn@wma.com

and

Frankfurt Kurnit Klein & Selz, PC

488 Madison Avenue

New York, NY 10022

Attn: Richard B. Heller, Esq.

Fax: (347) 438-2105

Email: rheller@fkks.com

Notices to Rodale shall be sent to:

Rodale Inc.

733 Third Avenue, 15th Floor

New York, NY 10017

Attn: Andrew Gelman

Fax: (610) 967-9525

Email: Andrew.gelman@rodale.com

With a courtesy copy to:

Lee Eastman

Eastman & Eastman

39 West 54th Street

New York, NY 10019

Fax:212-977-8408

lve@eastmanandeastman.com

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

11

 

Please acknowledge your acceptance of the foregoing by signing below and returning a copy to
me.

	 	 	 

	 

	 	Sincerely,
	 
	 	 
	 

	 	WATERFRONT MEDIA, INC.
	 
	 	 
	 

	 	By: /s/ Ben Wolin
	 

	 	Title: CEO

	 	 	 

	Agreed and accepted:

	 	 
	 
	 	 
	SBD/WATERFRONT MEDIA LIMITED PARTNERSHIP
	 	 
	BY: SBD/Waterfront Media, Inc., its General Partner
	 	 
	 
	 	 
	By: /s/ Arthur Agatston
	 	 
	Its: President
	 	 
	 
	 	 
	RODALE INC.
	 	 
	 
	 	 
	By: [ILLEGIBLE]
	 	 
	Title: President, Publishing and Marketing
	 	 

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

12

 

SCHEDULE A

1. The South Beach Diet: The Delicious Doctor Designed, Fool Proof Plan for Fast Healthy Weight Loss (Rodale Inc., 2003)

2. The South Beach Diet Cookbook (Rodale Inc., 2004)

3. The South Beach Diet Quick & Easy Cookbook (Rodale Inc., 2005)

4. The South Beach Diet Parties & Holidays Cookbook (Rodale Inc., 2006)

5. The South Beach Diet Taste of Summer Cookbook (Rodale Inc., 2007)

6. The South Beach Diet Good Fats Food Carbs Guide (Rodale Inc., 2004, 2005)

7. The South Beach Diet Dining Guide (Rodale Inc., 2005)

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

13

 

SCHEDULE B

(1) Access to written background material used to develop the books listed in Schedule A and the South Beach Diet

(2) Access to recipes provided from Agatston or Agatston trained nutritionists to Agatston patients

(3) Access to generic (not patient specific) support information provided to patients. Example: Exercise Plans

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

14

 

SCHEDULE C

Sample Report

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

15

 

SCHEDULE D

 

			
	[ * ] = 	 	Certain confidential information contained in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406
of the Securities Act of 1933, as amended.

16Exhibit 10.1

Exhibit 10.1

COVANTA HOLDING CORPORATION

RESTRICTED STOCK AWARD AGREEMENT

THIS AGREEMENT is made and entered into as of this 16th day of August, 2010 (the “Grant Date”)
by and between Covanta Holding Corporation, a Delaware corporation (the “Company”), and Sanjiv
Khattri (the “Employee”), pursuant to the Covanta Holding Corporation Equity Award Plan for
Employees and Officers (the “Plan”). This Agreement and the award contained herein is subject to
the terms and conditions set forth in the Plan, which are incorporated by reference herein, and the
following terms and conditions:

WITNESSETH:

WHEREAS, Employee is an employee of the Company or its Affiliates or Subsidiaries;

WHEREAS, the Company has adopted the Plan in order to promote the interests of the Company and
its stockholders by using equity interests in the Company to attract, retain and motivate its
management and other eligible persons and to encourage and reward their contributions to the
Company’s and/or its Affiliates’ and Subsidiaries’ performance and profitability;

WHEREAS, the Compensation Committee of the Board (the “Compensation Committee”) has determined
that it is in the best interests of the Company to grant Restricted Stock (as defined herein) under
the Plan to Employee on the terms and conditions set forth below; and

WHEREAS, the Employee is entrusted with knowledge of the confidential and proprietary
information and particular business methods of the Company, Covanta Energy Corporation and their
respective Subsidiaries and Affiliates (“Covanta Group”) and the clients of the Covanta Group, and
the Employee is trained and instructed in the Covanta Group’s particular operations, all of which
is exceptionally valuable to the Covanta Group and vital to the success of the Covanta Group’s
business.

NOW, THEREFORE, in consideration of the various covenants and agreements herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:

1. Award of Restricted Stock. In consideration for the continued service of the
Employee to any member of the Covanta Group, and as part of the Plan, the Company hereby awards to
the Employee, subject to the further terms and conditions set forth in this Agreement, 30,675
shares (the “Restricted Stock”) of its common stock, $0.10 par value per share (the “Common
Stock”), as of the Grant Date.

2. Rights of Stockholder. Employee shall have all of the rights of a stockholder with
respect to the shares of Restricted Stock (including the right to vote the shares of Restricted
Stock and the right to receive dividends with respect to the shares of Restricted Stock), except as
provided in Section 3 and Section 6 hereof.

 

 

 

3. Restrictions on Transfer. Except as otherwise provided in this Agreement, Employee
may not sell, transfer, assign, pledge, encumber or otherwise dispose of any of the shares of
Restricted Stock or the rights granted hereunder (any such disposition or encumbrance being
referred to herein as a “Transfer”). Any Transfer or purported Transfer by Employee of any of the
shares of Restricted Stock shall be null and void and the Company shall not recognize or give
effect to such Transfer on its books and records or recognize the person to whom such purported
Transfer has been made as the legal or beneficial holder of such shares. The shares of Restricted
Stock shall not be subject to sale, execution, pledge, attachment, encumbrance or other process and
no person shall be entitled to exercise any rights of Employee as the holder of such Restricted
Stock by virtue of any attempted execution, attachment or other process until the restrictions
imposed herein on the Transfer of the shares of Restricted Stock shall lapse as provided in Section
4 hereof. All certificates representing the shares of Restricted Stock shall have endorsed thereon
the following legend (in addition to any other legends that are customary or required on
certificates representing shares of the Company’s Common Stock):

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND OTHER TERMS AND CONDITIONS (INCLUDING FORFEITURE) SET FORTH IN A
RESTRICTED STOCK AWARD AGREEMENT DATED AS OF AUGUST 16, 2010 BETWEEN THE COMPANY AND
THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY. ANY TRANSFER OR PURPORTED TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IN VIOLATION OF SUCH RESTRICTED STOCK AWARD AGREEMENT SHALL BE NULL AND
VOID.”

If and when the restrictions imposed herein on the transfer of shares of Restricted Stock
shall have lapsed as provided in Section 4 hereof, certificates for such shares without the
restricted stock legend set forth in this section shall be delivered to the Employee. Until such
restrictions have lapsed, any certificates representing any shares of Restricted Stock shall be
held in custody by the Company. Employee may request the removal of such restricted stock legend
from certificates representing any shares of Restricted Stock as to which the restrictions imposed
herein on the transfer thereof shall have lapsed as provided in Section 4 hereof. Such request
shall be in writing to the General Counsel of the Company.

4. Lapse of Restrictions and Forfeiture. Subject to Section 4(b) hereof, the
restrictions on transfer imposed on the shares of Restricted Stock by Section 3 and this Section 4
shall lapse with respect to the shares of Restricted Stock and the Employee will vest, or gain
actual “ownership” of the shares of Restricted Stock in accordance with the terms of Section 4(a)
hereof.

 

2

 

(a) Restricted Stock Vesting. The Restricted Stock awarded hereunder shall vest as of the
dates and in the amounts set forth below provided that Employee is employed on such date by any
member of the Covanta Group:

	 	A.	 	7,688 shares shall vest on March 17, 2011;
	 
	 	B.	 	7,669 shares shall vest on March 17, 2012;
	 
	 	C.	 	7,669 shares shall vest March 17, 2013; and
	 
	 	D.	 	7,669 shares shall vest on March 17, 2014.

(b) Notwithstanding anything to the contrary in Section 4(a), in the event that prior to the
lapse of restrictions on transfer pursuant to Section 4(a), Employee’s employment with all of the
Covanta Group is terminated for any reason other than death or Disability, Employee shall forfeit,
on the date on which his employment is terminated, all of the shares of Restricted Stock as to
which the restrictions on transfer imposed thereon by Section 3 hereof shall not have lapsed prior
to such date.

(c) Notwithstanding anything to the contrary in Section 4(a) hereof, in the event of a Change
in Control, the restrictions on transfer imposed by Section 3 on the shares of Restricted Stock
shall lapse. For purposes of this Agreement, a “Change in Control” shall mean the occurrence of
any of the following events, each of which shall be determined independently of the others: (i)
any “Person” (as hereinafter defined), other than a holder of at least 10% of the outstanding
voting power of the Company as of the date of this Agreement, becomes a “beneficial owner” (as such
term is used in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) of a majority of the stock of the Company entitled to vote in the election of
directors of the Company; (ii) individuals who are Continuing Directors of the Company (as
hereinafter defined) cease to constitute a majority of the members of the Board; (iii) stockholders
of the Company adopt and consummate a plan of complete or substantial liquidation or an agreement
providing for the distribution of all or substantially all of the assets of the Company; (iv) the
Company is a party to a merger, consolidation, other form of business combination or a sale of all
or substantially all of its assets, with an unaffiliated third party, unless the business of the
Company following consummation of such merger, consolidation or other business combination is
continued following any such transaction by a resulting entity (which may be, but need not be, the
Company) and the stockholders of the Company immediately prior to such transaction hold, directly
or indirectly, at least a majority of the voting power of the resulting entity; provided, however,
that a merger or consolidation effected to implement a recapitalization of the Company (or similar
transaction) shall not constitute a Change in Control; (v) there is a Change in Control of the
Company of a nature that is reported in response to item 5.01 of Current Report on Form 8-K or any
similar item, schedule or form under the Exchange Act, as in effect at the time of the change,
whether or not the Company is then subject to such reporting requirements; provided, however, that
for purposes of this Agreement a Change in Control shall not be deemed to occur if the Person or
Persons deemed to have acquired control is a holder of at least 10% of the outstanding voting power
of the Company as of the date of this Agreement; or (vi) the Company consummates a
transaction which constitutes a “Rule 13e-3 transaction” (as such term is defined in Rule
13e-3 of the Exchange Act) prior to the termination or expiration of this Agreement.

 

3

 

(d) In the event of a Rule 13e-3 transaction, then effective coincident with the consummation
of such Rule 13e-3 transaction, the restrictions on transfer imposed by Section 3 on the shares of
Restricted Stock shall lapse; provided, however, that notwithstanding the foregoing, in connection
with the consummation of such Change in Control or Rule 13e-3 transaction, all such unvested shares
of Restricted Stock then held by Employee shall be deemed to vest and become exercisable at such
time in order to permit Employee to participate in such transaction.

(e) In the event that Employee is an employee of Covanta Energy Corporation and its
subsidiaries, then the references to the Company in Section 4(c)(i), (iii), (iv), (v) and (vi)
above shall also include, in the alternative, Covanta Energy Corporation.

(f) For purposes of this Section 4, “Continuing Directors” shall mean the members of the Board
on the date of execution of this Agreement, provided that any person becoming a member of the Board
subsequent to such date whose election or nomination for election was supported by at least a
majority of the directors who then comprised the Continuing Directors shall be considered to be a
Continuing Director; and the term “Person” is used as such term is used in Sections 13(d) and 14(d)
of the Exchange Act.

5. Transferability. Notwithstanding anything contained in this Agreement to the
contrary, shares of Restricted Stock are not transferable or assignable by the Employee until the
restrictions thereon have lapsed.

6. Adjustment Provisions. If, during the term of this Agreement, there shall be any
merger, reorganization, consolidation, recapitalization, stock dividend, stock split, rights
offering or extraordinary distribution with respect to the Common Stock, or other change in
corporate structure affecting the Common Stock, the Compensation Committee shall make or cause to
be made an appropriate and equitable substitution, adjustment or treatment with respect to the
Restricted Stock, including a substitution or adjustment in the aggregate number or kind of shares
subject to this Agreement, notwithstanding that the Restricted Stock are subject to the
restrictions on transfer imposed by Section 3 above. Any securities, awards or rights issued
pursuant to this Section 6 shall be subject to the same restrictions as the underlying Restricted
Stock to which they relate.

7. Tax Withholding. As a condition precedent to the receipt of any shares of
Restricted Stock hereunder, Employee agrees to pay to the Company, at such times as the Company
shall determine, such amounts as the Company shall deem necessary to satisfy any withholding taxes
due on income that Employee recognizes as a result of (i) the lapse of the restrictions imposed by
Section 3 hereof on the shares of Restricted Stock or (ii) Employee’s filing of an election
pursuant to Section 83(b) of the Internal Revenue Code of 1986 (the “Code”), as amended, with
respect to the shares of Restricted Stock. The obligations of the Company under this Agreement and
the Plan shall be conditional on such payment or arrangements, and the Company, its Affiliates and
Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from
any payment otherwise due to the Employee.

 

4

 

In addition, Employee may elect, unless otherwise determined by the Compensation Committee, to
satisfy the withholding requirement by having the Company withhold shares of vested Restricted
Stock with a Fair Market Value, as of the date of such withholding, sufficient to satisfy the
withholding obligation.

8. Registration. This grant is subject to the condition that if at any time the Board
or Compensation Committee shall determine, in its discretion, that the listing of the shares of
Common Stock subject hereto on any securities exchange, or the registration or qualification of
such shares under any federal or state law, or the consent or approval of any regulatory body,
shall be necessary or desirable as a condition of, or in connection with, the grant, receipt or
delivery of shares hereunder, such grant, receipt or delivery will not be effected unless and until
such listing, registration, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Board or Compensation Committee. The Company agrees
to make every reasonable effort to effect or obtain any such listing, registration, qualification,
consent or approval.

9. Rights of Employee. In no event shall the granting of the Restricted Stock or the
other provisions hereof or the acceptance of the Restricted Stock by Employee interfere with or
limit in any way the right of the Company, an Affiliate or Subsidiary to terminate Employee’s
employment at any time, nor confer upon Employee any right to continue in the employ of the
Company, an Affiliate or Subsidiary for any period of time or to continue his or her present or any
other rate of compensation.

10. Noncompetition; Nonsolicitation; Confidential Information, etc. Employee hereby
acknowledges that, during and solely as a result of Employee’s employment by the Company or its
Subsidiaries or Affiliates, Employee has received and will continue to receive special training and
education with respect to the operations of such entity(ies) and access to confidential information
and business and professional contacts, all of which is exceptionally valuable to the Covanta Group
and vital to the success of the Covanta Group’s business and other related matters. In
consideration of such special and unique opportunities afforded to Employee as a result of
Employee’s employment and the grant of Restricted Stock, Employee hereby agrees to be bound by and
acknowledges the reasonableness of the following covenants, which are specifically relied upon by
the Company and Covanta in entering into this Agreement and as a condition to the grant of the
Restricted Stock. Employee acknowledges and agrees that each of the individual provisions of this
Section 10 constitutes a separate and distinct obligation of Employee to the Covanta Group,
individually enforceable against Employee.

(a) Covenant Not to Compete. During the period Employee is employed by Company or its
Subsidiary and for a period following Employee’s termination of employment for any reason, equal to
the lesser of (i) the applicable severance period for the Employee’s job title and position as
provided in the Company’s severance plan, as in effect as of the date of termination of employment
and (ii) the severance period in effect as of the date of this Agreement, Employee shall not,
without the consent of the Board, in any form or any manner, directly or indirectly, on Employee’s
own behalf or in combination with others, become engaged in (as an individual, partner,
stockholder, director, officer, principal, agent, independent contractor, employee, trustee, lender
of money or in any other relation or capacity whatsoever, except as a holder of securities of a
corporation whose securities are publicly traded and which is

 

5

 

subject to the reporting requirements of the Exchange Act, and then only to the extent of
owning not more than two percent (2%) of the issued and outstanding securities of such corporation
or other entity) or provide services to any business which renders services or sells products, or
proposes to render services or sell products, that compete with the Business of the Covanta Group
within the United States and any foreign country in which the Covanta Group conducts any aspect of
the Business during the term of this Agreement. For purposes of this Agreement, the term
“Business” shall mean the development, ownership and/or operation of businesses engaged in
waste-to-energy and other renewable energy facilities, waste management and/or waste procurement.
Notwithstanding the foregoing, after termination of Employee’s employment for any reason, Employee
shall be permitted to work for any business that owns and operates independent power generation
projects or that provides services to competitors or customers of the Covanta Group, so long as
such business, as determined in the good faith judgment of the Board, does not compete with the
Covanta Group.

(b) Covenant Not to Solicit Employees. During the period Employee is employed by the
Company or its Subsidiary and for a period equal to the lesser of (i) the applicable severance
period for the Employee’s job title and position as provided in the Company’s severance plan, as in
effect as of the date of termination of employment and (ii) the severance period in effect as of
the date of this Agreement, Employee agrees and covenants that he shall not, for any reason,
directly or indirectly, employ, solicit or endeavor to entice away from the Covanta Group (whether
for Employee’s own benefit or on behalf of another person or entity), or facilitate the
solicitation, employment or enticement of, any employee of the Covanta Group to work for Employee,
any affiliate of Employee or any competitor of the Covanta Group, nor shall Employee otherwise
attempt to interfere (to the Covanta Group’s detriment) in the relationship between the Covanta
Group and any such employees.

(c) Covenant Not to Solicit Customers. During the period Employee is employed by
Company or its Subsidiary and for a period equal to the lesser of (i) the applicable severance
period for the Employee’s job title and position as provided in the Company’s severance plan, as in
effect as of the date of termination of employment and (ii) the severance period in effect as of
the date of this Agreement, Employee agrees and covenants that he shall not, directly or
indirectly, in any form or manner, contact, solicit, or facilitate the contacting or solicitation
of, any Customer of the Covanta Group for the purpose of competing with the Business. For purposes
of this Agreement, the term “Customer” shall mean and refer to each person, entity, municipality or
other governmental entity that has a contract with or is actively being solicited by the Covanta
Group to deliver waste, receive services or purchase energy.

(d) Covenant of Confidentiality. At any time during the term of Employee’s employment
with the Company or its Subsidiary (pursuant to this Agreement or otherwise), and for a period of
five (5) years after the termination of Employee’s employment with the Company or its Subsidiary,
as applicable, for any reason, Employee shall not, except in furtherance of the Business of the
Covanta Group or otherwise with the prior authorization of the Company, in any form or manner,
directly or indirectly, divulge, disclose or communicate to any person, entity, firm, corporation
or any other third party (other than in the course of Employee’s employment), or utilize for
Employee’s personal benefit or for the benefit of any competitor or customer of the Covanta Group
any Confidential Information. For purposes of this Agreement, “Confidential Information” shall
mean, but shall not be limited to, any technical or non-technical data,

 

6

 

formulae, patterns, compilations, programs, devices, methods, techniques, drawings, designs,
processes, procedures, improvements, models or manuals of any member of the Covanta Group or which
are licensed by any member of the Covanta Group, any financial data or lists of actual or potential
customers or suppliers (including contacts thereat) of the Covanta Group, and any information
regarding the contracts, marketing and sales plans, which is not generally known to the public
through legitimate origins of the Covanta Group. The parties hereto each acknowledge and agree
that such Confidential Information is extremely valuable to the Covanta Group and shall be deemed
to be a “trade secret.” In the event that any part of the Confidential Information becomes
generally known to the public through legitimate origins (other than by the breach of this
Agreement by Employee or by misappropriation), or is required to be disclosed by legal,
administrative or judicial process (provided that Employee has provided to the Company and Covanta
reasonable prior notice of such request and the Company or Covanta has had a reasonable
opportunity, at its expense, to dispute, defend or limit such request for the Confidential
Information), that part of the Confidential Information shall no longer be deemed Confidential
Information for purposes of this Agreement, but Employee shall continue to be bound by the terms of
this Agreement as to all other Confidential Information.

(e) Return of Property. Upon termination of Employee’s employment for any reason,
Employee shall promptly deliver to the Company or its Subsidiary all correspondence, drawings,
blueprints, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial
documents or any other documents, including all copies in any form or media, concerning the Covanta
Group’s Customers, marketing strategies, products or processes which contain any Confidential
Information.

(f) Assignment of Inventions. Any and all writings, inventions, improvements,
processes, procedures and/or techniques now or hereafter acquired, made, conceived, discovered or
developed by Employee, either solely or jointly with any other person or persons, whether or not
during working hours and whether or not at the request or upon the suggestion of the Company or its
Subsidiaries or Affiliates, which relate to or are useful in connection with any business now or
hereafter carried on or contemplated by the Covanta Group, including developments or expansions of
its present fields of operations, shall be the sole and exclusive property of the Company or its
Subsidiaries or Affiliates, as applicable. Employee shall make full disclosure to the Company or
its Subsidiaries or Affiliates of all such writings, inventions, improvements, processes,
procedures, techniques, or any other material of a proprietary nature, including, without
limitation, any ideas, inventions, discoveries, improvements, developments, designs, methods,
systems, computer programs, trade secrets or other intellectual property whether or not patentable
or copyrightable and specifically including, but not limited to, copyright and mask works,
formulae, compositions, products, processes, apparatus, and new uses of existing materials or
machines (collectively, “Inventions”), made, conceived or first reduced to practice by Employee
solely or jointly with others while employed by the Company or its Subsidiaries or Affiliates and
which relate to or result from the actual or anticipated business, work, research or investigation
of the Covanta Group or which are suggested by or result from any task assigned to or performed by
Employee for the Covanta Group; and Employee shall do everything necessary or desirable to vest the
absolute title thereto in the Company or its Subsidiaries or Affiliates, as applicable. Employee
shall write and prepare all descriptions, specifications and procedures regarding the Inventions as
may be required by the Company or its Subsidiaries or Affiliates to protect the Company’s or its
Subsidiaries or

 

7

 

Affiliates rights in and to the Inventions, and otherwise aid and assist the Company or its
Subsidiaries or Affiliates so that the Company or its Subsidiaries or Affiliates can prepare and
present applications for copyright or letters patent therefor and can secure such copyright or
letters patent wherever possible, as well as reissues, renewals, and extensions thereof, and can
obtain the record title to such copyright or patents so that the Company or its Subsidiaries or
Affiliates shall be the sole and absolute owner thereof in all countries in which it may desire to
have copyright or patent protection. Employee will, at the Company’s or its Subsidiaries or
Affiliates request, execute any and all assignment, patent or copyright forms and the like, deemed
reasonably necessary by the Company or its Subsidiaries or Affiliate. The Company’s or its
Subsidiaries or Affiliates rights hereunder shall not be limited to this country but shall extend
to any country in the world and shall attach to each Invention notwithstanding that it is
perfected, improved, reduced to specific form or used after termination Employee’s employment.
Employee agrees to lend such assistance as he or she may be able, at the Company’s or its
Subsidiaries or Affiliates request in connection with any proceedings relating to such letters of
patent, trade secrets, copyright or application thereof, as may be determined by the Company or its
Subsidiaries or Affiliates to be reasonably necessary. The Company, in its sole discretion, may
agree to pay Employee a reasonable fee to defray any costs or time incurred by Employee in
providing such assistance. Employee shall not be entitled to any additional or special
compensation or reimbursement regarding any and all such writings, inventions, improvements,
processes, procedures and techniques.

(g) Equitable Remedies. In the event that Employee breaches any of the terms or
conditions set forth in this Section 10 (collectively, the “Restrictive Covenants”), Employee
stipulates that such breach will result in immediate and irreparable harm to the business and
goodwill of the Company and/or its Subsidiaries or Affiliates and that damages, if any, and
remedies at law for such breach would be inadequate. The Company and/or its Subsidiaries or
Affiliates shall therefore be entitled to seek for and receive from any court of competent
jurisdiction a temporary restraining order, preliminary and permanent injunctive relief and/or an
order for specific performance to protect its rights and interests and to restrain any violation of
this Agreement and such further relief as the court may deem just and proper, each without the
necessity of posting bond. Following judgment or other final determination by such court, the
non-prevailing party in such proceeding shall pay the costs and expenses (including court costs and
reasonable attorneys’ fees) of the prevailing party. The Company and/or its Subsidiaries or
Affiliates may elect to seek such remedies at its sole discretion on a case by case basis. Failure
to seek any or all remedies in one case shall not restrict the Company and/or its Subsidiaries or
Affiliates from seeking any remedies in another situation. Such action by the Company and/or its
Subsidiaries or Affiliates shall not constitute a waiver of any of its rights.

(h) Continuing Obligation. During Employee’s employment and upon termination of
Employee’s employment for any reason the obligations, duties and liabilities of Employee pursuant
to Sections 10(a), 10(b), 10(c), 10(d) and 10(e) of this Agreement are continuing, and for the
periods set forth in such provisions hereof are absolute and unconditional, and shall survive and
remain in full force and effect as provided in each such Section. Notwithstanding anything else
contained in this Agreement to the contrary, the parties hereto agree that in the event, and at the
moment, Employee breaches any of the terms, duties or obligations contained in Sections 10(a),
10(b), 10(c), and 10(d) of this Agreement, all of the shares of Restricted Stock as to which the restrictions on transfer imposed thereon by Section
3 hereof shall not have lapsed prior to such date will immediately be cancelled and forfeited.

 

8

 

11. Construction.

(a) Successors. This Agreement and all the terms and provisions hereof shall be
binding upon and shall inure to the benefit of the parties hereto and their respective legal
representatives, heirs and successors, except as expressly herein otherwise provided.

(b) Entire Agreement; Modification. This Agreement contains the entire understanding
between the parties with respect to the matters referred to herein. Subject to Section 16(c) of
the Plan, this Agreement may be amended by the Board or Compensation Committee at any time.

(c) Capitalized Terms; Headings; Pronouns; Governing Law. Capitalized terms used and
not otherwise defined herein are deemed to have the same meanings as in the Plan. The descriptive
headings of the respective sections and subsections of this Agreement are inserted for convenience
of reference only and shall not be deemed to modify or construe the provisions which follow them.
Any use of any masculine pronoun shall include the feminine and vice-versa and any use of a
singular, the plural and vice-versa, as the context and facts may require. The construction and
interpretation of this Agreement shall be governed in all respects by the laws of the State of
Delaware.

(d) Notices. Each notice relating to this Agreement shall be in writing and shall be
sufficiently given if delivered by registered or certified mail, or by a nationally recognized
overnight delivery service, with postage or charges prepaid, to the address hereinafter provided in
this Section 10. Any such notice or communication given by first-class mail shall be deemed to
have been given two business days after the date so mailed, and such notice or communication given
by overnight delivery service shall be deemed to have been given one business day after the date so
sent, provided such notice or communication arrives at its destination. Each notice to the Company
shall be addressed to it at its offices at 40 Lane Road, Fairfield, New Jersey 07004 (attention:
Chief Financial Officer), with a copy to the Secretary of the Company or to such other designee of
the Company. Each notice to the Employee shall be addressed to the Employee at the Employee’s
address shown on the signature page hereof.

(e) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement or the application thereof to any party or circumstance shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the minimal extent of such
provision or the remaining provisions of this Agreement or the application of such provision to
other parties or circumstances.

(f) Counterpart Execution. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which, when taken together, shall constitute the
entire document.

 

9

 

	 	 	 	 	 
	 	COVANTA HOLDING CORPORATION

 	 
	 	By:  	/s/ Anthony Orlando
 	 
	 	 	Title   President and CEO 	 
	 

	 	 	 	 	 
	Accepted this 16th day of

August, 2010.

 	 	 
	/s/ Sanjiv Khattri
 	 	 

EMPLOYEE’S ADDRESS:

405 Tarrytown Road

Suite 1562

White Plains, NY 10607

 

10

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