Document:

SusGlobal Energy Ltd  - Exhibit 10.8 - Filed by newsfilecorp.com

BIODIGESTER EXPANSION AND OPERATION AGREEMENT 

THIS biodigester expansion and operation agreement made as of
the 1st day of June, 2016 (the "Effective Date");

 B E T W E E N: 

The Corporation of the Township of
Georgian Bluffs 
(hereinafter called “Georgian Bluffs”) 

and 

The Corporation of the Township of
Chatsworth 
(hereinafter “Chatsworth”) 

and 

SusGlobal Energy Canada I Ltd 

(hereinafter called “the Company”)

WHEREAS Georgian Bluffs and Chatsworth (together the
"Municipalities") together own property and operate a biodigester and
electricity generating facility located at 062111 Side Road 3, Georgian Bluffs
(Lot 4, Concession 6, former Township of Derby, County of Grey) (the “Existing
Facility”); 

AND WHEREAS the Municipalities have formed a joint board, as a
joint municipal standing committee, the Biodigester Joint Board, to report,
recommend and oversee the management of the Existing Facility,to make reports
and recommendations concerning the Existing Facility to the Councils of each of
the Municipalities and to pursue improvements to the Existing Facility (the
“Joint Board”); 

AND WHEREAS subsection I I (3) of the Municipal Act, 2001
provides that the Municipalities may pass by- laws respecting, inter alia, waste
management and public utilities; 

AND WHEREAS section 74 of the Municipal Act, 2001 provides that
municipalities may for their own purposes pass such by-laws in relation to waste
management in the municipality or in another municipality: 

AND WHEREAS section 93 of the Municipal Act provides that no
person shall construct, maintain or operate a sewage public utility in the
municipality if the municipality has jurisdiction to provide the public utility
in that area without first obtaining consent of the municipality and further
provides that the consent may be subject to such conditions and li mits on the
powers to which the consent relates as may be agreed upon; 

 

AND WHEREAS the Municipalities deem it desirable to provide
consent to the Company to construct, maintain and operate a sewage public
utility and to set out the conditions and limits on such consent as have been
agreed upon; AND WHEREAS the Municipal Act, 2001 provides that each of
the Municipalities may enter into agreements for the provision of municipal
capital facilities including facilities used for wastewater purposes; 

AND WHEREAS a municipal capital facilities agreement may
provide for the lease, operation and maintenance of the municipal capital
facilities and may provide for certain types of assistance to be provided in
respect of such facilities; 

AND WHEREAS each of the Municipalities may provide financial or
other assistance to any person who has entered into a municipal capital
facilities agreement in respect of the facilities that are subject of the
agreement; 

AND WHEREAS by resolution <*>, Council of Georgian Bluffs
has declared that the Existing Facility and the Proposed Expansion are municipal
capital facilities for the purposes of the Township and are for a wastewater
purpose; 

AND WHEREAS by resolution <*>, Council of Chatsworth has
declared that the Existing Facility and the Proposed Expansion are municipal
capital facilities for the purposes of the Township and are for a wastewater
purpose; 

AND WHEREAS in order to grant the license to the Company for a
period of 25 years Chatsworth has enacted By-law <*>and Georgian Bluffs
has enacted By-law <>; 

AND WHEREAS Georgian Bluffs has amended the current tipping
fees pursuant to By-law Number <*> and Chatsworth has amended the current
tipping fees pursuant to By-law Number<*>; 

AND WHEREAS each of Georgian Bluffs and Chatsworth have
provided notice as required by the their respective By-laws prior to authorizing
execution of this Agreement; AND WHEREAS the Municipalities wish to improve the
economic performance of the Existing Facility; 

AND WHEREAS the electricity generated and environmental
attributes by the Existing Facility are sold to or the property of the
Independent Electricity System Operator pursuant to a Feed-In Tariff Contract
-Contract # F-000-981-BIG-l 30-203 ("FIT Contract"); 

AND WHEREAS the Company desires to invest certain capital to
modify the Existing Facility and construct the Plant (as defined below) and the
Municipalities are willing to permit such investment to occur subject to the
terms and conditions provided herein; 

AND WHEREAS the Company has represented it has the technical
and financial resources to improve the performance of the Existing Facility and
operate the Plant on the terms and conditions provided herein; 

2 

 

NOW, THEREFORE, in consideration of the agreements herein
expressed and other good and valuable consideration, the receipt and sufficiency
of such consideration being acknowledged by each Party to each other Party, the
Parties agree as follows: 

	1. 	
      DEFINITIONS

	 	 
		
      Whenever used in this Agreement, the following terms
      shall have, unless otherwise expressly indicated, the meanings defined as
      follows:

	 	(l) 	
      "Agreement" shall mean this biodigester expansion and
      operation agreement including all schedules hereto as such may from time
      to time be amended;

	 	 	
       

	 	(2)	
      "Applicable Laws" shall mean any applicable Canadian
      federal, provincial or municipal laws, orders-in-council, by-laws, codes,
      rules, policies, regulations and statutes; (b) applicable orders,
      decisions, codes, judgments, injunctions, decrees, awards and writs of any
      court, tribunal, arbitrator, Governmental Authority or other person having
      jurisdiction; (c) applicable rulings and conditions of any licence,
      permit, certificate, registration, authorization, consent and approval
      issued by a Governmental Authority; and (d) any requirements under or
      prescribed by applicable common law;

	 	 	
       

	 	(3)	
      "Business Day" shall mean any day other than a Saturday,
      Sunday or statutory holiday in the Province of Ontario;

	 	 	
       

	 	(4)	
      "Company" or "company" shall mean SusGlobal Energy Canada
      I Ltd.; Company shall also mean and include any successor of the Company
      or any permitted assignee of the Company;

	 	 	
       

	 	(5)	
      "Control'' for the purposes of this Agreement 1s
      determined based on the following:

	 	 	
       

	 		
      (a) in the case of a corporation, a person controls such
      corporation if securities to which are attached more than fifty percent
      (50%) of the votes that may be cast to elect directors of such corporation
      are beneficially owned by the person and the votes attached to those
      securities are sufficient, if exercised, to elect a majority of the
      directors of such corporation;

	 	 	
       

	 		
      (b) in the case of a limited partnership, the general
      partner of such limited partnership controls such limited
    partnership;

	 	 	
       

	 		
      (c) in the case of a person other than a corporation or a
      limited partnership, a person controls such person if the former person
      possesses, directly or indirectly, at least a majority partnership,
      co-tenancy or other interest in such person and has the overall power to
      determine the policies and conduct of the management of such person;
      and

	 	 	
       

	 		
      (d) a person who controls another person is deemed to
      control any person which is controlled, or deemed to be controlled, by the
      other person, and the words "Controls" and "Controlled" have
      corresponding meanings;

3 

 

	 	(6) 	
      "Chatsworth" means The Corporation of the Township of
      Chatsworth, a municipal corporation;

	 	 	 
	 	(7) 	
      "ECA" means an environmental compliance approval,
      renewable energy approval, certificate of approval or similar approval
      issued by the MOECC;

	 	 	 
	 	(8) 	
      "Effective Date" means the date first written
    above;

	 	 	 
	 	(9) 	
      "Environmental Law" shall mean and include any Applicable
      Law relating to the release of Hazardous Materials or protection of the
      environment and human health.

	 	(I0) 	
      "Georgian Bluffs" means The Corporation of the Township
      of Georgian Bluffs, a municipal corporation; 

	 	 	     
	 	(11) 	
      "Good Engineering and Operating Practices" means any of
      the practices, methods and activities adopted by a significant portion of
      the North American electric utility and environmental waste management
      industry as good practices applicable to the design, building, and
      operation of facilities of similar type, size and capacity or any of the
      practices, methods or activities which, in the exercise of skill,
      diligence, prudence, foresight and reasonable judgement by a prudent
      operator in light of the facts known at the time the decision was made,
      could reasonably have been expected to accomplish the desired result at a
      reasonable cost consistent with good business practices, reliability,
      safety, expedition and Laws and Regulations. Good Engineering and
      Operating Practices are not intended to be limited to the optimum
      practices, methods or acts to the exclusion of all others, but rather are
      intended to delineate acceptable practices, methods, or acts generally
      accepted in the North American electric utility industry and environmental
      waste management industry. Without limiting the generality of the
      foregoing and in respect of the operation of the Facility, Good
      Engineering and Operating Practices include taking Commercially Reasonable
      Efforts to ensure that: 

	 	(a) 	
      adequate materials, resources and supplies are available
      to meet the Facility's needs under reasonable conditions and reasonably
      anticipated abnormal conditions;

	 	 	 
	 	(b) 	
      sufficient operating personnel are available and are
      adequately qualified, experienced and trained to operate the Facility
      properly, efficiently and taking into account manufacturers' guidelines
      and specifications and are capable of responding to abnormal
      conditions;

	 	 	 
	 	(c) 	
      preventative, routine and non-routine maintenance and
      repairs are performed on a basis that ensures reliable long-term and safe
      operation and taking into account manufacturers' recommendations and
      are performed by knowledgeable, trained and experienced
      personnel utilizing proper equipment, tools and procedures; and

4 

	 	(d) 	
      appropriate monitoring and testing is done to ensure
      equipment is functioning as designed and to provide assurance that
      equipment will function properly under both normal and abnormal
      conditions.

	 	(12) 	
      "Govern mental Authority" means any federal, provincial,
      or municipal government, parliament or legislature, or any regulatory
      authority, agency, tribunal, commission, board or department of any such
      government, parliament or legislature, or any court or other law,
      regulation or rule-making entity, having jurisdiction in the relevant
      circumstances and any person acting under the authority of any
      Governmental Authority;

	 	 	 
	 	(13) 	
      "Hazardous Material" shall mean and include each
      substance designated as a hazardous waste, hazardous substance, hazardous
      material, hazardous waste, special waste, radioactive material, pollutant,
      contaminant, toxic substance or other compound, element or substance in
      any form as designated with words of similar meaning and regulatory effect
      under any Environmental Law, petroleum and petroleum products,
      derivatives, wastes or additives, polychlorinated biphenyls, asbestos, and
      any other substance for which liability or standards of conduct may be
      imposed under Environmental Law.

	 	 	 
	 	(14) 	
      "IESO" means the Independent Electricity System Operator,
      or its successor;

	 	 	 
	 	(15) 	
      "Insolvency Legislation" means the Bankruptcy and
      Insolvency Act (Canada), the Winding Up and Restructuring Act
      (Canada), the Companies' Creditors Arrangement Act (Canada) and
      analogous legislation in effect in the provinces and territories of Canada
      and the bankruptcy, insolvency, creditor protection or similar laws of any
      other jurisdiction (regardless of the jurisdiction of such application or
      competence of such law);

	 	 	 
	 	(16) 	
      "ITA" means the Income Tax Act, R.S.C., 1985, c. I
      (5th Supp.);

	 	 	 
	 	(17) 	
      "Letter of Credit" means one or more irrevocable and
      unconditional standby letters of credit issued by a financial institution
      listed in either Schedule I or II of the Bank Act (Canada) or
      another financial institution having a minimum Credit Rating of (i) A-
      with S&P, (ii) A3 with Moody's, (iii) A (low) with DBRS, or (iv) A-
      with Fitch IBCA;

	 	 	 
	 	(18) 	
      "Material Adverse Effect" means any change (or changes
      taken together) in, or effect on, the affected Party that materially and
      adversely affects the ability of such Party to perform its obligations
      hereunder;

	 	 	 
	 	(19) 	
      "MFIPPA" means the Municipal Freedom of Information
      and Protection of Privacy Act, R.S.O. 1990, c.
M.56;

5 

	 	(20) 	
      "MOECC" means the Ontario Ministry of the Environment and
      Climate Change and any successor ministry;

	 	 	 
	 	(21) 	
      "Municipalities" means Chatsworth and Georgian Bluffs and
      "Municipality" means either of Chatsworth or Georgian Bluffs, as the
      context requires;

	 	 	 
	 	(22) 	
      "Mu11icipal Act, 2001" means the Municipal Act,
      2001, S.O. 2001, c. 25;

	 	 	 
	 	(23) 	
      "OHSA" means the Occupational Health and Safety Act,
      R.S.O. 1990, c. 0.1;

	 	 	 
	 	(24) 	
      "Parties" means all of Chatsworth, Georgian Bluffs and
      the Company and "Party" shall mean any one of them, provided that wherever
      Party is used, Chatsworth and Georgian Bluffs shall be deemed a single
      Party unless the contrary is expressly stated;

	 	 	 
	 	(25) 	
      "Plant" shall mean any and all equipment required for a
      facility to process Source Separated Organics ("SSO") including but not
      limited to the equipment listed in Schedule "A" to this Agreement and any
      associated structures including material handling, digestion, biogas
      collection and energy conversion equipment and Utilities Interfaces and
      other related equipment as deemed appropriate and supplied by the Company.
      All equipment supplied by the Company will be agreed by both parties after
      Environmental Permits are issued. The approved equipment listing will be
      substituted into Schedule "A" to this Agreement, which will be initialed
      by the Parties to demonstrate such approval, it being agreed that the
      Schedule "A" currently attached represents the equipment considered by the
      Parties hereto as representing the equipment required to be supplied. For
      certainty, it is agreed by the Parties that SSO does not include any
      commercial, agricultural or manure organic wastes.

	 	 	 
	 	(26) 	
      "Property" means the land owned jointly where the
      biodigester, the Existing Facility, is located, with a legal description
      as set out in Schedule "D" to this Agreement;

	 	 	 
	 	(27) 	
      "Regulation 170/03" means Ontario Regulation 170/03
      issued under the

	 	 	 
	 		
      Environmental Protection Act, R.S.O. 1990, c.
      E.19;

	 	 	 
	 	(28) 	
      "Site" shall mean a location within the Municipalities'
      Property, having an approximate size of I O hectares. The Site shall be
      mutually agreed upon by the Parties, taking into account the convenience
      to supply SSO Feedstock, the convenience and proximity to the Utilities
      Interfaces, and aesthetic and environmental considerations. The Site shall
      include any necessary access to provide such vehicle access, water,
      sanitary and storm sewers, natural gas, biogas and electrical services to
      and from the Site as many be required. Following selection of the Site and
      utility locations, they shall be surveyed and a plan thereof be prepared
      at the expense of the Company, which plan and description shall be
      initialed by the Parties and attached to this Agreement as Schedule
      "E";

6 

	 	(29) 	
      "Start Date" means the earlier of the date the Company
      first receives SSO for the Plant or the date that is 18 months after the
      Effective Date;

	 	 	 
	 	(30) 	
      "STDC" means Sustainable Development Technology Canada or
      successor organization;

	 	 	 
	 	(31) 	
      "Taxes" means all ad va/orem, property, municipal,
      education, occupation, severance, production, transmission, utility, gross
      production, gross receipts, sales, use, excise and other taxes,
      governmental charges, licenses, permits and assessments, other than (i)
      HST and (ii) taxes based on profits, net income or net worth;

	 	 	 
	 	(32) 	
      "Utilities Interfaces" shall mean the equipment supplied
      by the Company that makes possible the interconnection between the Plant
      and utility services including but not limited to electricity, gas and
      water.

	2. 	
      TERM & TERMINATION

	 	(1) 	
      Unless terminated earlier in accordance with the
      provisions of this Agreement, the term of this Agreement ("Term") shall be
      for twenty-five (25) years commencing upon the Effective Date and
      terminating at 5:00 p.m. local time on the twenty- fifth anniversary of
      the Effective Date. The Term may be renewed and extended for two
      additional periods for five (5) years each, each a Renewal Term, unless
      one Party delivers written notice of termination to the other Parties not
      later than one hundred and eighty days (180) prior to the end of the
      initial Term or any renewal and extension thereof. Provided, however, that
      in any renewal term each party shall have the right to terminate the
      contract upon provision of the 180 days written notice.

	 	 	 
	 	(2) 	
      This Agreement shall be immediately terminated upon
      written notice from the Municipalities to the Company, if one of the
      following events occurs:

	 	(a) 	
      One of the events of Default in paragraphs 4(1)(a),
      4(1)(b), 4(1)(c), 4( l ){d) or 13 occurs;

	 	 	 
	 	(b) 	
      If the Company is unable to secure the commitment of $7.5
      million in funding with at least $1,000,000.00 being advanced to the
      Company within fifty (50) Business Days of the Effective Date (the "first
      tranche" of funding) or fails to provide any Letter of Credit or other
      financial assurance as provided for in this Agreement;

	 	 	 
	 	(c) 	
      If the Company fails to receive all approvals required
      for the construction of the Plant prior to the first anniversary of the
      Effective Date; or

	 	 	 
	 	(d) 	
      Fails to secure a supply of SSO of fifteen thousand
      (15,000) tonnes per annum, in the aggregate, for a minimum period of
      fifteen (15) years prior to the first anniversary of the Start
  Date;

7 

	 	(3) 	
      This Agreement may be terminated with twenty (20)
      Business Days written notice by:

	 	(a) 	
      Any Party if an event of Force Majeure exceeds 1 year in
      duration; or

	 	 	 
	 	(b) 	
      The Parties mutually agree in writing to terminate this Agreement .

	 	(4) 	
      If this Agreement is terminated as provided in
      Sub-section 2(2)(b), 2(2)(c), 2(2)(c) or 2(2)(d)
then:

	 	(a) 	
      Any assigned agreements (Maintenance, utility connection
      agreements, service agreements) will be immediately transferred to the
      Municipalities and the Parties shall work cooperatively through the
      transition; and

	 	 	 
	 	(b) 	
      the Company shall have twenty (20) Business Days to
      remove any of the Company's equipment, materials, vehicles or other items
      from the Property and shall have no further access to the Property
      thereafter.

	 	(5) 	
      If this Agreement is terminated pursuant to Section 2(2)
      (a) or 3(3), the Municipality shall have the right to purchase the Plant
      for $1.00.

	3. 	
      LICENSE

	 	 	 
		(1) 	
      The Municipalities hereby demise and license the Site to
      the Company, and the Company hereby licenses and accepts the Site from the
      Municipalities, to have and to hold during the Term, subject to the terms
      and conditions of this Agreement. During the Term of this Agreement, the
      Municipalities shall provide the Company with the quiet enjoyment of the
      Site for the purpose of the Existing Facility and Plant. Any use the
      Municipalities may make of the Property shall not interfere with the
      Company's operation of the Existing Facility and P l a n t .

	 	 	 
		(2) 	
      The Company shall use the Site only for the purposes
      related to the Existing Facility and Plant as contemplated herein. A
      security fence consisting of chain link construction or similar but
      comparable construction may be placed around the perimeter of the Site,
      provided that the fence is located on the Site at the discretion of the
      Company, if it is necessary for reasons of security or safety, after
      consultation with the Municipalities. All improvements shall be at the
      Company's expense, and the installation of all improvements shall be at
      the discretion and option of the Company. Any fill brought onto the site
      by the Company or its contractors will be "clean fill" according to civil
      works good practice in effect at the time. The Company shall have the
      right to replace, repair, add or otherwise modify its equipment or any
      portion thereof, whether the equipment is specified or not on any Schedule
      attached hereto, during the Term. This Agreement does not confer upon
      Company any rights to any mineral, water, aggregate, soil, or timber on
      the Property. The Municipalities may extract these resources provided
      that, in so doing, there is no interference with the Company’s rights in
      the Property herein or created by this Agreement. Any topsoil displaced
      during borehole, foundation excavations or otherwise shall be stockpiled
      and not removed from the Property, unless so done by the Municipalities or is
      required by Applicable Law.

8 

	 	(3) 	
      The Company will maintain the Property, the Existing
      Facility, the Site and the Plant in good condition, reasonable wear and
      tear excepted. It is understood and agreed that the Company's ability to
      use the Site is contingent upon it obtaining after the execution of this
      Agreement all of the certificates, permits and other approvals
      (collectively, the "Governmental Approvals") that may be required by any
      federal, provincial or local authorities which will permit the Company's
      use of the Site as set forth above. The Municipalities shall cooperate
      with the Company in its effort to obtain such approvals and shall take no
      action which would adversely affect the status of the Property with
      respect to the proposed use by the Company. In the event that any of such
      applications for such Governmental Approvals should be finally rejected or
      any Governmental Approval issued to the Company is canceled, expires,
      lapses or is otherwise withdrawn or terminated by Governmental Authority,
      this Agreement is terminated and the Company shall have twenty (20)
      Business Days to remove any its equipment, materials, vehicles or other
      items from the Property and shall have no further access to the Property
      thereafter.

	 	 	 
	 	(4) 	
      During the Term of this Agreement, the Municipalities
      shall exempt the Company from all of the taxes levied by the
      Municipalities, including for municipal and school purposes related to the
      Property.

	4. 	
      PRIOR TO CONSTRUCTION OF THE
  PLANT

	 	(1) 	
      The Company shall:

	 	 	 	 	 
	 		(a) 	
      Prior to 5:00 p.m. local time on the fiftieth
      (50th) Business Day following the Effective Date,
  have:

	 	 	 	 	 
	 			(1) 	
      received the commitment of the funders to finance the
      expansion/construction and operation of the Plant and shall have received
      the first tranche of the funding and provide written confirmation of such
      to the Municipalities; and

	 	 	 	 	 
	 			(2) 	
      made suitable arrangements with the Municipalities to
      take over the operation and maintenance of the Existing Facility,
      including but not limited having the required insurance in place, transfer
      of responsibility for the utility services for the Existing Facility,
      assignment of the manufacturers services agreements and any filings with
      any Governmental Authority required for the operation of the Existing
      Facility.

	 	(b) 	
      After 5:00 p.m. local time on the fiftieth
      (50th) Business Day following the Effective Date, when the
      Company assumes control and responsibility for the Existing Facility,
      subject only to any express reservations, have retained Aquatech Canadian
      Water Services ("Facility Operator") to operate, maintain and repair the Existing Facility in
      accordance with all Applicable Law and Good Engineering and Operating
      Practices all at the sole cost of the Company. The Company may, subject to
      the consent of the Municipalities, which is not to be unreasonably withheld,
      from time to time, replace the Facility Operator, with a suitably
      qualified and experienced person to operate, maintain and repair the
      Existing Facility and shall provide the Municipalities with written proof
      of such retainer forthwith upon such retainer. Notwithstanding the
      foregoing, the Company shall remain solely responsible to ensure the
      Existing Facility is operated, maintained and repaired in compliance with
      Good Engineering and Operating Practice and all Applicable Laws.

9 

	 	(c) 	
      Prior to 5:00 p.m. local time on the seventieth
      (70111 ) Business Day following the Effective Date, have
      submitted a complete application to the MOECC for an amendment to the
      existing approval for the Existing Facility and/or for a new approval for
      the Plant and/or Existing Facility, each or all as may be required by the
      MOECC to amend or replace the ECA for the Existing Facility.

	 	 	 
	 	(d) 	
      At or prior to 5:00 p.m. local time on the fiftieth
      (50111 ) Business Day following the Effective Date and
      continuing during the Term, provide a Letter of Credit to the
      Municipalities in the amount of two hundred thousand dollars ($200,000.00)
      to secure the Company's performance of its obligations hereunder,
      including paying third parties. The Municipalities may draw upon the
      Letter of Credit where (i) the Company has failed to make a required
      payment to the Municipalities under this Agreement; or (ii) where the
      Company has failed to pay a third party and such obligation is required to
      be paid by the Company under the provisions of this Agreement; or (iii)
      the Company has failed to pay a third party any amount owed in respect of
      the Existing Facility or Plant and the Municipalities use the Letter of
      Credit to pay such. The Letter of Credit shall be in a form acceptable to
      the Municipalities acting reasonably. Where the Letter of Credit has been
      drawn upon, the Company shall replenish such Letter of Credit within
      twenty (20) Business Day of the Letter of Credit being drawn upon.

	 	 	 
	 	(e) 	
      Obtain all required permits and approvals or assist the
      Municipalities where applicable including as may be required zoning
      changes, official plan amendments, building permits and reimburse the
      Municipalities for any and all costs reasonably incurred and approved in
      advance in writing by the Company.

	 	 	 
	 	(f) 	
      Make the necessary arrangements for the completion of all
      Utilities Interfaces necessary for the Plant at the sole cost of the
      Company.

	 	 	 
	 	(g) 	
      Engage only qualified contractors, sub-contractors and
      other persons for the planning, design, installation and construction of
      the Plant in accordance with Good Engineering and Operating Practices
      and all Applicable Laws.

10 

	 	(h) 	
      Engage only qualified equipment suppliers with industry
      standard warranties.

	 	 	 
	 	(i) 	
      Ensure any person used for the planning, design,
      operation or construction of the Plant or part thereof, is properly
      qualified and has the appropriate insurance, including having any
      contractor or sub-contractor provide material and performance bonding in
      the amount of the contract price for the construction of the
  Plant.

	 	(2) 	
      The Company shall provide a copy of its plans to the
      Municipalities to review prior to submission of any application for
      permits or approvals. The Municipalities agree to provide their comments
      on the plans as soon as reasonably practicable.

	 	 	 
	 	(3) 	
      The Company shall remit and/or pay all Taxes and other
      employers' fees, including but not limited to WSIB remittances, insurance
      premiums, Canada Pension Plan remittances and Employment Insurance
      remittances, related to any persons it employs to operate the Existing
      Facility and Plant and the Company acknowledges and agrees that any
      persons it so employs are its responsibility and are not employees, agents or
      contractors of the Municipalities.

	5. 	
      CONSTRUCTION AND
OPERATION

	 	(1) 	
      The Company, at its sole cost,
shall:

	 	(a) 	
      plan and develop the Plant in accordance with Schedule
      "B" - Plan and Description, unless otherwise agreed to by the
    Parties.

	 	 	 
	 	(b) 	
      adhere to Good Engineering and Operating Practices and
      all Applicable Law in carrying out the planning, design, engineering,
      project management, installation, construction, operation, maintenance and
      repair
      of the modifications to the Existing Facility, the Utilities Interfaces and the
      Plant.

	 	 	 
	 	(c) 	
      be identified as the 'constructor' of the Work for
      purposes of the OHSA and shall perform all obligations in connection
      therewith. Company shall be responsible for submission of the required
      'Notice of Project" and registration form under OHSA.
      The Company shall deliver a copy of such "Notice of Project" to the
      Municipalities promptly on such document being available, and in any event
      prior to the commencement of construction of a Project. The Company shall
      develop, implement and diligently manage a worker health and safety
      management system to ensure compliance with all Applicable Laws.
      Throughout performance of work, the Company shall promptly notify the
      Municipalities of any critical injury, fatality, or any other significant
      worker health and safety incident,including any incident reported to a Governmental
      Authority, occurring at any Site. In the event of such incident, the
      Company shall take immediate actions in accordance with all Applicable
      Laws to mitigate the impact to worker health and safety.

11 

	 	(d) 	
      agrees to comply with all provisions of the
      Construction Lien Act, R.S.O. 1990, c. C.30, and other statutes
      from time to time applicable in respect of all work done or improvements
      made to the Site for which the Company is responsible pursuant to this
      Agreement and the Company shall take all steps necessary to ensure that no
      lien is enforceable against the Site or Property. If any lien becomes
      enforceable, then the Company shall use its commercially reasonable
      efforts to arrange for such lien to be discharged or vacated within sixty
      (60) Business Days of the date on which the Company becomes aware of such
      lien. Without limiting any of the foregoing, the Company shall satisfy all
      judgments and pay all costs resulting from any liens, or other
      encumbrances arising from the performance of the work or any actions
      brought in connection with any such liens or other encumbrances, or in
      connection with any other claim or lawsuit brought against the
      Municipalities by any person that provided goods or services to the
      Company.

	 	(e) 	
      Arrange for the provision and payment of the necessary
      Utilities Interfaces.

	 	 	 
	 	(f) 	
      Charge and collect tipping fees as may be provided in the
      applicable by- laws of each Municipality and which accord with the
      provisions of this Agreement, provided that the Company shall not collect
      tipping fees for the Sunset Strip businesses as listed in Schedule
    “F”.

	 	 	 
	 	(g) 	
      Undertake commissioning in accordance with the
      commissioning plan provided in Schedule "C".

	 	 	 
	 	(h) 	
      Maintain the existing fence and any other fence installed
      on or within the Property in good condition.

	 	 	 
	 	(i) 	
      Collect and remit taxes as required by Applicable
    Law.

	 	 	 
	 	(j) 	
      Plan, design, install, finance, construct and maintain
      any capital improvements of the Existing Facility as may be required by
      Applicable Laws or Good Engineering and Operating Practices.

	 	 	 
	 	(k) 	
      Prior to the first anniversary of the Start Date, have
      secured a stable, secure supply of SSO from one or more suppliers for a
      volume, in aggregate, of fifteen thousand (15,000) tonnes per annum for at
      least fifteen (15) years and confirmed such with the Municipalities by
      providing them evidence of such arrangements;.

12 

	 	(2) 	
      The Parties acknowledge that the continuity of the Plant
      operation will be subject to short term interruptions caused by routine
      maintenance, equipment breakdowns, testing schedules, forced outages and
      force majeure. The Company shall use commercially reasonable efforts to
      minimize the duration of interruptions.

	 	 	 
	 	(3) 	
      The Company shall receive, accept and process all septage
      and sewage from the geographic area of the Municipalities at the Existing
      Facility and/or the Plant, subject to compliance with Applicable
    Laws.

	 	 	 
	 	(4) 	
      The Company shall at no charge, on an as needed basis,
      accept and process all septage and sewage from the Sunset Strip businesses
      as listed in Schedule “F” collected and transported to the Existing
      Facility by the Municipalities.

	 	 	 
	 	(5) 	
      The Company shall be responsible for all sales and
      marketing of the SSO operation in order to secure the necessary feed stock
      and input materials and shall be responsible for the management and
      disposal of all outputs and waste products in accordance with Applicable
      Laws.

	 	 	 
	 	(6) 	
      The Parties shall record and maintain all records
      required by this Agreement or any other Governmental
  Authority.

	6. 	
      DECOMMISSIONING

	 	 	 
		
      (1)	
       Except where this Agreement is terminated prior to
      the twenty-fifth anniversary of the Effective Date, at the Municipalities'
      written request, the Company shall remove the Plant from the Site on the
      later of the twenty-fifth anniversary of the Effective Date or thirty (30)
      Business Days after receipt of such request and restore the Site as close
      as practicable to the current state as at the Effective Date of this
      Agreement. The Company shall ensure the Existing Plant is left in a tidy,
      safe and operable state similar to the current state at the time of the
      Effective Date of this Agreement. All Hazardous Materials shall be removed
      from the Site and transported and disposed of in accordance with al l
      Applicable  Laws.

	 	 	 
		(2) 	
      Where this Agreement is terminated prior to the
      twenty-fifth anniversary of the Effective
Date:

	 	(a) 	
      and it is terminated as a result of a default by the
      Municipalities or otherwise without default by the Company, the Company
      may remove the equipment it owns from the Site and the Plant provided no
      harm is caused to the Existing Facility and the Existing Facility is left
      in a safe condition and in good working order; and

	 	 	 
	 	(b) 	
      and it is terminated as a result of a default by the
      Company, the Municipalities may purchase the Plant and equipment owned by
      the Company at the Site for one dollar ($1
..00).

	7. 	
      RESPONSIBILITIES OF THE
  MUNICIPALITIES

13 

	 	(1) 	
      The Municipalities:

	 	 	 	 
	 		(a) 	
      Agree to process any building permit application from the
      Company for the Plant in accordance with their existing
  practices;

	 	 	 	 
	 		(b) 	
      Shall cooperate with the Company in the permitting,
      design, financing, construction, modification and operation of the
      Existing Facility and the Plant, all at the cost of the Company;

	 	 	 	 
	 		(c) 	
      Shall cooperate with the Company to apply for capital
      grants to STDC and the Eureka Program and cooperate with the Company in
      any other applications for grants or financial assistance, all at the cost
      of the Company;

	 	 	 	 
	 		(d) 	
      Shall ensure that the Company receives the quiet
      enjoyment of the Site during the Term; and

	 	 	 	 
	 		(e) 	
      Consider requests from the Company to amend the by-laws
      establishing tipping fees.

	8. 	
      FIT CONTRACT

	 	 	 
		(1) 	
      The Company acknowledges the Existing Facility is subject
      to the FIT Contract. It shall be the responsibility of the Company to
      secure any amendments, if such are required, to the FIT Contract to permit
      the Plant to be constructed.

	 	 	 
		(2) 	
      The Company acknowledges that pursuant to the FIT
      Contract, the Environment Attributes related to the Existing Facility are
      the property of the IESO and the Company has no right to such
      Environmental Attributes, as such is defined in the FIT Contract. After
      5:00 pm on the fiftieth (50th) Business Day following the Effective Date,
      the Company shall, at its sole cost except where the FIT Contract provides
      otherwise, track and provide information required by the FIT Contract for
      dealing with the Environmental Attributes. All right, title and interest
      in and to all Environmental Attributes arising in connection with the
      Plant, the Existing Facility, the Property or any of the activities or
      facilities or their operation as contemplated herein or as may occur from
      time to time in the future during the term of this Agreement, other than
      the Environmental Attributes that are the property of the IESO under the
      FIT Contract, belong to and are owned by the Company and each of the
      Municipalities hereby transfers, assigns and forever quit claims those
      Environmental Attributes to the Company.

	 	 	 
		(3) 	
      The Municipalities shall provide reasonable assistance to
      the Company to secure any amendments to the FIT Contract necessary for the
      Plant.

	 	 	 
		(4) 	
      The Company acknowledges that the FIT Contract will
      remain in the name of the Municipalities. After 5:00 pm on the fiftieth
      (501 h) Business Day following the Effective Date, the
      Municipalities are entitled to ten percent (10%) of the revenues and any
      other economic benefit from the FIT Contract and the Company is entitled ninety percent (90%) of the revenues and any
      other economic benefit from the FIT Contract. The Municipalities shall
      hold the said ninety percent (90%) of the revenues and any other economic
      benefit from the FIT Contract in trust for and on behalf of the Company
      and may offset any portion thereof consisting of money against any monies
      owed by the Company to the Municipalities if they have provided notice of
      such to the Company in sufficient time to prevent any reasonable
      likelihood of payment of the monies so offset by the Company..

14 

	 	(5) 	
      The Company shall operate the Existing Facility in
      compliance with the FIT Contract and Applicable Laws and shall use
      commercially reasonable efforts to maximize the energy output and revenue
      from the generation of electricity from the Existing
  Facility.

	9. 	
      TIPPING FEES &
PAYMENTS

	 	 	 
		(1) 	
      Each of the Municipalities retain the sole right and
      responsibility to establish tipping fees for the Existing Facilities and
      Plant, for both septage and the processing of SSO where such septage or
      SSO has its source and is produced in the geographic area of such
      Municipality ("In-Franchise Materials"). The Company may, no more than
      once per year, request the Municipalities to amend the by-law in respect
      of the tipping fees for In-Franchise Materials. The Municipalities will
      set the tipping fees for In-Franchise Materials in a manner that is
      consistent with Applicable Laws. For all septage or SSO generated from
      outside the geographic area of the Municipalities ("Ex-franchise
      Materials") the Municipalities agree that the Company may set all other
      tipping fees, and change, amend and otherwise deal with those other
      tipping fees, entirely as it sees fit so long as the tipping fees for Ex-
      Franchise Materials is not less than the tipping fees for In-Franchise
      Materials.

	 	 	 
		(2) 	
      After, 5:00 p.m. on the fiftieth (501h)
      Business Day following the Effective Date (when the Company shall assume
      control of the Existing Facility), the Company shall be responsible to
      bill and collect tipping fees in accordance with the approved by-laws of
      the relevant Municipality for the Plant for both septage and the
      processing of SSO which have their source and are produced in the
      geographic area of such Municipality, other than the sewage and septage of
      the Sunset Strip businesses as listed on Schedule “F” which is to be dealt
      with as set out in Section 9(5). Risk of collection of such fees
      (excluding Sunset Strip businesses fees where the risk resides with the
      Municipalities) resides with the Company.

	 	 	 
		(3) 	
      Commencing on the Start Date, for each one year period
      ending on the anniversary of the Start Date, the Company shall ensure that
      payment is made to the Municipalities in the total amount to the
      Municipalities, together, of a minim um of [+], excluding any amounts
      referred to in Section 9(6) and any applicable Taxes, for each such twelve
      month period commencing on, and not before, the Start Date and ending on
      the termination of this Agreement (prorating as required at
      the time of such termination). This amount shall be paid in twelve (12)
      equal monthly installments of [+], excluding applicable Taxes, on the
      first (lst) Business Day of each month. The Municipalities may set off the
      revenue received pursuant to the FIT Contract being held in trust for and
      on behalf of the Company during a month against the amount to be paid by
      the Company to the Municipalities on the first (15t) Business
      Day of the following month if but only if such set off is carried out in
      accordance with the requirements of Section 8(4). The payment may be made
      by electronic funds transfer or cheque payable to Georgian Bluffs, in
      trust for the Municipalities.

[+] Indicates confidential portion has been omitted pursuant to
a request for confidential treatment and has been filed separately with the
Securities and Exchange Commission. 

15 

	 	(4) 	
      During the Term of this Agreement, within twenty (20)
      Business Days of each anniversary of the Start Date, the Company shall
      provide a summary showing the revenue from the Existing Facility from
      septage and sewage (other than for certainty the revenue from tipping fees
      from septage and sewage from the Sunset Strip businesses listed on
      Schedule “F” and the FIT Contract. Often percent of the annual revenue
      from septage and sewage plus the FIT Contract exceeds [+] then the Company
      shall immediately pay the amount by which the ten percent of the annual
      revenue from septage and sewage plus the FIT Contract exceeds [+] to the
      Municipalities plus any applicable Taxes.

	 	 	 
	 	(5) 	
      Subject to Section 9(6) below, the Company shall be
      entitled to all revenue and benefits accruing or received with respect to
      the Existing Facility, the Property and the Plant from and after the date
      which is the fiftieth (501 h) Business Day after the Effective
      Date, provided that the Municipalities shall be entitled to ten percent
      (10%) of sewage and septage from local haulers and ten percent (10%) of
      the revenues from the FIT Contract during the period from the fiftieth
      (50th) Business Day after the Effective Date to (but not including) the
      Start Date. The Company shall have no right to receive any revenue for
      accepting and processing sewage and septage from the Sunset Strip
      businesses which shall remain with and be collected by the Municipalities .

	 	 	 
	 	(6) 	
      Any debts owing to the Municipalities with regard to
      septage and Sunset Strip fees as of the day the Company takes control of
      the Existing Facility (5:00 p.m. on the fiftieth (50th) Business Day
      following the Effective Date) are considered bad debts owing to the
      Municipalities and are their debts to collect and any such revenue
      collected shall remain revenue of the Municipalities, regardless of when
      collected. For certainty, it is confirmed by each of the Municipalities
      that all revenue and liabilities accruing or incurred with respect to the
      Existing Facility or the property prior to the Company taking control of
      the Existing Facility on the fiftieth (501 ) Business Day after
      the Effective Date are entirely and completely for the account of and the
      responsibility of the Municipalities.

	 	 	 
	 	(7) 	
      The Municipalities may periodically invoice the Company
      in respect of time spent by employees of each Municipality dealing with
      the Company as provided for in this Agreement, provided that no such
      employee time shall be spent without the prior written consent of the Company which expressly and
      specifically requests the same.

[+] Indicates confidential portion has been omitted pursuant to
a request for confidential treatment and has been filed separately with the
Securities and Exchange Commission. 

16 

	 	(8) 	
      All invoices are due and payable when rendered. If
      invoices are not paid within twenty (20) Business Days, then the
      Municipality may draw upon the Letter of Credit for the amount owing, it
      being agreed that any draw on the Letter of Cred it shall be treated as a
      payment by the Company under this Agreement.

	I0. 	INSPECTION

	  	  	  
		(1) 	
      The Municipalities shall, at all times upon two (2)
      Business Days' prior notice, at any time after the fiftieth (501
      h) Business Day following the Effective Date, have access to the
      Property, Existing Facility, Plant and Site and every part thereof during
      regular business hours and the Company shall, and shall cause all
      personnel operating and managing the Existing Facility and Plant, to
      furnish the Municipalities with all reasonable assistance in inspecting
      the Existing Facility and Plant for the purpose of ascertaining compliance
      with this Agreement; provided that such access and assistance shall be
      carried out in accordance with and subject to the reasonable safety and
      security requirements of the Company and all personnel operating and
      managing the Existing Facility and Plant, as applicable, and shall not
      interfere with the operation of the Existing Facility and Plant.

	  	  	     
		(2) 	
      The inspection of the Existing Facility and Plant by or
      on behalf of the Municipalities shall not relieve the Company any of its
      obligations to comply with the terms of this Agreement or Applicable Law.
      No Event of Default of the Company will be waived or deemed to have been
      waived by any inspection by or on behalf of the Municipalities. In no
      event will any inspection by the Municipalities hereunder be a
      representation that there has been or will be compliance with this
      Agreement and Laws and Regulations. 

	  	  	     
		(3) 	
      Failure by the Municipalities to inspect the Existing
      Facility or Plant or any part thereof shall not constitute a waiver of any
      of the rights of the Municipalities hereunder. An inspection not followed
      by a notice of an Event of Default to the Company shall not constitute or
      be deemed to constitute a waiver of any Event of Default of the Company,
      nor shall it constitute or be deemed to constitute an acknowledgement that
      there has been or will be compliance by the Company with this Agreement.
      

	  	  	     
		(4) 	
      The Municipalities shall bear its costs of the
      inspections carried out pursuant to Section 1 0(1).

	11. 	
      REPRESENTATIONS AND WARRANTS

	 	 	 
		(1) 	
      The Company represents to the Municipalities as follows,
      and acknowledges that the Municipalities are relying on such
      representations in entering into this Agreement:

17 

	 	(a) 	
      The Company is a corporation incorporated under the laws
      of the Province of Ontario, is registered or otherwise qualified to carry
      on business in the Province of Ontario, and has the requisite power to
      enter into this Agreement and to perform its obligations
  hereunder.

	 	 	 
	 	(b) 	
      This Agreement has been duly authorized, executed, and
      delivered by the Company and is a valid and binding obligation of the
      Company enforceable in accordance with its terms except as such
      enforcement may be limited by bankruptcy, insolvency and other laws
      affecting the rights of creditors generally and except that equitable
      remedies may only be granted in the discretion of a court of competent
      jurisdiction.

	 	 	 
	 	(c) 	
      The execution and delivery of this Agreement by the
      Company and the consummation of the transactions contemplated by this
      Agreement will not result in the breach or violation of any of the
      provisions of, or constitute a default under, or conflict with or cause
      the termination, cancellation or acceleration of any material obligation
      of the Company under:

	 	(1) 	
      any contract or obligation to which the Company is a
      party or by which it or its assets may be bound, except for such defaults
      or conflicts as to which requisite waivers or consents have been
      obtained;

	 	 	 
	 	(2) 	
      the articles, by-laws or other constating documents, or
      resolutions of the directors or shareholders of the Company;

	 	 	 
	 	(3) 	
      any judgment, decree, order or award of any Governmental
      Authority or arbitrator;

	 	 	 
	 	(4) 	
      any licence, permit, approval, consent or authorization
      held by the Company; or

	 	 	 
	 	(5) 	
      any Laws and Regulations,

that could have a Material Adverse
Effect on the Company. 

	 	(d) 	
      There are no bankruptcy, insolvency, reorganization,
      receivership, seizure, realization, arrangement or other similar
      proceedings pending against or being contemplated by the Company or, to
      the knowledge of the Company, threatened against the Company.

	 	 	 
	 	(e) 	
      There are no actions, suits, proceedings, judgments,
      rulings or orders by or before any Governmental Authority or arbitrator,
      or, to the knowledge of the Company, threatened against the Company that
      could have a Material Adverse Effect on the
Company.

18 

	 	(f) 	
      All requirements for the Company to make any filing,
      declaration or registration with, give any notice to or obtain any
      licence, permit, certificate, registration, authorization, consent or
      approval of, any Governmental Authority as a condition to entering into
      this Agreement have been satisfied.

	 	 	 
	 	(g) 	
      The Company is not a non-resident of Canada for the
      purposes of the ITA, unless it has notified the Municipalities of such
      non-resident status as per Section 6.

	 	 	 
	 	(h) 	
      All statements, specifications, data confirmations and
      information that have been set out in the Schedules to this Agreement are
      complete and accurate in all material respects and are hereby restated and
      reaffirmed by the Company as representations made to the Municipalities
      hereunder and there is no material information omitted from the Schedules
      to this Agreement which makes the information in such Schedules misleading
      or inaccurate.

	 	 	 
	 	(i) 	
      The Company is in compliance with all Laws and
      Regulations, other than acts of non-compliance which, individually or in
      the aggregate, would not have a Material Adverse Effect on the Company or
      on its obligations under this Agreement.

	 	(2) 	
      The Company is not aware of any facts or circumstances
      that would reasonably be expected to prevent the fulfilment of any of its
      obligations under this Agreement.

	 	 	 
	 	(3) 	
      The Municipalities represent to the Company as follows,
      and acknowledges that the Company is relying on such representations in
      entering into this Agreement:

	 	(a) 	
      The Municipalities are corporations without share capital
      created under the laws of Ontario, and have the requisite power to enter
      into this Agreement and to perform its obligations hereunder.

	 	 	 
	 	(b) 	
      This Agreement has been duly authorized, executed, and
      delivered by each of the Municipalities and is a valid and binding
      obligation of the Municipalities enforceable in accordance with its terms,
      except as enforcement may be limited by bankruptcy, insolvency and other
      laws affecting the rights of creditors generally and except that equitable
      remedies may be granted solely in the discretion of a court of competent
      jurisdiction.

	 	 	 
	 	(c) 	
      The execution and delivery of this Agreement by each of
      the Municipalities and the consummation of the transactions contemplated
      by this Agreement will not result in the breach or violation of any of the
      provisions of, or constitute a default under, or conflict with or cause
      the termination, cancellation or acceleration of any material obligation
      of such Municipality under:

19 

	 	(1) 	
      any contract or obligation to which the Municipality is a
      party or by which it or its assets may be bound, except for such defaults
      or conflicts as to which requisite waivers or consents have been
      obtained;

	 	 	 
	 	(2) 	
      the by-laws of the Municipality;

	 	 	 
	 	(3) 	
      any judgment, decree, order or award of any Governmental
      Authority or arbitrator;

	 	 	 
	 	(4) 	
      any licence, permit, approval, consent or authorization
      held by the Municipality; or

	 	 	 
	 	(5) 	
      any Applicable Laws,

	 		
      that could have a Material Adverse Effect on the
      Municipality.

	 	 	 
	 	(d) 	
      There are no bankruptcy, insolvency, reorganization,
      receivership, seizure, realization, arrangement or other similar
      proceedings pending against, or being contemplated by the Municipalities
      or, to the knowledge of the Municipalities, threatened against the
      Municipalities.

	 	 	 
	 	(e) 	
      There are no actions, suits, proceedings, judgments,
      rulings or orders by or before any Governmental Authority or arbitrator,
      or, to the knowledge of either of the Municipalities, threatened against
      either of the Municipalities, that could have a Material Adverse Effect on
      either of the Municipalities.

	 	 	 
	 	(f) 	
      Each of the Municipalities are in compliance with
      Applicable Laws other than acts of non-compliance which, individually or
      in the aggregate, would not have a Material Adverse Effect on the
      Municipality or on its obligations under this
Agreement.

	12. 	
      INSURANCE

	 	(1) 	
      To protect each of the Parties against liability, loss,
      or expense arising out of, in connection with, or resulting from the
      respective duties of the Parties provided for hereunder, the Company
      shall, on the fiftieth (501 h) Business Day following the
      Effective Date and thereafter throughout the term of this Agreement, at
      its own expense, in reliable insurance companies authorized to do business
      in the Province and approved by Municipalities, maintain insurance in the
      amount and type of a prudent owner/operator of similar facilities with at
      least the following minimum insurance
coverages:

	 	(a) 	
      Comprehensive General Liability Insurance, including
      contractor's contingent coverage, with limits of not less than five
      million dollars ($5,000,000) per occurrence for Bodily Injury and five
      million ($5,000,000) per occurrence for Property
Damage;

20 

	 	(b) 	
      Contractual Bodily Injury Liability and contractual
      Property Damage Liability Insurance covering liability assumed under this
      Agreement, with limits the same as that provided for comprehensive General
      and Environmental Liability Insurance;

	 	 	 
	 	(c) 	
      All risks property insurance for an amount of at least
      the full replacement cost of the Insuring Party's property;

	 	 	 
	 	(d) 	
      To the extent applicable, Workers Compensation Insurance
      as required by law and Employers Liability Insurance limits of not less
      than one hundred thousand dollars ($100,000) for any accident covering the
      location(s) of all work places involved in this Agreement;

	 	 	 
	 	(e) 	
      Personal injury, broad Form Property Damage, Non-Owned
      Automobile, Products-Completed Operations, Cross Liability, Severability
      of Interest Clause.

	 	(2) 	
      Any and all deductibles in the above-described insurance
      policies shall be assumed by, for the account of and at the Company's sole
      risk. The deductible shall not exceed five percent (5%) of the coverage
      amount.

	 	 	 
	 	(3) 	
      The Company's policies shall name the Municipalities as
      an additional insured and provide proof of insurance to each of the
      Municipalities with five (5) Business Days of being requested to provide
      such information.

	13. 	
      EVENTS OF DEFAULT

	 	 	 
		(1) 	
      Each of the following will constitute an Event of Default
      by the Company (each, a "Company Event of
Default"):

	 	(a) 	
      The Company fails to make any payment when due, if such
      failure is not remedied within five (5) Business Days after written notice
      of such failure from the Municipalities.

	 	 	 
	 	(b) 	
      The Company fails to replenish the Letter of Credit
      within the timeframe stipulated herein.

	 	 	 
	 	(c) 	
      The Company fails to perform any material covenant or
      obligation set forth in this Agreement (except to the extent constituting
      a separate Company Event of Default) if such failure is not remedied
      within twenty (20) Business Days after written notice of such failure from
      the Municipalities, provided that such cure period shall be extended by a
      further fifteen (15) Business Days if the Company is diligently remedying
      such failure and such failure is capable of being cured during such
      extended cure period.

	 	 	 
	 	(d) 	
      The Company fails or ceases to hold a valid licence,
      permit, certificate, registration, authorization, consent or approval
      issued by a Governmental Authority where such failure or cessation results in, or
      could be reasonably expected to result in, a Material Adverse Effect on
      the Company and is not remedied within thirty (30) Business Days after
      receipt by the Company of written notice of such failure or cessation from
      the Municipalities, provided that such cure period shall be extended by a
      further thirty (30) Business Days if the Company is diligently remedying
      such failure or cessation and such failure or cessation is capable of
      being corrected during such extended cure period.

21 

	 	(e) 	
      Any representation made by the Company in this Agreement
      is not true or correct in any material respect when made and is not made
      true or correct in all material respects within thirty (30) Business Days
      after receipt by the Company of written notice of such fact from the
      Municipalities, provided that such cure period (i) shall be extended for a
      further period of thirty (30) Business Days and (ii) may be extended by
      such further period of time as the Municipalities in its sole and absolute
      discretion determines is reasonable, if, in each case, the Company is
      diligently correcting such breach and such breach is capable of being
      corrected during such extended cure period.

	 	 	 
	 	(f) 	
      An effective resolution is passed or documents are filed
      in an office of public record in respect of, or a judgment or order is
      issued by a court of competent jurisdiction ordering, the dissolution,
      termination of existence, liquidation or winding up of the Company, unless
      such filed documents are immediately revoked or otherwise rendered
      inapplicable, or unless there has been a permitted and valid assignment of
      this Agreement by the Company under this Agreement to a person which is
      not dissolving, terminating its existence, liquidating or winding up and
      such person has assumed all of the Company's obligations under this
      Agreement.

	 	 	 
	 	(g) 	
      The Company amalgamates with, or merges with or into, or
      transfers the Facility or all or substantially all of its assets to,
      another person unless, at the time of such amalgamation, merger or
      transfer, there has been a permitted and valid assignment hereof by the
      Company under this Agreement to the resulting, surviving or transferee
      Person and such person has assumed all of the Company's obligations under
      this Agreement.

	 	 	 
	 	(h) 	
      A receiver, manager, receiver-manager, liquidator,
      monitor or trustee in bankruptcy of the Company or of any of the Company's
      property is appointed by a Governmental Authority or pursuant to the terms
      of a debenture or a similar instrument, and such receiver, manager,
      receiver- manager, liquidator, monitor or trustee in bankruptcy is not
      discharged or such appointment is not revoked or withdrawn within thirty
      (30) days of the appointment. By decree, judgment or order of a
      Governmental Authority, the Company is adjudicated bankrupt or insolvent
      or any substantial part of the Company's property is sequestered, and such
      decree, judgment or order continues undischarged and unstayed for a period
      of thirty (30 days after the entry thereof. A petition, proceeding or filing is made
      against the Company seeking to have the Company declared bankrupt or
      insolvent, or seeking adjustment or composition of any of its debts
      pursuant to the provisions of any Insolvency Legislation, and such
      petition, proceeding or filing is not dismissed or withdrawn within thirty
      (30) days.

22 

\	 	(i) 	
      The Company makes an assignment for the benefit of its
      creditors generally under any Insolvency Legislation, or consents to the
      appointment of a receiver, manager, receiver-manager, monitor, trustee in
      bankruptcy, or liquidator for all or part of its property or files a
      petition or proposal to declare bankruptcy or to reorganize pursuant to
      the provisions of any Insolvency Legislation.

	14. 	
      INDEMNITY

	 	 	 
		(1) 	
      The Company agreed to indemnify and hold harmless the
      Municipalities and any and all agents, directors, officers, employees,
      sub-contractors or servants of Municipalities against any and all losses,
      costs or expenses (including all legal expenses), claims, demands, suits
      or judgments (including, but not limited to claims, demands, suits or
      judgments for bodily injury, death, or loss of services, property or
      wages) which may be brought against the Municipalities or in which the
      Municipalities is named a party defendant, or in which any or all such
      agents, directors, officers, employees, subcontractors, or servants of the
      Municipalities are named party defendant or parties defendant, as the case
      may be, by any employee, licensee or invitee of the Company or by any
      employee, licensee or invitee of the Company's subcontractors, or the
      legal representative or successor of such employee, licensee or invitee or
      by any claimant, in any way arising out of or incidental to the work
      performed by or under the direction of the Company under this Agreement,
      irrespective of whether such suits are based on the relationship of master
      and servant, third party, or otherwise, or are based upon strict liability
      or in tort; provided, however, that the Company shall not be liable for
      the negligence of the Municipalities or any and all agents, directors,
      officers, employees, sub-contractors or servants of the Municipalities.
      The Company further agrees to investigate, handle, respond to, provide
      defence for and defend any such claim, demand, or suit as its sole
      expense, and agrees to bear all other costs and expenses related thereto,
      even if the same is groundless, false, or fraudulent; and the Company may
      make such investigation, negotiation, and settlement of any such claim,
      demand, or suit as it deems expedient.

	 	 	 
		(2) 	
      The Company hereby specifically agrees to indemnify,
      defend and hold the Municipalities and their respective present and future
      councilors, employees, agents, representatives, successors and assigns
      harmless from and against any and all losses, liabilities, claims,
      demands, damages, causes of action, fines, penalties, costs and expenses
      (including, but not limited to, all reasonable consulting, engineering,
      attorneys' or other professional fees), that they may incur or suffer by
      reason of:

23 

	 	(a) 	
      any introduction, release, discharge or deposit of a
      Hazardous Material by the Company or its subcontractors, agents or
      representatives;

	 	 	 
	 	(b) 	
      any enforcement or compliance proceeding commenced by or
      in the name of any Governmental authority because of an alleged,
      threatened or actual violation of any Environmental Law by contractor or
      its subcontractors; and

	 	 	 
	 	(c) 	
      any action reasonably necessary to abate, remediate or
      prevent a violation or threatened violation of any Environmental Law by
      contractor or its subcontractors.

	 	(3) 	
      Notwithstanding the foregoing Section 14(2), the Company
      shall not be responsible for any Hazardous Materials that are brought on
      Site by the Municipalities or for any Hazardous Materials that were
      present on any Site prior to the commencement of the construction of the
      work by the Company, and the Company will promptly notify the
      Municipalities if any Hazardous Materials are found on any Site prior to
      the commencement of the work.

	 	 	 
	 	(4) 	
      No Party will be liable under this Agreement, or under
      any cause of action relating to the subject matter of this Agreement, for
      any special, indirect, incidental, punitive, exemplary or consequential
      damages, including loss of profits, loss of use of property or claims of
      customers or contractors of the Parties for any such
  damages.

	15. 	
      REPORTING & PUBLIC
    STATEMENTS

	 	 	 
		(1) 	
      The Company shall provide the Municipalities with a
      monthly facility performance report is required within twenty (20)
      Business Days of the completion of each month. The reports will consist
      of, at a minimum, the following:

	 	(a) 	
      Treatment plant influent flows, average day, maximum day,
      total month Volumes (treated and bypassed);

	 	 	 
	 	(b) 	
      Raw sewage and effluent concentrations and loadings for
      parameters samples as required by the MOECC and ECA;

	 	 	 
	 	(c) 	
      Facility and equipment repair and maintenance details
      including scheduled and unscheduled maintenance;

	 	 	 
	 	(d) 	
      Complaints and other public inquiries received and action
      taken;

	 	 	 
	 	(e) 	
      Regulatory issues (inspections, orders, reports) filed
      with regulators;

	 	 	 
	 	(t) 	
      Health and Safety issues;

	 	 	 
	 	(g) 	
      Status of capital projects; and

24 

	 	(h) 	
      Other noteworthy occurrences/inspections of the
      facility.

	 	(2) 	
      Within ninety (90) days of the end of each fiscal year
      end, the Company shall annually provide to the Municipalities:

	 	 	 	 
	 		(a) 	
      copies of its audited financial statements; and

	 	 	 	 
	 		(b) 	
      a copy of the business plan for the operation of the
      Plant for the following year;

	 	(3) 	
      The Company shall attend meetings of the Joint Board when
      requested to do so by the Joint Board. The Company may be requested and
      shall attend a maximum of two (2) meetings with the Council of each
      Municipality in a calendar year. Except in exigent circumstances, the
      Municipality shall provide the Company with five (5) Business Days' notice
      with details of the purpose, time and location of the meeting.

	 	 	 
	 	(4) 	
      Annual reporting as per the MOECC specifications is
      required to be provided to both of Municipalities and the MOECC no later
      than the date specified under Regulation 170/03. Such report is to be
      submitted to the Municipalities no later than sixty (60) days following
      the end of each calendar year.

	16. 	
      NOTICE

	 	 	 
		(1) 	
      All notices, consents, approvals, requests, reports and
      other information pertaining to this Agreement not explicitly permitted to
      be in a form other than writing shall be in writing and shall be addressed
      to the other Party as follows (each, a
"Notice"):

	 	If to the Company: 	SusGlobal Energy Canada I Ltd. 
	 	  	200 Davenport Avenue, 
	 	 	Toronto, Ontario, MSR 112 
	 	  	 
	 	  	Attention:      CEO,
      Gerald P. Hamaliuk 
	 	  	Facsimile:     
       (416) 223-8507 
	 	  	E-mail:             ghamaliuk@susglobalenergy.com
	 	  	 
	 	With a copy to: 	SusGlobal Energy Canada I Ltd. 
	 	 	200 Davenport Avenue, 
	 	 	Toronto, Ontario, MSR J J2 
	 	  	 
	 	  	Attention:      Marc
      M. Hazout, 
	 	  	Facsimile:     
       (4 J 6) 223-8507 
	 	  	E-mail:            
      mhazout@susglobalenergy.com
	 	  	 
	 	If to Georgian Bluffs: 	Township of Georgian Bluffs 
	 	  	177964 Grey Road 18, R.R. #3 
	 	  	Owen Sound, Ontario, N4K 5N5

25 

	 	  	Attention:     Clerk 
	 	  	Facsimile:    
       519-372-1620 
	 	  	E-mail:           
      office@georgianbluffs.on.ca
	 	  	 
	 	If to Chatsworth: 	Township of Chatsworth 
	 	  	316837 Highway 6, R.R. 1 
	 	  	Chatsworth, Ontario, NOH I GO 
	 	  	 
	 	  	Attention:      Clerk
    
	 	  	Facsimile:        (519)
      794-4499 
	 	  	E-mail:             
      office@chatsworth.ca

	 		
      Any Party may, by written Notice to the other, change its
      respective Representative or the address to which Notices are to be
      sent.

	 	 	 
	 	(2) 	
      Notices shall be delivered or transmitted as set out
      below, and shall be considered to have been received by the other
      Party:

	 	(a) 	
      on the date of delivery if delivered by hand or by
      courier prior to 5:00 p.m. (local time of the recipient) on a Business Day
      and otherwise on the next following Business Day, it being agreed that the
      onus of establishing delivery shall fall on the Party delivering the
      notice;

	 	 	 
	 	(b) 	
      in those circumstances where electronic transmission
      (other than transmission by facsimile) is expressly permitted under this
      Agreement, on the date of delivery if delivered prior to 5:00 p.m. (local
      time of the recipient) on a Business Day and otherwise on the next
      following Business Day, provided that a copy of such notice is also
      delivered by regular post within a reasonable time thereafter;

	 	 	 
	 	(c) 	
      on the third (3rd) Business Day following the date of
      transmission by facsimile, if transmitted prior to 5:00 p.m. (local time
      of the recipient) on a Business Day and otherwise on the fourth (4th)
      following Business Day, provided that a copy of such notice is also
      delivered by regular post within a reasonable time thereafter;
  and

	 	 	 
	 	(d) 	
      on the fifth (5th) Business Day following the date of
      mailing by registered post.

	 	(3) 	
      Notwithstanding Section 16(2)16(2):

	 	 	 	 
	 		(a) 	
      any Notices of an Event of Default and termination of
      this Agreement shall only be given by hand or courier delivery;
  and

	 	 	 	 
	 		(b) 	
      if regular post service, facsimile, or other form of
      electronic communication is interrupted by strike, slowdown, a Force
      Majeure event or other cause, a notice, direction or other instrument sent
      by the impaired means of communication will not be
deemed to be received until actually received, and the Party sending the notice
shall utilize any other such service which has not been so interrupted to
deliver such notice. 

26 

	 	
       
	17. 	
      FORCE MAJEURE

	 	 	 
		(1) 	
      No Party shall be or shall be deemed to be in default of
      this Agreement where the failure to perform or the delay in performing any
      obligation is due to a cause beyond its reasonable control. Causes beyond
      the reasonable control of a Party ("Force Majeure Event") include an act
      of God, an act of any federal, provincial, regional, municipal or other
      government, an order of any court or administrative or regulatory
      authority, civil commotion, strikes, lockouts and other labour disputes,
      shortages of materials other than SSO material, equipment or labour,
      fires, floods, sabotage, earthquakes, windstorms, ice storms, snow storms
      and other storms and epidemics. In no event shall shortages of SSO
      material, insolvency, bankruptcy or lack of money constitute a Force
      Majeure Event.

	 	 	 
		(2) 	
      A Party subject to a Force Majeure Event
  must:

	 	(1) 	
      give each other Party Notice immediately upon the
      occurrence thereof providing detailed particulars thereof, the anticipated
      or actual commencement of a Force Majeure Event, the cause thereof and the
      anticipated or actual postponement of performance or inability to perform
      and the anticipated length of the Force Majeure
Event;

	 	(2) 	
      give each other Party prompt Notice of any material
      changes in the Force Majeure Event, including when the Force Majeure Event
      is at an end; and

	 	 	 
	 	(3) 	
      use commercially reasonable efforts to avoid, minimize
      and remove the cause of the Force Majeure Event and to eliminate or
      minimize the consequences thereof, including utilizing all resources
      reasonably required in the circumstances including obtaining supplies or
      services from other resources if they are reasonably
  available.

	 	(3) 	
      The time for performing any obligation affected by a
      Force Majeure Event shall be extended for a period equal to the time
      during which the Party was subject to the Force Majeure Event. The Parties
      not subject to the Force Majeure Event shall be excused from any of their
      obligations that are dependent or consequent upon the performance by any
      other Party of any obligation that is subject to the Force Majeure Event.
      The obligation to make a payment shall not be delayed by a Force Majeure
      Event.

	 	 	 
	 	(4) 	
      Notwithstanding the other provisions of this Article, the
      settlement of any strike, lockout, restrictive work practice or other
      labour disturbance constituting a Force Majeure Event shall be within;
      sole discretion of the Party in such strike,
lockout, restrictive work practice or other labour disturbance and
      nothing in this Article shall require such Party to mitigate or alleviate
      the effects of such strike, lockout, restrictive work practice or other
      labour disturbance.

27

	 	(5) 	
      Where a Force Majeure Event or series of Force Majeure
      Events is ongoing for twelve (12) consecutive months, either Party may
      terminate this Agreement as provided in Paragraph 2(3) (a) of this
      Agreement by giving thirty (30) days written notice of such
      termination.

	18. 	
      CONFIDENTIALITY, PUBLIC STATEMENTS AND MFIPPA
      RECORDS

	 	 	 
		(1) 	
      The Parties acknowledge and agree that the Municipalities
      are subject to MFIPPA and that MFI PPA applies to and governs all records
      in the custody or control of the Municipalities ("MFIPPA Records") and
      may, subject to MFIPPA, require the disclosure of such MFIPPA Records to
      third parties. Each Municipality, as appropriate, agrees to provide a copy
      of any MFIPPA Records that it previously provided to the Municipality if
      the Company continues to possess such MFIPPA Records in a deliverable form
      at the time of the Municipality's request. If the Company does possess
      such MFIPPA Records in a deliverable form, it shall provide the same
      within a reasonable time after being directed to do so by the
      Municipality. The provisions of this Section 18 shall survive any
      termination or expiry of this Agreement and shall prevail over any inconsistent
      provisions in this Agreement.

	 	 	 
		(2) 	
      The Company and the Municipalities shall both keep
      complete and accurate records and all other data required by either of
      them for the purpose of proper administration of this Agreement. All such
      records shall be maintained as required by Applicable Laws but for no less
      than for seven (7) years after the creation of the record or data. Each
      Party shall provide reasonable access to the relevant and appropriate
      financial and operating records and data kept by it relating
      to this Agreement reasonably required for any other Party to comply with its
      obligations to Governmental Authorities or to verify or audit billings or
      to verify or audit information provided in accordance with this Agreement,
      including the provision of copies of documents and all other information
      reasonably required by the Municipalities, which shall be delivered to the
      premises of the Municipalities as may be directed. A Party may at its own
      expense appoint an auditor to conduct its audit. The Party seeking access
      to such records in this manner shall pay the fees and expenses associated
      with use of the third party auditor.

	 	 	 
		(3) 	
      Except as required by Applicable Law, no Party shall make
      or allow any public announcements, press releases, sales brochures,
      advertising or other publicity materials, or other public disclosure (a
      "Public Statement"): (i) in which the name or logo of a Municipality or
      the Company is used; or (ii) that relates to this Agreement or the
      transactions contemplated in this Agreement except with the prior written
      consent of all Parties which may, having regard to the nature of the
      relationship of the Parties and the transaction provided
      for herein, bear bitrarily or unreasonably withheld or subjected to
any conditions solely determined by the Party granting the consent. Where the
Public Statement is required by Applicable Laws, the Party required to make the
Public Statement will use commercially reasonable efforts to obtain the approval
of the other Parties as to the form, nature and extent of the disclosure.
Notwithstanding the foregoing, the Municipality may, without the consent of the
Company, be permitted to make public announcements and press releases of a type
commonly made by municipal governments with respect to community developments
provided that any such public announcement or press release does not disclose
any confidential information of the Company that would be of competitive
advantage to the Company's competitors. 

28 

	 	
       
	19. 	
      DISPUTES & RESOLUTIONS

	 	 	 
		(1) 	
      If any Party considers that a dispute has arisen under or
      in connection with this Agreement that the Parties cannot resolve, then
      such Party may deliver a notice to the other Party describing the nature
      and the particulars of such dispute. Within twenty (20) Business Days
      following delivery of such notice to the other Party, a senior
      representative from each Party shall meet, either in person or by
      telephone (the "Resolution Conference"), to attempt to resolve the
      dispute. Each senior representative shall be prepared to propose a
      solution to the dispute. If, following the Resolution Conference, the
      dispute is not resolved, the dispute may be settled by arbitration
      pursuant to Section 19(2).

	 	 	 
		(2) 	
      Except as otherwise specifically provided for in this
      Agreement, any matter in issue between the Parties as to their rights
      under this Agreement may be decided by arbitration provided, however, that
      the Parties have first completed a Resolution Conference pursuant to
      Section 19(1). Any dispute to be decided by arbitration will be decided by
      a single arbitrator appointed by the Parties or, if such Parties fail to
      appoint an arbitrator within fifteen (15) days following the agreement to
      refer the dispute to arbitration, upon the application of either of the
      Parties, the arbitrator shall be appointed by a Judge of the Superior
      Court of Justice (Ontario) sitting in the Judicial District of Toronto
      Region. The arbitrator shall not have any current or past business or
      financial relationships with any Party (except prior arbitration). The
      arbitrator shall provide each of the Parties an opportunity to be heard
      and shall conduct the arbitration hearing in accordance with the
      provisions of the Arbitration Act, 1991 (Ontario). Unless otherwise
      agreed by the Parties, the arbitrator shall render a decision within
      ninety (90) days after the end of the arbitration hearing and shall notify
      the Parties in writing of such decision and the reasons therefor. The
      arbitrator shall be authorized only to interpret and apply the provisions
      of this Agreement and shall have no power to modify or change this
      Agreement in any manner. The decision of the arbitrator shall be
      conclusive, final and binding upon the Parties. The decision of the
      arbitrator may be appealed solely on the grounds that the conduct of the
      arbitrator, or the decision itself, violated the provisions of the
      Arbitration Act, 1991 (Ontario) or solely on a question of law as
      provided for in the Arbitration Act, 1991 (Ontario). The
      Arbitration Act, 1991 (Ontario) shall govern the
  procedures to apply in the enforcement of any
award made. If it is necessary to enforce such award, all costs of enforcement
shall be payable and paid by the Party against whom such award is enforced.
Unless otherwise provided in the arbitral award to the contrary, each Party
shall bear (and be solely responsible for) its own costs incurred during the
arbitration process, and each Party shall bear (and be solely responsible for)
its equal share of the costs of the arbitrator. Each Party shall be otherwise
responsible for its own costs incurred during the arbitration process. 

29 

	 	
       
	20. 	
      ASSIGNMENT & CHANGE OF
      CONTROL

	 	(1) 	
      Except as otherwise provided in this Agreement, neither
      this Agreement nor any rights, remedies, liabilities or obligations
      arising under or by reason of this Agreement shall be assignable or
      assigned by a Party without the prior written consent of the other Party,
      which, having regard to the nature of the relationship of the Parties and
      the transaction provided for herein, may be arbitrarily or unreasonably
      withheld or subjected to any conditions solely determined by the Party
      granting the consent. Notwithstanding the foregoing, a Party may, without
      the prior consent of the other Party, assign this Agreement and any of its
      rights, remedies, liabilities or obligations
to:

	 	(1) 	
      any corporation or partnership which is on the effective
      date of the assignment and is intended to continue thereafter to be,
      controlled by, under the control of or under common control with the
      assigning Party; or

	 	 	 
	 	(2) 	
      a financial institution or other entity for purposes of
      obtaining financing.

	 	(2) 	
      A Party making an assignment permitted by this Section
      20(1) shall provide the other Party with prompt Notice of such assignment.
      An assignment shall not release the assigning Party from any liability or
      obligation under this Agreement to the other Party, unless and until such
      Party provides such release in writing.

	 	 	 
	 	(3) 	
      The Company shall not permit or allow a change of Control
      of the Company, except with the prior written consent of the
      Municipalities, which consent may not be unreasonably withheld. It shall
      not be unreasonable to withhold such consent if the change of Control will
      have or is likely to have, as determined by the Municipalities acting
      reasonably, a Material Adverse Effect on the Company's ability to perform
      its obligations under this Agreement, in which case such consent may be
      withheld by the Municipalities. For greater certainty, a change of Control
      shall include a change from no person having Control of the Company to any
      Person having Control of the Company, as well as a change from any person
      having Control of the Company to no Person having Control of the
      Company.

	21. 	
      GENERAL

	 	 	 
		(1) 	
      Each Party shall be solely liable for the payment of all
      wages, taxes, and other costs related to the employment by such Party of
      persons who perform this Agreement, including all federal, provincial, and local income,
      social insurance, health, payroll and employment taxes and
      statutorily-mandated workers' compensation coverage. None of the persons
      employed by either Party shall be considered employees of the other Party
      for any purpose. Nothing in this Agreement shall create or be deemed to
      create a relationship of partners, joint venturers, fiduciary, principal
      and agent or any other relationship between the Parties.

30 

	 	(2) 	
      This Agreement may be executed in two (2) or more
      counterparts, and all such counterparts shall together constitute one and
      the same Agreement. It shall not be necessary in making proof of the
      contents of this Agreement to produce or account for more than one such
      counterpart. Any Party may deliver an executed copy of this Agreement by
      facsimile or electronic mail but such Party shall, within ten (10)
      Business Days of such delivery by facsimile or electronic mail, promptly
      deliver to the other Party an originally executed copy of this
      Agreement.

	 	 	 
	 	(3) 	
      In addition to the other rights of set-off under this Agreement
      or otherwise arising in law or equity, either Party may set off any amounts
      owing to such Party under this Agreement against any amounts owed to the
      other Party under this Agreement.

	 	 	 
	 	(4) 	
      If any provision of this Agreement is found by a court of
      competent jurisdiction to be invalid, illegal or unenforceable in any
      respect, such provision shall be deemed severed from this Agreement and
      shall not affect the validity, legality or enforceability of the remaining
      provisions of this Agreement, unless such invalidity or unenforceability
      frustrates the fundamental operation of this Agreement and in such case
      this Agreement shall terminate unless such invalidity or unenforceability
      frustrates the fundamental operation of this Agreement and i n such case
      this Agreement shall terminate.

	 	 	 
	 	(5) 	
      Time is of the essence in the performance of the Parties'
      respective obligations under this Agreement. Where the Company is required
      to provide any information or documentation to the Municipalities and no
      timeframe has been specified in this Agreement, the Company shall provide
      such information or documentation promptly.

	 	 	 
	 	(6) 	
      Each of the Parties shall, from time to time on written
      request of the other Party, do all such further acts and execute and
      deliver or cause to be done, executed or delivered all such further acts,
      deeds, documents, assurances and things as may be required, acting
      reasonably, in order to fully perform and to more effectively implement
      and carry out the terms of this Agreement. The Parties agree to promptly
      execute and deliver any documentation required by any Governmental Authority
      in connection with any termination of this Agreement.

	 	 	 
	 	(7) 	
      The provisions of Sections 2(4), 2(5), 3(3), 4(1) (d),
      4(3), 5(l) (d), 5(l) (i), 6(1), 6(2), 14, 18 and 19 shall survive the
      expiration of the Term or earlier termination of this Agreement. The
      expiration of the Term or a termination of
this Agreement shall not affect or prejudice any rights or obligations
      that have accrued or arisen under this Agreement prior to the time of
      expiration or termination and such rights and obligations shall survive
      the expiration of the Term or the termination of this Agreement for a
      period of time equal to the applicable statute of limitations. 

31 

	 	(8) 	
      Except where otherwise expressly provided, all amounts in
      this Agreement are stated, and shall be paid, in Dollars. 

	 	  	     
	 	(9) 	
      The inclusion of headings and a table of contents in this
      Agreement are for convenience of reference only and shall not affect the
      construction or interpretation of this Agreement. In this Agreement,
      unless the context otherwise requires, words importing the singular
      include the plural and vice versa and words importing gender include all
      genders. 

	 	  	     
	 	(I0) 	
      This Agreement shall be governed by and construed in
      accordance with the laws of the Province of Ontario and the federal Jaws
      of Canada applicable therein. 

	 	  	     
	 	(11) 	
      Except as expressly provided in this Agreement, no
      amendment or waiver of any provision of this Agreement shall be binding
      unless executed in writing by the Party (or Parties). No waiver of any
      provision of this Agreement shall constitute a waiver of any other
      provision nor shall any waiver of any provision of this Agreement
      constitute a continuing waiver or operate as a waiver of, or estoppel with
      respect to, any subsequent failure to comply unless otherwise expressly
      provided. 

	 	  	     
	 	(12) 	
      This Agreement constitutes the entire agreement between
      the Parties pertaining to the subject matter of this Agreement. There are
      no warranties, conditions, or representations (including any that may be
      implied by statute) and there are no agreements in connection with the
      subject matter of this Agreement except as specifically set forth or
      referred to in this Agreement. No reliance is placed on any warranty,
      representation, opinion, advice or assertion of fact made by a Party to
      this Agreement, or its directors, officers, employees or agents, to the
      other Party to this Agreement or its directors, officers, employees or
      agents, except to the extent that the same has been reduced to writing and
      included as a term of this Agreement. 

	 	  	     
	 	(13) 	
      References in this Agreement to any legislation
      (including but not limited to regulations and by-laws) or any provision
      thereof include such legislation or provision thereof as amended, revised,
      re-enacted and/or consolidated from time to time and any successor
      legislation thereto. 

	 	  	     
	 	(14) 	
      In the event that a change of Applicable Laws after the
      date of this Agreement imposes additional unforeseen material obligations
      or costs on a Party, or restricts the sale or price of electricity, the
      Parties agree to negotiate in good faith, an amendment to this Agreement
      which would attempt to maintain the economic benefits of this Agreement
      for each Party. 

32 

	 	(15) 	
      In all aspects of this Agreement time is of the essence
      and the Parties agree that they will act in a commercially reasonable
      manner with due regard to the issue, context and circumstances in any
      event.

REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK. 

33 

 

 

 

SCHEDULE "A" - EQUIPMENT 

Process Equipment 

	Equipment Brand 	Equipment Function 	Equipment Capacity 	Equipment Location 
	Honey Monster - Envirocan 	Screen septage and wastewater 	1 .3 m 3/min. 	Septage receiving station 
	MAVITEC Food Depacking system 	SSO pre-treatment 	180 ml/day 	SSO receiving facility 
	MAVITEC SSO residue washing system 	Plastic cleaning 	11 ml/day 	SSO receiving facility 
	Flygt Mechanical Mixer 	Septage and centrate mixing 	25 HP 	Septage and Centrate tank 
	Flygt Submersible Sludge Pump 	Septage and centrate pump 	130 ml/day. 	Septage and Centrate tank 
	Flygt Mechanical Mixer 	SSO and liquid waste mixing 	25 HP 	Surry tank 
	Flygt Submersible Sludge Pump 	Digester feedstock pump 	500 ml/day. 	Surry tank 
	Flottweg 	Primary digester sludge thickening 	400 ml/day. 	Existing Control and septage dewatering Bldg.
    
	Greatario 	Secondary digester 	2000 m3 	At present concrete storage tank 6 m x 14 m
    
	Hydraulix Process Mixing System 	Secondary digester mixing 	Mixing of 2000 m3 of digester 	Secondary Digester 
	Flygt Submersible Sludge Pump 	Secondary digester digestate pump 	500 m3/day 	Secondary Digester 
	Martin Machinery 	Electrical power generation and heat recovery
    	500kWelectricity - 500kWofheat 	Biogas Generator 
	Flottweg 	Secondarydigester - Thickening and dewatering
    	300 m3/day 	SSO Processing Building 
	Geomembrane Technologies Inc. 	Biagas Disposal 	600 ml/day 	Biagas flare location

35 

PLAN AND DESCRIPTION - SCHEDULE "B" 

Our proposal is for treating the existing septage through the
anaerobic digestion ("AD") system and to add 20,000 t/a source separated
organics to feed the existing I 000 m3 mesophilic digestor and an
added 2,000m3 thermophilic digestor as in the Block Flow Diagram
attached to this section. Wastewater from the Sunset Strip will be screened and
sent directly to the aerated lagoon. 

The front end system to process source separated organics
C’SSO") is supplied in two trains of me 0,000+ t /a processing capacity to grind
the food wastes, take out the plastics, clean the plastics and deliver ground
food wastes to slurry tank. Equipment is from a European Company that has
supplied many units in the U.S. Dilution water for the SSO processing will be
supplied from centrate taken out of the digestrate from the thermophilic
digestion stage and from the septage that will be screened and routed to a new
holding tank before being sent to the SSO or AD systems. Plastics will be sent
back to the SSO source for disposal in the trucks delivering the SSO material,
so none of this material is a waste to be disposed of locally. Once the waste
plastics are characterized, SusGlobal Energy Canada I Ltd. ("SusGlobal") plans
to install two or three trains that covert the plastics to a low sulphur, high
cetane diesel fuel at this site. SusGlobal Energy Corp. has the license to use
this technology for any location in N. America, any number of units of 5,000 1/d
diesel production. 

The slurried SSO will then be piped to the existing digestor
along with septage if there is any not used for dilution. Digestrate from that
first stage digestor will go to a Heat Treating Unit ("HTU") then to the smaller
holding tank currently used to store biosolids that will be converted to a
digestor for the thermophilic (75 C) digestion stage. We plan to run the first
stage digestor at around l 0% solids loading, then route the digestrate through
a centrifuge to get 18 to 20% solids to the HTU. Steam from a heat recovery
steam generator ("HRSG") installed on the exhaust of the gensets will supply
steam at 250 C to the HTU. Steam dilution will get us around 15% solids in the
second digestor and we will install a hydraulic mixing system in the second
stage digestor. We will recover exhaust heat from a 200 kW genset fuelled by
biogas installed to make the plant net-zero for energy inputs. The HTU system is
licensed from a Canadian patent holder, Eastern Power Ltd. Any excess biogas may
be utilized by the existing diesel genset at the Harold Sutherland Construction
site across the road from the A D site. Harold Sutherland Construction is
considering modifying the diesel genset to be able to operate on dual fuels,
firing both diesel and natural gas or biogas. SusGlobal will also install a
flare to combust any biogas that cannot be used for beneficial purposes. This
will both eliminate odor emissions from the site and reduce greenhouse gas
emissions by emitting CO2 instead of CH4. CH4 has 25 times the global warming
potential that CO2 does. Any environmental benefits from greenhouse gas emission
reductions remain the property of SusGlobal and will be monetized if possible
under Ontario's Cap and Trade regime. The amount of biogas recovered from the
system is estimated to be the equivalent of generating 500 kW of electricity in
biogas gensets. 

Digestate from the second stage digestor will be around 20%
solids and amounts to l O to 15,000 t/a total volume, or about 3,000 t/a solids.
The rest of the organic material is converted into biogas. Since the solids have
been subjected to a HTU at 230 to 250 C, then to l O to 15 days retention time in the thermophilic digestor at 55 C, the
operating temperature recommended by consultation with U of Waterloo researchers
for stable operation which the Company proposes to operate at ,all pathogens
have been destroyed, so this digestrate will qualify as Class AA Organic
Fertilizer that can be added to composting facilities or incorporated directly
into fertilizer compounds. The site will have surplus heat energy, so the
digestate could be dried and used directly as organic fertilizer. SusGlobal will
apply for the Class AA fertilizer category as soon as material required testing
is available. In the meantime, the existing land application of the digestate
will be utilized. SusGlobal intends to install a 500kW genset with heat
recovery. 

36 

Because SusGlobal is planning to install the SSO processing
equipment and Plastic to Diesel equipment to augment the value of the existing
assets, we are exploring leasing of a 2 hectare site across the road from the AD
site to conduct those operations there. This would be slightly more expensive
than building everything on the AD site, but our lender advises that this would
be a more acceptable arrangement for such a large loan. Of course, the
repurposing of the small storage tank, the HTU, the second genset, flare and
biogas treating system will all be on the existing AD site. Permitting would be
more complex, but the existing C. of A. needs to be reapplied for or amended
because the through put for the facility would be in the order of
130m3/d for 5 days/week operation. We would likely be operating 7
days/week in our process, and, of course, the AD system operates 24/7, as the
microbes never rest, they only die if undernourished, so our objective is to
keep them well fed. 

37 

 

TRANSITION PROCEDURES - SCHEDULE "C" 

Initial Transition Plan 

The transition process starts with establishing a
communications protocol among all parties involved. The operations manager will
establish communications protocols. 

(16) Overview 

Aquatech Canadian Water Services - GSS Engineering will begin
the Transition Plan based on many different activities: 

	 	• 	Management of the existing Facility 
	 	  	o 	Initial Condition Survey 
	 	  	o 	Implementation of specific procedures: 
	 	  		• 	Standard operational procedures (S0Ps) 
	 	  		• 	Emergency Plan 
	 	  		• 	Contingency Plan 
	 	  		• 	Health and Safety Plan with the COR
      (Certificate of Recognition) 
	 	 	 	 	 
	 	• 	Design interface and input 
	 	 	 	 	 
	 	• 	Construction interface and follow up 
	 	 	 	 	 
	 	• 	Operation of the existing Facility during
      construction 
	 	  			 
	 	• 	Start-up and Commissioning of new equipment and
      facility 

(17) Activities 

For the first activity, Management of the existing facility,
different steps arc planned: 

	 	• 	
      Preparation of the final Transition Plan (first week of
      the contract) 

	 	 	 
	 	• 	
      Kick off meeting with the other members of the joint
      venture 

	 	 	 
	 	• 	
      Meeting present workforce (transfer of the current
      operator to Aquatech-GSS) 

	 	 	 
	 	• 	
      Workforce scheduling 

	 	 	 
	 	• 	
      Condition survey of the existing facility and associated
      equipment 

	 	 	 
	 	• 	
      Implementation and Validation of the Contingency Plan
    

	 	 	 
	 	• 	
      Maintenance planning 

	 	 	 
	 	• 	
      Validation of the compliance monitoring (sampling, follow
      up of the treatment. treatment efficiency, ) 

	 	 	 
	 	• 	
      Validation of the current SOP's, modification for some of
      them and establish new ones when required 

	 	 	 
	 	• 	
      Sampling and Measurement 

Within 30 days of the commencement of the contract, we will
provide a comprehensive written inventory of the existing facilities and
equipment. The inventory report will become the basis for our initial condition
survey for the facility. This document will be supplied to the Joint Venture
including the condition of the equipment with pictures and notes. This report
will be used to provide a start-up baseline and a benchmark for the
end-of-contract condition of the facilities. 

We will also utilize a standard start and health and safety
checklist to assist us with the transitioning to new facilities and identify any
issues that must be addressed. 

We will conduct assessments of the following: 

	
  Electrical/mechanical equipment 

  
	
  Operational review and assessment 

38 

 

>Monitoring equipment 
>Health
and Safety audit 
>Availability of tools and equipment 
>Inventory
spare parts 
>Alarms 

The report will include a comprehensive written inventory of
the existing facilities and equipment along with: 

	An electrical/mechanical condition assessment
  
	Need for repair or replacement
  
	Photographs
  
	The location of each asset 

Transition Consideration 

Aquatech-GSS Engineering will address the following
requirements: 

	
  Signage: New signage on facilities to inform wastewater customers 

  
	
  Operational review of: 

>Consumables; 
>Individual
process units are performing as designed; 
>Status of sampling schedule;
and past inspections (MOE, MOL, TSSA, ESA) 

	
  Operations and maintenance manuals: review and identify any deficiencies
  with the current operations and maintenance manuals 

  
	
  Drawings and figures: compile all current facility drawings for future use
  

  
	
  Implementation of a computerized maintenance recording system: 

>Equipment data collection;

>Asset inventory; 
>Implement preventative maintenance schedules;

>Asset renewal program; 
>Develop equipment renewal
program (capital improvements) 

We will expect the Townships to be involved in the following:

	Review and commenting the various plans and programs recommended by
  Aqua1cch- GSS;
  
	Review transitional issues requiring the Townships involvement to move to
  normalized operations;
  
	Provide access to the facilities and staff;
  
	Communicate critical issues related to the operation and maintenance of
  the facilities;
  
	Communicate plans for employee and public announcements, and security measures

Recruitment and Staffing 

Continuity of operations, staffing and knowledge will take
priority in our initial strategy. Retaining existing operator is our preferred
approach. We have a recruitment infrastructure in place to ensure we can fill
any vacancies quickly. 

Aquatech-GSS Engineering team staff will shadow the current
operating authority for a period of two weeks in order to familiarize themselves
with the operations of the systems. We are sensitive to issues related to
operator transitions from the incumbent to our own organizations. Our goal and
role is to ensure that the transition and operation of the facility is
transparent to the Townships. For the second activity, Design interface and
input, the Aquatech-GSS team will: 

	Provide direction and recommendation to the SusGlobal design Team 

 

39 

	Propose them minor changes when required to facilitate the operation and
  maintenance of the facilities
  
	Schedule with the different entities of the Team forthe different interventions
  required. 

For the third activity, Construction interface and follow up,
the Aquatech-GSS team will: 

	Coordinate the work with the normal operation of the existing plant
  
	Coordinate the equipment shut down and start the new ones
  
	Develop the new SOPs for the new installed equipments
  
	Implement the CMMS for all the new equipment and the new facility.

For the fourth activity, Commissioning of new equipments and
facility, the Aquatech-GSS team will validate the process and verify the
efficiency of the new installed equipment. We will look to see if there is any
deficiencies to treat and will find if required some corrective actions to im
prove the process. We will work closely in collaboration with the construction
and the design team to obtain the optimum efficiency. 

The commissioning is planned to be executed during 5 weeks in 5
different stages: 

	
  Dry Commissioning: Test and adjustment all process equipment,
  instrumentation, controls, and the SCADA system to demonstrate that all
  equipment have been properly installed are in good working order and perform
  in accordance with their intended use under dry conditions. To obtain the
  required result, a planning will be done with all involved Companys or
  manufacturers. This plan with the work to do will be presented to the client
  for acceptance before realization and the result of the commissioning for each
  equipment item will be presented as a commissioning report indicating all
  change, improvement, problem, solutions results obtained during the
  commissioning. 

  
	
  Building Commissioning: Test and adjustment of all systems in the upgraded
  or new facility as HVAC, heating, Odor Control, stand-by generator, lightning,
  laboratory, SCADA and all other to demonstrate that all the systems,
  instrumentation and controls have been properly installed, are in good working
  order and perform in accordance with their intended use to obtain the required
  result, a planning will be done with all involved Companys or manufacturers.
  This planning with the work to do will be presented to the client for
  acceptation before realization and the result of the commissioning for each
  systems will be presented as a commissioning report indicating all change,
  improvement, problem solutions results obtained during the commissioning. 

  
	
  Wet Commissioning: Test and adjustment all process equipment,
  instrumentation, controls, and the SCADA system for a period of fourteen
  consecutive days without interruption. For this test, clean water will be used
  and we will inspect for any leakage and seepage and ensure for water
  tightness. The demonstration that the process equipment, the instrumentation,
  the controls and the SCADA operate satisfactorily and are calibrated
  appropriately will be done. As part of this wet commissioning, hydro- testing
  of the channels and tankage will be done with potable water. A planning with
  the work to do will be presented to the client who will review and approve the
  plan for acceptation before realization and the result of the commissioning
  for each system will be presented as a commissioning report indicting all
  change, improvement, problem, solutions results obtained during the
  commissioning. 

  
	
  Running test: Operation of all Process Equipment, instrumentation, controls
  and the SCADA System for a minimum period of 30 consecutive days using
  wastewater. For the running test, the performance will be monitored and
  perform as long as the biomass will be sufficient to produce enough WAS to
  test the dewatering process. 

  
	
  Performance Test: Demonstrate that for a minimum period of consecutive days
  without interruption using waste water that all requirements are metas for example:
  

40 

		o 	
      All Process Equipment, instrumentation, controls, SCADA
      System and unit processes are operating satisfactorily as intend and
      without incident and interruption or malfunction, 

	 	o 	
      The Effluent meets the Effluent Quality Requirements
    

	 	o 	
      The Odor Emissions meet the Odor Quality Requirements
    

	 	o 	
      The Sludge meets the Sludge Quality Requirements
  

		o 	
      All Sludge handling, dewatering, storage and truck
      loading are fully satisfactory, including odor control measures 

		o 	
      The Performance of the new facility is within I 0% of the
      electrical and chemical consumption values represented and warranted in
      the life cycle cost estimate 

Following the Performance Test, a deficiency list with solution
and timeline to eliminate these deficiencies will be presented to the client by
SusGlobal. 

(18) Resources 

To realize these different Interim Operation Plan's phases, the
involved Resources with their Role and Responsibilities will be for the
Aquatech-GSS Engineering team: 

Andie Lebeuf, P. Eng. Interim Plant
Manager: 
As a Wastewater level 2 operator; Andre will be responsible of the
O&M management, Staff scheduling, Reporting, Budget control and Quality
Control implementation. Andre has been responsible of the Eastern Passage WWTF
in Halifax from November 2011 to February 2015 where he had to operate a
Biomethane burner unit from the anaerobic tank of the WWTF process. For this
project Aquatcch was part of the Joint Venture with Maple Reinders. Andre is
also presently involved in an optimization of the treatment project with GSS

Engineering at the Brighton Wastewater
treatment facility in Ontario since April 2015. 

Eric Joncas, P.Eng. Commissioning
Manager: 
With Responsibilities as Design-review, Construction witnessing,
Equipment reception on site, Equipment start-up and testing, Process start-up
and control, Performance testing, Quality Control implementation. Eric has been
involved in a huge quantity of start-up and commissioning from 1992 to now. 

Rakesh Sharma P. Eng. 
With
Responsibilities as overseeing the operation maintenance and management of the
Township's facilities and directly supervise the operators, regularly meet with
client and review plant operations data reports to ensure full compliance.
Rakcsh has been involved in the operational maintenance and management of water
and wastewater systems since 1997. He has been the operator in charge and
overall responsible operator for water and wastewater facilities including 11
water systems in Amabel/Sauble area. Mr. Sharma was responsible for directing
the plant operators to implement optimization of chemical treatment (turbidity
variation from 5NTU to >200 NTU in few hours). He assisted other plant in
filter optimization study by undertaking a full scale pilot study by adopting
different combination of PAC and polymers. 

(19) Budget 

Aquatech-GSS Engineering during the Interim Operations Period
will be fully responsible of all aspects of the Transition Work. Aquatech-GSS
Engineering team will pay directly or reimburse the following operating incurred
after the beginning of the operation and Maintenance period. 

	Power
  
	Energy (electricity, fuel for standby generator and natural gas)
  
	Aquatech-GSS Engineering Staff
  
	Chemical for treatment and chemical for lab
  
	Consumables (ex. Oil and grease)
  
	Equipment small repairs
  
	Water
  
	Materials and supply for preventive maintenance 

41 

	Clean/Sanitary supply
  
	Analysis for performance testing and compliance
  
	Garbage disposal
  
	Specialized subcontractor for preventive maintenance 

(20) Schedule 

Duration: 25 years (end 2040 will be used) 

The estimated Schedule will be the following and will be
adapted accordingly to the request for the different steps and following the
kick off meeting and the design and construction schedule: 

	I. 	Management of the existing
      facility: approximately 25 years 
	 	 
	2. 	Design Interface and Input: less
      than 18 months 
	 	 
	3. 	Construction Interface &
      Follow up: in place prior to 18 months 
	 	 
	4. 	Commissioning of new equipment
      and facility: at 18 months 

FINAL TRANSITION PERIOD 

At the end of the operation period, after 25 years of operation
or after any extension period ends without extending, the Aquatech-GSS team will
organize with the client a transition period to transfer the information and the
Operation and Maintenance back to the client. 

This final transition period will last minimum one month to
have time to give to the client all the required information. The client will
have his staff present on site and shadowing the Aquatech- GSS staff to see
every facet of the operation and any problem that can appear. During that
period, Aquatech-GSS Team, will establish a final condition survey report with
inventories and pictures associated. We will transfer the Company's account for
chemical, spare parts and other to the client name and will see with client to
order in their name. If required the required spare parts or product to be sure
not to fall in back order just after the transition. We will execute the
Maintenance in company of the client representative. We will fix everything that
was not operating properly and will give some improvement information for future
operation to the client. We will ensure that the operation and Maintenance
manuals, the drawings, the SOP's, the Health and Safety procedures, and other
documents have been updated in their more up-to-date version. We will remove the
Aquatech-GSS signage onsite to install the one from the client. We will change
the phone call numbers for the emergency operation call in. We will give back
all the keys for the operation. 

Aquatcch-GSS Team will transfer all the responsibilities to the
client but will stay available to help or to give information on request. 

42 

SCHEDULE "D" 

Property Description 

062111, Side Road 3, Lot 4, Concession 6, Township of Georgian
Bluffs as shown on attached (to be inserted). 

43 

SCHEDULE "E" 

Site Description 

The Parties shall, acting reasonably, agree to a description of
the Site within the Property within a reasonable time after the application for
the ECA has been submitted to the MOECC. 

 

 

44 

Schedule “F” 
Sunset Strip Agreement Holders 

	Business Name 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 
	[+] 

[+] Indicates confidential portion has been omitted pursuant to
a request for confidential treatment and has been filed separately with the
Securities and Exchange Commission. 

45EX-10.1

 EXHIBIT 10.1 

EXECUTION VERSION 
 PANERA BREAD
COMPANY 
 NON-COMPETITION AGREEMENT 

Non-Competition Agreement (the “Agreement”), dated as of April 4, 2017, by and
between Panera Bread Company, a Delaware corporation (together with its affiliates, the “Company”), with its principal offices at 3630 South Geyer Road, St. Louis, Missouri 63127, and Ronald M. Shaich (“Executive”).

 WHEREAS, the Company is entering into the Agreement and Plan of Merger, dated as of April 4, 2017, by and among the Company
and JAB Holdings B.V. (“Parent”), as it may be amended from time to time (the “Merger Agreement”); and 

WHEREAS, the Company has determined that it is in the best interests of the Company and its shareholders to ensure Executive’s
continued dedication to his duties in the event of the consummation of the transactions contemplated by the Merger Agreement and to require the Executive to comply with certain restrictive covenants for a reasonable period of time after such
transactions and termination of the Executive’s employment. 
 NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements herein contained, the Company and Executive hereby agree as follows: 
  

	1.	Effectiveness. The Agreement will take effect on the date the merger provided for in the Merger Agreement becomes effective (the “Merger Date”). If the Merger Agreement terminates for any reason
before the merger occurs, or if Executive’s employment with the Company terminates for any reason (except as set forth in Section 2(i)) before the merger occurs, the Agreement will be null and void and of no effect. All capitalized terms
that are not defined in the Agreement shall have the meanings ascribed to such terms in the Merger Agreement. 

  

	2.	Change in Control Protection Payments. 

  

	 	a.	Upon a Qualifying Protection Event, Executive will be entitled to a payment equal to three (3) times the sum of Executive’s (i) current base salary and (ii) target annual incentive bonus (in each
case, determined prior any event described in Section 2(h) below), paid in a lump sum on the sixtieth (60th) day following the Qualifying Protection Event. 

 

	 	b.	During the two year period following the Closing while Executive is employed with the Company, Executive will continue to be eligible to participate in the Company’s annual incentive bonus program, including for
the 2017 fiscal year. Upon an Involuntary Termination, Executive will be entitled to receive a pro rata bonus paid at the time bonuses are paid to similarly situated employees of the Company, which will be equal to Executive’s annual incentive
bonus earned in the year of termination based on actual performance, multiplied by the number of days in the year up to and including the date of termination of Executive’s employment and divided by 365. 

	 	c.	In addition, in the event that the Qualifying Protection Event is an Involuntary Termination (as defined in Section 2(g) below), the Company shall provide medical insurance coverage substantially identical to
(including the applicable cost of coverage) that provided to other senior executives of the Company (which may be provided pursuant to payment of Executive’s Consolidated Omnibus Budget Reconciliation Act premiums) for eighteen (18) months
following the date of Executive’s termination of employment. 

  

	 	d.	As a condition to the payments and other benefits set forth in this Section 2, if the Qualifying Protection Event is an Involuntary Termination, Executive must execute a separation and general
release agreement (the “Release”) in a form reasonably acceptable to the Company and such Release must become effective within sixty (60) days of the date of the Involuntary Termination. 

 

	 	e.	For purposes of the Agreement, “Cause” means: (i) conviction of a felony or other crime involving moral turpitude; (ii) willful misconduct, gross dereliction and/or gross neglect of duties; or
(iii) a material breach by Executive of the terms of the Agreement which, if curable, continues uncured for fifteen (15) days after the Company has given written notice to Executive specifying in reasonable detail the material breach; in
each case determined in good faith by the Company. 

  

	 	f.	For purposes of the Agreement, “Good Reason” means any of the following events, provided that Executive has given written notice of such event to the Company within ninety (90) days after becoming
aware of such event, the Company has not cured such event within thirty (30) days of such notice and Executive resigns his or her employment within two (2) years of the initial occurrence of such event: (i) material diminution in
position, authority, duties or responsibilities as the Chief Executive Officer of a publicly traded company; (ii) material reduction in base salary, annual bonus opportunity or the aggregate level of employee benefits; or (iii) a material
breach by the Company of the terms of the Agreement. 

  

	 	g.	For purposes of the Agreement, “Involuntary Termination” means any termination of Executive’s employment (i) by the Company without Cause at the direction of Parent on or within sixty
(60) days prior to Closing, (ii) by the Company without Cause following Closing and prior to the two year anniversary of the Closing or (iii) by Executive for Good Reason following Closing and prior to the two year anniversary of the
Closing. 

  

	 	h.	For purposes of the Agreement, “Qualifying Protection Event” means the earlier of (i) an Involuntary Termination and (ii) the second anniversary of the Closing. 

 

	 	i.	Notwithstanding anything to the contrary set forth herein, if Executive’s employment is terminated by the Company without Cause at the direction of Parent on or within sixty (60) days prior to Closing, the
Agreement will still become effective upon the Merger Date and Executive will be entitled to payments and benefits under this Section 2. 

 

	3.	No Assurances of Continued Employment. Executive understands and agrees that nothing in the Agreement or any discussions he has had with the Company or any of its representatives shall be construed to give
Executive any right or assurance of continued employment by the Company; and that Executive’s employment relationship with the Company is terminable at will, with or without notice, with or without reason, by either the Company or Executive.

  
 2 

	4.	Confidential and Proprietary Information. 

  

	 	a.	Executive understands and acknowledges that in the course of his employment, he has received and/or will receive and/or may receive and/or has access to certain Confidential Information of the Company. Executive hereby
acknowledges that such Confidential Information constitutes a valuable and proprietary asset of the Company which the Company desires to protect. 

  

	 	b.	For purposes of the Agreement, “Confidential Information” shall include, but not be limited to, the following: the Agreement; trade secrets; operating techniques, procedures and methods; product
specifications; customer lists and customer information (including, but not limited to catering customers and credit card information); customer information (including, but not limited to, credit card information); account information; price lists;
discount schedules; budgets; correspondence with customers (including, but not limited to catering customers), vendors, competitors, employees, partners, franchisees or any other entity or person; drawings; software; samples; leads from any source;
marketing techniques; procedures and methods; employee lists; internal financial reports (including, but not limited to, internal sales and/or profit and loss reports) of the Company and its affiliates and/or franchisees; sourcing lists; and
recruiting lists; and any other such proprietary information, but shall not include any such information which has become generally known to or available for use by the public other than by Executive’s act(s) or omission(s). 

 

	 	c.	Executive agrees that during the term of the Agreement and at any time thereafter, he will not, without the written authorization of the Company: (i) disclose any Confidential Information to any person or entity
for any purpose whatsoever; or (ii) make use of any Confidential Information for his own purposes or for the benefit of any other person or entity, other than the Company, and it is expressly understood and agreed that this prohibition
restricts Executive from using any Confidential Information in competition with the Company at any time. 

  

	 	d.	 Pursuant to 18 U.S.C. § 1833(b), Executive understands that he will not be held criminally or civilly liable
under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to his attorney and
(B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. Executive understands that if he files a
lawsuit for retaliation by the Company for reporting a suspected violation of law, he may disclose the trade secret to his attorney and use the trade secret information in the court proceeding if he (I) files any document containing the trade
secret under seal, and (II) does not disclose the trade secret, except pursuant to court order. Nothing in the Agreement, or any other agreement that Executive has with the Company, is intended to conflict with 18 U.S.C. § 1833(b) or
create 

  
 3 

	 	
liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in the Agreement or any other agreement that Executive has with the Company shall prohibit
or restrict him from making any voluntary disclosure of information or documents concerning possible securities law violations to any governmental agency or legislative body, or any self-regulatory organization, in each case, without advance notice
to the Company. 

  

	 	e.	Executive understands that his obligations under this Section 4 are in addition to, and not in limitation of, his obligations under Panera’s Standards of Business Conduct (or successor
document thereto). 

  

	5.	Restrictive Covenants and Non-Competition Payment. 

  

	 	a.	Executive covenants and agrees not to engage in any Competitive Activity during Executive’s employment with the Company and at any time within the twelve (12) month period following the date of
Executive’s termination from the Company for any reason or no reason, or if Executive is terminated pursuant to Section 2(g)(i), then the period from such termination of employment through the twelve (12) month anniversary of the
Closing (the “Restricted Period”), and Executive agrees that these restrictions are reasonable and appropriate for purposes of protecting the Company’s legitimate business interests and will not result in severe economic
hardship for Executive or Executive’s family. 

  

	 	b.	During the Restricted Period, Executive also covenants and agrees not to directly or indirectly solicit or otherwise attempt to induce, influence, or encourage any employee, independent contractor, consultant, supplier,
catering customer or franchisee of the Company to terminate and/or modify in any harmful way his/her and/or its employment or other such business relationship with the Company and/or its affiliates. 

 

	 	c.	As compensation for the Restricted Period and as additional consideration in exchange for the terms and provisions contained herein, the Company shall pay to Executive a lump sum cash payment equal to $7 million on
the Closing. 

  

	 	d.	If Executive violates the covenants contained in this Section 5, Executive shall cease to be entitled to any payments or other benefits under Sections 2 and 5(c) of the Agreement
and will be required to repay to the Company the full amounts previously paid or delivered to Executive pursuant to such sections promptly upon written demand thereof. 

 

	 	e.	For purposes of the Agreement, “Competitive Activity” shall include the following: 

  

	 	i.	directly or indirectly being employed by, advising, consulting in, or acting in any way as an agent for any company (including the Parent Companies) listed on Attachment A (the “Listed Competitors”); or

  

	 	ii.	directly or indirectly being employed by, advising, consulting in, or acting in any way as an agent for any entity engaged, in whole or in part, in any casual or fast food company with over $2 billion in annual
“restaurant revenue” at the time of such involvement (the “Other Competitors”); or 

  
 4 

	 	iii.	providing any services, directly or indirectly, to any division or direct or indirect parent company of any Listed Competitor or Other Competitor (including the Parent Companies listed on Attachment A), or to any other
affiliated company of a Listed Competitor or Other Competitor; other than any entity that owns a minority interest in a Listed Competitor or Other Competitor solely as a passive investor, without any involvement in the management of such Listed
Competitor or Other Competitor. 

 For the avoidance of doubt, any activity that Executive is engaged in as of the date of the
Agreement shall not constitute a Competitive Activity. Executive may have or acquire an interest in any Listed Competitor or Other Competitor for investment purposes without constituting a Competitive Activity, provided, however, that
such investment by Executive must not exceed 5% of the stock of such company and must be passive and without Executive’s active involvement. 
  

	6.	 Section 280G. In the event that any payments or benefits otherwise payable to Executive
(1) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (2) but for this Section 6, would be subject to
the excise tax imposed by Section 4999 of the Code, then such payments and benefits will be either (x) delivered in full, or (y) delivered as to such lesser extent that would result in no portion of such payments and benefits being
subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999 of the Code (and
any equivalent state or local excise taxes), results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such payments and
benefits may be taxable under Section 4999 of the Code. Unless the Company and Executive otherwise agree in writing, any determination required under this Section 6 will be made in writing by a nationally-recognized
accounting firm mutually agreed to by the Company and Executive (the Accountants”), whose determination will be conclusive and binding upon Executive and the Company for all purposes. For purposes of making the calculations required by
this Section 6, the Accountants (i) may make reasonable assumptions and approximations concerning applicable taxes, (ii) may rely on reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code, and (iii) shall take into account a “reasonable compensation” (within the meaning of Q&A-9 and Q&A-40 to Q&A 44 of
the final regulations under Section 280G of the Code) analysis of the value of services provided or to be provided by Executive, including any agreement by Executive to refrain from performing services pursuant to a covenant not to compete or
similar covenant applicable to Executive that may then be in effect (including, without limitation, those contemplated by Section 5 of the Agreement). The Company and Executive agree to furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to make a determination under this provision. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this
provision. To the extent 

  
 5 

	 	
such aggregate parachute payment amounts are required to be so reduced, the parachute payment amounts due to Executive (but no non-parachute payment
amounts) shall be reduced in the following order: (i) the parachute payments that are payable in cash shall be reduced (if necessary, to zero) with amounts that are payable last reduced first; (ii) payments and benefits due in respect of
any equity, valued at full value (rather than accelerated value) (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24) shall be reduced in each case in reverse order beginning
with payments or benefits which are to be paid the furthest in time; and (iii) all other non-cash benefits not otherwise described in clause (ii) of this Section 6 reduced
last. 

  

	7.	Taxes; Section 409A. 

  

	 	a.	The Company may withhold from any amounts or benefits payable under the Agreement income taxes and payroll taxes that are required to be withheld pursuant to any applicable law or regulation. 

 

	 	b.	The Agreement is intended to comply with or be exempt from the requirements of Section 409A of the Code (together with the applicable regulations thereunder, “Section 409A”) with respect to amounts, if
any, subject thereto and shall be interpreted, construed and performed consistent with such intent. To the extent that any provision in the Agreement is ambiguous as to its compliance with Section 409A or to the extent any provision in the Agreement
must be modified to comply with Section 409A (including, without limitation, Treasury Regulation 1.409A-3(c)), such provision will be read, or will be modified (with the mutual consent of the parties, which
consent will not be unreasonably withheld), as the case may be, in such a manner so that all payments due under the Agreement will comply with Section 409A. For purposes of Section 409A, each payment made under the Agreement will be treated as a
separate payment. 

  

	 	c.	All reimbursements provided under the Agreement will be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses
incurred during Executive’s lifetime (or during a shorter period of time specified in the Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any
other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to
liquidation or exchange for another benefit. 

  

	 	d.	Executive further acknowledges that any tax liability incurred by Executive under Section 409A of the Code is solely the responsibility of Executive. 

 

	 	e.	 Notwithstanding any provision of the Agreement to the contrary, if necessary to comply with the restriction in
Section 409A(a)(2)(B) of the Code concerning payments to “specified employees” (as defined in Section 409A) any payment on account of Executive’s separation from service that would otherwise be due hereunder within six months after
such separation will nonetheless be delayed until the first business day of the seventh month 

  
 6 

	 	
following Executive’s date of termination and the first such payment will include the cumulative amount of any payments that would have been paid prior to such date if not for such
restriction. Notwithstanding anything contained herein to the contrary, Executive will not be considered to have terminated employment with the Company for purposes of Section 2 hereof unless he would be considered to have
incurred a “separation from service” from the Company within the meaning of Section 409A. 

  

	8.	Cooperation. Executive agrees that during his employment and thereafter, at the Company’s reasonable expense, Executive will do all things including, but not limited to, the giving of evidence in suits and
other proceedings which the Company shall deem necessary or appropriate to obtain, maintain or assert rights accruing to, and defending claims against, the Company, its affiliates and/or franchisees in connection with which Executive has knowledge,
information or expertise; provided, however, that the Company shall not unreasonably disrupt Executive’s current employment and the Company shall compensate Executive for the value of his time spent assisting in such matters at Executive’s
then current compensation rate if he is not so compensated by Executive’s then current employer. 

  

	9.	Benefits. Except as herein otherwise provided herein, any benefits arising out of or connected with Executive’s employment shall cease as of the effective date of Executive’s termination of active
employment, as applicable. The foregoing shall not relieve the Company of its obligations under the law pertaining to Executive’s benefits following the effective date of Executive’s termination of employment. 

 

	10.	Injunctive Relief. Executive acknowledges that the Company’s remedy at law for a breach of Section 5 of the Agreement would be inadequate and Executive hereby expressly agrees that
the Company shall be entitled to apply to any court, having jurisdiction, for an injunction restraining Executive in the event of a breach, actual or threatened, of the covenants contained in the Agreement without the necessity of proof of actual
damages. Such right shall be in addition to any other remedies provided for herein or otherwise available at law or equity. Executive further waives any requirement that a bond be posted or that irreparable damage be demonstrated as a condition to
any injunctive relief. 

  

	11.	Indemnification. The Company agrees that if Executive is made a party to or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a
“Proceeding”), by reason of the fact that Executive is or was a trustee, director or officer of the Company or is or was serving at the request of the Company or any subsidiary or either thereof as a trustee, director, officer,
member, employee or agent of another corporation or a partnership, joint venture, trust or other enterprise, including, without limitation, service with respect to employee benefit plans, whether or not the basis of such Proceeding is alleged action
in an official capacity as a trustee, director, officer, member, employee or agent while serving as a trustee, director, officer, member, employee or agent, Executive will be indemnified and held harmless by the Company to the fullest extent
authorized by applicable law (including the advancement of applicable, reasonable legal fees and expenses), as the same exists or may hereafter be amended, against all expenses incurred or suffered by Executive in connection therewith, and such
indemnification will continue as to Executive even if Executive has ceased to be an officer, director, trustee or agent, or is no longer employed by the Company and will inure to the benefit of his heirs, executors and administrators.

  
 7 

	12.	Notices. Any notices required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Such notice shall be
deemed given upon personal delivery to the appropriate address or if sent by certified or registered mail, three (3) days after the date of mailing. 

  

	 	a.	All notices to Executive shall be addressed to Executive at the address on file with the Company or to such other place(s) as Executive may designate by written notice to the Company. 

 

	 	b.	All notices to the Company shall be addressed to the Company, with a copy to Parent, at: 

 Three
Charles River Place 
 63 Kendrick Street 

Needham, MA 02494 
 Attention:
General Counsel 
 Copy to: 

JAB Holdings B.V. 
 c/o JAB
Holding Company LLC 
 1701 Pennsylvania Avenue NW, Suite 801 

Washington, DC 20006 
 or to such
other place(s) as the Company may designate by written notice to Executive. 
  

	13.	Notification of New Employer. Executive agrees that he will advise any prospective employer of the covenants and restrictions of the Agreement before accepting any offer from another employer. 

 

	14.	Death. The Agreement and all obligations of the Company hereunder shall terminate upon Executive’s death. In the event of a termination upon Executive’s death, monies or compensation owed by the Company
to Executive up to the date of termination shall be paid to Executive’s estate or designee. 

  

	15.	Miscellaneous. 

  

	 	a.	Executive agrees and consents that the Agreement and any dispute arising hereunder shall be governed by the laws of the State of Missouri and its applicable courts shall have jurisdiction over such matters; and
Executive agrees and consents to waive trial by jury in any action or proceeding between the parties. 

  

	 	b.	No waiver by the Company of any breach of the Agreement shall be a waiver of any preceding or succeeding breach. No waiver by the Company of any right under the Agreement shall be construed as a waiver of any other
right. The Company shall not be required to give notice to enforce strict adherence to all terms of the Agreement. 

  
 8 

	 	c.	In case any one or more of the provisions contained in the Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect the other provisions of the Agreement, the Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein, and each provision of the Agreement shall, if necessary, be deemed to be
independent of each other and each supported by valid consideration. If moreover, any one or more of the provisions contained in the Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or
subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear. 

  

	 	d.	To the extent necessary to provide the Company with the full and complete benefit of the Agreement, the provisions in the Agreement and Executive’s obligations hereunder shall survive the termination of the
Agreement and shall not be affected by such termination. The provisions of the Agreement shall also survive the assignment of the Agreement by the Company to any successor in interest or other assignee. 

 

	 	e.	The Agreement will be binding upon Executive’s heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns. Following the Closing,
the Agreement will be binding upon the Surviving Corporation. 

  

	 	f.	The captions and headings throughout the Agreement are for convenience and reference only, and they shall in no way be held or deemed to define, modify or add to the meaning, scope or intent of any provision of the
Agreement. 

  

	 	g.	The Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between Executive and the Company. No modification of
or amendment to the Agreement, nor any waiver of any rights under the Agreement, will be effective unless in writing and signed by the party to be charged. 

  

	 	h.	The Agreement may be executed simultaneously in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original but all of which counterparts shall together constitute but one
agreement. 

  

	 	i.	By signing below, Executive acknowledges receiving a copy of the Agreement; Executive acknowledges and agrees that Executive is entering into the Agreement voluntarily and of Executive’s own free will; and
Executive acknowledges and agrees that Executive has not been coerced or suffered any duress in order to induce Executive to enter into the Agreement. 

  

	16.	Attorney Review. Executive acknowledges that Executive has been expressly advised by the Company to review the Agreement with an attorney prior to executing it. 

  
 9 

 EXECUTIVE HAS READ THE AGREEMENT CAREFULLY AND UNDERSTANDS THE MEANING OF ITS VARIOUS TERMS AND
THE CONSEQUENCES OF SIGNING THE AGREEMENT. 
  

	
	 /s/ Ronald M. Shaich

	Signature
	
	 April 4, 2017

	Date
	
	 Ronald M. Shaich

	Name (typed or printed)

 ACCEPTED AND AGREED TO: 

PANERA BREAD COMPANY 
  

			
	By:	 	 /s/ Fred K. Foulkes

	Name:	 	Fred K. Foulkes
	Title:	 	Chair, Compensation and Management Development Committee
		
	Dated:	 	April 4, 2017

 [Signature Page to Non-Competition Agreement] 

 Attachment A 

 

			
	 Listed Competitors
	  	 Parent Companies 

	 Atlanta Bread Company
	  	 Brinker International, Inc.

	 Au Bon Pain, ABP Corporation
	  	 Bruegger’s Corporation

	 Bruegger’s Bagel Bakeries
	  	 Compass Group plc

	 Cosi, Inc.
	  	 Doctor’s Associates Inc.

	 Corner Bakery Cafe
	  	 Dunkin’ Brands Inc.

	 Dunkin’ Donuts
	  	 Great Harvest Franchising, Inc.

	 Evolution Fresh
	  	 Groupe Le Duff

	 Great Harvest Bread Co.
	  	 IAWS plc

	 La Brea Bakery
	  	 Roark Capital Group

	 la Madeleine French Bakery and Café

Le Boulange
	  	 Starbucks Corporation

	 Le Pain Quotidien

Montana Mills Bread Company, Inc.
	  	
	 Pret à Manger
	  	
	 Restaurant Brands International
	  	
	 Schlotsky’s, Inc.
	  	
	 Seattle’s Best Coffee

Subway
	  	

  
 A-1

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