Exhibit 10.1
TRANSFER AND ASSIGNMENT
THIS TRANSFER AND ASSIGNMENT is executed as of June 29, 2001, by and
among WasteMasters Holding, Inc., a Delaware corporation (the
"Assignor"), and Environmental Energy Services, Inc. (the "Assignee").
WHEREAS, the Assignor owns the assets (hereinafter, the "Assets")
identified on Exhibit A attached hereto, which assets the parties agree
have an aggregate fair market value equal to $1,409,561;
WHEREAS, the Assignee has agreed to purchase the Assets for
consideration equal to their fair market value by the assumption of the
liabilities identified on Exhibit B attached hereto in the amount of
$1,342,500, and the other consideration specified herein;
NOW THEREFORE, for the consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by each party hereto,
Assignor and Assignee hereby agree as follows:
1. Transfer and Assignment. Assignor hereby sells, transfers,
assigns, delivers and conveys to the Assignee all right, title and
interest of Assignor in and to the Assets for the Purchase Price,
including any documents, memos, accounting records, or files relating or
pertaining to the Assets.
2. Purchase Price. In consideration for the purchase of the
Assets pursuant to Paragraph 1 herein, the Assignee hereby agrees to pay
the liabilities identified on Exhibit B, and to pay the Assignor $67,061
pursuant to the Promissory Note attached hereto as Exhibit C. The
Assignee hereby agrees to indemnify and hold the Assignor harmless
against any claim or liability asserted against the Assignor from the
persons listed in Exhibit B attached hereto.
3. Adjustment of Purchase Price. In the event the validity of
this transaction is ever challenged by a creditor or shareholder of the
Assignor in a court of law, and the court enters a final, nonappealable
judgment containing a finding that the total Purchase Price for the
Assets was less than the fair market value of the Assets, then the
Assignee shall immediately pay the Assignor the amount of such difference
between the total Purchase Price of the Assets and the fair market value
of the Assets as found by said court.
4. Release of Assignor. In consideration for the transactions
effectuated herein, the Assignor hereby releases and discharges the
Assignee from any claim or liability which it may have against the
Assignee and its subsidiaries, and the Assignor hereby agrees to
indemnify and hold the Assignee harmless against any such claim or
liability, including attorney's fees incurred in defense of such claim or
liability, which the Assignor may have against the Assignee and its
subsidiaries. The Assignor agrees that he shall not take any act in any
capacity to cause the Assignor to assert any claim or cause of action
against the Assignee or assist any party in asserting any claim or cause
of action of the Assignor against the Assignee.
5. Survival of Assignment. The provisions of this Assignment
shall survive the consummation of the transactions provided for herein.
6. Governing Law. This instrument shall be construed and
enforced in accordance with and governed by the laws of the State of
Georgia.
7. Binding Effect. This instrument shall bind and inure to the
benefit of the parties hereto and their respective heirs, executors,
personal representatives, successors and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have executed and sealed
this Assignment as of the day and year first above written.
ENVIRONMENTAL ENERGY SERVICES,
INC.:
/s/ A. Xxxx Xxxxxx
By: A. Xxxx Xxxxxx
WasteMasters Holdings, Inc., a
Delaware corporation
/s/ A. Xxxx Xxxxxx
By: A. Xxxx Xxxxxx, President
EXHIBIT A
Asset
Advance - Startec
GECL Stock (1.2mm shares)
Startec
Startec Royalty
Investment in Ace Waste
Note receivable - Ace
Interest in Appalachian Environmental Energy, Inc.
Note receivable - Fairview
EXHIBIT B
Liability Amount
Notes payable to Xxxxxx X. Xxxxxx $300,000
Notes payable to Mallard Landing, LLC $200,000
10% Senior Secured Convertible Debentures $375,000
Loan from Xxxxx Partners $146,000
Accrued Interest, penalties and
attorney's fees on loans (est.) $150,000
Account payable - Xxxxxx Xxxxx (est.) $40,000
Account payable - Xxxxxxx, Xxxxxx &
Xxxxxxx (est.) $80,000
Advance - RJM, PC $12,500
Account payable - Etskovitz (est.) $15,000
Account payable - Xxxxxx, Xxxxxx & Xxxxx (est.) $11,000
Account payable - Xxxxxxxx & Xxxxxxxx (est.) $10,000
Account payable - Xxxxxx & Xxxxxx, P.C. $3,000
Total Liabilities to be Assumed: $1,342,500.00
EXHIBIT C
PROMISSORY NOTE
FOR VALUE RECEIVED, Environmental Energy Services, Inc.
(hereinafter referred to as the "Maker"), jointly and severally, promises
to pay to the order of WasteMasters Holdings, Inc. ("Holder"), or
assigns, at 000 Xxxxx Xxxxxxxx, Xx Xxxx, Xxxxxxxx 00000, or at such other
place as the Holder may from time to time designate in writing to the
Maker, in lawful money of the United States of America, the principal sum
of Sixty-Seven Thousand and Sixty-One Dollars and No Cents ($67,061) or
so much thereof as may be hereafter disbursed, together with interest
thereon from date set forth below at the rate of eight (8%) percent per
annum, simple interest, until maturity. The interest due under this Note
shall be paid semi-annually, with all principle outstanding under this
Note being due and payable on the second anniversary of this Note.
Interest shall accrue only on the amount of principal actually
outstanding from time to time. The indebtedness evidenced by this Note
may be prepaid in whole or in part at any time without penalty or
premium. Any payment of principal or interest on this Note which is not
made when due, as herein provided, shall bear interest at the same rate
specified above unless the Note is accelerated, in which case interest
shall accrue as specified in the following paragraph.
Upon the failure of the Maker to pay, when due, any one of the
installments hereon, the Holder shall have the option and right to
declare the amount of the total unpaid principal balance hereafter due
and payable if the Maker fails to cure such default within ten (10) days
after written notice to Maker of a notice of default and intention to
accelerate sent to the Maker by certified or registered mail to the last
address of Maker known to the Holder. Upon acceleration of the unpaid
principal balance pursuant to this Note, all amounts due under the Note
will bear interest at 12% per annum until paid in full.
If from any circumstances whatsoever fulfillment of any provision of
this Note at the time performance of such provision shall be due shall
involve transcending the limit prescribed by any applicable usury statute
or any other applicable law, with regard to obligations of like character
and amount, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, so that in no event shall any
exaction be possible under this Note or under any other instrument
evidencing or securing the indebtedness evidenced hereby, that is in
excess of the current limit of such validity, but such obligation shall
be fulfilled to the limit of such validity.
Presentment for payment, demand, protest and notice of demand,
notice of dishonor and notice of nonpayment and all other notices are
hereby waived by Maker. No failure to accelerate the debt evidenced
hereby by reason of default hereunder, acceptance of a past due
installment, or indulgences granted from time to time shall be construed
(1) as a novation of this Note or as a restatement of the indebtedness
evidenced hereby or as a waiver of such right of acceleration or of the
right of the Holder thereafter to insist upon strict compliance with the
terms of this Note, or (2) to prevent the exercise of such right of
acceleration or any other right granted hereunder or by applicable law;
and Maker hereby expressly waives the benefit of any statute or rule of
law or equity now provided, or which may hereafter be provided, which
would produce a result contrary to or in conflict with the foregoing. No
extension of the time for the payment of this Note or any installment due
hereunder, made by agreement with any person now or hereafter liable for
the payment of this Note shall operate to release, discharge, modify,
change or affect the original liability of the Maker under this Note,
either in whole or in part, unless the Holder agrees otherwise in
writing. This Note may not be changed orally, but only by an agreement
in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
Maker hereby waives and renounces for itself, its heirs, successors
and assigns, all rights to the benefits of any statute of limitations,
any moratorium, reinstatement, marshaling, forbearance, valuation, stay,
extension, redemption, appraisement and exemption now provided, or which
may hereafter by provided, by the Constitution and laws of the United
States of America and of any state thereof, against the enforcement and
collection of the obligations evidenced by this Note.
This Note shall be convertible at the office of Maker, and at such
other place or places, if any, as the Board of Directors of the Maker may
designate, into fully paid and non-assessable shares (calculated as to
each conversion to the nearest l/100th of a share) of Common Stock of the
Maker. The number of shares of Common Stock issuable upon conversion of
this Note shall be equal to the amount of principle and interest due
under this Note divided by the Conversion Price in effect at the time of
conversion determined as hereinafter provided. The price at which shares
of Common Stock shall be delivered upon conversion (the "Conversion
Price") shall be initially $0.10 per share of Common Stock; provided,
however, that such Conversion Price shall be subject to adjustment from
time to time in certain instances as hereinafter provided. No payment or
adjustment shall be made in respect of dividends previously declared and
paid on the Common Stock upon conversion of this Note into shares of
Common Stock. If the Maker elects to prepay part or all of this Note,
such right of conversion shall cease and terminate, as to the portion
designated for prepayment, at the close of business on the prepayment
date, unless the Maker defaults in the prepayment. Further, if
conversion is designated, only the face amount of the Note herein shall
be used to calculate the number of shares issued hereunder. No
fractional shares of Common Stock will be issued, and instead the number
of shares of Common Stock to be issued on conversion of this Note will,
to the extent necessary, be rounded up to the nearest whole number of
shares. The Holder may only convert this Note in full, and may not less
than all of this Note.
Before the Holder of this Note shall be entitled to convert the same
into Common Stock, the Holder shall surrender this Note to the Maker,
duly endorsed to the Maker or in blank, at the office of the Maker or at
such other place or places, if any, as the Board of Directors of the
Maker has designated, and shall give written notice to the Maker at said
office or place that it elects to convert the same and shall state in
writing therein the name or names (with addresses) in which it wishes the
certificate or certificates for Common Stock to be issued. The Maker
will, as soon as practicable thereafter, issue and deliver at said office
or place to such Holder, or to its nominee or nominees, certificates for
the number of full shares of Common Stock to which it shall be entitled
as aforesaid. This Note shall be deemed to have been converted as of the
close of business on the date of the surrender of the Note for conversion
as provided above, and the person or persons entitled to receive the
Common Stock issuable upon conversion shall be treated for all purposes
as the record holder or holders of such Common Stock as of the close of
business on such date.
The Conversion Price in effect at any time shall be subject to
adjustment as follows:
(i) In case the Maker shall (A) declare a dividend on its Common
Stock in shares of its capital stock, (B) subdivide its outstanding
shares of Common Stock, (C) combine its outstanding shares of Common
Stock into a smaller number of shares, or (D) issue by reclassification
of its Common Stock (including any such reclassification in connection
with a consolidation or merger in which the Maker is the continuing
corporation) any shares of its capital stock, the Conversion Price in
effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification shall
be proportionately adjusted so that if this Note is surrendered for
conversion after such time, the Holder shall be entitled to receive the
kind and amount of shares of Common Stock which it would have owned or
have been entitled to receive had this Note been converted immediately
prior to such time. Such adjustment shall be made successively whenever
any event listed above shall occur.
(ii) In case the Maker shall distribute to all holders of its
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Maker is the continuing corporation)
evidences of its indebtedness or assets (excluding dividends or other
distributions paid out of earned surplus), the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which the numerator shall be
the Current Market Price per share of the Common Stock on the date fixed
for such determination less the fair market value (as determined by the
Board of Directors of the Maker, whose determination shall be conclusive
and described in a Board Resolution of the Maker filed with the Transfer
Agent) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator
shall be such Current Market Price per share of the Common Stock on the
date fixed for such determination, such adjustment to become effective
immediately prior to the opening of business of the day following the
date fixed for the determination of stockholders entitled to receive such
distribution.
(iii) For the purpose of any computation under paragraph (ii)
above, the "Current Market Price" on any date shall be deemed to be the
average of the daily closing prices per share of Common Stock for 20
consecutive business days selected by the Maker commencing 35 business
days before such date. The closing price for each day shall be the last
sale price or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, in either case on the New York Stock
Exchange, or, if the Common Stock is not listed or admitted to trading on
such Exchange, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if it is not listed or
admitted to trading on any national securities exchange, the average of
the closing bid and asked prices as furnished by any member of the
National Association of Securities Dealers, Inc., selected from time to
time by the Maker for that purpose, or, if no member of the National
Association of Securities Dealers, Inc. furnishes a bid or ask price for
the Common stock, the book value of the Common Stock as determined from
an unaudited balance sheet of the Maker prepared according to generally
accepted accounting principles as of a date which is 90 days preceding
the date of the conversion.
(iv) All calculations under this paragraph (6) shall be made to
the nearest cent or the nearest l/100th of a share, as the case may be.
(v) In case of any consolidation or merger of the Maker with or
into any other corporation (other than a consolidation or merger in which
the Maker is the continuing corporation), or in case of any sale or
transfer of all or substantially all of the assets of the Maker, the
Holder of this Note shall after such consolidation, merger, sale or
transfer have the right to convert this Note into the kind and amount of
shares of stock and other securities and property which such holder would
have been entitled to receive upon such consolidation, merger, sale or
transfer if he had held the Common Stock issuable upon the conversion of
this Note immediately prior to such consolidation, merger, sale or
transfer.
(vi) In the event that at any time, as a result of an adjustment
made pursuant to paragraph (i) above, the holder of this Note surrendered
for conversion shall become entitled to receive any securities other than
shares of Common Stock, thereafter the amount of such other securities so
receivable upon conversion of this Note shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained
in paragraphs (i) to (v), inclusive, above, and the provisions of this
paragraph (6) with respect to the Common Stock shall apply on like terms
to any such other securities.
(vii) No adjustment in the Conversion Price shall be required
unless such adjustment would require a change of at least l% in such
price; provided, however, that any adjustments which by reason of this
paragraph (vii) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
Whenever the Conversion Price is adjustable as herein provided, the
Maker shall notify the Holder of this Note of the change in the
Conversion Price within 30 days of any such change.
The Maker will at all times reserve, keep available and be prepared
to issue, free from any preemptive rights, out of its authorized but
unissued Common Stock, solely for the purpose of effecting conversion of
this Note, the full number of shares of Common Stock then issuable upon
the conversion of all outstanding Notes. The Maker shall from time to
time, in accordance with the laws of the State of Georgia, endeavor to
amend its Certificate of Incorporation to increase the authorized amount
of its Common Stock if at any time the authorized amount of its Common
Stock remaining unissued shall be not sufficient to permit the conversion
of this Note and all other securities of the Maker which are convertible
into Common Stock. The Maker shall, if any shares of Common Stock
required to be reserved for issuance upon conversion of this Note
pursuant to this paragraph (6) require registration with or approval of
any governmental authority under any Federal or state law before such
shares may be issued upon such conversion, endeavor to cause such shares
to be so registered or approved as expeditiously as possible.
The Maker will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of this
Note pursuant hereto. The Maker shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the
issue or transfer and delivery of shares of Common Stock in a name other
than that in which this Note so converted was originally issued, and no
such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Maker the amount of any such tax or
has established to the satisfaction of the Maker that such tax has been
paid.
At any time that the Current Market Price of the Common Stock
exceeds the Conversion Price, the Maker may convert this Note into shares
of Common Stock at the Conversion Price. The Maker may exercise such
right by delivering a notice of conversion to the Holder at the Holder's
last known address. After sending such notice, the Holder shall
surrender this Note to the Maker, duly endorsed to the Maker or in blank,
at the office of the Maker or at such other place or places, if any, as
the Board of Directors of the Maker has designated, and shall give
written notice to the Maker at said office or place of the name or names
(with addresses) in which it wishes the certificate or certificates for
Common Stock to be issued. The Maker will, as soon as practicable
thereafter, issue and deliver at said office or place to such Holder, or
to its nominee or nominees, certificates for the number of full shares of
Common Stock to which it shall be entitled as aforesaid. This Note shall
be deemed to have been converted as of the close of business on the date
of the Maker sends a notice of conversion to the Holder, and the person
or persons entitled to receive the Common Stock issuable upon conversion
shall be treated for all purposes as the record holder or holders of such
Common Stock as of the close of business on such date.
In the event that this Note is collected by law or through an
attorney at law, or under advice therefrom, the Maker agrees to pay all
costs of collection, including reasonable attorneys' fees.
This Note shall be governed by the laws of the State of Georgia.
Given under the hand and seal of the undersigned, the date and year
indicated below.
Dated: this 29th of June, 2001.
ENVIRONMENTAL ENERGY SERVICES, INC.,
/s/ A. Xxxx Xxxxxx
By: A. Xxxx Xxxxxx, Chief Executive
Officer
