EX-10.4
SEPARATION AGREEMENT
This Separation Agreement (this "Agreement") is made and entered
into this 22nd day of January, 2004, by and between Synthetic Turf
Corporation of America, a Nevada corporation ("SYTR"), and Xxxxxxx
Xxxxxxx and Xxxxxx XxXxxxxxxx, individuals residing in the State of
Colorado ("Shareholders").
The parties recite and declare that:
A. On and prior to December 9, 2002, the Shareholders were
equal co-owners of International Surfacing of Colorado, Inc., a
Colorado corporation ("ISOC Colorado"), which was engaged in the
business (herein the "Business") of selling and installing artificial
turf products in the State of Colorado.
B. On December 9, 2002, the Shareholders and SYTR entered into
an Agreement and Plan of Merger ("Acquisition Agreement"), whereby
ISOC-Colorado was to be merged with and into a wholly-owned Nevada
subsidiary of SYTR, in exchange for a quantity of newly issued
restricted shares of SYTR (the "Restricted Shares").
C. On January 7, 2003, the transaction which was the subject of
the Acquisition Agreement was closed by the Shareholders and SYTR.
D. During the 2003 calendar year, the Business has been managed
and operated by the Shareholders as a consolidated subsidiary of SYTR.
E. The Shareholders and SYTR now desire to make this Agreement
and carry out the actions required of them hereunder in order to
effect a separation and return to the Shareholders of the Business,
effective as of the close of business on December 31, 2003, such that
the Business may be managed and operated by the Shareholders, from and
after January 1, 2004, in the manner it was managed and operated by
the Shareholders prior to the closing of the Acquisition Agreement.
For the reasons set forth above, and in consideration of the
mutual covenants of the parties hereto, the parties hereby agree,
effective as of the close of business on December 31, 2003, and in
settlement of all disputes and claims that any of the parties may have
with or against each other, that SYTR will take the actions required
of it hereinbelow and will transfer back, assign and reconvey the
Business to the Shareholders, provided that, as the consideration for
such actions and transfer, (i) 10 million of the 15 million of
Restricted Shares shall be cancelled, and (ii) the Shareholders will
take the actions required of them hereinbelow.
1. Actions Due from SYTR
1.1. As soon as possible, SYTR shall execute and deliver to the
Shareholders such instruments of conveyance necessary to convey to the
Shareholders the equity shares representing ownership of its
subsidiary carrying on the Business.
1.2. SYTR agrees to pay the sum of $6,000.00 to the Shareholders
immediately upon execution of this Agreement by the Shareholders.
1.3. No later than March 15, 2004, SYTR agrees to conclude a
"stand alone" audit of the financial results of the Business for the
calendar year 2003, and to remit to the Shareholders, no later than
fifteen (15) days after the results of such audit are known, a true
and complete copy thereof together with one-half (") of the earnings
before income tax, depreciation and amortization (EBITDA) of the
Business during such period reflected in such report of audit. For
purposes of such audit, transactions between the Business and SYTR on
terms other than market terms shall be adjusted, to the greatest
extent possible, to market terms, so that such audit report will
determine the true financial results of the Business for the period
covered by the report.
1.4. The portion of the EBITDA due to the Shareholders under the
preceding Section 1.3 shall be further increased by the amount
currently due from ISOC Colorado to vendors for a 2003 trade show, in
the amount of approximately $4,300.
2. Actions Due from the Shareholders
2.1. The Shareholders agree that their employment agreements with
SYTR are cancelled and none of the parties to such agreements will
have any further rights or obligations thereunder.
2.2. The Shareholders agree to clean, vacate and surrender
possession to the landlord of each storage unit rented in the name of SYTR.
2.3. The Shareholders shall immediately return to SYTR all
unopened turf adhesive containers in the possession or control of the
Shareholders, and shall surrender the certificates representing the
Restricted Shares, so that they can be exchanged at SYTR's transfer
agent for the certificates representing the lesser number of shares to
be re-issued to the Shareholders hereunder. The parties acknowledge
the probable delay in returning the certificate(s) representing the
Restricted Shares of Xxxxxx XxXxxxxxxx, who agrees to surrender such
certificate(s) as soon as practical.
2.4. For a period of twelve months, the Shareholders will hold in
confidence and not disclose in any manner whatsoever, any of the
confidential and proprietary information of SYTR acquired by the
Shareholders while the Business was owned by SYTR, and will take all
reasonable measures to protect the secrecy of and avoid disclosure or
use of such confidential information in order to prevent it from
falling into the public domain or the possession of unauthorized
persons. The Shareholders agree to notify SYTR in writing of any such
misuse or misappropriation of such confidential information of SYTR
party that may come to their attention.
3. Other Agreements of the Parties
3.1. Subject to the other terms and conditions of this
Agreement, each of the parties hereto hereby jointly and severally
releases, acquits and forever discharges each of the other parties
from any and all claims, demands, actions, causes of actions,
liabilities, obligations, costs, expenses, loss of service, debts, attorneys'
fees, claims for sanctions, or damages of any kind or nature whatsoever, and in
any and all forums and courts, whether known or unknown, suspected or
unsuspected, arising from the beginning of time up to and including
the date of this Agreement, arising out of, resulting from of or in
any way related to the Acquisition Agreement or the transactions
undertaken or contemplated thereby, other than any obligations under
this Agreement. The Releasing Parties represent and warrant that they
have not sold, assigned, transferred, conveyed (except to the parties
to this Agreement) or otherwise disposed of any claims, demands,
actions or causes of action released herein.
3.2. Signed facsimile transmissions of this document shall
be considered as valid as the original. This Agreement may be executed
as a single document or in counterparts, each of which shall be deemed
an original, and all of which together shall constitute one and the
same agreement.
3.3. This agreement will be governed and construed in accordance
with the laws of the State of Colorado. This Agreement was produced by
all parties hereto and shall not be construed against any of them.
3.4. Each person signing this agreement for an entity confirms
that they have full authority to execute this agreement and obligate
such company, firm, corporation, partnership, organization,
individual, and/or entity identified as a party herein.
3.5. Each of the parties, at the request of any other
party, will execute all such further instruments and take all such
further action consistent with the provisions hereof as may be
reasonably necessary to carry out the intent of this Agreement.
3.6. For a period of twelve months and except as
otherwise required by any law, rule or regulation, no party to this
Agreement shall make, publish or facilitate any disparaging comments
or remarks, in any public medium, concerning any other party to this
Agreement or the basis or rationale for the parties' execution of this
Agreement.
3.7. This Agreement is intended to set forth the
important terms between the parties but is unlikely to cover all
circumstances. In this regard, if the parties are unable to resolve
any disagreement between them, or problems that arise in the future,
which may or may not be covered by this Agreement, an arbitrator shall
be selected by agreement, and if the parties are unable to agree on an
arbitrator, then one shall be selected from the American Arbitration
Association in accordance with their normal procedures. The
arbitrator's procedural and substantive decision shall be binding upon
all parties. The arbitrator so selected shall decide the issues to be
determined, based upon the following:
(i) That both parties be treated fairly and equitably;
(ii) The intent of this Agreement or any subsequent
amendments; and
(iii) Practical considerations.
Any decision of the arbitrator shall be binding in any court
of law so that the terms of the decision can be enforced.
Dated: January 22, 2004 Dated: January 22, 2004
"Shareholders" "SYTR"
Synthetic Turf Corporation of America, a
Nevada Corporation
/s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
By: /s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx, President
/s/ Xxxxxx XxXxxxxxxx
Xxxxxx XxXxxxxxxx
