Exhibit 10.2
SEPARATION AGREEMENT
This SEPARATION AGREEMENT (the "Agreement") is executed as of the
11th day of December, 1998 by and between WASTEMASTERS, INC., a Maryland
corporation (hereinafter referred to as "WASTEMASTERS") and X. X.
XXXXXXXX, XX., an individual (hereinafter referred to as "XXXXXXXX").
W I T N E S S E T H:
WHEREAS, XXXXXXXX is currently a director, Chairman of the Board of
Directors, and Chief Executive Officer of WASTEMASTERS, and an officer
and director of various wholly-owned subsidiaries of WASTEMASTERS more
particularly itemized on the schedule attached hereto as Exhibit "A" and
incorporated herein by reference; and
WHEREAS, XXXXXXXX and WASTEMASTERS desire to mutually separate and
terminate their relationship, and provide for various agreements to be
effected relating to such termination and separation;
A G R E E M E N T:
NOW, THEREFORE, in consideration of the mutual covenants, promises
and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged and
confirmed, the parties hereby agree as follows:
1. RESIGNATION. Upon the execution of this Agreement, XXXXXXXX
shall tender his written resignation as a director, Chairman of the Board=
of Directors, and as Chief Executive Officer of WASTEMASTERS.
2. COMPETITIVE ACTIVITIES.
2.1. Competition. XXXXXXXX shall not directly or indirectly
engage, and shall not directly or indirectly become involved with (except=
as a beneficial owner of less than 10% of the outstanding voting
securities of an entity whose voting securities are traded publicly) any
entity that directly or indirectly engages, in any business in which
WASTEMASTERS is engaged in the geographic area serviced by WASTEMASTERS
in which XXXXXXXX performed duties and in which WASTEMASTERS had actual
operations during the six (6) month period immediately preceding the date=
of this Agreement. This covenant shall be effective for a period of
three (3) years following the date of this Agreement.
2.2. Business Opportunities. As an independent covenant, XXXXXXXX
shall not directly or indirectly divert, take, solicit or accept or
attempt to divert or take, whether on his own or on behalf of any other
party, and shall not directly or indirectly become involved with (except
as a beneficial owner of less than 10% of the outstanding voting
securities of an entity whose voting securities are traded publicly) any
entity that directly or indirectly diverts, takes, solicits or accepts or=
attempts to divert or take, whether on its own behalf or on behalf of any=
other party, any customer of WASTEMASTERS in the geographic area serviced=
by WASTEMASTERS and in which WASTEMASTERS had actual operations during
the six (6) month period immediately preceding the date of this
Agreement. This covenant shall be effective for a period of three (3)
years following the date of this Agreement.
2.3. Employees. As an independent covenant, XXXXXXXX shall not
directly or indirectly induce or influence or attempt to induce or
influence, whether on his own behalf or on behalf of any other party, and=
shall not directly or indirectly become involved with (except as a
beneficial owner of less than 10% of the outstanding voting securities of=
an entity whose voting securities are traded publicly) any entity that
directly or indirectly induces or influences or attempts to induce or
influence, whether on its own behalf or on behalf of any other party, any=
employee of WASTEMASTERS to terminate his/her employment with
WASTEMASTERS. This covenant shall be effective for a period of three (3)
years following the date of this Agreement.
XXXXXXXX understands and agrees that the purpose of the foregoing
covenants is to protect the legitimate business interests of WASTEMASTERS=
and is not to restrict XXXXXXXX'X mobility or to prevent him from
utilizing his general technical skills.
3. MUTUAL RELEASES.
Attached hereto as Exhibit "B" and incorporated herein by reference
is the form of a Release that XXXXXXXX agrees to execute
contemporaneously with this Agreement releasing WASTEMASTERS from any
claims or liabilities which he may have against WASTEMASTERS (excluding
however, the obligations of WASTEMASTERS under this Agreement) that
exists now or in the future, or that may have arisen in connection with
the relationship between XXXXXXXX and WASTEMASTERS (the "XXXXXXXX
RELEASE"). Attached hereto as Exhibit "C" and incorporated herein by
reference is the form of a Release that WASTEMASTERS agrees to execute
contemporaneously with this Agreement releasing XXXXXXXX from any claims
or liabilities which it may have against XXXXXXXX (excluding however, the=
obligations of XXXXXXXX under this Agreement) that exists now or in the
future, or that may have arisen in connection with the relationship
between XXXXXXXX and WASTEMASTERS (the "WASTEMASTERS RELEASE").
4. EXPENSE REIMBURSEMENT.
XXXXXXXX has incurred expenses in connection with his duties as an
officer and director of WASTEMASTERS for such items as entertainment,
traveling, hotels, and similar items. XXXXXXXX shall be entitled to be
reimbursed all reasonable expenses incurred by him prior to the date
hereof, subject to such reasonable requirements, procedures, and rules as=
may be established by WASTEMASTERS for similarly situated executives from=
time to time in its reasonable discretion, including, without limitation,=
the requirement of submission of appropriate receipts for such expenses
prior to reimbursement. Such reimbursement shall be made within 30 days
of the date of this Agreement.
5. SEPARATION AND CONSULTING PAYMENT.
In further consideration for the performance of XXXXXXXX pursuant to=
the terms of this Agreement, and for the consulting services of XXXXXXXX,=
WASTEMASTERS agrees to make a monthly separation and consulting payment
in the amount of $7,500.00 per month commencing June 1, 1999 and
continuing on the first day of each successive month thereafter for a
total of 36 months for a total payment of $270,000.00. In exchange for
such payment, XXXXXXXX agrees to provide information to WASTEMASTERS and
other services as mutually agreed. In the event WASTEMASTERS fails to
make any payment upon the date it is due, the entire unpaid balance of
this Agreement shall be immediately due and payable in full.
0.XX CHANGE OF CONTROL.
During the term of this Agreement, XXXXXXXX agrees on behalf of himself
or any other nominee that for a period of three (3) years from the date
of this Agreement that he will not seek to become a director, officer, or=
attempt to influence management of the Corporation in any way, including
but not limited to any attempt to gain control of WASTEMASTERS or its
board of directors. In this regard, XXXXXXXX agrees that for a period of=
three (3) years from the date of this Agreement, XXXXXXXX agrees not to
cause Continental Investment Corporation to exercise any warrant owned by=
Continental Investment Corporation which entitles it to exchange shares
of Continental Investment Corporation for shares of WASTEMASTERS.
7. INDEMNIFICATION FOR PERSONAL GUARANTYS AND DIRECT OBLIGATIONS.
XXXXXXXX has personally guaranteed or become obligated for various
obligations of WASTEMASTERS in the ordinary course of business. Attached=
hereto as Exhibit "D" and incorporated herein by reference is the form of=
an Indemnification Agreement that WASTEMASTERS agrees to execute in favor=
of XXXXXXXX indemnifying him from personal guarantees and other
liabilities he has incurred in the ordinary course of business on behalf
of WASTEMASTERS.
8. MISCELLANEOUS PROVISIONS.
8.1 Notices. All notices and other communications given by any
party hereto in connection herewith (a) must be in writing and (b) may be=
served only by (i) depositing the same in the United States mail,
properly addressed as provided herein, postage prepaid, registered or
certified mail, and with return receipt requested, (ii) delivering the
same in person; or (iii) by overnight package delivery, courier, or by
facsimile. Any notice or other communication deposited in the mail in
the manner provided herein shall be effective upon the earlier to occur
of receipt by the addressee or the expiration of 3 days after the date on=
which it is so deposited, and any notice or other communication delivered=
in person shall be effective when it is received by the addressee. For
the purpose hereof, the addresses of the parties hereto shall be as
follows:
WASTEMASTERS:
WASTEMASTERS, INC.
0000 Xxxxxxxxx Xx. X.X., Xxxxx 0000
Promenade II
Xxxxxxx, Xxxxxxx 00000
XXXXXXXX:
X. X. Xxxxxxxx, Xx.
____________________________
____________________________
Any party hereto may change its address for the purposes hereof by giving=
written notice of such change of address to the other parties as
specified herein.
8.2. Superseding Agreement. This Agreement supersedes all prior
negotiations, understandings and agreements among the parties hereto
relating to the subject matters hereof, other than those agreements
signed contemporaneously herewith.
8.3. Amendments. No alterations, modifications, amendments or
changes in this Agreement shall be effective or binding on any party
hereto, unless the same shall be in writing and executed by all of the
parties hereto.
8.4. Enforceability. This Agreement and all agreements and
covenants made by the parties hereto under this Agreement shall inure to
the benefit of, and be enforceable by and against, their respective
heirs, successors, legal representatives and permitted assignees.
8.5. Assignments. WASTEMASTERS may not assign, convey, transfer or=
otherwise dispose of all or any portion of its interest in this Agreement=
or its rights or obligations hereunder without the prior written consent
of XXXXXXXX. XXXXXXXX may assign, convey, transfer or otherwise dispose
of all or any portion of its interest in this Agreement or its rights or
obligations hereunder without the prior written consent of WASTEMASTERS.
8.6. Governing Law. This Agreement shall be governed by, construed=
under, and enforced in accordance with the laws of Georgia.
8.7. Modification and Severability. If a court of competent
jurisdiction declares that any provision of this Agreement is illegal,
invalid or unenforceable, then such provision shall be modified
automatically to the extent necessary to make such provision fully
enforceable. If such court does not modify any such provision as
contemplated herein, but instead declares it to be wholly illegal,
invalid or unenforceable, then such provision as severed from this
Agreement, and such declaration shall in no way affect the legality,
validity and enforceability of the other provisions of this Agreement to
which such declaration does not relate. In this event, this Agreement
shall be construed as if it did not contain the particular provision held=
to be illegal, invalid or unenforceable, the rights and obligations of
the parties hereto shall be construed and enforced accordingly, and this
Agreement otherwise shall remain in full force and effect.
8.8. Captions. The captions contained herein are for the purpose
of reference only and shall not affect in any way the meaning,
interpretation or scope of this Agreement.
8.9. Waivers. Any waiver by any party hereto of any breach or
violation of any provision of this Agreement by any other party shall not=
operate or be construed as a waiver by such party of any subsequent
breach or violation thereof.
8.10. Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an original
for all purposes, and all of which together shall constitute one and the
same instrument.
8.11 Dispute Resolution. Except as otherwise provided in this
Agreement, any and all disputes, controversies, or claims arising out of
or relating to this Agreement shall be settled exclusively by final and
binding arbitration in Dallas, Texas before an arbitrator selected in
accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association ("AAA").
IN WITNESS WHEREOF, the parties hereunto set their hands and seals
as of the date above first stated.
XXXXXXXX:
___________________________________
X. X. XXXXXXXX, XX.
WASTEMASTERS:
WASTEMASTERS, INC.
A Maryland corporation
By:_______________________________________
Its:_______________________________________
EXHIBIT "A"
SCHEDULE OF SUBSIDIARIES
FROM WHICH X. X. XXXXXXXX, XX.
RESIGNS AS AN OFFICER AND DIRECTOR
C.A.T. RECYCLING, INC.
SEBRING LANDFILL, INC.
AMERICAN RECYCLING AND MANAGEMENT CORPORATION
C & D RECYCLING CORP.
WASTEMASTERS OF PALM BEACH, INC.
SALES EQUIPMENT COMPANY, INC.
EXHIBIT "B"
XXXXXXXX RELEASE
This Release and Covenant Not To Xxx (this "Release") is executed by=
X. X. XXXXXXXX, XX. ("XXXXXXXX") (hereinafter referred to as the
"Releasing Party").
Upon and in consideration of the performance of WASTEMASTERS, INC.,
a Maryland Corporation pursuant to the terms of that Separation Agreement=
dated effective December _____, 1998, the terms of which are incorporated=
herein by reference, (the foregoing hereinafter collectively referred to
as the "Party Released") the Releasing Party hereby irrevocably covenants=
and agrees as follows:
1. Release. The Releasing Party hereby irrevocably releases and=
forever discharges WASTEMASTERS, INC., of and from all manner of action,
causes of action, counterclaims or third party actions, controversies,
agreements, promises, damages, expenses, claims, monetary demands
(including but not limited to the payment of interest) and other demands
whatsoever (whether known or unknown, fixed or contingent) existing at
(or at any time prior to and including) the date of this Release, in law,=
in equity, or otherwise, which the Releasing Party has, or may ever have,=
excluding however, the obligations of WASTEMASTERS, INC. pursuant to the
Termination Agreement.
2. Covenant Not To Xxx. The Releasing Party will never
institute any suit or action at law or equity against the Party Released,=
nor institute, prosecute or in any way aid in the institution or
prosecution of any claim, demand, action, or cause of action for damages,=
costs, loss of services, expenses, or compensation for or on the account
of any damage, resulting or to result, known or unknown, past, present,
or future which are, were, might or could have been asserted against the
Party Released prior to the date hereof, excluding however, the
obligations of WASTEMASTERS, INC. pursuant to the Termination Agreement.
3. Further Assurances. The Releasing Party agrees to execute
such further instruments and documents as shall be furnished to them as
necessary to fully and completely effectuate the intent and purposes of
this Release.
4. Binding Effect. This Release shall be binding upon and inure=
to the benefit of the parties hereto and their respective successors and
assigns.
5. Representation. The Releasing Party represents (i) that,
with regard to this Release, they have had and exercised the opportunity
to confer with counsel or any other person or advisor of their choosing
and (ii) that this Release has been duly authorized by all necessary
action, corporate, partnership or otherwise.
6. Payment in Full; Accord and Satisfaction. The Releasing
Party acknowledges and agrees that (i) the receipt of the performance by
WASTEMASTERS, INC. pursuant to the Separation Agreement constitutes
payment in full and an accord and satisfaction of any amounts claimed as
due and owing to the Releasing Party from any of the parties listed in
Section 1 of this Release and (ii) this Release would not be made by the
Releasing Party without the prior execution of the Separation Agreement
by WASTEMASTERS, INC.
7. Obligations Not Released. Nothing in this Release shall be
deemed to release WASTEMASTERS, INC. from its obligations pursuant to the=
Separation Agreement. Upon satisfaction of such obligations, this
Release shall be unconditional.
EXECUTED on the ______ day of December 1998.
Releasing Party's Legal Name:
___________________________
X. X. XXXXXXXX, XX.
EXHIBIT "C"
WASTEMASTERS RELEASE
This Release and Covenant Not To Xxx (this "Release") is executed by=
WASTEMASTERS, INC. pursuant to the terms of that certain Separation
Agreement dated effective December_____, 1998, the terms of which are
incorporated herein by reference (the foregoing hereinafter collectively
referred to as the "Releasing Party").
Upon and in consideration of the performance of X. X. XXXXXXXX, XX.
(hereinafter referred to as the "Party Released") the Releasing Party
hereby irrevocably covenants and agrees as follows:
1. Release. The Releasing Party hereby irrevocably releases and=
forever discharges the Party Released, his agents, attorneys, and
representatives of and from all manner of action, causes of action,
counterclaims or third party actions, controversies, agreements,
promises, damages, expenses, claims, monetary demands (including but not
limited to the payment of interest) and other demands whatsoever (whether=
known or unknown, fixed or contingent) existing at (or at any time prior
to and including) the date of this Release, in law, in equity, or
otherwise, which the Releasing Party has, or may ever have, excluding
however, the obligations of the Party Released pursuant to the
Termination Agreement.
2. Covenant Not To Xxx. The Releasing Party will never
institute any suit or action at law or equity against the Party Released,=
nor institute, prosecute or in any way aid in the institution or
prosecution of any claim, demand, action, or cause of action for damages,=
costs, loss of services, expenses, or compensation for or on the account
of any damage, resulting or to result, known or unknown, past, present,
or future which are, were, might or could have been asserted against the
Party Released, excluding however, the obligations of the Party Released
pursuant to the Separation Agreement.
3. Further Assurances. The Releasing Party agrees to execute
such further instruments and documents as shall be furnished to them as
necessary to fully and completely effectuate the intent and purposes of
this Release.
4. Binding Effect. This Release shall be binding upon and inure=
to the benefit of the parties hereto and there respective successors and
assigns.
5. Representation. The Releasing Party represents (i) that,
with regard to this Release, they have had and exercised the opportunity
to confer with counsel or any other person or advisor of their choosing
and (ii) that this Release has been duly authorized by all necessary
action, corporate, partnership or otherwise.
6. Payment in Full; Accord and Satisfaction. The Releasing
Party acknowledges and agrees that (i) the receipt of the performance by
the Party Released pursuant to the Separation Agreement constitutes
payment in full and an accord and satisfaction of any amounts claimed as
due and owing to the Releasing Party from any of the parties listed in
Section 1 of this Release and (ii) this Release would not be made by the
Releasing Party without the prior execution of the Separation Agreement
by the Party Released.
7. Obligations Not Released. Nothing in this Release shall be
deemed to release XXXXXXXX from his obligations pursuant to the
Termination Agreement. Upon satisfaction of such obligations, this
Release shall be unconditional.
EXECUTED on the ______ day of December 1998.
Releasing Party's Legal Name:
WASTEMASTERS, INC,
a Maryland Corporation
By:___________________________
Its:___________________________
EXHIBIT "D"
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is entered into this ___ day of
December, 1998, by and between X. X. XXXXXXXX, XX. (hereinafter referred
to as "Xxxxxxxx"), and WASTEMASTERS, INC. (hereinafter referred to as
"WasteMasters"):
W I T N E S S E T H :
WHEREAS, Xxxxxxxx desires to be indemnified by WasteMasters in
connection with the obligations of WasteMasters, Inc. for which Xxxxxxxx
is either directly the maker or obligor or personal guarantor (the
"Obligations").
A G R E E M E N T:
NOW, THEREFORE, for and in consideration of the performance of
Xxxxxxxx pursuant to the terms of a Separation Agreement dated December
11, 1998, the covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged and confessed, WasteMasters agrees with Xxxxxxxx as follows:
1. Indemnification of Xxxxxxxx. WasteMasters shall proceed with=
all diligence to obtain the release of Xxxxxxxx from all Obligations and
WasteMasters (herein called the "Indemnitor") shall indemnify and hold
harmless Xxxxxxxx, his estate, executor, independent administrator,
spouse, family members, partners, employees, affiliated entities and
controlling persons (Xxxxxxxx and each such other person or entity being
herein called the "Indemnitee") from and against any and all losses,
claims, damages, and liabilities, joint or several, including all
expenses, including fees and disbursements of counsel, reasonably
incurred by any Indemnitee in connection with the preparation for or
defense of any claim, action or proceeding, whether or not resulting in
any liability, as incurred, to which an Indemnitee may become subject
under any applicable federal or state law or otherwise caused by or
arising out of any claim for the Obligations.
2. Notice of Claim. Promptly after receipt by an Indemnitee of
notice of any claim or commencement of any action or proceeding in
connection with any matter related to such Indemnitee's activities
pursuant hereto, such Indemnitee will notify immediately the Indemnitor
in writing of such claims or of the commencement of such action or
proceeding, and if requested by such Indemnitee, the Indemnitor shall
assume the defense of such action including the employment of counsel
satisfactory and selected by such Indemnitee and the payment of the fees
and disbursements of such counsel. In the event such Indemnitee
determines, in its reasonable judgment, that there is a conflict of
interest by reason of having a common counsel, or if the Indemnitor fails=
to defend the action, then the Indemnitee may employ separate counsel
satisfactory to the Indemnitee or any other Indemnitee in any such action=
or proceeding in which such Indemnitee or such other Indemnitee may
become involved or to be named as defendant, and the Indemnitor shall
pay, as incurred, the fees and disbursements of such counsel. The
Indemnitee shall also notify the Indemnitor promptly of the assertion
against the Indemnitee and/or the Indemnitor or any of their officers,
directors, employees, controlling persons or affiliated companies of any
claim or of the commencement of any action or proceeding in connection
with any such matter.
3. Reimbursement of Expenses. The Indemnitor shall, in
addition, reimburse each Indemnitee for any out-of-pocket expenses
incurred in the event that such Indemnitee's personnel are required or
requested by the Indemnitor to appear as witnesses in any action brought
against the Indemnitor, whether or not such Indemnitee is named as a
defendant.
4. Entire Agreement. This Agreement contains the entire
understanding between the parties hereto concerning the subject matter
contained herein. There are no representations, agreements,
arrangements, or understandings, oral or written, between or among the
parties hereto, relating to the subject matter of this Indemnification,
which are not fully expressed herein.
5. Further Acts. Each party hereto agrees to perform any and
all such further and additional acts and execute and deliver any and all
such further and additional instruments and documents as may be
reasonably necessary in order to carry out the provisions and effectuate
the intent of this Indemnification.
6. Modification. Any modification of this Indemnification shall=
be in writing and agreed to by all parties.
7. Authority. Each party hereto represents and warrants that it=
has full authority to execute the Indemnification and bind to the
Indemnification its respective partners, trustees, beneficiaries,
remaindermen, directors, officers, employees, agents, advisors,
attorneys, successors, assigns and personal representatives.
8. Action on Claims. In any action brought on any claim of any
kind herein released, this Indemnification may be pled by the defending
party as a defense or by way of counterclaim or cross-claim. The
prevailing party in such an action shall be entitled to its reasonable
attorneys' fees and costs from the opposing party.
9. Severability. If any provision hereof is held to be illegal,=
invalid, or unenforceable under present or future laws effective during
the term hereof, such provisions shall be duly severable; this Agreement
shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof; and the
remaining provisions hereof shall remain in full force and effect and
shall not be affected by the severance of the illegal, invalid, or
unenforceable provision or provisions.
10. Governing Law and Venue. This Indemnification shall be
governed by and construed in accordance with the laws of the State of
Texas. The terms of this Indemnification shall be specifically
performable in the State of Texas.
11. Breach. Should any party breach any part of this
Indemnification, and litigation ensue, the parties agree that the
prevailing party shall be entitled to its reasonable attorneys' fees and
costs in prosecuting or defending its claims.
12. Counterpart Execution. This Indemnification may be executed=
in multiple counterparts, each of which shall be fully effective as an
original, for which together shall constitute only one (1) instrument.
13. Termination. Upon termination of the Obligations, this
Indemnification Agreement shall automatically terminate without the
necessity of any further action by Xxxxxxxx or WasteMasters other than
the execution of any documents by Xxxxxxxx deemed necessary by
WasteMasters to evidence the termination of this Indemnification
Agreement.
IN WITNESS WHEREOF, the parties hereunto set their hands and seals
as of the date above first stated.
INDEMNITOR:
WASTEMASTERS, INC.,
A Maryland corporation
By:__________________________
Its:__________________________
INDEMNITEE:
______________________________
X. X. XXXXXXXX, XX
