SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 11, 1998
WASTEMASTERS, INC.
(Exact name of registrant as specified in its charter)
Maryland 0-12914 52-1507818
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
1117 Perimeter Center West,
Suite 500 East,
Atlanta, Georgia 30338
(Address of principal executive offices) (Zip Code)
(404) 888-0158
(Registrant's telephone number, including area code)
<PAGE>
Item 1. Changes in Control of Registrant.
Not Applicable.
Item 2. Acquisition or Disposition of Assets.
On January 1, 1999, the Registrant entered into a Lease/Purchase
Agreement ("Agreement") under which the Registrant leased to J. Marcus
Enterprises, Inc. its interest in the following subsidiaries and assets: =
Wood Management, Inc., a New Jersey corporation; Mini-Max Enterprises,
Inc., a New Jersey corporation; Tri-State Waste Disposal, Inc., a New
Jersey corporation; Southeastern Research & Recovery, Inc., a South
Carolina corporation; Atlantic Coast Demolition & Recycling, Inc., a
Pennsylvania corporation (hereinafter, the "Corporations"); and all of
the real estate and personal property used by the Registrant in the
operation of that landfill in Lisbon, Ohio (hereinafter, the "Landfill").=
In addition, under the Agreement the lessee was granted an option to
purchase the Corporations and Landfill for aggregate consideration of $7
million, which option may be exercised at any time during the term of the=
Agreement. The purchase price for the Corporation and the Landfill under=
the option is payable as follows: $1 million at closing; $2 million one
year from closing; $2 million two years from closing; and $2 million
three years from closing; provided, however, that the lessee has the
option of making the payment due on the first anniversary of closing by
delivering $50,000 and 400,000 shares of its restricted common stock; the=
lessee has the option of making the payment due on the second anniversary=
of closing by delivering $75,000 and 400,000 shares of its restricted
common stock; and the lessee has the option of making the payment due on
the third anniversary of closing by delivering $125,000 and 400,000
shares of its restricted common stock. The Registrant's obligation to
perform under the option is conditional upon the Registrant's board of
directors approving the purchase price after receipt of an independent
report justifying the purchase price. Separately, the lessee orally
agreed to loan the Registrant up to $1,000,000 secured by the
Corporations and the Landfill, of which a substantial part has already
been loaned to the Registrant. In the event the option is exercised by
the Lessee, the loan amount will be applied to the purchase price under
the option.
Under the Agreement, the lessee leased the Corporations and the
Landfill for $10 per month for a term equal to the lesser of one year or
the date of Closing in the event the lessee exercises an option contained=
in the Agreement. Under the Agreement, the Registrant granted the lessee=
a proxy to elect the board of directors of each of the subsidiaries
during the term of the Agreement. During the term of the Agreement, the
lessee is responsible for payment of any losses incurred in the operation=
of the Corporations and the Landfill determined under generally accepted
accounting principles, excluding any noncash expenses such as
depreciation or amortization.
The lessee is controlled by the former general counsel for the
Registrant. The Registrant decided to enter into the Agreement in order
to allow the Registrant to concentrate on its Florida operations, and to
raise capital to fund such operations.
On December 11, 1998, the Registrant agreed to convey its interest
in the following subsidiaries to Institute for Business Development &
Law, Inc., a nonprofit legal clinic unaffiliated with the Registrant, for=
$6,000.00: WasteMasters of South Carolina, Inc.; WasteMasters of
Michigan, Inc.; WasteMasters of Pennsylvania, Inc.; WasteMasters of New
York, Inc.; WasteMasters of Louisiana, Inc.; and F&E Resource Systems
Technology, Inc. Each of the subsidiaries was in bankruptcy proceedings
at the time. With the exception of Wastemasters of South Carolina, Inc.,
all of the assets of the subsidiaries had been foreclosed upon or seized
by creditors, but the subsidiaries still had substantial liabilities
which were included on the consolidated financial statements of the
Registrant. In the case of Wastemasters of South Carolina, Inc., the
liabilities exceeded the realizable value of its assets. In addition, as=
part of the disposal of the subsidiaries, the Registrant issued the
purchaser a warrant to purchase 10,000,000 shares of the Registrant's
common stock for $0.35 per share exercisable until December 31, 2003.
Item 3. Bankruptcy or Receivership.
On January 11, 1999, C.A.T. Recycling, Inc., a wholly-owned
subsidiary of the Registrant, filed a Chapter 11 petition in the United
States Bankruptcy Court for the Northern District of Georgia, Atlanta
Division.
Item 4. Changes in Registrant's Certifying Accountant.
Not Applicable.
Item 5. Other Events.
On or about November 6, 1998, Stewart Rahr ("Rahr") filed a First
Amended Complaint against the Registrant, Continental Investment
Corporation ("CICG"), and a large number of entities and individuals
associated and affiliated with the Registrant and CICG, including certain=
present and former officers, directors and employees of the Registrant,
in an action styled Stewart Rahr v. R. Dale Sterritt, Jr., pending in the=
United States District Court for the Eastern District of New York, Case
No. 98 Civ. 6212. The Complaint alleges that Mr. Rahr purchased common
stock of the Registrant on the open market in reliance on false and
misleading information contained in SEC filings and press releases of the=
Registrant. Based on the amount of Mr. Rahr's investment in securities
of the Registrant as set forth in the complaint, the Registrant does not
believe its liability, if any, to Mr. Rahr is material.
On December 16, 1998, Stewart Rahr filed a motion to intervene in
that action styled Nikko Trading of American Corporation, et al. v.
Wastemasters, Inc., pending in the United States District Court for the
Northern District of Texas, Dallas Division, Civil Action No. 3-98CV0048-
D. Mr. Rahr requested that a Consent Judgment entered in that action on
February 5, 1998 be vacated, and that Rahr be granted leave to defend the=
action derivatively on behalf of the Registrant. Under the Consent
Judgment, approximately 63 million shares of common stock were issued to
the plaintiffs to fully settle and compromise the Registrant's liability
under approximately $3.2 million of debentures held by the plaintiffs
therein. Mr. Rahr alleges that the Consent Judgment was obtained as a
result of collusion between the plaintiffs in the action and the
Registrant, and that because of that collusion the Registrant ignored
certain legal defenses in the action and agreed to a judgment which was
not in the best interests of the Registrant. The Registrant is reviewing=
the motion and the facts alleged therein to determine their effect on the=
Registrant, and what position it should take therein.
=09In September 1997, the Registrant entered into a transaction with
Continental Investment Corporation ("CIC") in which, among other things,
the Registrant received 300,000 shares of common stock of CIC in
consideration for the issuance to CIC by the Registrant of 4.5 million
shares of common stock, 5 million shares of preferred stock which are
convertible into 25 million shares of common stock and a warrant under
which CIC has the right to acquire 100 million shares of common stock of
the Registrant in return for 1 million shares of common stock of CIC. At=
the time of the transaction, CIC's common stock was selling for $23.50
per share. Since the transaction, the market price of CIC's common stock=
has dropped to about $2 per share. In addition, at least two lawsuits
have been filed against CIC which allege that CIC violated Section 10(b)
of the Securities Exchange Act of 1933 by illegally inflating the market
price of its common stock at the time of the transaction with the
Registrant through the dissemination of false and misleading information
to the public through its SEC filings, press releases and statements to
investors. The Registrant is currently investigating the allegations
made against CIC, but believes that those allegations, if true, would
enable the Registrant to rescind the transaction with CIC and cancel the
shares and warrant. Pending the Registrant's investigation and any legal=
action which the Registrant may decide to take, the Registrant intends to=
oppose any transfer of the common or preferred stock issued to CIC or the=
exercise of the warrant issued to CIC.
Item 6. Resignations of Registrant's Directors.
On December 11, 1998, R. D. Sterritt, Jr. resigned as a director and=
Chief Executive Officer of the Registrant, as well as a director of
numerous subsidiaries of the Registrant. At the time of the resignation,=
Mr. Sterritt was the Chairman of the Board of the Registrant. Following
the resignation, Leon Blaser was appointed Chairman of the Board and
Chief Executive Officer. In connection with Mr. Sterritt's resignation,
the Registrant and Mr. Sterritt executed a Separation Agreement, which
provided, among other things, that Mr. Sterritt would not compete with
the Registrant in any geographic area in which the Registrant did
business within six months before the date of the Agreement, would not
take any act to divert any business opportunity of the Registrant, would
not take any act to hire any employee of the Registrant, would not take
any act to become an officer or director of the Registrant or influence
management of the Registrant for a three year period, would not take any
act to cause Continental Investment Corporation to exercise any warrant
to acquire shares of stock of the Registrant. In addition, the
Registrant agreed to reimburse certain expenses which Mr. Sterritt
incurred in connection with the performance of his duties for the
Registrant, agreed to pay Mr. Sterritt severance of $7,500 per month for
36 months beginning on June 1, 1999, and agreed to indemnify Mr. Sterritt=
for certain liabilities of the Registrant which Mr. Sterritt has
guaranteed. Finally, the Registrant and Mr. Sterritt executed releases
of any claim which each as against the other.
Effective December 16, 1998, Brian Galligan resigned as a director
of the Registrant. Mr. Galligan did not provide the Registrant with a
reason for his resignation.
Effective January 13, 1999, Noel Khalil resigned as a director of
the Registrant. Mr. Khalil did not provide the Registrant with a reason
for his resignation.
On December 11, 1998, Michael J. Smith was appointed to fill the
vacant board position resulting from the resignation of R. Dale Sterritt,=
Jr. Leon Blaser was appointed Chairman of the Board.
On January 20, 1999, the board of directors of the Registrant
appointed Malcolm Kelso to the board of directors to fill one of the
vacant board positions. Mr. Kelso was appointed as a nominee of the
plaintiffs in that litigation styled Nikko Trading of American
Corporation, et al. v. Wastemasters, Inc., pending in the United States
District Court for the Northern District of Texas, Dallas Division, Civil=
Action No. 3-98CV0048-D pursuant to a Consent Judgment entered therein
(see Item 5 herein). Pursuant to the resolution appointing Mr. Kelso,
Mr. Kelso's appointment as a director terminated automatically in the
event the Consent Judgment pursuant to which he was appointed is vacated
or its effectiveness stayed for any reason. The District Court
subsequently allowed Stewart Rahr to intervene in the action, and because=
of that ruling two members of the board of directors have taken the
position that Mr. Kelso's position as a board member has terminated
automatically.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Businesses Acquired: Not
applicable.
(b) Pro Forma Financial Information: To be added by amendment.
(c) Exhibits:
Regulation
S-B Number Exhibit
10.1 Lease/Purchase Agreement between Wastemasters, Inc. and
J. Marcus Enterprises, Inc. dated January 1, 1999
10.2 Separation Agreement between R. D. Sterritt, Jr. and
Wastemasters, Inc. dated December 11, 1998
Item 8. Change in Fiscal Year.
Not Applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S
Not Applicable.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,=
the registrant has duly caused this report to be signed on its behalf by=
the undersigned thereunto duly authorized.
WASTEMASTERS, INC.
Date: February 15, 1999 By: /s/ Michael Smith
Michael Smith, President
Exhibit 10.1
LEASE/PURCHASE AGREEMENT
THIS LEASE/PURCHASE AGREEMENT is made as the 1st day of January,
1999, by and among WasteMasters, Inc., a Maryland corporation
(hereinafter called "Lessor"), and J. Marcus Enterprises, Inc.
(hereinafter called "Lessee").
WITNESSETH:
1. Leased Property. Lessor, for and in consideration of the
rents, covenants, agreements, and stipulations hereafter mentioned,
provided for and contained to be paid, kept and performed by Lessee,
leases and rents unto Lessee, and Lessee hereby leases and takes upon the=
terms and conditions which hereinafter appear, the following described
property, (hereinafter called the "Property"), to wit: Wood Management,
Inc., a New Jersey corporation; Mini-Max Enterprises, Inc., a New Jersey
corporation; Tri-State Waste Disposal, Inc., a New Jersey corporation;
Southeastern Research & Recovery, Inc., a South Carolina corporation;
Atlantic Coast Demolition & Recycling, Inc., a Pennsylvania corporation
(hereinafter, the "Corporations"); and all of the real estate and
personal property normally used by the Lessor in the operation of that
landfill in Lisbon, Ohio (hereinafter, the "Landfill"), which real estate=
is more particularly described on Exhibit A attached hereto.
2. Term. The Lessee shall have and hold the Property for a term
equal to the shorter of one year or the date of Closing in the event the
Lessee exercises the Option (as defined herein).
3. Rental. Lessee agrees to pay to Lessor at the address of
Lessor as stated in this Lease, without demand, deduction or set off,
monthly rental in the amount of $10.00 per month. Monthly rental
payments shall be paid in advance on the first day of each calendar month=
during the term hereof. Upon execution of this Lease, Lessee shall pay
to Lessor the first full month's rent due hereunder.
4. Management of Property. During the term of this Lease, the
Lessee shall have the sole and exclusive right to operate and manage the
Property. As sole shareholder of the Corporations, the Lessor hereby
grants the Lessee an irrevocable proxy during the term of this Lease to
vote the Lessor's shares in the Corporations to appoint such persons that=
the Lessee deems advisable to the board of directors of each of the
Corporations, and the Lessee hereby agrees to replace the board of
directors of each of the Corporations with the Lessee's nominees promptly=
after execution of this Lease. Lessor and Lessee agree that the
foregoing proxy shall not entitle the Lessee to vote the Lessor's shares
of stock in the Corporations on any matter other than the election of
directors to the Corporations during the term of this Lease, including
without limitation any proposed merger, share exchange, sale of assets,
amendment to articles of incorporation or any other act which requires
approval of the shareholders of the Corporations under the Corporations'
articles of incorporation, bylaws or applicable law. The Lessee further
agrees that the foregoing proxy shall expire upon the expiration or
termination of this Lease, and that the foregoing proxy is not
exercisable at any time that the Lessee is in default under this Lease.
The Lessee further agrees that it will not take any action to cause the
Corporations to sell, mortgage, pledge or lease any assets outside the
ordinary course of business or file any petition for relief under the
United States Bankruptcy Code without the prior written consent of the
Lessor.
5. Operation of Property. The Lessee shall be responsible for
providing all management, consulting, financial, marketing and
operational support services to the Property. The Lessee shall be
entitled to all revenues generated by the Property and shall be
responsible for paying all expenses and liabilities incurred and accrued
by the Property on and after the date of this Agreement including,
without limitation, all installments of approved Company Debt. Lessee
agrees that it shall be responsible for providing funds to the Property
to the extent the expenses of the Property are greater than the revenues
of the Property during the term of this Lease determined on an accrual
basis under generally accepted accounting principles (but excluding any
noncash expenses such as depreciation or amortization of goodwill), and
the Lesseee shall be entitled to retain all profits generated by the
Property determined under the same principles. The obligations of the
Lessee to manage the Property include the obligation to:
(a) Administer, supervise and control all of the finances of the
Property, including payroll, taxes, accounting, bookkeeping, record
keeping, managing or accounts payable, and accounts receivable, banking,
financial records and reporting functions as they pertain to the business=
of the Property, with the power to make such changes therein, in its sole=
discretion, and to incorporate such functions into systems used by
Lessee. Lessee shall prepare and maintain financial statements for the
Property according to generally accepted accounting principles
consistently applied and shall provide the Lessor with monthly operating
reports and statements including but not limited to cash flow statements,=
income statements, accounts payable and accounts receivable reports and
such other reports and information as may be requested by Lessor from
time to time to enable the Lessor to comply with its reporting
requirements under the Securities Exchange Act of 1934.
(b) Select and employ all personnel necessary to service the
Property.
(c) Supervise and control the purchase of all materials and
supplies, and acquire, lease, dispose of and repair equipment and
facilities necessary to provide safe and adequate service to the business=
of the Property.
(d) Manage, at Lessee's sole discretion, all costs and all pricing
on a customer-by-customer basis, estimate all costs on new contracts, bid=
on and enter into new contracts, and control all costs for contracts in
progress.
(e) Commence, defend and control all legal actions, arbitrations,
investigations and proceedings that arise or are pending during the term
of this Lease.
(f) Maintain the assets of the Property in good repair, order and
condition, normal and reasonable wear and tear excepted.
6. Licenses and Permits. The parties acknowledge that this Lease=
as well as the transfer of the Property to the Lessee pursuant to the
option herein may be subject to approval by the State of Ohio
Environmental Protection Agency, and similar state agencies in New Jersey=
and Pennsylvania and they will cooperate in seeking such approval. The
Lessee shall be responsible for the cost of transferring or obtaining any=
licenses or permits necessary to conduct the business of the Property,
and for maintaining such licenses and permits in good standing during the=
term of this Lease.
7. Books and Records. The Lessor shall provide the Lessee with
access to all books and records necessary for the transition of
management of the Property to the Lessee hereunder, including any
corporate records of the Property, any payroll records for employees of
the Property, any customer lists, and any financial records, such as the
general ledger, accounts payable, accounts receivable, etc. Promptly
after the termination or expiration of this Lease, the Lessee shall turn
over to the Lessor all books and records relating to or generated during
the Lessee's operation of the Property during the term of this Lease, or
which was turned over to Lessee at the commencement of this Lease.
8. No Agency. The Lessee shall, at all times, be independent of=
the Lessor. Nothing contained herein shall be deemed to make or render
the Lessor a partner, co-venturer or other participant in the business or=
operations of the Lessee, or in any manner to render Lessor liable, as
principal, surety, guarantor, agent or otherwise for any of the debts,
obligations or liabilities of the Property incurred during the term of
this Lease.
9. Abandonment of Property. Lessee agrees not to abandon or
vacate the Property during the term of this Lease and agrees to use the
Property for the purposes herein leased until the expiration hereof.
10. Indemnity; Insurance. Lessee agrees to and hereby does
indemnify and save Lessor harmless against all claims for damages to
persons or property by reason of Lessee's use or occupancy of the
Property, and all expenses incurred by Lessor because thereof, including
attorney's fees and court costs. Lessee agrees that it will, at its own
expense, at all times procure for, deliver to and maintain for the
benefit of Lessor during the term of this Lease, original paid up
insurance policies of such insurance companies, in such amounts, in such
form and substance, and with such expiration dates as are acceptable to
Lessor and which name the Lessor as additional insured. Until the Lessee=
is notified otherwise in writing by the Lessor, the Lessee shall maintain=
the following insurance: (a) Comprehensive General Liability of
$1,000,000.00, which includes insurance against liability for injury to
or death of persons or loss or damage to their property occurring in or
about the Property; (b) Hazard insurance against loss or damage to the
Property by fire, lightning, windstorm, hail, explosion, riot, riot
attending a strike, civil commotion, aircraft, vehicles, smoke, vandalism=
and malicious mischief and against such other hazards as, under good
insurance practices, from time to time are insured against for properties=
of similar character and location, the amount of which insurance shall be=
not less than one hundred (100.0%) per cent of the full replacement cost
of the Property without deduction for depreciation and which policies of
insurance shall contain satisfactory replacement cost endorsements.
Lessee shall deliver to Lessor a certificate of any renewal insurance
policies on or before the date of expiration of any existing insurance
policy.
11. Governmental Orders. Lessee agrees, at his own expense, to
comply promptly with all requirements of any legally constituted public
authority made necessary by reason of Lessee's occupancy and management
of the Property. Lessor agrees to comply promptly with any such
requirements if not made necessary by reason of Lessee's occupancy and
management.
12. Assignment and Subletting. Lessee shall not have the right
to sublease the Property or any part thereof, assign this Lease or any
interest hereunder, or permit the use of the Property by another party
other than the Lessee without the prior written consent of Lessor. No
sublease or assignment by Lessee shall relieve Lessee of any liability
hereunder.
13. Termination of Lease. Lessor may, at its option, upon ten
(10) days' written notice terminate this Lease (if such default is not
cured within such ten (10) day period or such longer period as required
to effect a cure if a cure is commenced within 10 days and diligently
prosecuted): (i) if Lessee shall violate any material provision of this
Lease; (ii) if Lessee shall violate or be in material breach of any
provision, representation, warranty, covenant or undertaking herein; or
(iii) if Lessee (a) makes an assignment for the benefit of creditors, (b)=
is adjudicated a bankrupt, (c) files or has filed against it any
bankruptcy, reorganization, liquidation or similar petition or any
petition seeking the appointment of a receiver, conservator or other
representative, or (d) proposes a composition arrangement with creditors.=
Termination of the Lease pursuant to this paragraph shall not limit or
impair any other rights which the Lessor has hereunder, including without=
limitation the right to file suit against the Lessee to recover damages
for the violation of any term herein or to right to set off any debt
which the Lessor may owe the Lessee against any liability of the Lessee
to the Lessor hereunder.
14. Quiet Enjoyment. So long as Lessee observes and performs
the covenants and agreements contained herein, it shall at all times
during the Lease term peacefully and quietly have and enjoy possession of=
the Property, but always subject to the terms hereof.
15. No Estate in Property. This Lease shall create the
relationship of Lessor and Lessee between the parties hereto. No estate
shall pass out of Lessor. Lessee has only a usufruct not subject to levy=
and sale, and not assignable by Lessee except by Lessor's consent.
16. Attorney's Fees. In the event that any action or proceeding=
is brought to enforce any term, covenant or condition of this Lease on
the part of Lessor or Lessee, the prevailing party in such litigation
shall be entitled to recover reasonable attorney's fees to be fixed by
the court in such action or proceeding. Furthermore, Lessor and Lessee
agree to pay the attorney's fees and expenses of the other party to this
Lease (either Lessor or Lessee) if it is made a party to litigation
because of its being a party to this Lease and when it has not engaged in=
any wrongful conduct itself.
17. Press Releases. No publicity release or announcement
concerning this Lease or the Option or the transactions contemplated
hereby shall be issued without advance approval of the form and substance=
thereof by Lessor or Lessee.
18. Rights Cumulative. All rights, powers, and privileges
conferred hereunder upon the parties hereto shall be cumulative and not
restrictive of those given by law.
19. Waiver of Rights. No failure of Lessor to exercise any
power given Lessor hereunder or to insist upon strict compliance by
Lessee of its obligations hereunder and no custom or practice of the
parties at variance with the terms hereof shall constitute a waiver of
Lessor's right to demand exact compliance with the terms hereof.
20. Agency Disclosure. Lessor represents to Lessee that Lessor
has not engaged any agent in regard hereto or to the sale or lease of the=
Property, and Lessor hereby agrees to indemnify Lessee and hold Lessee
harmless against all liability, loss, cost, damage and expense
(including, without limitation, attorneys' fees and cost of litigation)
Lessee shall ever suffer or incur because of any claim by any agent
claiming by, through or under Lessor, whether or not meritorious, for any=
fee, commission or other compensation with respect hereto. Lessee
represents to Lessor that it has not engaged any agent in regard hereto,
and Lessee hereby agrees to indemnify Lessor and hold Lessor harmless
against all liability, loss, cost, damage and expense (including, without=
limitation, attorneys' fees and cost of litigation) Lessor shall ever
suffer or incur because of any claim by any agent claiming by, through or=
under Lessee, whether or not meritorious, for any fee, commission or
other compensation with respect hereto or with respect to the Property.
21. Environmental Laws. Lessor represents, to the best of their=
knowledge and belief, that 1) the Property are in compliance with all
applicable environmental laws, and 2) there are not excessive levels (as
defined by the Environmental Protection Agency) of radon, toxic waste or
hazardous substances on the Property. Lessee represents and warrants
that Lessee shall comply with all applicable environmental laws and that
Lessee shall not permit any of his employees, agents, contractors for
subcontractors, or any person present on the Property to generate,
manufacture, store, dispose or release on, about, or under the Property
any hazardous substances which would result in the Property not complying=
with any applicable environmental laws, and Lessee hereby indemnifies and=
holds Lessor harmless from any liability or claim, including attorney's
fees incurred by Lessor, arising out of a breach of Lessor's obligations
under this paragraph.
22. Option to Purchase. The Lessor hereby grants to the Lessee
an option to purchase the Property on the terms and conditions set forth
below:
a) Option Price. The Lessee may purchase the Property for
consideration of seven million dollars ($7,000,000) ("Aggregate Purchase
Price"), which amount will be payable as follows: one million dollars
($1,000,000) at Closing ("Initial Consideration"); two million dollars
($2,000,000) exactly one (1) year thereafter from Closing ("Year One (1)
Consideration"); two million dollars ($2,000,000) exactly two (2) years
from Closing ("Year Two (2) Consideration"); and two million dollars
($2,000,000) exactly three (3) years from Closing ("Year Three (3)
Consideration"). However, in year one (1), Lessee shall have the option,=
for delivering unto Lessor consideration in the amount of fifty thousand
dollars ($50,000) and four hundred thousand (400,000) shares of its SEC
Rule 144 common stock, to Satisfy the Year One (1) Consideration; in year=
two (2), Lessee shall have the option, for delivering consideration unto
Lessor in the amount of seventy five thousand dollars ($75,000) and four
hundred thousand (400,000) shares of its SEC Rule 144 common stock, to
Satisfy the Year Two (2) Consideration; and in year three (3), Lessee
shall have the option, for delivering consideration unto Lessor in the
amount of one hundred and twenty five thousand dollars ($125,000) and
four hundred thousand (400,000) shares of its SEC Rule 144 common stock,
to Satisfy the Year Three (3) Consideration.
b) Term of Option. The Lessee may exercise this Option at any time
prior to the expiration or termination of this Lease.
c) Manner of Exercise of Option. The Lessee may exercise this
Option by written notice to the Lessor in the manner set forth in this
Lease for the giving of notice to the Lessor. Such notice shall state
the Lessee's election to exercise this Option, shall be signed by an
officer of the Lessee, and shall state a date, time and location in the
Atlanta, Georgia metro area where the Closing of the purchase of the
Property will take place, which date shall be between 10 and 20 days
after the date of receipt of such notice. The exercise of the Option by
the Lessee shall constitute a binding obligation on the part of the
Lessee to purchase the Property on the terms and conditions set forth
herein and on the Lessor to convey the Property on the terms and
conditions set forth herein.
d) Title to Property. In the event the Option is exercised, the
Corporations shall be conveyed to the Lessee by assignment of all of the
issued and outstanding common stock of the Corporations to the Lessee by
the Lessor free and clear of all liens, claims or encumbrances. The
Landfill shall be conveyed to the Lessee by limited warranty deed, to the=
extent the Landfill constitutes real property, and by bill of sale, to
the extent the Landfill constitutes personal property, subject to all
liens, claims and encumbrances which encumbered such property when it was=
acquired by the Lessor, but otherwise free and clear of any liens, claims=
and encumbrances.
e) Condition of Property. In the event the Option is exercised,
the Property shall be conveyed to the Lessee "as is, where is," without
any express or implied warranties, including any warranties of condition,=
of merchantability or fitness for a particular purpose. Furthermore, the=
Lessor makes no warranties as to the financial condition of the
Corporations, it being understood by the parties that the Lessee shall
conduct any due diligence investigation of the Property while it is the
Lessee under this Lease prior to exercising the Option to purchase the
Property.
f) Conditions to Conveyance. The Lessee acknowledges and agrees
that the Lessor's obligation to convey the Property is conditioned upon
the subsequent approval of the Option price by the board of directors of
the Lessor after receipt of such independent valuations or reports as may=
be necessary in the judgment of the board to determine that the Option
price fairly represents the value of the Property. The Lessor agrees to
commission and obtain any fairness opinions or reports which it may need
to approve the Option price herein as soon as practical after the
execution of this Lease.
23. Time of Essence. Time is of the essence with respect to
this Lease.
24. Notices. All notices required or permitted under this Lease=
shall be in writing and shall be personally delivered or sent by U.S.
Certified Mail, return receipt requested, postage prepaid. Agent shall
be copied with all required or permitted notices. Notices to Lessee
shall be delivered or sent to the address shown below, except that upon
Lessee's taking possession of the Property, the Property shall be
Lessee's address for notice purposes. Notices to Lessor and Agent shall
be delivered or sent to the addresses hereinafter stated, to wit:
Lessor:
Michael Smith
WasteMasters, Inc.
1230 Peachtree Street N.W., Suite 2545
Atlanta, Georgia 30309
Phone: (404) 888-0158
Fax: (404) 888-9447
with a copy to:
Robert J. Mottern, Esq.
Mottern, Fisher & Rosenthal, P.C.
2300 Northlake Centre Drive
Suite 200
Tucker, Georgia 30084
Phone: (770) 496-4565
Fax: (770) 496-4560
Lessee:
All notices shall be effective upon delivery. Any party may change his
notice address upon written notice to the other parties.
25. Entire Agreement. This Lease contains the entire agreement
of the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties not embodied herein,
shall be relied upon by the other party or be of any force or effect.
IN WITNESS WHEREOF, the parties herein have hereunto set their hands and
seals, in triplicate, the date and year first above written.
LESSOR:
WASTEMASTERS, INC.
________________________________
By: A. Leon Blaser, CEO
ATTEST:
________________________________
By: _____________________________
Title: ___________________________
[SEAL]
LESSEE:
J. MARCUS ENTERPRISES, INC.
________________________________
By: _____________________________
Title: ___________________________
ATTEST:
________________________________
By: _____________________________
Title: ___________________________
[SEAL]
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 R. D.
STERRITT, JR., an individual (hereinafter referred to as "STERRITT").
W I T N E S S E T H:
WHEREAS, STERRITT 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, STERRITT 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, STERRITT
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. STERRITT 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 STERRITT 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, STERRITT
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, STERRITT 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.
STERRITT understands and agrees that the purpose of the foregoing
covenants is to protect the legitimate business interests of WASTEMASTERS=
and is not to restrict STERRITT'S 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 STERRITT 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 STERRITT and WASTEMASTERS (the "STERRITT
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 STERRITT from any claims
or liabilities which it may have against STERRITT (excluding however, the=
obligations of STERRITT under this Agreement) that exists now or in the
future, or that may have arisen in connection with the relationship
between STERRITT and WASTEMASTERS (the "WASTEMASTERS RELEASE").
4. EXPENSE REIMBURSEMENT.
STERRITT 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. STERRITT 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 STERRITT pursuant to=
the terms of this Agreement, and for the consulting services of STERRITT,=
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, STERRITT 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.
6.NO CHANGE OF CONTROL.
During the term of this Agreement, STERRITT 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, STERRITT agrees that for a period of=
three (3) years from the date of this Agreement, STERRITT 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.
STERRITT 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 STERRITT 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.
1230 Peachtree St. N.E., Suite 2545
Promenade II
Atlanta, Georgia 30309
STERRITT:
R. D. Sterritt, Jr.
____________________________
____________________________
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 STERRITT. STERRITT 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.
STERRITT:
___________________________________
R. D. STERRITT, JR.
WASTEMASTERS:
WASTEMASTERS, INC.
A Maryland corporation
By:_______________________________________
Its:_______________________________________
<PAGE>
EXHIBIT "A"
SCHEDULE OF SUBSIDIARIES
FROM WHICH R. D. STERRITT, JR.
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.
<PAGE>
EXHIBIT "B"
STERRITT RELEASE
This Release and Covenant Not To Sue (this "Release") is executed by=
R. D. STERRITT, JR. ("STERRITT") (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 Sue. 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:
___________________________
R. D. STERRITT, JR.
<PAGE>
EXHIBIT "C"
WASTEMASTERS RELEASE
This Release and Covenant Not To Sue (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 R. D. STERRITT, JR.
(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 Sue. 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 STERRITT 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:___________________________
<PAGE>
EXHIBIT "D"
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT is entered into this ___ day of
December, 1998, by and between R. D. STERRITT, JR. (hereinafter referred
to as "Sterritt"), and WASTEMASTERS, INC. (hereinafter referred to as
"WasteMasters"):
W I T N E S S E T H :
WHEREAS, Sterritt desires to be indemnified by WasteMasters in
connection with the obligations of WasteMasters, Inc. for which Sterritt
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
Sterritt 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 Sterritt as follows:
1. Indemnification of Sterritt. WasteMasters shall proceed with=
all diligence to obtain the release of Sterritt from all Obligations and
WasteMasters (herein called the "Indemnitor") shall indemnify and hold
harmless Sterritt, his estate, executor, independent administrator,
spouse, family members, partners, employees, affiliated entities and
controlling persons (Sterritt 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 Sterritt or WasteMasters other than
the execution of any documents by Sterritt 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:
______________________________
R. D. STERRITT, JR
