SHAREHOLDER AGREEMENT
ACE WASTE SERVICES, INC.
This Agreement is made this 13th day of November, 2000, by and among
Xxxxx Xxxxxx-XxXxxxx ("XxXxxxx") and WasteMasters, Inc. ("WasteMasters")
(herein collectively the "Shareholders"), comprising all of the
shareholders of Ace Waste Services, Inc., a corporation organized under
the laws of the State of New Jersey (hereinafter called the
"Corporation"), and the Corporation.
Now therefore, in consideration of the mutual promises and agreements
contained herein, the parties agree as follows:
Section 1.
The Shareholders shall vote their respective shares so that the Board of
Directors of the Corporation shall consist of two persons nominated by
XxXxxxx and two persons nominated by WasteMasters, for so long as parties
hereto and their successors, executors, administrators, heirs and assigns
hold stock in the Corporation. Any disputes that may arise hereinafter
between the Shareholders, from action or inaction by the Corporation
requiring majority approval by the Board of Directors and based upon a
tie of 2-2 in Shareholder votes, shall be resolved exclusively pursuant
to the Arbitration Provision below, as incorporated herein by reference:
"Any dispute, controversy or claim arising out of or relating to this
Agreement or the relationship between the parties shall be settled by
binding arbitration in accordance with the rules of the American
Arbitration Association ("AAA"). Such arbitration shall be conducted in
the City of Philadelphia, Pennsylvania or such location as the parties
may mutually agree. The arbitration shall be conducted by Xxxxxx Di Tomo,
Esq., Attorney ID number 09984, within thirty (30) days after one (1)
party or the Corporation itself, has delivered notice to the other party
requesting arbitration of a stated dispute. The decision of the
arbitrator shall be final and accorded full faith and credit and entitled
to recognition by the federal and state courts of the United States."
Section 2.
A Shareholder may not transfer any shares whether now owned or hereafter
acquired without the prior written consent of the Corporation and all of
the Shareholders, except by a transfer which meets the requirements of
this agreement. Any purported transfer of shares shall be void and shall
not be effective to transfer any interest in or title to any of the
shares to the purported transferee. All share certificates shall bear a
legend referring to this restriction.
Section 3.
A Shareholder may transfer any of the shares to any other person or
entity, without the need to comply with the other provisions of this
Agreement, so long as the transferee agrees in writing to be bound by
this Agreement as to the transferred shares and any other shares
previously or subsequently acquired.
Section 4.
If a Shareholder (the "Seller") intends to sell, exchange, or otherwise
transfer any shares to anyone, the Seller shall first send a written
notice to the Corporation and the other Shareholders specifying the
number of shares to be transferred (the "Offered Shares"), the proposed
purchase price and payment terms, the identity of the transferee and any
other material terms of the transfer. For a period of 90 days, the
Corporation shall have an option to purchase all or any part of the
Offered Shares upon payment of the price specified in the offer. If
within the 90 day period the Corporation does not exercise its option to
purchase all of the shares specified in the notice, then the other
Shareholder(s) shall have an option for an additional 90 day period to
purchase all (but not less than all) the shares not purchased by the
Corporation (the "Available Shares") at the same purchase price and upon
the same terms and conditions. The Available Shares shall be divided
among the Shareholder(s) electing to purchase them in such manner as they
may agree or if they do not so agree, in proportion to the number of
shares of the Corporation then owned by such Shareholders.
Section 5.
Shareholder WasteMasters, its successors or assigns, has the option (the
"Option"), effective November 13, 2002, to acquire all (but not less than
all) the other Shareholder(s) shares in the Corporation, at a ratio of
Fifteen (15) times (X's) monthly revenue, as calculated by the average
monthly revenue for the preceding Six (6) months, minus (-) long term
notes payable (in excess of One (1) year), times (X's) the percentage (%)
of shares of the Corporation beneficially owned by a Shareholder at such
time. An example calculation is as follows:
If the Corporation has an average monthly revenue of $500,000 and notes
payable of $500,000 and the shares to be acquired by WasteMasters equate
to 49% beneficial ownership in the Corporation, then: $500,000 x 15
- $500,000 x .49 = $3,430,000.
If the Option is exercised, and WasteMasters acquires XxXxxxx'x 49%
common stock interest in the Corporation, then XxXxxxx'x designees
herein, Xxxxxx Xxxxxxxx and Xxxxxxx XxXxxxx (the "Employees"), shall be
granted an irrevocable right, but not a duty, to employment in the
Corporation, for three (3) years subsequent to the Option exercise date
(the "Employment Term"), at a rate of pay equal to the average rate of
pay, as referenced on the payroll register of the Corporation, for the
preceding six (6) months prior to the Option exercise date. Termination
of this employment for any conceivable reason, except by the resignation
by the Employees themselves, may only be effectuated by the delivery to
the Employees of funds in cash, US monies, equal to the rate of pay of
Employees at the time of termination multiplied by the remaining pay
periods of the entire Employment Term and delivery to each Employee of
Five Hundred Thousand Dollars ($500,000) worth of SEC Rule 144 common
stock of WasteMasters.
As consideration for this Option, WasteMasters shall cause the delivery
of Two Hundred Thousand (200,000) shares of SEC Rule 144 common stock to
XxXxxxx, her successors or assigns, on or before December 31, 2000. Said
Option is null and void otherwise.
Section 6.
This Agreement shall be binding upon all of the Shareholders and their
respective heirs, executors, administrators and assigns. This Agreement
may only be modified or amended by a further written agreement signed by
all the Shareholders and may not be assigned except in connection with a
transfer of shares as herein provided. No waiver of any of the provisions
hereof shall be effective unless in writing signed by all the parties.
IN WITNESS WHEREOF, the Corporation and the Shareholders have caused this
Agreement to be executed as of the date set forth above.
Date of Signing: November 13, 2000
WASTEMASTERS, INC. WITNESS:
By: By:
Name: Name:
Title:
XXXXX XXXXXX-XXXXXXX WITNESS:
By:
Name:
