Dec 02 2003 9:14AM HP LASERJET 3330 7133691750 pet A714 Fromfewaras & Gorge LL? 7139383283 Tua Pontos F931 = ~ Soutrn fame Cou ah IN THE UNITED STATES DISTRICT COURT NOV 2 5 2005 FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ‘Michool . Mitay, Comte SYNAGRO NORTHEAST, INC. 8 § Plaintiff, 5 Q a , 1 ctl QS - 5412 5 JAY M. WAXENBAUM § § JURY TRIAL DEMANDED Defendant. § 3 § § SYNAGRO NORTHEAST, INC.'S ORIGINAL COMPLAINT AND REQUEST FOR DECLARATORY JUDGEMENT. Plaintiff Synagro Northeast, Inc. files this Original Comelaint and Request for Declaratory Judgment against Defendant Jay M. Waxenbaum, and would show the Court as follows: 1 PARTIES 1, Plaintiff Synagro Northeast, Inc. (“Synagro”) is a Delaware corporation with its principal place of business in Houston, Texas. 2. Defendant Jay M. Wexenbaum (“Waxenbaum”), an individual, is a citizen of the state ‘of New Jersey and may be served with process at 107 Oak Haven Lane, Franklin Lakes, New Jersey, 07417.2-01-08 f2 2003 9:14AM HP LASERJET 3330 7133681750 Froe-Edearde & ue risaapnans Toda P.00s/008 Fetal no. JURISDICTION AND VENUE 3. This Court has subject matter jurisdiction over this controversy pursuant to 28 U.S.C. § 1332 because the Plaintiff and the Defendant are citizens of different states and the amount in controversy exceeds $75,000, excluding interest and costs. 4, Venue is ptoper in the Southern District of Texas pursuant to 28 U.S.C. § 1391(a)(2) in that the agreements which form the basis of this suit were formuluted, negotiated, and executed in the Southem District of Texas. 5. This Coun has personal jurisdiction over the Defendant because Defendant purposefully availed himself of the benefits and protections of the State of Texas by establishing minimum contacts within the State. iT, FACTUAL BACKGROUND 6. Synagro brings this claim for a declaratory judgment under both Federal Rule of Civil Procedure 57 and 28 U.S.C. §§2201, 2202. 7. Synagro is a subsidiary of a publicly held company, Synagro Technologies, Inc. (‘Synagro Technologies"), that provides residuals management services, including the land application of biosolids, to wastewater treatment plants across the country. 8. In March 2000, Synsgro Technologies agreed to purchase Environmental Protection & Improvement Company, Inc. ("EPIC"). At the time of the purchase, Waxenbaum was an employee of EPIC, On June 15, 2000, Synagro and Waxenbaum entered into an Employment and Confidentiality Agreement (“Employment Agreement”), Pursuant to Section 3 of the Employment Agreement, the initial term was for a period of three years from the date of the2-s-03 2 2003 9:14AM HP LASERJET 3330 7133681750 Vd Frometovarde & Ge uw risaaes2a3 we F-08008 FR) agreement. Section 3 further provided that Synagro may terminate Waxenbaum “for cause at any time” if certain events occurred. 9. On June 23, 2003, Synagro and Waxenbaum entered into an Extension and Amendment of Employment and Confidentiality Agreement (“Amendment”), Pursuant to Section } of the Amendment, the initial term of the Employment Agreement was extended an additional 12 months. While the Amendment does extend and modify certain sections of the Employment Agreement, it does not amend or modify Section 3 of that agreement. 10. In late September 2003, Synagro was informed by the Director of Operations for EPIC, Mr, Norman Hammond, that Waxenbaum was soliciting kickbacks from « contractor of EPIC, Mr. Jchn Simons. In addition to demanding the kickback himself, Waxenbaum also instructed Mr. Hammond to contact Mr. Simons in an effort to obtain the kickback, Mr. Simons refused to cooperate in Waxenbaum’s kickback scheme, even though Mr. Waxenbaum informed ‘Mr. Simons, both directly and through Mr. Hammond, that Mr. Simons would lose business with EPIC as a result. 11. After the incident with Mr. Simons, Mr. Waxenbaum informed Mr. Hammond that he was “going to add $1 per ton” to a particular contract because he knew “someone who could use it.” Mr. Hammond recognized this as Waxenbaum's second artempt at a kickback scheme and reported this conduct to Synagro, 12, In October 2003, Synagro conducted an investigation into the allegations against Waxenbsum. This investigation included interviews of Waxenbaum, Mr. Hammond, Mr. Simons, and several other individuals. At the conclusion of this investigation, Synagro terminated Waxenbaum's employment for cause, as permitted under Section 3 of the Employment Agreement, om October 20, 3003, p.6Fi2 2003 9:14AM HP LASERJET 3330 7133691750 p.7 12-01-03 17:14 rowsEdvarde & Gaorae LL? Tianaenaas Tul P 09T/008 Fath Iv. DECLARATORY JUDGEMENT ACTION 13, Synagro incorporates by reference all allegations raised in prior paragraphs. 14, Synagro requests a declaration that it did not breach the Employment Agreement or Amendment when it terminated Waxenbaum for cause on October 20, 2003. 15. Declaraiory relief is necessary in this matter due to the fact that Waxenbaum continues to threaten to publish what Synagro believes to be misleading, and in some cases fabricated, allegations against Synagro in an effort to damage Synagro's ongoing business operations. These threats are made solely for the purpose of extorting a monetary settlement fiom Synagro. v. CONCLUSION AND PRAYER Wherefore, Synagro prays that this Court grant Synagro the following relief against Defendants: (a) Declare that Synagro did not violate the Employment Agreement of Amendment when it terminated Waxenbaum’s employment for cause on October 20, 2003; (>) Award Syaagro attorneys fees and costs; and (©) Allother relief the court deems appropriate.02 2003 9:14AM HP LASERJET 3330 NaeQ1-0B 11d Brom-Edvarés & Guerge LLP OF COUNSEL: John Davis Powell ‘Texas Bar No. 24007863 Federal LD. 22950 ‘EDWARDS & GEORGE, LL? 5847 San Felipe, Suite 2375 Houston, Texas 77057 (713) 339-3233 (713) 339-2233 Facsimile mamas 7133691750 Teas federal LD. No. 18196 EDWARDS & GEORGE, LLP 5847 San Felipe, Suite 2375 ‘Houston, Texas 77057 (713) 339-3233 (713) 339-2233 Facsimile Pot/oue Fatt ATTORNEY-IN-CHARGE POR DEFENDANTS