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UNITED STATES
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 earliest event reported: March 14, 2000
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ENVIRO-CLEAN OF AMERICA, INC.
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(Exact Name of Registrant as Specified in Its Charter)
NEVADA 0-26433 88-0386415
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
211 Park Avenue, Hicksville, NY 11801
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 931-4455
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N/A
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(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Disposition of 1,000,000 Shares of b2bstores.com, Inc. Common Stock
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In June of 1999, Enviro-Clean of America Inc. (the "Company"), along
with Richard Kandel, shareholder, director and officer of the Company, Randall
K. Davis, shareholder, director and officer of the Company, Steven Etra,
shareholder, director and officer of the Company, Mint Corporation of New York,
a company in which Richard Kandel is a 50% owner, and other parties acquired
3,666,667 shares of b2bstores.com, Inc. ("b2bstores") common stock, par value
$0.01, (the "b2b Common Stock") for $27,500 in the form of $11,000 in cash and
the transfer to b2bstores of all the rights and interest in www.b2bstores.com
and all related assets, including intellectual property. Of the shares, Enviro-
Clean of America, Inc. received 2,000,000 shares, Richard Kandel received
1,000,000 shares, Randall Davis received 333,333 shares, Steven Etra, received
66,667 shares, and Mint Corp. of New York, received 66,667 shares,. The
remaining 200,000 shares went to nonaffiliates of the Company, Kandel, Davis and
Etra.
The Company entered into a lock-up agreement (the "Lock-Up Agreement")
in favor of Gaines Berland, Inc. and Nolan Securities, Inc. (the "Underwriters")
in connection with b2bstore's initial public offering, which restricted certain
disposition of 2,000,000 shares of b2b Common Stock held by the Company for a
one year period commencing February 15, 2000. On March 14, 2000, the
Underwriters granted a waiver to the Lock-Up Agreement to sell 1,000,000 of the
2,000,000 shares held by the Company. Upon receiving the waiver, the Company
sold 1,000,000 shares of the b2b Common Stock in a private placement to
ZERO.NET, Inc., a Delaware corporation, at $7.00 per share for an aggregate of
$7,000,000. The Company paid a brokerage commission of $250,000 in connection
with this sale. The shares purchased by ZERO.NET, Inc. will also be subject to a
twelve month lock-up agreement. There are no material relationships between
ZERO.NET, Inc. and the Company or the Company's affiliates, directors, officers,
or any associates of the Company's directors or officers.
ITEM 5. OTHER EVENTS
Redemption of 320,000 Shares of the Series D Cumulative Convertible Preferred
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Stock
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On March 14, 2000 , the Board of Directors approved a resolution
allowing the Company to redeem 320,000 shares of the Company's Series D
Cumulative Convertible Preferred Stock (the "Series D Stock") at a redemption
price of $5.00 per share. This resulted in a payment of $1,600,000 for the
outstanding 320,000 shares of the Series D Stock and a total of $29,071.04 for
the accrued dividends on the Series D Stock. The Series D Stock was issued to
Randall K. Davis and Charles Davis, the father of Randall K. Davis and employee
of a wholly owned subsidiary of the Company, in conjunction with the acquisition
of Cleaning Ideas, Inc. and its subsidiaries as described in the Company's 8-K
filed on September 3, 1999.
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Of the total redemption price, Randall K. Davis, who held 250,000
shares of the Series D Stock, received $1,272,711.75, while the remaining amount
of $356,359.29 went to Charles Davis.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
The following is a list of exhibits filed as part of this Form 8-K.
Exhibit Number Description of Document
99.1 Form of Lock-up Agreement executed by Enviro-Clean of
America, Inc., Richard Kandel, Randall K. Davis and
Steven Etra.
99.2 Waiver of Lock-Up Agreement for one million shares of
b2bstores.com, Inc. stock held by Enviro-Clean of
America, Inc.
99.3 Stock Purchase Agreement dated March 13, 2000 between
ZERO.NET, Inc. and Enviro-Clean of America, Inc. for the
sale of one million shares of b2bstores.com, Inc.
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SIGNATURES
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 hereunto duly authorized.
ENVIRO-CLEAN OF AMERICA, INC.
Date: 03/17/00, 2000 By: /s/ Randall K. Davis
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Name: Randall K. Davis
Title: President
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INDEX TO EXHIBITS
Exhibit Number Description of Document
99.1 Form of Lock-up Agreement executed by Enviro-Clean of America,
Inc., Richard Kandel, Randall K. Davis and Steven Etra.
99.2 Waiver of Lock-Up Agreement for one million shares of
b2bstores.com, Inc. stock held by Enviro-Clean of America, Inc.
99.3 Stock Purchase Agreement dated March 13, 2000 between ZERO.NET,
Inc. and Enviro-Clean of America, Inc. for the sale of one
million shares of b2bstores.com, Inc.
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EXHIBIT 99.1
GAINES, BERLAND INC.
NOLAN SECURITIES, INC.
c/o GAINES, BERLAND INC.
As Representatives of the Several Underwriters
1055 Stewart Avenue
Bethpage, NY 11714
Re: Lock Up Agreement
Gentlemen:
In order to induce Gaines, Berland Inc. and Nolan Securities, Inc.,
the representatives of the several underwriters (the "Representatives"), and
b2bstores.com Inc., a Delaware corporation (the "Company"), or its successor, to
enter into an underwriting agreement with respect to the public offering of
shares of common stock, (the "Common Stock") of the Company (or its successor),
I hereby agree that for a period of twelve (12) months following the effective
date of the Company's (or its successor's) Registration Statement in connection
with such public offering, I will not, without prior written consent of the
Representatives, directly or indirectly, sell, offer to sell, grant an option
for the sale of, transfer, assign, hypothecate, pledge, distribute or otherwise
dispose or encumber (either pursuant to Rule 144 of the regulations under the
Securities Act of 1933, as amended, or otherwise) any shares of Common Stock of
the Company (or its successor) or options, rights, warrants or other securities
convertible into, Common Stock of the Company (or its successor) or options,
rights, warrants or other securities convertible into, exchangeable or
exercisable for or evidencing any right to purchase or subscribe for shares of
Common Stock of the Company (or its successor) (collectively, the "Securities")
(whether or not beneficially owned by the undersigned), or any beneficial
interest therein, provided, however, that the undersigned may transfer the
Securities, or a beneficial interest therein, in a private transaction pursuant
to an exemption from registration (other than Rule 144) provided that the
transferee agrees in writing to be bound by the terms of this agreement.
In order to enable the Representatives to enforce the aforesaid
covenants, I hereby consent to the placing of legends and stop-transfer orders
with the transfer agent of the Company's (or its successor's) securities with
respect to any of the securities registered in my name or beneficially owned by
me.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to conflict of law
principles.
Dated: 01/12/99
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Enviro-Clean of America, Inc.
By:
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Signature Print Address
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Print Name Print Social Security Number or
Taxpayer I.D. number
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EXHIBIT 99.2
Randy Davis, President
Enviro-Clean of America, Inc.
1023 Morales
San Antonio, Texas 78207
Re: b2bStores.com, Inc. Lock-up Agreement
Dear Mr. Davis:
Reference is made to that certain Lock-up Agreement entered into by
Enviro-Clean of America, Inc. (the "Lock-up Agreement") in connection with the
initial public offering of b2bstores.com, Inc. (the "Company") which went
effective February 15, 2000. The undersigned hereby consents to the private
sale of 1,000,000 shares of Common Stock of the Company covered by the Lock-up
Agreement to zero.net, Inc., a Delaware corporation, on the condition that said
purchaser enter into a new lock-up agreement restricting the transfer of said
1,000,000 shares of Common Stock for a period of twelve months following the
effective date of the Company's registration statement.
This letter agreement by the undersigned shall be binding on the
undersigned and our respective successors and assigns. Each of the undersigned
has the authority to enter in to this letter agreement.
Dated: 03/14/00
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Gaines Berland, Inc.
By: /s/ Joseph Berland
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Name: Joseph Berland
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Title: Chairman
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Nolan Securities, Inc.
By: /s/ Bruce P. Kelly
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Name: Bruce P. Kelly
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Title: Managing Director
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EXHIBIT 99.3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into
this 13th day of March, 2000 by and among ZERO.NET, Inc., a Delaware corporation
(the "Buyer") and Enviro-Clean of America, Inc. (the "Seller").
PRELIMINARY STATEMENTS
Whereas, Seller owns two million (2,000,000) shares of common stock, $.01
par value, of b2bstores.com, Inc., a Delaware corporation (the "Company"); and
Whereas, Buyer is desirous of purchasing, and Seller is desirous of
selling, one million (1,000,000) shares of the Company common stock which Seller
owns.
I. AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties, intending to be legally bound, hereby agree
as follows:
1. Sale of Shares. Subject to the terms and conditions of this Agreement, and
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the representations and warranties herein contained, Seller hereby agrees to
sell and Buyer hereby agrees to purchase one million (1,000,000) shares of
Company common stock (the "Shares") for the consideration hereinafter described.
2. Purchase Price. The purchase price to be paid by Buyer and received by
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Seller for the Shares shall be Seven Million Dollars ($7,000,000) (hereinafter
the "Purchase Price").
3. Closing.
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a. Closing Date. The closing (the "Closing") shall take place at the
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offices of Akin, Gump, Strauss, Hauer & Feld, L.L.P., 300 Convent, Suite 1500,
San Antonio, Texas 78205 on the date hereof. The date of the Closing shall
herein be referred to as the "Closing Date."
b. Payment of Purchase Price. At the Closing, Buyer shall deliver to
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Seller the Purchase Price by wire transfer of immediately available funds in
accordance with the following instructions:
c. Seller's Closing Documents. Seller shall deliver, or cause to be
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delivered, to Buyer at Closing stock certificates for the Shares either duly
endorsed to Buyer by the registered holder thereof or accompanied by appropriate
stock transfer powers duly executed, or in the alternative deliver appropriate
instructions to Donaldson, Lufkin &
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Jenrette, the custodian of such certificates, accompanied by appropriate stock
transfer powers duly executed, to deliver such certificates to the Company's
transfer agent with instructions that the Shares be registered in the name of
Buyer.
4. Representations and Warranties of Seller. Seller hereby represents and
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warrants to Buyer as follows: (i) Seller is the sole record owner of the Shares
which are duly issued, fully paid and non-assessable shares of common stock of
the Company; (ii) the Shares are free and clear of all security interests,
liens, claims, options, commitments, demands, charges, encumbrances, or
covenants of any kind, (iii) Seller has full legal power, right and authority,
and all authorizations and approvals to sell, transfer and deliver good and
valid title to the Shares free and clear of any encumbrances pursuant to the
terms of this Agreement, (iv) there are no existing impediments to the sale and
transfer of the Shares except as contemplated by this Agreement including, but
not limited to, any obligation of Seller under any shareholder or other such
agreement granting rights of first refusal to purchase the Shares or any other
such rights that require the consent of any third party to enable Seller to sell
the Shares as contemplated herein or any obligation of Seller or the Company to
register the Shares under any state or United States securities laws. In
addition, Seller represents that to its knowledge that the Company's Form SB-2,
as amended, filed with the Securities and Exchange Commission in connection with
the Company's initial public offering dated February 15, 2000 (the "IPO"), is
accurate in all material respects as though such Form SB-2 was dated as of the
date hereof.
5. Conditions Precedent to Obligations of Seller. The obligations of Seller
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hereunder are subject to the following conditions precedent:
a. Performance. Each covenant and agreement of Buyer set forth in this
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Agreement to be performed on or before the Closing Date shall have been duly
performed in all material respects.
b. No Violation of Statutes, Orders, etc. There shall not be in effect any
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statute, rule, or regulation which makes it illegal for Seller to consummate the
transactions contemplated hereby, or any order, decree, or judgment enjoining
Seller from consummating the transactions contemplated hereby.
c. Release of Lock-up Agreement. The lock-up agreement executed by Seller
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in favor of the underwriter in connection with the IPO shall have been released
with respect to the sale of the Shares contemplated hereby.
d. Legal Opinion. Legal counsel for Seller or the Company shall have
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provided its legal opinion that the transfer of the Shares is exempt from
registration under all applicable securities laws.
6. Conditions Precedent to Obligations of Buyer. The obligations of the Buyer
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hereunder are subject to the following conditions precedent:
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a. Performance. Each covenant and agreement of Seller set forth in this
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Agreement to be performed on or before the Closing Date shall have been duly
performed in all material respects.
b. Representations and Warranties True. The representations and warranties
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of Seller contained in the Agreement shall have been true in all material
respects.
c. Release of Lock-up Agreement. The lock-up agreement executed by Seller
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in favor of the underwriter in connection with the IPO shall have been released
with respect to the sale of the Shares contemplated hereby, provided that Buyer
will be required to enter into a new lock-up agreement restricting sales for a
period of 12 months following the IPO.
d. Legal Opinion. Legal counsel for Seller or the Company shall have
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provided its legal opinion that the transfer of the Shares is exempt from
registration under all applicable securities laws.
e. No Violation of Statutes, Orders, etc. There shall not be in effect any
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statute, rule, or regulation which makes it illegal for Buyer to consummate the
transactions contemplated hereby, or any order, decree, or judgment enjoining
Buyer from consummating the transactions contemplated hereby.
7. Miscellaneous.
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a. Brokerage. Seller and Buyer each hereby represent and warrant to the
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other that neither has incurred any brokerage commissions in connection with the
sale of the Shares other than a $250,000 fee to be paid by Seller to a broker
disclosed to Buyer. Seller agrees to indemnify Buyer from and against claims by
said broker with respect to Seller's fees.
b. Disclaimer. Seller and Buyer each hereby waive any right or cause of
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action that any of them may now or in the future have against the other or their
respective affiliates, successors, assigns, transferees, directors, officers,
agents, or employees as a result of the sale and purchase of the Shares
hereunder; provided, however, that this waiver shall not extend to any liability
of a party hereto arising from the breach by said party of its warranties,
representations, covenants, and agreements contained in this Agreement.
c. Further Assurances. The parties will use reasonable efforts to
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implement the provisions of this Agreement, and for such purpose a party, at the
request of the other party, at or after the Closing, will, without further
consideration, promptly execute and deliver, or cause to be executed and
delivered, such consents and other instruments in addition to those required by
this Agreement, in form and substance satisfactory to the other party, as is
reasonably necessary to implement any provision of this Agreement.
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d. Entire Agreement. This Agreement constitutes the complete and exclusive
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statement of the agreement between Buyer and Seller with respect to the subject
matter herein set forth, and supersedes all prior representations, warranties,
discussions, and agreements by and between the parties.
e. Amendments. This Agreement may not be amended, altered, or terminated,
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except in writing.
f. Inurement. This Agreement shall be binding upon the parties hereto and
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their respective heirs, executors, administrators, legal representatives,
successors, and assigns.
g. Language. The language used in this Agreement shall be deemed to be
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language chosen by the parties thereto to express their mutual intent, and no
rule of strict construction against any party shall apply to any term or
condition thereof.
h. Assignment. This Agreement may only be assigned in whole or in part by
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the Buyer without the consent of the Seller.
i. Governing Law. This agreement shall be governed by and construed in
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accordance with the laws of the state of Delaware.
j. Gender. Wherever herein that the singular number is used, the same
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shall include the plural, and the masculine gender shall include the feminine
and neuter genders, and vice versa, as the context may require.
k. Counterparts. This Agreement may be executed in counterparts, each of
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which shall constitute an original but all of which taken together shall
constitute one agreement.
(SIGNATURE PAGE FOLLOWS)
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(STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE)
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of
the date first written above.
BUYER: ZERO.NET, Inc.
By:___________________________
Name:_________________________
Title:________________________
SELLER: Enviro-Clean of America, Inc.
By:___________________________
Randall K. Davis, President
