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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) MAY 1, 1999
EARTHCARE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 000-24685 58-2335973
- ---------------------------- ------------------------ ------------------
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
14901 Quorum Drive, Suite 200, Dallas, Texas 75240
- -------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(972) 858-6025
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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Item 2. Acquisition or Disposition of Assets
Effective May 1, 1999, EarthCare Company (the "Company") acquired all of
the assets of Rooter Plus, Inc. ("Rooter Plus"), a Georgia Corporation, in
exchange for $2.6 million in cash and the issuance of 100,000 shares of
EarthCare Company common stock. This transaction was consummated pursuant to an
asset purchase agreement, dated April 30, 1999.
Rooter Plus is a residential and commercial sewer and drain services
company servicing customers in Georgia.
The Company currently intends to operate Rooter Plus in substantially the
same manner as it was operated prior to this transaction. The Company funded the
cash portion of the purchase price with borrowings under the Company's revolving
credit facility with Bank of America Trust and Savings Association. The purchase
price was determined based upon an evaluation of the business of Rooter Plus and
the results of negotiations between the parties.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired. - Not Required
(b) Pro Forma Financial Information. - Not Required
(c) Exhibits
3.1 Asset Purchase Agreement dated as of April 30, 1999, by and among Rooter
Plus, Inc. a Georgia corporation, Gary Jeffers and T. Ann Jeffers, and
EarthCare Company, a Delaware corporation.
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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 thereunto duly authorized.
EARTHCARE COMPANY
(Registrant)
Date: May 12, 1999 By: /s/ James E. Farrell
James E. Farrell
Vice President and Chief Financial
Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
3.1 Asset Purchase Agreement dated as of April 30, 1999, by and among Rooter
Plus, Inc. a Georgia corporation, Gary Jeffers and T. Ann Jeffers,
and EarthCare Company, a Delaware corporation dated April 30, 1999.
</TABLE>
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EXHIBIT 3.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into by and between Rooter Plus, Inc. a
Georgia Corporation ("Seller" or "Company"), Gary Jeffers and T. Ann Jeffers,
individuals residing at 634 Emerald Acres Way, Sugar Hill, GA (hereinafter
sometimes referred to as "Stockholders"), and EarthCare Company, a Delaware
Corporation (hereinafter referred to as "EarthCare" or "Buyer").
WITNESSETH:
WHEREAS, the Seller is the owner of certain assets used in Seller's business
(hereinafter sometimes referred to as the "Assets").
WHEREAS, Buyer desires to acquire the Assets from Seller in accordance with the
terms and conditions hereinafter provided, in exchange for shares of the common
stock, $.0001 par value of the Buyer (said shares of common stock are hereafter
sometimes referred to as the "EarthCare Common Stock").
NOW THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration the mutual receipt and sufficiency of which is
hereby acknowledged by the parties hereto, THE PARTIES HERETO AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF ASSETS.
A. Upon the basis of the representations and warranties contained herein and
subject to the terms and conditions of this Agreement, at the time of "Closing"
(as hereinafter defined) Seller
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shall sell, convey, transfer, assign and deliver to Buyer, and Buyer shall
purchase from Seller, the Assets specifically described on Schedule 1A.
B. At the time or within 72 hours of Closing, as the purchase price for the
assets, and in exchange therefor, Buyer shall pay to Seller: (1) 100,000 shares
of EarthCare Common Stock duly registered under the Securities Act of 1933 as
amended (the "Act") to the extent necessary to permit disposition of such
shares; and cash in the amount of $2,600,000.
i. Buyer intends to pay certain liabilities attributable to the Assets at
Closing. To the extent it is subsequently determined that any such
payments are less than or in excess of the actual amount of such
liabilities, Buyer shall pay to Seller the amount of any excess and
Shareholders shall pay to Buyer the amount of any shortfall.
C. Except as set forth in this Agreement, Buyer shall not assume or be
responsible for any liabilities, obligations or commitments of Seller,
contingent or otherwise, asserted or unasserted, matured or unmatured.
2. CLOSING. Subject to the terms and conditions of this Agreement, the
closing of the purchase and sale of the Assets (the "Closing") shall be held as
of April 30, 1999 at NationsBank, Atlanta, Georgia or at such other time and
date as shall be mutually agreed upon by the parties hereto
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in writing. (Such time and date is sometimes hereinafter referred to as the
"Closing Date" or "Closing".)
3. PROCEDURE AT THE CLOSING. The parties hereto agree to take the following
steps in the order set forth below:
A. Seller shall deliver to the Buyer the Assets, and such bills of sale,
assignments and other instruments to transfer to the Buyer good and marketable
title to the Assets, free and clear of all liens, claims and encumbrances.
B. In exchange for the Assets, Buyer shall deliver to Seller (72 hours
after Closing) 100,000 shares of registered EarthCare Common Stock and cash in
the amount of $2,600,000.
C. The parties shall also exchange other documents contemplated by this
Agreement.
D. Buyer agrees to assume Seller's obligations pursuant to a lease
agreement on its principal office through August 31, 1999.
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND STOCKHOLDERS. In order to
induce the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereunder, the Seller and Stockholders hereby make
the following representations, warranties, covenants and agreements:
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A. ORGANIZATION AND EXISTENCE. The Company is a corporation duly incorporated
and in good standing under the laws of the State of Georgia, and has all
requisite corporate power and authority to carry on its business as now
conducted. The Company is qualified to do business in the State of Georgia
which is the only state which by the nature of the business of the Company and
the character of the properties owned or leased by it requires qualification to
do business. Seller has delivered to Buyer a true and correct copy of the
Articles of Incorporation (duly certified by the Secretary of State of Georgia)
and By-Laws of the Company (certified by its Secretary).
B. SUBSIDIARIES OR OTHER ENTITIES. Company has no investments or ownership
interests in any corporations, partnerships, joint ventures or other business
enterprises.
C. FINANCIAL CONDITION. Seller has furnished to Buyer copies of the following
financial statements of the Company, all of which are true and complete in all
material respects and have been prepared in accordance with generally accepted
accounting principles consistently applied (except to the extent otherwise
reported):
1. A Balance sheet ("Balance Sheet") of the Company as of December 31, 1998.
2. Statements of income and retained earnings of the Company for the twelve
(12) months
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ended December 31, 1998. (Collectively, the Balance Sheet and statements of
income and retained earnings are hereinafter referred to as the "Financial
Statements").
The Financial Statements are complete and correct and in accordance with the
books of account and records of the Company and present fairly the financial
position of the Company's business and the income, stockholders' equity and
cash flow of the Company's business at the dates and for the periods indicated.
3. Seller and Stockholders warrant that current assets of the Company will be
sufficient to pay the liabilities of the Company as of the Closing Date.
4. Seller and Stockholders warrant that Seller's gross revenues for the year
ending December 31, 1998, based on generally accepted accounting principles,
were not less than $4,800,000, and neither Seller nor Stockholders have
knowledge of any fact, event or action which would have a material adverse
effect on the Company's gross revenue for periods after December 31, 1998.
D. ASSETS.
1. The Company has good and marketable title to, and is in possession of all
the Assets, equipment, vehicles, properties and rights, including all
properties, assets, vehicles and equipment listed on Schedule 4-D-1 attached
hereto and as shown on the Balance Sheet, free and clear of all liabilities,
mortgages, liens, pledges, security interests, restrictions, conditional sales
agreements, title retention agreements, charges or encumbrances except as shown
on the Balance Sheet. Seller
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represents that Schedule 4-D-1 sets forth a list of all materialmen of
equipment, vehicles, properties, containers, machinery, shop equipment, welders,
grinders, work benches, jacks, stands, parts, office furniture, fixtures,
computer hardware/software and equipment owned by the Company as of the date of
this Agreement and used in connection with its business operations (hereinafter
sometimes referred to as the "Operating Equipment"); such list identifies the
Operating Equipment by size, manufacturer, model number and serial number, where
available.
2. Except as set forth on Schedule 4-D-2, all of the Operating Equipment is in
good operating condition (normal wear and tear excepted), has been well
maintained, and is in adequate condition to service the Company's Customer
Accounts (as herein defined) and to conduct the operations of the Company as
existing on the Closing Date.
3. There has not been any material change in the Operating Equipment, in the
aggregate, since the inspection of such Operating Equipment by Buyer on
_____________________, and there shall not be any material change in the
Operating Equipment, in the aggregate, subsequent to a final inspection of the
Operating Equipment to be performed by Buyer and Seller prior to Closing.
4. Schedule 4-D-4 shall identify all assets and property of Seller which shall
be excluded from this Agreement.
E. LIABILITIES. Except as set forth in Schedule 4-E attached hereto or in the
Financial Statements submitted to Buyer, or in any other Exhibit delivered
pursuant hereto, neither the Company nor its assets or properties are subject
to any liabilities or obligations (accrued, absolute, contingent or otherwise),
except for liabilities incurred in the ordinary course of business affairs and
the Company is not in material default in respect of any material term or
condition of any material
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indebtedness or liability. The transactions contemplated by this Agreement do
not and will not subject the Company or the Buyer to any claim or liability for
any obligation, debt or contract other than as specifically disclosed in this
Agreement and the Schedules attached hereto. All required consents of creditors,
if any have been, or by closing will be, obtained for performance of this
Agreement.
F. CUSTOMER ACCOUNTS, MUNICIPAL CONTRACTS AND RELATED MATTERS.
1. Customer Accounts are the commercial, industrial, municipal, and
residential accounts of the Company pursuant to which the Company provides waste
removal, collections, incorporation, storage and/or disposal. Said Customer
Accounts are listed on Schedule 4-F-1 attached hereto. (Each of the Customer
Accounts listed in Schedule 4-F shall identify the name and address of each of
the Customer Accounts, and shall reflect as to each the current monthly billing
amount, frequency of service and size and type of container).
2. Schedule 4-F-2 is a true, accurate and complete listing of all written
service agreements, franchises, licenses or other contracts, if any, to which
the Company is a party and which relate to Customer Accounts. Original copies
of all such contracts shall be delivered by the Seller to the Buyer no later
than the Closing Date, and such copies shall be true, accurate and complete and
shall include all amendments, supplements or other modifications to such
contracts. Except as disclosed in Schedule 4-F-2, to the knowledge of the
Seller, neither the Company nor any other party to any of the Company's
municipal contracts or Customer Accounts is in material default or alleged to
be in material default thereunder and there exists no condition or event which,
after notice or the lapse of time or both, would constitute such a default. The
sale, transfer and assignment of the Assets will not result in a breach,
violation or default of any of the Company's municipal contracts or Customer
Accounts, and all of the Company's municipal contracts and Customer Accounts
will remain in full
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force and effect as if there had been no sale, transfer and assignment thereof.
3. Except as otherwise disclosed in Schedule 4-F-3, neither the Stockholders
nor the Seller knows of no oral or written communication, fact, event or action
which exists or has occurred within 90 days prior to the date of execution of
this Agreement, which would tend to indicate that any current customers of the
Company intends to terminate its business relationship with the Company.
4. Except for deminimis amounts, none of the Customer Accounts, service
agreements, franchises, licenses, or other contracts for collection and
transportation of waste, in any manner involve the collection or transportation
of waste materials classified as special, hazardous, toxic, chemical or
radioactive under the laws of the United States or of any state or other
governmental jurisdiction in which the Company conducts collection and
transportation operations, or under any rules or regulations promulgated by any
administrative agency thereof. G. MATERIAL CONTRACTS. Attached hereto as
Schedule 4-G is a list and brief description, as of the date of this Agreement,
of certain leases, contracts, commitments, agreements and other documents to
which the Company is a party or by which it is bound and which is related to the
operation of its business. Except for contracts and documents listed in Schedule
4-G, the Company is not a party to or bound by any written or oral (i) contracts
not made in the ordinary course of business; (ii) employment contracts, other
than those terminable at the will of the Company; (iii) contracts with any labor
union or association; (iv) bonus, pension, profit sharing, retirement,
hospitalization, insurance or other plan providing employee benefits; (v) leases
with respect to any property, real or personal, whether as lessor or lessee;
(vi) continuing contracts for the future purchase of materials, supplies or
equipment in excess of the requirements of its business now booked; (vii)
contracts or commitment for capital expenditures; (viii) contracts continuing
over a period
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of more than six (6) months from its date; or (ix) material contracts necessary
to conduct the operations and business of the Company. A true copy of each
contract, commitment and agreement listed on Schedule 4-I will be furnished to
Buyer prior to Closing.
H. EMPLOYEES - LABOR MATTERS. The Company has generally enjoyed a good
employer-employee relationship with its employees. Attached hereto as Schedule
4-H is a complete list of all employees of the Company whose duties are related
to the operation of the business of the Company. Seller warrants there exists
no pending or threatened actions by any employees alleging sex, age, race, or
other discriminatory practices, no current effort to organize these employees
into collective bargaining units, and no collective bargaining agreement is now
in effect. There are no contracts, written or oral, between the Company and any
of its employees, except as specifically disclosed in Schedule 4-H.
I. INSURANCE. The Company maintains in effect insurance covering its assets
and businesses and any liabilities relating thereto in an amount believed
adequate by the Seller, and such insurance coverage shall be maintained by the
Company through the Closing Date. Between the date hereof and the Closing Date,
the Seller shall cause the Company to furnish to the Buyer such information as
the Buyer shall reasonably request regarding the Company's insurance. Except as
set forth in Schedule 4-I attached hereto, there are no pending material
property damage or personal injury claims against the Company or any of its
assets.
J. LICENSES AND PERMITS. The Company possesses all licenses and other required
governmental or official approvals, permits or authorizations, if any, the
failure to possess which would have a material adverse effect on the
businesses, financial condition or results of operations of the Company
including, without limitation, all common carrier rights, certificates of public
need,
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waste material transportation permits, trademarks and trade names necessary to
carry on its business as now being conducted, without known conflict with valid
licenses, permits, trademarks and trade names of others. All such licenses and
permits are in full force and effect, and no violations are or have been
recorded in respect to any thereof, and no proceeding is pending, or to the
knowledge of Seller threatened, to revoke, suspend or otherwise limit such
licenses or permits. All licenses and permits will survive the closing of the
transactions contemplated by this Agreement.
K. TAX MATTERS. The Company has timely filed all federal, state, sales tax,
franchise tax, and other tax returns which are required to be filed by it and
has paid or has made provision for the payment of all taxes which have or may
become due pursuant to said returns. All taxes, including, without limitation,
withholding and social security taxes due with respect to the Company's
employee, federal and state income tax liabilities, corporate franchise taxes,
sales, use, excise and ad valorem taxes, due, payable or accrued by the Company
on or before the Closing Date have or will be paid. The Company has filed all
reports required to be filed by it with all such taxing authorities. Seller
shall be responsible for any tax liability attributable to operations of the
Company prior to Closing.
L. LITIGATION. Except as disclosed in Schedule 4-L attached hereto, the
Company has not received any notices of material default and is not in material
default of (i) any order, writ, injunction or decree of any court, or any
federal, state, municipal or other governmental department, commission, board,
bureau or instrumentality, or (ii) any agreement or obligation to which the
Company is a party or by which the Company is bound or to which the Company or
any of the property of the Company's may be subject. Except as disclosed in
Schedule 4-L, there are no material outstanding claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Seller,
threatened against the Company or which affect the Company or any of its assets
or property,
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at law or in equity before or by any federal, state, municipal court or other
governmental department, authority, commission, board, bureau, agency or
instrumentality.
M. COMPLIANCE WITH LAWS. Except as otherwise disclosed in Schedule 4-M
attached hereto, the Company is in compliance in all material respects with all
federal, state, and local laws, ordinances, regulations, rules, and orders
applicable to it or to its assets including, without limitation, all laws and
regulations relating to the protection of the environment, the safe conduct of
the Company's business, anti-competitive practices, discrimination, employment,
wage and hour practices and health. The Company has not received notification of
any asserted past or present failure to comply with any of such laws or
regulations.
N. ENVIRONMENTAL MATTERS Except as disclosed in Schedule 4-N attached hereto,
there are no claims, actions, suits, proceedings or investigations relating to
any Environmental Law (as hereinafter defined) pending or threatened against or
affecting the Company. Except as set forth on Schedule 4-N attached hereto: (i)
no release of any hazardous substance, medical waste, toxic waste or controlled
substance has occurred or is occurring as a result of the business of the
Company; (ii) no hazardous substance, medical waste, toxic waste or controlled
substance is currently present at, or has been previously generated, stored,
treated or disposed of at any landfill by the Company or through the conduct of
the business of the Company except deminimis amounts mixed with household waste;
(iii) no underground or partially underground storage tank has been or is
currently located at any facility of the Company; (iv) the business, activities
and processes heretofore conducted by the Company comply in all material
respects with all applicable Environmental Laws; (v) no facility of the Company
is listed on any list, registry or other compilation of sites that require, or
potentially require, removal, remedial action or any other response under any
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Environmental Law as the result of the presence, release or potential release of
any hazardous substance, medical waste, toxic waste, or controlled substance;
(vi) neither Seller nor the Company has received any notice that the Company is
liable or responsible, or potentially liable or responsible, for any costs of
any removal, remedial action or other response under any Environmental Law as
the result of the presence, release or potential release of any hazardous
substance, medical waste, toxic waste, or controlled substance; and (vii) there
is no pending litigation or administrative proceeding (and neither Seller nor
the Company knows or has reason to know of any potential or threatened
litigation or administrative proceeding) in which it is asserted that the
Company has violated or is not in compliance with any material Environmental
Law. "Environmental Law" means all laws, statutes or acts of the United States
of America, the State of Georgia, or any political subdivision thereof, that
relate to the condition of the air, ground or surface water, land or other parts
of the environment, to the release or potential release of any substance or
radiation into the air, ground or surface water, land or other parts of the
environment, or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or other handling of substances that might pollute,
contaminate or be hazardous or toxic if present in the air, ground or surface
water, land, or other parts of the environment. The Company has not received any
written notice to the effect that the landfills and other disposal sites to
which waste material transported by the Company has been delivered are not
properly licensed pursuant to applicable Environmental Laws to receive the
material disposed of therein.
O. NO BROKERS' OR AGENT'S FEES. No agent, broker, finder, representative or
other person or entity acting pursuant to authority of the Seller or
Stockholders will be entitled to any commission or finder's fee in connection
with the origination, negotiation, execution or performance of the transactions
contemplated under this Agreement.
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P. NO MATERIAL OR ADVERSE CHANGE. Except as otherwise disclosed in Schedule
4-P attached hereto, since December 31, 1998, there has not been: (i) any
material adverse change in the financial condition, assets, liabilities,
business or results of operations of the Company; (ii) to the knowledge of the
Seller, any threatened or prospective event or condition of any character
whatsoever which could materially and adversely affect the business, financial
condition or results of operations of the Company; (iii) any sale or other
disposition of any of the Company's assets other than in the ordinary course of
business; or (iv) any damage, destruction or loss (whether or not insured)
materially and adversely affecting the property, business or prospects of the
Company.
Q. DUE AUTHORIZATION AND ABSENCE OF BREACH. This Agreement and all other
agreements of the Seller contemplated hereunder constitute valid and binding
obligations of the Seller, enforceable in accordance with their respective
terms. Neither the execution and delivery of this Agreement (or any agreement
contemplated hereunder) nor the consummation of the transactions contemplated
hereby will: (i) conflict with or violate any provision of the Articles of
Incorporation or By-Laws of the Company; (ii) conflict with or violate any
decree, writ, injunction or order of any court or administrative or other
governmental body which is applicable to, binding upon or enforceable against
the Company or Seller; or (iii) except as set forth on Schedule 4-S result in
any breach of or default (or give rise to any right of termination,
cancellation or acceleration) under any mortgage, contract, agreement,
indenture, will, trust or other instrument which is either binding upon or
enforceable against the Seller or the Company or its assets.
R. AUTHORITY TO CONTRACT. Seller has the full power, right and authority to
enter into and perform this Agreement without the consent of any person, entity
or governmental agency, and the consummation of the transactions contemplated by
this Agreement will not result in the breach or termination of any provision of
or constitute a default under any lease, indenture, mortgage, deed of
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trust or other agreement or instrument or any order, decree, statute or
restriction to which Seller or the Company is a party or by which the Company is
bound or to which the outstanding shares of stock of the Company or any of the
properties of the Company is subject.
S. ACCURACY OF THE INFORMATION FURNISHED BY THE SELLER. No representation,
statement or information made or furnished by the Seller to the Buyer,
including those contained in this Agreement and the various exhibits attached
hereto and the other information and statements referred to herein, contains or
shall contain any untrue statement of any material fact.
5. REPRESENTATION AND WARRANTIES OF BUYER. In order to induce the Seller to
enter into this Agreement and to consummate the transactions contemplated
hereunder, the Buyer hereby makes the following representations, warranties,
covenants and agreements:
A. ORGANIZATION AND EXISTENCE. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all the requisite corporate power and authority to carry on its business as now
conducted and to consummate the transactions contemplated by this Agreement.
B. AUTHORITY TO CONTRACT. The execution, delivery and performance of this
Agreement by Buyer has been duly approved by its Board of Directors, and no
further corporate action is necessary on the part of Buyer to consummate the
transactions contemplated by this Agreement, assuming due execution of this
Agreement by the Parties.
C. NO BROKER'S OR AGENT'S FEES. No agent, broker, finder, representative or
other person or entity acting pursuant to the authority of the Buyer will be
entitled to any commission or finder's fee
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in connection with the origination, negotiation, execution or performance of the
transactions contemplated under this Agreement.
D. ACCURACY OF INFORMATION FURNISHED BY BUYER. No representation, statement or
information made or furnished by Buyer to the Seller in this Agreement, or in
connection with the transactions contemplated hereby including, without
limitation copies of the Buyer's filings with the Securities and Exchange
Commission, contains, or shall contain any untrue statement of any material
fact or omits or shall omit any material fact necessary to make the information
contained herein true.
E. REGISTRATION. The EarthCare common stock delivered to Seller on the Closing
Date has been duly registered with the Securities and Exchange Commission on
Form S-1 effective December 9, 1998, and such registration statement is true
and correct in all material respects and does not omit to state any material
information necessary to make such registration statement not misleading.
6. ADDITIONAL AGREEMENT OF THE SELLER AND STOCKHOLDERS. The Seller further
agrees with the Buyer as follows:
A. ACCESS TO OFFICES AND RECORDS. The Seller shall cause the Company to afford
representatives of the Buyer, from and after the date of execution of this
Agreement, full access, during normal business hours and upon reasonable
notice, to all offices, books, properties, contracts, documents and records of
the Company and to furnish to the Buyer or its representatives all additional
information, including financial or operating information with respect to the
business and affairs of the Company that the Buyer or its representatives may
reasonably request. Seller acknowledges that Buyer is a publicly-traded
corporation and that Buyer will be required under the applicable securities
laws to make public disclosure of detailed financial data concerning the
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Company's operations. Prior to the Closing Date, Buyer has Seller's permission
to disclose publicly: (i) the amount of the Company's revenues; and (ii) such
other information as shall be included in any press release of Buyer which
Seller approves in advance of being released; such approval shall not be
unreasonably withheld. Provided, however, that any furnishing of such
information to the Buyer and any investigation by the Buyer shall not affect the
right of the Buyer to rely solely upon the representations and warranties made
by the Seller in or pursuant to this Agreement; and provided further, that the
Buyer: (i) will hold in strict confidence all documents and information
concerning the Company so furnished; and (ii) will promptly return all such
documents and all copies to the Company if this Agreement is not closed for any
reason.
B. CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the execution and
delivery of this Agreement and until the Closing Date, except as otherwise
provided by the prior written consent or approval of the Buyer:
1. The Seller will conduct its business and operations in the manner in which
the same has heretofore been conducted and Seller will use his best efforts to
cause the Company to: (i) preserve the Company's current business organization
intact; (ii) keep available to the Buyer the services of the Company's current
employees and the Company's agents and distributors; and (iii) preserve the
Company's current relationships with customers, suppliers and others having
business dealing with the Company.
2. The Seller will maintain all of its properties in customary repair, order
and condition, reasonable wear and use excepted, and will maintain its existing
insurance upon all of its properties and with respect to the conduct of its
business in such amounts and of such kinds comparable to that in effect on the
date of this Agreement.
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3. The Seller will not: (i) pay any bonus or increase the rate of compensation
of any of the Company's employees or enter into any new employment agreement or
amend any existing employment agreement; (ii) make any general increase in the
compensation or rate of compensation payable or to become payable to the
Company's hourly-rated employees; (iii) sell or transfer any of the Company's
assets; (iv) obligate itself for capital expenditures other than in the
ordinary course of business and not unusual in amount; or (v) incur any
material obligations or liabilities, which are not in the ordinary course of
business, or enter into any material transaction.
C. EXECUTION OF FURTHER DOCUMENTS BY SELLER. From and after the Closing, upon
the reasonable request of the Buyer, the Seller shall execute, acknowledge and
deliver such documents as may be appropriate to carry out the transactions
contemplated by this Agreement.
D. INDEMNIFICATION BY SELLER AND STOCKHOLDERS.
1. The Seller and Stockholders will indemnify and hold the Buyer harmless from
and against any and all damage, loss, cost, deficiency, assessment, liability
or other expense (including reasonable attorney's fees, costs of court and
litigation expenses, if any) suffered, incurred or paid by the Buyer as a
result of:
(a) The untruth, inaccuracy, breach or violation of any representation,
warranty, covenant or other obligation of the Seller or Stockholders set forth
in or made in connection with this Agreement;
(b) The assertion against the Buyer or the Company of any material
liability or obligation of the Company or of any claim relating to the
operation of the Company's waste collection and
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transportation and disposal business, prior to the Closing Date, whether
absolute or contingent, matured or unmatured, known or unknown as of the Closing
Date, or
(c) The enforcement of the Buyer's right to indemnification under this
Agreement.
2. The Buyer shall give written notice to the Seller of any claim, action,
suit or proceeding relating to the indemnity herein provided by Seller not later
than ten (10) days after Buyer has received notice thereof. Seller shall have
the right, at his option, to compromise or defend, at his own expense and by his
own counsel (which counsel shall be reasonably satisfactory to Buyer), any such
action, suit or proceeding. Buyer and Seller agree to cooperate in any such
defense or settlement and to give each other full access to all information
relevant thereto.
3. If within such one hundred eighty day period Buyer asserts there has been a
breach of any of Seller's representations, warranties or covenants or asset
loss or damage due to uncollectible Receivable, then Buyer shall notify Seller
in writing within such period setting forth the nature of the breach and/or the
amount of loss, damage, cost or expense, as provided above. A claim or claims
by Buyer against Seller must total at least ten thousand dollars ($10,000.00)
in the aggregate before Seller is liable for indemnification; however, once
Buyer's claim(s) total at least ten thousand dollars ($10,000.00) in the
aggregate, then Seller shall be liable for the full amount of such claim(s) and
not just for the incremental amount above $10,000.00.
4. Except as herein expressly provided, the remedies provided in paragraph 6.D
hereof shall be cumulative and shall not preclude assertion by the Buyer of any
other rights or the seeking of any other remedies available against the Seller
at law or in equity.
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7. ADDITIONAL AGREEMENT OF THE BUYER.
A. EXECUTION OF FURTHER DOCUMENTS BY BUYER. From and after the Closing, upon
reasonable request of Seller, Buyer shall execute, acknowledge and deliver to
Seller all such further documents as may be appropriate to carry out the
transactions contemplated by this Agreement.
B. INDEMNIFICATION BY BUYER.
1. The Buyer will indemnify and hold the Seller harmless from and against any
and all damages, loss, cost, deficiency assessment, liability or other expense
(including reasonable attorney's fees, costs of court and costs of litigation,
if any) suffered, incurred or paid by the Seller as a result of:
(a) The untruth, inaccuracy, breach or violation of any representation,
warranty, covenant or other obligation of the Buyer set forth in or made in
connection with this Agreement;
(b) The assertion against the Seller of any liability or obligation of
the Buyer or the Company or of any claim relating to the operation of the
Company's waste collection and transportation business subsequent to the
Closing Date (including, without limitation, customer claims or disputes); or
(c) The enforcement of the Seller's right to indemnification under
this Agreement.
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2. The Seller shall give written notice to the Buyer of any claim, action,
suit or proceeding relating to the indemnity herein provided by Buyer not later
than ten (10) days after Seller has received notice thereof. Buyer shall have
the right, at its option, to compromise or defend, at its own expense and by its
own counsel (which counsel shall be reasonably satisfactory to Seller), any such
action, suit or proceeding. Seller and Buyer agree to cooperate in any such
defense or settlement and to give each other full access to all information
relevant thereto.
3. Except as herein expressly provided, the remedies provided in Paragraph 7.B
hereof shall be cumulative and shall not preclude assertion by the Seller of
any other rights or the seeking of any other remedies available against the
Buyer at law or in equity.
8. CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligations of the Buyer to
effect the transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing Date of each of the following
conditions:
A. VALIDITY OF SELLER'S REPRESENTATIONS. All representations and warranties of
the Seller contained in this Agreement or otherwise made in writing pursuant to
this Agreement shall have been true and correct at and as of the date hereof
and they shall be true and correct at and as of the Closing Date, with the same
force and effect as though made at and as of the Closing Date.
B. PRE-CLOSING OBLIGATIONS. The Seller shall have performed and complied with
all the obligations and conditions required by this Agreement to be performed or
complied with by Seller at or prior to the Closing Date, including the execution
and delivery of all documents and contracts required to be delivered at or
before the Closing Date pursuant to this Agreement.
C. OPINION OF COUNSEL FOR SELLER. The Buyer shall have received a favorable
opinion
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from counsel for the Seller dated the date of the Closing, in form satisfactory
to counsel for the Buyer, to the effect that:
1. The Company is a corporation, duly organized and legally existing under the
laws of the State of Georgia, and it has the corporate power and authority to
carry on its business as now being conducted and to own or hold under lease, or
otherwise, its assets.
2. This Agreement has been duly executed and delivered by the Seller, and
constitutes a valid, enforceable and binding obligation of the Seller pursuant
to the terms of this Agreement.
3. Except as otherwise disclosed in this Agreement, counsel does not know of
any action, suit, investigation or other legal, administrative or arbitration
proceeding pending against the Seller or the Company, or which questions the
validity or enforceability of this Agreement or of any action taken or to be
taken pursuant to or in connection with this Agreement or any agreement
contemplated herein.
4. To the knowledge of such counsel, no consent, authorization, license,
franchise, permit, approval or order of any court or governmental agency or
body, other than those obtained by Seller and delivered to the Buyer prior to
or on the date of the opinion, is required for the sale of the Assets by the
Seller pursuant to this Agreement.
5. The execution and performance of this Agreement by the Seller will not
violate: (i) the Articles of Incorporation or the By-Laws of the Company, or
(ii) any order of any court or other agency of government known to said
counsel.
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6. The instruments of conveyance and assignments executed by the Seller to the
Buyer pursuant to this Agreement are adequate to convey the ownership to the
Assets, free and clear of all liens, claims or encumbrances known to such
counsel after conducting a UCC-1 lien search with the offices of the Secretary
of State for the State of Georgia, and the offices of the County Clerk for the
County of _______, in the State of Georgia.
D. RECEIPT BY THE BUYER OF NECESSARY CONSENTS. All necessary consents or
approvals of third parties to any of the transactions contemplated hereby shall
have been obtained, and satisfactory evidence of such consents or approvals
shall have been delivered to the Buyer at Closing.
E. RESIGNATION OF OFFICERS AND DIRECTORS. Buyer shall have received such
resignations of officers and directors of the Companies as shall have been
requested by Buyer.
9. CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligations of the Seller to
effect the transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing Date of each of the following conditions:
A. VALIDITY OF BUYER'S REPRESENTATIONS. All representations and warranties of
the Buyer contained in this Agreement or otherwise made in writing pursuant to
this Agreement shall have been true and correct at and as of the date hereof and
they shall be true and correct at and as of the Closing Date, with the same
force and effect as though made at and as of the Closing Date.
B. PRE-CLOSING OBLIGATIONS. The Buyer shall have performed and complied with
all the
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obligations and conditions required by this Agreement to be performed or
complied with by Seller at or prior to the Closing Date, including the execution
and delivery of all documents and contracts required to be delivered at or
before the Closing Date pursuant to this Agreement.
C. CORPORATE AUTHORITY OF BUYER. The execution and performance of this
Agreement by the Buyer shall have been duly and legally authorized in accordance
with applicable law, and the Buyer shall have furnished to counsel for the
Seller certified copies of resolutions adopted by the Board of Directors of the
Buyer authorizing and proving the execution and delivery of this Agreement and
performance of the transactions contemplated hereunder.
D. OPINION OF COUNSEL FOR BUYER. The Seller shall have received a favorable
opinion from counsel for the Buyer dated the date of the Closing, in form
satisfactory to counsel for the Seller, to the effect that:
1. The Buyer is a corporation, duly organized and legally existing in good
standing under the laws of the State of Delaware, and it has the corporate
power and authority to carry on its business as now being conducted and to
carry out the transactions and agreements contemplated hereby.
2. All corporate and other proceedings required to be taken by or on the part
of the Buyer in order to authorize it to perform its obligations hereunder have
been duly and properly taken, including any necessary approval or authorization
by the Board of Directors of the Buyer.
3. This Agreement has been duly executed and delivered by the Buyer and
constitutes a valid, enforceable and binding obligation of the Buyer pursuant
to the terms of this Agreement.
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4. Except as otherwise disclosed in this Agreement, said counsel does not know
of any action, suit, investigation or other legal, administrative or
arbitration proceeding which questions the validity or enforceability of this
Agreement or of any action taken or to be taken pursuant to or in connection
with this Agreement or any agreement contemplated herein.
5. The execution and performance of this Agreement by the Buyer will not
violate: (i) the Articles of Incorporation or the By-Laws of the Buyer; or (ii)
any order of any court or other agency of government known to said counsel.
10. SELLER'S NON-COMPETE AND NON-SOLICITATION AGREEMENT. As inducement to Buyer
to enter into this Agreement and perform its obligations hereunder, and in
consideration of the payments to Seller pursuant to this Agreement, the Seller
agrees that Seller will not, for a period of three (3) years from the Closing
Date, directly or indirectly (whether as owner, partner, shareholder, agent,
employee, independent contractor, consultant or otherwise): (i) engage in the
waste management business, waste collection and transportation business,
landfill business, or any other business which directly or indirectly competes
with business of the Buyer, or with any subsidiary of Buyer, in each case,
within any County in the State of Georgia where the Seller is currently
conducting its business; (ii) solicit any party who is or was a customer or
supplier of the Company on the Closing Date or at any time during the 12 month
period immediately prior thereto for services of any type or quality being
provided by the Company; (iii) solicit for employment any person who was or is
an employee of the Company on the Closing Date, or at any time during the 12
month period immediately prior thereto; or (iv) either directly or indirectly,
divulge, disclose, or communicate to any person, firm or corporation in any
manner whatsoever any confidential information relating to the business of
Buyer, or the Company. The term, "confidential information", as used herein
means all information of a business or technical nature relative to the
business of Buyer, the business of any customers of
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the Company or any business of any person, firm or corporation which consults
with, or is affiliated with, Buyer or the Company. The term "confidential
information" shall not include information so generally known as to be part of
the public domain. Provided, however, that nothing contained herein shall
prohibit Seller from conducting the business currently conducted by Seller in
Athens, Georgia.
Each of the covenants contained in this Article are separate and independent.
The Seller acknowledges and agrees that Buyer's and Company's remedies at law
may be inadequate in the event of a breach or threatened breach of the
covenants set forth herein, and in such event, Buyer and the Company shall be
entitled to have an injunction issued by any court of competent jurisdiction,
enjoining and restraining each and every party concerned therewith from the
creation or continuation of such breach.
11. OTHER PROVISIONS.
A. EMPLOYMENT AGREEMENTS. At Closing, Buyer will enter into written Employment
Agreements with key employees of Company in a form satisfactory to Buyer.
B. INCOMPLETE EXHIBITS. The parties hereto acknowledge and agree (a) that
many, if not all, of the schedules to be attached to this Agreement will not
have been prepared by the time of execution of this Agreement, and (b) that
consummation of the transactions contemplated by this Agreement are subject to
the completion of such exhibits by Seller (to the extent that an exhibit is to
be completed by Seller, such exhibit must be reasonably acceptable to Buyer) or
Buyer (to the extent that an exhibit is to be completed by Buyer, it must be
reasonably acceptable to Seller) as the case may be, prior to or at the Closing,
pursuant to the terms of this Agreement.
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C. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, obligations and agreements of the parties contained in this
Agreement, or in any writing delivered pursuant to provisions of this Agreement,
shall survive the Closing for a period of eighteen (18) months with the
exception of representations and warranties concerning Paragraph 4.K. hereof,
Tax Matters and Paragraph 4.N. hereof, Environmental Matters, which will survive
for as long as any claims may be asserted under the applicable periods of
limitation for violations of any tax or environmental law, rule or regulation.
D. WAIVER OR EXTENSION OF CONDITIONS. The Seller or the Buyer may extend the
time for or waive the performance of any of the obligations of the other party,
waive any inaccuracies in the representations or warranties by the other party,
or waive compliance by the other party with any of the covenants or conditions
contained in this Agreement. Any such extension or waiver shall be in writing
and signed by the Seller and the Buyer. Any such extension or waiver shall not
act as a waiver or an extension of any other provisions of this Agreement.
E. NOTICES. Any notice, request or other document shall be in writing and sent
by registered or certified mail, return receipt requested, postage prepaid and
addressed to the party to be notified at the following addresses, or such other
address as such party may hereafter designate by written notice to all parties,
which notice shall be effective as of the date of posting:
(i) If to the Buyer:
EarthCare Company
14901 Quorum Drive
Suite 200
Dallas, TX 75240
Copy to: Robert C. Gist, Esq.
12809 Plum Hollow Drive
Oklahoma City, OK 73142-5148
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(ii) If to the Seller
Gary and T. Ann Jeffers
634 Emerald Acres Way
Sugar Hill, GA 30518
Copy to:
F. GOVERNING LAW. This Agreement shall be governed by the laws of the State of
Georgia.
G. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, representatives,
successors and assigns.
H. HEADINGS. The subject headings of the Sections of this Agreement are
included for purposes of convenience only and shall not affect the construction
or interpretation of any of its provisions.
I. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
J. ARBITRATION. Any controversy or claim arising out of, in connection with,
or relating to this Agreement or a breach thereof shall be settled by binding
arbitration in ____________, ____________. The arbitration panel shall be
comprised of three arbitrators. Each party shall appoint one arbitrator for the
panel and the two so appointed shall appoint a third. The panel shall resolve
the dispute within sixty (60) days of the appointment of the panel and shall
notify the parties of its findings in writing. Each party agrees to bear its own
costs of arbitrators and to split equally the cost of the third arbitrator.
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K. ENTIRE AGREEMENT; MODIFICATION. This Agreement (including the schedules
attached hereto) and the documents delivered pursuant hereto constitute the
entire agreement and understanding between the parties, and supersede any prior
agreements and understandings relating to the subject matter hereof. This
Agreement may be modified or amended by a written instrument executed by all
parties hereto.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
__________ day of April, 1999.
"Seller"
Rooter Plus, Inc.
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By:
---------------------------
Gary Jeffers, President
"Stockholders"
- ------------------------------
Gary Jeffers
- ------------------------------
T. Ann Jeffers
"Buyer"
EarthCare Company
By:
---------------------------
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