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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) September 1, 1999
EARTHCARE COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 000-24685 58-2335973
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
14901 Quorum Drive, Suite 200, Dallas, Texas 75240
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(Address of principal executive offices) (Zip Code)
(972) 858-6025
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(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
On September 1, 1999, EarthCare Company (the "Company") acquired all of
the outstanding capital stock of Magnum Environmental Inc. ("Magnum"), a Florida
corporation, in exchange for cash and common stock to the former owners of
Magnum. This transaction was consummated pursuant to a Stock Purchase Agreement,
dated September 1, 1999 (the "Agreement").
Magnum is a commercial and industrial liquid waste transportation,
treatment and disposal services company servicing customers in Florida.
The Company currently intends to operate Magnum in substantially the
same manner as it was operated prior to this transaction. The Company funded the
cash portion of the purchase price of $12.0 million with borrowings under the
Company's revolving credit facility with Bank of America National Trust and
Savings Association and issued 310,000 shares of common stock pursuant to its
Registration Statement on Form S-1. The Company issued an additional 275,000
shares of unregistered common stock, which will be held in escrow and released
to the former owners if certain earnings targets are achieved, as described in
the Agreement. The purchase price was determined based upon an evaluation of the
business of Magnum and the results of negotiations between the parties.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
It is impracticable for the Registrant to provide the required
financial statements for the business acquired at the time this Current Report
on Form 8-K is filed. Such financial statements will be filed as soon as
practicable but not later than 60 days after the date this Current Report on
Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
It is impracticable for the Registrant to provide the required
pro forma financial information for the business acquired at the time this
Current Report on Form 8-K is filed. Such proforma financial information will be
filed as soon as practicable but not later than 60 days after the date this
Current Report on Form 8-K is required to be filed.
(c) Exhibits
2.1 Stock Purchase Agreement, by and between EarthCare Company
and Albert DiMaria, James Frederico, and Osiris Ramos, dated as of September 1,
1999.
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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: September 8, 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
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<S> <C>
2.1 Stock Purchase Agreement, by and between EarthCare Company
and Albert DiMaria, James Frederico, and Osiris Ramos, dated
as of September 1, 1999.
</TABLE>
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EXHIBIT 2.1
PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of September,
1999 by and between Albert DiMaria, James Frederico, and Osiris Ramos,
individuals having an office for the transaction of business at 1280 N.E. 48th
Street, Pompano Beach, Florida 33064(hereinafter sometimes referred to
individually as "Seller" and collectively as "Sellers"), and, EarthCare
Company, a Delaware Corporation with principal offices at 14901 Quorum Drive,
Suite 200, Dallas, Texas 75240 (hereinafter referred to as "EarthCare" or
"Buyer").
WITNESSETH:
WHEREAS, the Sellers are the owners of all of the capital stock of the
following corporations: MAGNUM ENVIRONMENTAL SERVICES, INC. (hereinafter
referred to as "ENVIRONMENTAL SERVICES"); MAGNUM WORLD ENTERPRISES, INC.
(hereinafter referred to as "WORLD ENTERPRISES") and MAGNUM PROPERTY
DEVELOPMENT CORPORATION (hereinafter referred to as "PROPERTY DEVELOPMENT"),
such corporations being hereafter sometimes referred to as the "Corporations".
WHEREAS, the Sellers are the owners of all of the limited partnership
interests in, and Property Development is the sole owner of the general
partnership interest in, the following limited partnerships: MAGNUM EAST COAST
PROPERTIES, LTD (hereinafter referred to as "EAST COAST"), MAGNUM WEST COAST
PROPERTIES, LTD. (hereinafter referred to as "WEST COAST") and MAGNUM NORTH
EAST PROPERTIES, LTD. (hereinafter referred to as "NORTH EAST"), such limited
partnerships being hereinafter sometimes referred to as the "Limited
Partnerships."
WHEREAS, the Corporations and the Limited Partnerships are hereinafter
collectively referred to as the "Companies" and the interest of the Sellers in
the capital stock of the Corporations and the limited partnership interests of
the Limited Partnerships are hereinafter referred to sometimes collectively as
the "Ownership Interests."
WHEREAS, Buyer desires to acquire, and Sellers desire to sell, the
Ownership Interests for cash and shares of the common stock, ($.0001 par value
of the Buyer) said shares of common stock being hereinafter sometimes referred
to as the "Earth Care 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 OWNERSHIP INTERESTS.
1.1 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) Sellers shall sell, convey, transfer, assign and
deliver to Buyer, and Buyer shall purchase from Sellers, all
of the Ownership Interests.
1.2 At the time of Closing, as part of the purchase price for
the Ownership Interests, and in exchange therefor, Buyer
shall pay to Sellers:
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1.2(a) Base Purchase Price Sellers shall receive from Buyer
Two Million Two Hundred Seventy Eight Thousand One
Hundred Forty Three Dollars ($2,278,143) by a wire
transfer through the Federal Reserve System at
Closing. In addition, Buyer shall deliver to an
escrow agent satisfactory to Buyer and Sellers, the
sum of Five Hundred Thousand Dollars ($500,000) for
Sellers' benefit as security for the material
accuracy of Seller's representations and warranties
(Holdback Escrow). The form of the escrow agreement
with appropriate insertions is attached hereto as
SCHEDULE A and made a part hereof.
1.2(b) Registered Shares Purchase Price In addition,
Sellers shall receive from Buyer at Closing Three
Hundred Ten Thousand (310,000) shares of Buyers'
common stock duly registered under the Securities
Act of 1933 as amended ("Act") to the extent
necessary to permit dispositions of such shares.
1.2(c) Working Capital Purchase Price Buyer shall pay to
Sellers on October 31, 1999 (Adjustment Date), as
part of the purchase price, any excess working
capital computed as of August 31, 1999, actual
closing of books of account. To the extent that any
of Company's accounts receivable generated prior to
the Closing Date are outstanding and constitute a
portion of excess working capital on the Adjustment
Date, such accounts receivable shall be distributed
to Sellers on the Adjustment Date.
1.2(d) Earnout Purchase Price. Sellers shall receive from
Buyers Two Hundred Seventy-Five Thousand (275,000)
shares of unregistered EarthCare Common Stock at
Closing in escrow. The form of escrow agreement is
attached hereto as SCHEDULE A and made a part
hereof.
If Companies generate earnings before interest,
depreciation, taxes and amortization (EBIDTA) of Two
Million Dollars ($2,000,000) twelve (12) months
subsequent to the Closing, One Hundred Thirty-Eight
Thousand (138,000) of such shares shall be released
from escrow; and if they generate that much in the
second twelve (12) months subsequent to Closing, One
Hundred Thirty-Seven Thousand (137,000) shares shall
be released from escrow Notwithstanding anything to
the contrary stated herein 275,000 of such shares
shall be released from escrow if the EBIDTA for 24
months subsequent to closing equals or exceeds Four
Million Dollars ($4,000,000). EBIDTA shall be
determined in accordance with generally accepted
accounting principles. Such shares released from
escrow shall be registered as a "piggy back"
registration on EarthCare's first registration filed
after such release from escrow.
Buyer promises in calculating earnings in the EBIDTA
formula, that it will not intentionally or through
bad faith impact earnings so as to prevent Sellers
from receiving their earnout Purchase Price.
In addition, as a condition of escrow release, the
principal executives of the Companies are to be
employed (provided they are surviving) under the
terms of mutually agreeable employment agreements,
the form of which is
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attached hereto as SCHEDULE F, and no material
breach of this Agreement between Buyer and Sellers
shall remain unresolved.
1.2(e) Purchase Price Allocation. Buyer and Seller agree to
allocate the aggregate Purchase Price in the manner
set forth on SCHEDULE E attached hereto and made a
part hereof.
1.3 To facilitate the foregoing, Buyer agrees that for two (2)
years after the Closing, all Ownership Interests acquired
hereunder should be placed in and remain the sole assets of a
Buyer subsidiary entity for which separate financial
statements are prepared and reflected in the annual EBITDA
computation referred to herein and none of the assets of the
Companies shall be transferred to Buyer or its subsidiaries
or affiliates, whether in liquidation or otherwise.
2. CLOSING.
2.1 Immediately after the Closing, Buyer shall transfer to
Company by a wire transfer through the Federal Reserve System
at Closing Nine Million Two Hundred Twenty One Thousand Eight
Hundred Fifty-Seven Dollars ($9,221,857) to Companies'
creditors identified in SCHEDULE C attached hereto and made a
part hereof.
2.2 Subject to the terms and conditions of this
Agreement, the closing of the purchase and sale of
the Acquisition Stock (the "Closing") shall be held
as of August 31, 1999, at the offices of Magnum
Environmental Services, Inc., 1280 N.E. 48th Street,
Pompano Beach, Florida, or at such other time,
location and date as shall be mutually agreed upon
by the parties hereto in writing. (Such time and
date is sometimes hereinafter referred to as the
"Closing Date" or "Closing".) All term liabilities
of the Companies shall be paid by Buyer on the
Closing Date as set forth in paragraph 1.2(d), and
Buyer shall be responsible for obtaining the return
and cancellation of any and all guaranties of all
Companies' debt given by Sellers. All surety bonds
currently outstanding shall remain in full force and
effect.
3. PROCEDURE AT THE CLOSING. The parties hereto agree to take the
following steps in the order listed:
3.1 Sellers shall deliver to the Buyer the Ownership Interests,
and such stock certificates, endorsements, assignments and
other instruments to transfer to the Buyer good and
marketable title to the Ownership Interests, free and clear
of all liens, claims and encumbrances.
3.2 In exchange for the Ownership Interests, Buyer shall deliver
to Sellers the Purchase Price and other consideration
required by this Agreement.
3.3 The Buyer and Seller shall also deliver whatever other
documents are contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF SELLERS. In order to induce the
Buyer to enter into this Agreement and to consummate the transactions
contemplated hereunder, the Seller hereby makes the following
representations, warranties, covenants and agreements:
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4.1 ORGANIZATION AND EXISTENCE.
4.1(a) ENVIRONMENTAL SERVICES is a corporation duly
organized and legally existing in good standing
under the laws of the State of Florida, and has all
requisite corporate power to carry on its business
as now conducted. The nature of the business of
ENVIRONMENTAL SERVICES and the character of the
properties owned or leased by it do not require its
qualification to do business as a foreign
corporation in any state. Seller has delivered to
Buyer a true and correct copy of the Articles of
Incorporation of ENVIRONMENTAL SERVICES (certified
by the Secretary of State of Florida) and by-laws of
ENVIRONMENTAL SERVICES (certified by its Secretary).
4.1(b) WORLD ENTERPRISES is a corporation duly organized
and legally existing in good standing under the laws
of the State of Florida, and has all requisite
corporate power to carry on its business as now
conducted. The nature of the business of WORLD
ENTERPRISES and the character of the properties
owned or leased by it do not require its
qualification to do business as a foreign
corporation in any state. Seller has delivered to
Buyer a true and correct copy of the Articles of
Incorporation of WORLD ENTERPRISES (certified by the
Secretary of State of Florida) and By-Laws of WORLD
ENTERPRISES (certified by its Secretary).
4.1(c) PROPERTY DEVELOPMENT is a corporation duly organized
and legally existing in good standing under the laws
of the State of Florida, and has all requisite
corporate power to carry on its business as now
conducted. The nature of the business of PROPERTY
DEVELOPMENT and the character of the properties
owned or leased by it do not require its
qualification to do business as a foreign
corporation in any state. Seller has delivered to
Buyer a true and correct copy of the Articles of
Incorporation of PROPERTY DEVELOPMENT (certified by
the Secretary of State of Florida) and By-Laws of
PROPERTY DEVELOPMENT (certified by its Secretary).
4.1(d) EAST COAST is a limited partnership duly organized
and legally existing in good standing under the laws
of the State of Florida, and has all requisite power
to carry on its business as now conducted. The
nature of the business of EAST COAST and the
character of the properties owned or leased by it do
not require its qualification to do business as a
foreign limited partnership in any state. Sellers
have delivered to Buyer a true and correct copy of
the Limited Partnership Agreement of EAST COAST
(certified by the General Partner, Property
Development).
4.1(e) WEST COAST is a limited partnership duly organized
and legally existing in good standing under the laws
of the State of Florida, and has all requisite
corporate power to carry on its business as now
conducted. The nature of the business of WEST COAST
and the character of the properties owned or leased
by it do not require its qualification to do
business as a foreign corporation. Sellers have
delivered to Buyer a true and correct copy of the
Limited Partnership Agreement of WEST COAST
(certified by the General Partner, Property
Development).
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4.1(f) NORTH EAST is a limited partnership duly organized
and legally existing in good standing under the laws
of the State of Florida, and has all requisite power
to carry on its business as now conducted. The
nature of the business of NORTH EAST and the
character of the properties owned or leased by it do
not require its qualification to do business as a
foreign limited partnership in any state. Sellers
have delivered to Buyer a true and correct copy of
the Limited Partnership Agreement of NORTH EAST
(certified by the General Partner of Property
Development).
4.2 SUBSIDIARIES OR OTHER ENTITIES. Except as stated herein, none
of the Companies has any investments or ownership interests
in any corporations, partnerships, joint ventures or other
business enterprises, other than a limited partnership,
Midway Development Limited, which entity is not part of this
agreement.
4.3 CAPITALIZATION.
4.3(a) ENVIRONMENTAL SERVICES is authorized to issue
1,000,000 shares of common stock, no par value, of
which 436 shares are issued and outstanding at the
time of the execution of this Agreement. All of the
issued and outstanding shares of capital stock of
ENVIRONMENTAL SERVICES have been duly issued, are
validly outstanding, are fully paid and
nonassessable, and are held of record and
beneficially by Sellers; there are no outstanding
subscriptions, options, warrants or rights to
receive, purchase or subscribe to, or securities
convertible into or exchangeable for, any issued or
unissued shares of the capital stock of
ENVIRONMENTAL SERVICES. ENVIRONMENTAL SERVICES has
no liability for dividends declared and unpaid.
Prior to Closing, the Sellers shall not, and shall
not permit ENVIRONMENTAL SERVICES to, issue or enter
into any subscriptions, options, agreements or other
commitments in respect of the issuance, transfer,
sale or encumbrance of any shares of the
ENVIRONMENTAL SERVICES capital stock.
4.3(b) WORLD ENTERPRISES is authorized to issue 1,000,000
shares of common stock, $1.00 par value, of which
310 shares are issued and outstanding at the time of
the execution of this Agreement. All of the issued
and outstanding shares of capital stock of WORLD
ENTERPRISES have been duly issued, are validly
outstanding, are fully paid and nonassessable, and
are held of record and beneficially by Sellers;
there are no outstanding subscriptions, options,
warrants or rights to receive, purchase or subscribe
to, or securities convertible into or exchangeable
for, any issued or unissued shares of the capital
stock of WORLD ENTERPRISES. WORLD ENTERPRISES has no
liability for dividends declared and unpaid. Prior
to Closing, the Sellers shall not, and shall not
permit WORLD ENTERPRISES to, issue or enter into any
subscriptions, options, agreements or other
commitments in respect of the issuance, transfer,
sale or encumbrance of any shares of the WORLD
ENTERPRISES capital stock.
4.3(c) PROPERTY DEVELOPMENT is authorized to issue 300
shares of common stock, $1.00 par value, of which
100 shares are issued and outstanding at the time of
the execution of this Agreement. All of the issued
and
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outstanding shares of capital stock of PROPERTY
DEVELOPMENT have been duly issued, are validly
outstanding, are fully paid and nonassessable, and
are held of record and beneficially by Sellers;
there are no outstanding subscriptions, options,
warrants or rights to receive, purchase or subscribe
to, or securities convertible into or exchangeable
for, any issued or unissued shares of the capital
stock of PROPERTY DEVELOPMENT. PROPERTY DEVELOPMENT
has no liability for dividends declared and unpaid.
Prior to Closing, the Sellers shall not, and shall
not permit PROPERTY DEVELOPMENT, to issue or enter
into any subscriptions, options, agreements or other
commitments in respect of the issuance, transfer,
sale or encumbrance of any shares of the PROPERTY
DEVELOPMENT capital stock.
4.3(d) EAST COAST has a 1% general partner interest (owned
by PROPERTY DEVELOPMENT) and 99% limited partner
interests (owned by the Sellers) issued and
outstanding at the time of the execution of this
Agreement. All of the outstanding partnership
interests of EAST COAST have been duly issued, are
validly outstanding, are fully paid, and are held of
record and beneficially by PROPERTY DEVELOPMENT and
Sellers; there are no outstanding subscriptions,
options, warrants or rights to receive, purchase or
subscribe to, or securities convertible into or
exchangeable for, any issued or unissued partnership
interests of EAST COAST. EAST COAST has no liability
for distributions declared and unpaid. Prior to
Closing, the Sellers shall not, and shall not permit
EAST COAST to, issue or enter into any
subscriptions, options, agreements or other
commitments in respect of the issuance, transfer,
sale or encumbrance of any partnership interests of
EAST COAST.
4.3(e) West Coast has a 1% general partner interest (owned
by PROPERTY DEVELOPMENT) and 99% limited partner
interests (owned by the Sellers) issued and
outstanding at the time of the execution of this
Agreement. All of the outstanding partnership
interests of West Coast have been duly issued, are
validly outstanding, are fully paid, and are held of
record and beneficially by Sellers; there are no
outstanding subscriptions, options, warrants or
rights to receive, purchase or subscribe to, or
securities convertible into or exchangeable for, any
issued or unissued partnership interests of West
Coast. West Coast has no liability for distributions
declared and unpaid. Prior to Closing, the Sellers
shall not, and shall not permit West Coast to, issue
or enter into any subscriptions, options, agreements
or other commitments in respect of the issuance,
transfer, sale or encumbrance of any partnership
interests of West Coast.
4.3(f) NORTH EAST has a 1% general partner interest (owned
by PROPERTY DEVELOPMENT) and 99% limited partner
interests (owned by the Sellers) issued and
outstanding at the time of the execution of this
Agreement. All of the outstanding partnership
interests of NORTH EAST have been duly issued, are
validly outstanding, are fully paid, and are held of
record and beneficially by PROPERTY DEVELOPMENT and
Sellers; there are no outstanding subscriptions,
options, warrants or rights to receive, purchase or
subscribe to, or securities convertible into or
exchangeable for, any issued or unissued partnership
interests of NORTH EAST. NORTH EAST has no liability
for distributions declared and unpaid. Prior to
Closing, the
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Sellers shall not, and shall not permit NORTH EAST,
to issue or enter into any subscriptions, options,
agreements or other commitments in respect of the
issuance, transfer, sale or encumbrance of any
partnership interests of NORTH EAST.
4.4 OWNERSHIP. Sellers have, and at the time of Closing will
have, good and marketable title to the Ownership Interests,
and there are, and at the time of Closing will be, no
impediments to the sale and transfer of the Ownership
Interests to Buyer. Upon delivery of the Ownership Interests
to Buyer, by whatever instrument(s) are appropriate, the
Ownership Interests (i) shall constitute all of the issued
and outstanding Ownership Interests of the Companies, and
(ii) shall be free and clear of all security interests,
liens, charges, pledges, mortgages, encumbrances or rights of
third parties whatsoever. It is noted that the general
partnership interests in the Limited Partnership shall be
deemed adequately conveyed by Sellers' transfer to Buyer of
all of this issued and outstanding capital stock of PROPERTY
DEVELOPMENT, the sole general partner of each such Limited
Partnership.
4.5 FINANCIAL CONDITION. Sellers have furnished to Buyer copies
of the following consolidated financial statements of the
Companies, 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):
4.5(a) A consolidated balance sheet ("Balance Sheet") of
the Companies as of December 31, 1998.
4.5(b) Consolidated statements of income and retained
earnings of the Companies for the twelve (12) months
ended December 31, 1998 and for the 6-month period
ended June 30, 1999. (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 in
all material respects and in accordance with the
books of account and records of the Companies and
present fairly the financial position of the
Companies' business and the income, stockholders'
equity and cash flow of the Companies' business at
the dates and for the periods indicated.
4.5(c) Sellers warrant that the aggregate current assets of
the Companies will be sufficient to pay the
aggregate amount of current liabilities of the
Companies as of the Closing Date. Buyer agrees that
any excess working capital on the Closing Date after
payment of all term debt (including principal and
interest to Closing Date) shall be distributed to
Sellers as set forth in paragraph 1.2(c). Such
amount shall constitute part of the Purchase Price.
4.6 ASSETS.
4.6(a) To Sellers' knowledge, the Companies have good and
marketable title to, and are in possession of, all
of the assets, equipment, vehicles, properties and
rights, including all properties, assets, vehicles
and equipment as
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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
and in Companies' records. Sellers represent its
records to the extent available, to Sellers'
knowledge, set forth a list of all material items 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 Companies as of the date of this
Agreement and used in connection with its business
operations (hereinafter sometimes referred to as the
"Operating Equipment").
4.6(b) To Sellers' knowledge 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 Companies'
Customer Accounts (as herein defined) and to conduct
the operations of the Companies existing on the
Closing Date.
4.6(c) To Sellers' knowledge, there has not been any
material change in the Operating Equipment, since
the inspection of such Operating Equipment by Buyer
on August 31, 1999, 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
Sellers prior to Closing.
4.6(d) The transactions contemplated by this Agreement do
not and will not subject any of the Companies or the
Buyer to any claim or liability for any obligation,
debt or contract, other than as specifically
disclosed in this Agreement or the Schedules
attached hereto.
4.7 CUSTOMER ACCOUNTS, MUNICIPAL CONTRACTS AND RELATED MATTERS.
4.7(a) Customer Accounts are the commercial, industrial,
municipal, and residential accounts of the Companies
pursuant to which the Companies provide waste
removal, collections, incorporation, storage and/or
disposal. To Sellers' knowledge, said Customer
Accounts are listed on Companies' books and records.
4.7(b) To Sellers' knowledge, all written service
agreements, franchises, licenses or other contracts,
if any, to which any of the Companies is a party and
which relate to Customer Accounts is contained in
Companies' books and records. Original copies of all
such contracts shall be delivered by the Sellers 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. To the knowledge of
the Sellers, none of the Companies or any other
party to any of the Companies' 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.
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4.7(c) Except as otherwise disclosed, the Sellers know of
no oral or written communication, fact, event or
action which exists or has occurred within 30 days
prior to the date of execution of this Agreement,
which would tend to indicate that any current
customers of any of the Companies intends to
terminate their business relationship with any of
the Companies.
4.8 MATERIAL CONTRACTS. To Sellers' knowledge, none of the
Companies is a party to or bound by any material written or
oral (i) contracts not made in the ordinary course of
business; (ii) employment contracts, other than those
terminable at will; (iii) contracts with any labor union or
association; (iv) leases with respect to any property, real
or personal, whether as lessor or lessee, except intercompany
or as disclosed; (v) continuing contracts for the future
purchase of materials, supplies or equipment in excess of the
requirements of its business now booked; or (vi) contracts or
commitment for capital expenditures heretofore otherwise
disclosed.
4.9 EMPLOYEES - LABOR MATTERS. The Companies have generally
enjoyed a good employer-employee relationship with employees.
To Sellers' knowledge, 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.
4.10 INSURANCE. The Companies maintain in effect insurance
covering assets and businesses and any liabilities relating
thereto in an amount believed adequate by the Sellers, and
such insurance coverage shall be maintained by the Companies
through and shall survive the Closing Date. Between the date
hereof and the Closing Date, the Sellers shall cause the
Companies to furnish to the Buyer such information as the
Buyer shall reasonably request regarding the Companies'
insurance.
4.11 LICENSES AND PERMITS. To Sellers' knowledge, the Companies
possess 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 Companies including, without limitation,
all common carrier rights, certificates of public need, waste
material transportation permits, trademarks and trade names
necessary to carry on 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 to Sellers'
knowledge, no violations are or have been recorded in respect
to any thereof, and no proceeding is pending, or to the
knowledge of Sellers threatened, to revoke, suspend or
otherwise limit such licenses or permits, except for the
items identified in SCHEDULE G. To Sellers' knowledge, all
licenses and permits will survive the Closing of the
transactions contemplated by this Agreement.
4.12 TAX MATTERS. The Companies have filed all federal, state,
franchise tax, and other tax returns which are required to be
filed and have paid or have 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 all
of the Companies' employee, federal and state income tax
liabilities, corporate franchise taxes, due, payable or
accrued by each of the Companies on or before the Closing
Date have or will be paid. The
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Companies have filed all reports required to be filed with
all such taxing authorities. Sellers shall be responsible for
any tax liability attributable to operations of the Companies
prior to Closing; in such event, Companies agree to provide
Sellers with prompt access to Companies' records and
personnel at no expense to Sellers. The parties agree that if
Buyer wishes to maintain the Subchapter S status of the
Corporations, there shall be an interim closing of the books
as of the Closing Date so that Sellers shall be charged with
only the profit of the Corporations from the beginning of the
fiscal year to the Closing Date. Similar closing of the books
shall be had with respect to the Limited Partnerships.
Buyer and Sellers agree to cause the Companies to make the
election provided by Section 338[h][10] of the Internal
Revenue Code of 1986 as amended and Treasury Regulation
Paragraph 1.338[h][10]-1[d][1], and in connection therewith,
the parties agree that the allocation of the Purchase Price
shall be used in connection with the preparation of tax
returns reflecting the sale and purchase contemplated hereby.
Buyer agrees to reimburse Sellers for, and provide
simultaneously for the payment of, any and all additional
taxes, interest, and penalties incurred as a result of
Sellers agreeing to make such election and to indemnify
Sellers therefor together with any expenses incurred as a
result thereof including reasonable attorneys' and
accountants' fees.
4.13 LITIGATION. To the knowledge of Sellers, none of the
Companies has received any notices of material default and
none of the Companies is 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 any of the Companies is a
party or by which any of the Companies is bound or to which
any of the Companies or any of the property of the Companies'
may be subject. To Sellers' knowledge, there are no material
outstanding claims, actions, suits, proceedings or
investigations pending or, to the knowledge of the Sellers,
threatened against any of the Companies or which affect any
of the Companies or any assets or property of the Companies,
at law or in equity before or by any federal, state,
municipal court or other governmental department, authority,
commission, board, bureau, agency or instrumentality.
4.14 COMPLIANCE WITH LAWS. To Sellers' knowledge, the Companies
are in compliance in all material respects with all federal,
state, and local laws, ordinances, regulations, rules, and
orders applicable to the Companies or to assets of the
Companies including, without limitation, all laws and
regulations relating to the protection of the environment,
anti-competitive practices, discrimination, employment, and
wage and hour practices. None of the Companies has received
notification of any asserted past or present material failure
to comply with any of such laws or regulations.
4.15 ENVIRONMENTAL MATTERS. To the best of Seller's knowledge, and
not having conducted any environmental assessment, audit or
investigation.
4.15(a) During the period of time Seller owned
or operated any facility of the
Companies, Seller has been in material
compliance with all currently
applicable federal, state and local
statutes, rules, ordinances and other
laws and regulations relating to
environmental matters;
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4.15(b) No releases or threats of releases of
any toxic, hazardous or carcinogenic
substances or medical wastes
(including, but not limited to,
petroleum products) to the environment
from or at any facility of any of the
Companies have occurred which have not
been remediated to the extent required
under currently applicable federal,
state and local statutes, rules,
ordinances and other laws, regulations,
permits or orders of a governmental
authority;
4.15(c) None of the Companies have received any
written notice to the effect that the
landfills and other disposal sites to
which waste material transported by any
of the Companies has been delivered are
not properly licensed pursuant to
applicable environmental laws to
receive the material disposed of
therein.
4.15(d) No pending or threatened, claims,
assessments or litigation notices have
been received by Seller with respect to
any alleged noncompliance with any of
the Environmental Laws with respect to
the ownership or operation of any
facility of any of the Companies or any
of the other Acquired Assets.
4.16 NO BROKERS' OR AGENT'S FEES. No agent, broker, finder,
representative or other person or entity acting pursuant to
authority of the Sellers 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.
4.17 NO MATERIAL ADVERSE CHANGE. To Sellers' knowledge from
January 1, 1999, there has not been: (i) any material adverse
change in the financial condition, assets, liabilities,
business or results of operations of any of the Companies;
(ii) to the knowledge of the Sellers, 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 any of the
Companies; (iii) any sale or other disposition of any of the
Companies' assets other than in the ordinary course of
business; or (iv) any uninsured damage, destruction or loss
materially and adversely affecting the property, business or
prospects of any of the Companies.
4.18 DUE AUTHORIZATION AND ABSENCE OF BREACH. This Agreement and
all other agreements of the Sellers contemplated hereunder
constitute valid and binding obligations of the Sellers,
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 any of the Companies; (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 any of the Companies
or Sellers.
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4.19 AUTHORITY TO CONTRACT. Sellers have the full power, right and
authority to enter into and perform this Agreement without
the consent of any person, entity or governmental agency.
4.20 ACCURACY OF THE INFORMATION FURNISHED BY THE SELLERS. No
representation, statement or information made or furnished by
the Sellers to the Buyer, including those contained in this
Agreement and the various schedules attached hereto and the
other information and statements referred to herein, contains
or shall contain any materially untrue statement of any
material fact.
5. REPRESENTATION AND WARRANTIES OF BUYER. In order to induce the Sellers
to enter into this Agreement and to consummate the transactions
contemplated hereunder, the Buyer hereby makes the following
representations, warranties, covenants and agreements:
5.1 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.
5.2 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.
5.3 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 in connection with the origination,
negotiation, execution or performance of the transactions
contemplated under this Agreement.
5.4 ACCURACY OF INFORMATION FURNISHED BY BUYER. No
representation, statement or information made or furnished by
Buyer to the Sellers 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.
5.5 REGISTRATION. The EarthCare common stock delivered to Sellers
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. Buyer agrees to maintain the
currency of the registration statement and to provide Sellers
with sufficient copies of the prospectus, as the same may be
supplemented or stickered from time to time to enable Sellers
to sell the registered shares for one year from Closing Date
or until sold. Buyer also agrees to comply with the reporting
requirement of the Securities Exchange Act of 1934 so that
Sellers may sell the unregistered shares in accordance with
Rule 144 thereunder.
6. ADDITIONAL AGREEMENT OF THE SELLERS. The Sellers further agree with
the Buyer as follows:
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6.1 ACCESS TO OFFICES AND RECORDS. The Sellers shall cause the
Companies 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 Companies 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 Companies that the Buyer or its
representatives may reasonably request. Sellers acknowledge
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
Companies' operations. Prior to the Closing Date, Buyer has
Sellers' permission to disclose publicly: (i) the amount of
the Companies' revenues; and (ii) such other information as
shall be included in any press release of Buyer which Sellers
approve 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 Sellers in or pursuant to this Agreement; and
provided further, that the Buyer: (i) will hold in strict
confidence all documents and information concerning the
Companies so furnished; and (ii) will promptly return all
such documents and all copies to the Companies if this
Agreement is not closed or for no reason.
6.2 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:
6.2(a) The Sellers will cause the Companies to conduct
business and operations in the manner in which the
same has heretofore been conducted and Sellers will
use their best efforts to cause the Companies to:
(i) preserve the Companies' current business
organization intact; (ii) keep available to the
Buyer the services of the Companies' current
employees and the Companies' agents and
distributors; and (iii) preserve the Companies'
current relationships with customers, suppliers and
others having business dealings with the Companies.
6.2(b) The Sellers will cause the Companies to maintain all
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.
6.2(c) The Sellers will take action to insure that none of
the Companies will: (i) pay any bonus or increase
the rate of compensation of any of the Companies'
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 Companies' hourly-rated employees; (iii) sell or
transfer any of the Companies' assets, except in the
ordinary course; (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,
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which are not in the ordinary course of business, or
enter into any material transaction.
6.2(d) The Sellers shall not, and shall not permit any of
the Companies to, issue or enter into any
subscriptions, options, agreements or other
commitments in respect of the issuance, transfer,
sale or encumbrance of any shares of the Acquisition
Stock.
6.3 EXECUTION OF FURTHER DOCUMENTS BY SELLERS. From and after the
Closing, upon the reasonable request of the Buyer and at the
Buyer's cost and expenses, the Sellers shall execute,
acknowledge and deliver such documents as may be appropriate
to carry out the transactions contemplated by this Agreement.
6.4 INDEMNIFICATION BY SELLERS.
6.4(a) To the extent specified herein, the Sellers 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:
6.4(a)(1) The material untruth, inaccuracy,
breach or violation of any
representation, warranty, covenant
or other obligation of the Sellers
set forth in or made in connection
with this Agreement;
6.4(a)(2) The assertion against the Buyer or
any of the Companies of any
material liability or obligation of
any of the Companies or of any
claim relating to the operation of
the Companies' businesses, prior to
the Closing Date, whether absolute
or contingent, matured or
unmatured, known or unknown as of
the Closing Date (including,
without limitation, customer claims
or disputes).
6.4(a)(3) No claims for indemnification by
Buyer shall be payable until the
aggregate thereof reaches $50,000
and only claims in excess of
$50,000 shall be subject to
indemnification. The maximum amount
payable to Sellers for Buyer's
claims of indemnification shall be
$500,000.
6.4(b) The Buyer shall give written notice to the Sellers
of any claim, action, suit or proceeding relating to
the indemnity herein provided by Sellers not later
than ten (10) days after Buyer has received notice
thereof. Sellers 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 Sellers agree to
cooperate in any such defense or settlement and to
give each other full access to all information
relevant thereto.
6.4(c) The Holdback Cash shall constitute security for
Sellers' indemnification. If Buyer makes no claim of
breach of any of Sellers' representations,
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warranties or covenants, or of any deficiency
resulting from uncollectible accounts receivable,
then the Holdback Escrow shall be delivered in full
or in part to Sellers one hundred eighty (180) days
after the Closing Date, along with an assignment to
Sellers of the uncollectible accounts receivable.
6.4(d) Except as herein expressly provided, the remedies
provided in this paragraph 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 Sellers at law or in equity.
7. ADDITIONAL AGREEMENT OF THE BUYER.
7.1 EXECUTION OF FURTHER DOCUMENTS BY BUYER. From and after the
Closing, upon reasonable request of Sellers, Buyer shall
execute, acknowledge and deliver to Sellers all such further
documents as may be appropriate to carry out the transactions
contemplated by this Agreement.
7.2 INDEMNIFICATION BY BUYER.
7.2(a) The Buyer will indemnify and hold the Sellers
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 Sellers as a result of:
7.2(a)(1) 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;
7.2(a)(2) The assertion against the Sellers
of any liability or obligation of
the Buyer or any of the Companies
or of any claim relating to the
operation of the Companies'
business subsequent to the Closing
Date (including, without
limitation, guaranties, customer
claims or disputes); or
7.2(a)(3) As a result of any claim being made
by a creditor of Companies against
Buyer based on a personal guaranty
of the indemnity.
7.2(b) The Sellers 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 Sellers have 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 Sellers), any such
action, suit or proceeding. Sellers and Buyer agree
to cooperate in any such defense or settlement and
to give each other full access to all information
relevant thereto.
7.2(c) Except as herein expressly provided, the remedies
provided in this Paragraph hereof shall be
cumulative and shall not preclude assertion by
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the Sellers 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:
8.1 VALIDITY OF SELLERS' REPRESENTATIONS. All representations and
warranties of the Sellers 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.
8.2 PRE-CLOSING OBLIGATIONS. The Sellers shall have performed and
complied with all the obligations and conditions required by
this Agreement to be performed or complied with by Sellers 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.
8.3 OPINION OF COUNSEL FOR SELLERS. The Buyer shall have received
a favorable opinion from counsel for the Sellers limited to
State of Florida and federal law, dated the date of the
Closing, in form satisfactory to counsel for the Buyer, to
the effect that:
8.3(a) Each of the Companies is a duly organized and
legally existing in good standing under the laws of
its respective jurisdiction, and it has the power
and authority to carry on its business as now being
conducted and to own or hold under lease, or
otherwise, its assets.
8.3(b) This Agreement has been duly executed and delivered
by the Sellers, and constitutes a valid, enforceable
and binding obligation of the Sellers pursuant to
the terms of this Agreement.
8.3(c) 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 Sellers
or any of the Companies, 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.
8.3(d) To the knowledge of such counsel, and without
inquiry, no consent, authorization, license,
franchise, permit, approval or order of any court or
governmental agency or body, other than those
obtained by Sellers and delivered to the Buyer prior
to or on the date of the opinion, is required for
the sale of the Acquisition Stock by the Sellers
pursuant to this Agreement.
8.3(e) To the knowledge of such counsel, and without
inquiry, the execution and performance of this
Agreement by the Sellers will not violate: (i) the
Organizational Documents or the By-Laws, if
applicable, of any of the Companies, or (ii) any
order of any court or other agency of government
known to said counsel.
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8.3(f) The instruments of conveyance and assignments
executed by the Sellers to the Buyer pursuant to
this Agreement are adequate to convey the Ownership
Interests, free and clear of all liens, claims or
encumbrances known to such counsel after conducting
a UCC-11 lien search with the offices of the
Secretary of State for the State of Florida, and the
offices of the County Clerk for the Counties in
which Companies do business, and
8.3(g) To the knowledge of such counsel (after reasonable
investigation), Sellers own all of the issued and
outstanding Ownership Interests of the Companies.
The form of such opinion is set forth on SCHEDULE H attached
hereto and made a part hereof.
8.4 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.
8.5 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 in the form
attached hereto as SCHEDULE I and made a part hereof.
8.6 STOCK PURCHASE. On Closing, the obligations of the
signatories shall be consummated.
9. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the
Sellers 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:
9.1 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.
9.2 PRE-CLOSING OBLIGATIONS. The Buyer shall have performed and
complied with all the obligations and conditions required by
this Agreement to be performed or complied with by Sellers 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.
9.3 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 Sellers
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.
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9.4 OPINION OF COUNSEL FOR BUYER. The Sellers shall have received
a favorable opinion from counsel for the Buyer dated the date
of the Closing, in form satisfactory to counsel for the
Sellers, to the effect that:
9.4(a) 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.
9.4(b) 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.
9.4(c) 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.
9.4(d) 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.
9.4(e) 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. SELLERS' 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 Sellers pursuant to
this Agreement, the Sellers agree that Sellers will not, for a period
of two (2) years from the Closing Date, directly or indirectly, in
each case, within the County of Broward and the County of Palm Beach,
State of Florida; (whether as owner, partner, shareholder, agent,
employee, independent contractor, consultant or otherwise): (i) engage
in any business which directly competes with business of the Buyer, or
with any subsidiary of Buyer as of the Closing Date, (ii) solicit any
party who is or was a customer or supplier of the Company on the
Closing Date 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 (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 for a period of two
(2) years from date of Closing. 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 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.
Each of the covenants contained in this Article are separate and
independent. The Sellers acknowledge and agree that Buyer'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
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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.
11.1 EMPLOYMENT AGREEMENTS. At Closing, Buyer will enter into
written Employment Agreements with key employees of Company
in a form set forth on SCHEDULE F.
11.2 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 schedules by Sellers (to the extent
that an exhibit is to be completed by Sellers, such schedule
must be reasonably acceptable to Buyer) or Buyer (to the
extent that a schedule is to be completed by Buyer, it must
be reasonably acceptable to Sellers) as the case may be,
prior to or at the Closing, pursuant to the terms of this
Agreement.
11.3 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 180 days.
11.4 WAIVER OR EXTENSION OF CONDITIONS. The Sellers 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 Sellers and
the Buyer. Any such extension or waiver shall not act as a
waiver or an extension of any other provisions of this
Agreement.
11.5 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
(ii) If to the Sellers:
James Frederico
3779 N.W. 52nd Street
Boca Raton, FL 33496
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Copy to:
Samuel P. Merlo, Esq.
Woods, Oviatt, Gilman
Sturman & Clarke LLP
700 Crossroads Building
2 State Street
Rochester, New York 14614
11.6 GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Florida.
11.7 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.
11.8 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.
11.9 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.
11.10 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 24th day
of August, 1999
"Sellers"
- -----------------------------------
- -----------------------------------
- -----------------------------------
"Buyer"
EarthCare Company
By:_______________________________
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LIST OF SCHEDULES
A. Holdback and Earnout Escrow Agreement
B. Intentionally Omitted
C. Wire Transfer Creditor List
D. Intentionally Omitted
E. Purchase Price Allocation
F. Employee Contracts
G. Licenses and Permits Violation
H. Attorney Opinion Letter
I. Officer and Director Resignation
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