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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Sections 13 of 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 15, 1996
ENVIRONMENTAL PLUS, INCORPORATED
--------------------------------
(Exact name of registrant as specified in its charter)
Texas 0-13041 75-1939021
- -----------------------------------------------------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation Number)
2995 LBJ Freeway, Suite 200, Dallas, Texas 75234
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(Address of Principal Executive offices)
(214) 481-1211
_________________________________________________________________
(Registrant's Telephone Number, Including Area Code)
N/A
_________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. Acquisition or Disposition of Assets.
(a) On August 31, 1996, effective June 1, 1996, the Company
acquired all of the issued and outstanding shares of common
stock of Fire Zap, Inc. ("FireZap"), a Texas Corporation. The
acquisition resulted in FireZap becoming a wholly owned
subsidiary of the Company. Firezap will continue its business
of marketing a fire retarding foam as a fire fighting device
for industrial use.
The purchase price for the FireZap shares was (i) 450,000
shares of the Company's preferred stock, par value $1.00 per
share, convertible on a one-for-one basis into the Company's
common stock; and (ii) an additional payment of 450,000 of the
Company's preferred stock par value $1.00 per share,
convertible on a one-for-one basis into the Company's common
stock, provided that FireZap has total revenues for the 12
months ending June 1, 1997 of $900,000.
FireZap was incorporated in Texas in February 1996 and
will be accounted for on the purchase method of accounting for
the Company's financial statement purposes, and it will be
included in the Company's Form 10-K filings for the year ended
August 31, 1996.
(b) On October 15, 1996, effective October 1, 1996, the
Company acquired all of the issued and outstanding shares of
common stock of C.T. Lewis Industries, a Texas Corporation
("CTL"). CTL, a machine fabrication company, is engaged in
the business of fabrication of heavy metal, industrial
equipment processes, brakes, lathes, drill presses, vessels
and other metal products and equipment. CTL is a member of
the American Society of Mechanical Engineers. The acquisition
resulted in CTL becoming a wholly owned subsidiary of the
Company. CTL will continue its business as a subsidiary of
the Company.
The purchase price of the CTL shares was 300,000 shares
of the Company's preferred stock, par value $1.00 per share,
convertible on a one-for-one basis into the Company's common
stock.
ITEM 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
It is impractical to provide the financial statements of
the businesses acquired and described in Item 2 above at this
time, The Registrant intends to prepare the required
financial statements and file same under the cover of Form
8-K/A as soon as practical, but in no event later than
December 30, 1996.
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ITEM 7. Financial Statements and Exhibits. (cont.)
(b) Proforma Financial Information.
It is impractical to provide the pro forma financial
information required by this Item at this time. The
Registrant intends to prepare the required pro forma financial
statements and file same under the cover of Form 8-K/A as soon
as practical, but in no event later than December 30, 1996.
(c) Exhibits
Exhibit No. Document Description
----------- --------------------
2.1 Agreement of Purchase and Sale, dated as
of October 1, 1996, by and between
Environmental Plus, Incorporated and Carl
Lewis.*
2.2 Agreement of Purchase and Sale, dated as
of June 1, 1996, by and between
Environmental Plus, Incorporated, Wayne
Franklin, Thomas Garner and Marshall
Southerland.*
* filed herewith
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
ENVIRONMENTAL PLUS, INCORPORATED
By: /s/ George Davis
------------------------------
George Davis, Chairman, Secretary
and Treasurer
Date: October 30, 1996
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EXHIBIT INDEX
-------------
Exhibit No. Document Description
- ----------- --------------------
2.1 Agreement of Purchase and Sale, dated as of
October 1, 1996, by and between Environmental
Plus, Incorporated and Carl Lewis.
2.2 Agreement of Purchase and Sale, dated as of
June 1, 1996, by and between Environmental
Plus, Incorporated, Wayne Franklin, Thomas
Garner and Marshall Southerland.*
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Exhibit 2.1
AGREEMENT
OF PURCHASE AND SALE
BY AND BETWEEN
ENVIRONMENTAL PLUS, INCORPORATED,
AND
CARL LEWIS
EFFECTIVE
OCTOBER 1, 1996
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TABLE OF CONTENTS
Page
Section 1. PURCHASE AND SALE OF SHARES . . . . . . . . . . 3
1.1 Shares to be Conveyed. . . . . . . . . . . . . . . . 3
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . 3
1.3 Terms of the Buyer's Series A Convertible
Preferred Stock, $1.00 Par Value . . . . . . . . . . 4
1.4 Closing. . . . . . . . . . . . . . . . . . . . . . . 4
1.5 Inspection and Information . . . . . . . . . . . . . 4
Section 2. REPRESENTATIONS AND WARRANTIES OF
THE SELLING SHAREHOLDER . . . . . . . . . . . . 5
2.1 Organization and Corporate Power . . . . . . . . . . 5
2.2 Due Authorization; Effect of Transaction . . . . . . 5
2.3 Financial Statements . . . . . . . . . . . . . . . . 6
2.4 Employment Arrangements. . . . . . . . . . . . . . . 6
2.5 Ordinary Course of Business. . . . . . . . . . . . . 7
2.6 Litigation and Compliance with Laws. . . . . . . . . 8
2.7 Dividends and Distributions. . . . . . . . . . . . . 9
2.8 Extraordinary Events . . . . . . . . . . . . . . . . 9
2.9 Tax Returns. . . . . . . . . . . . . . . . . . . . . 10
2.10 Adverse Restrictions . . . . . . . . . . . . . . . . 10
2.11 Liabilities. . . . . . . . . . . . . . . . . . . . . 11
2.12 Material Information . . . . . . . . . . . . . . . . 11
2.13 Capitalization . . . . . . . . . . . . . . . . . . . 12
2.14 Certain Transactions . . . . . . . . . . . . . . . . 12
2.15 No Governmental Authorizations or Approvals
Required . . . . . . . . . . . . . . . . . . . . . . 12
2.16 Continuing Representations . . . . . . . . . . . . . 13
Section 3. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . 13
3.1 Organization and Corporate Power . . . . . . . . . . 13
3.2 Due Authorization; Effect of Transaction . . . . . . 13
3.3 Reservation and Status of Buyer's Common Stock . . . 13
3.4 Investment Representation. . . . . . . . . . . . . . 14
3.5 Continuing Representation. . . . . . . . . . . . . . 14
Section 4. DESTRUCTION OF ASSETS . . . . . . . . . . . . . 14
Section 5. COVENANTS . . . . . . . . . . . . . . . . . . . 14
Section 6. CONFIDENTIALITY . . . . . . . . . . . . . . . . 15
Section 7. EXPENSES. . . . . . . . . . . . . . . . . . . . 16
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Section 8. NATURE AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS: ENTIRE AGREEMENT. . . 16
Section 9. WAIVERS; AMENDMENTS; FURTHER AGREEMENTS . . . . 17
Section 10. ASSIGNMENT; SUCCESSORS AND ASSIGNS. . . . . . . 17
Section 11. OTHER OFFERS. . . . . . . . . . . . . . . . . . 18
Section 12. SEVERABILITY. . . . . . . . . . . . . . . . . . 18
Section 13. COUNTERPARTS. . . . . . . . . . . . . . . . . . 19
Section 14. SECTION AND OTHER HEADING . . . . . . . . . . . 19
Section 15. NOTICES . . . . . . . . . . . . . . . . . . . . 19
Section 16. GENDER. . . . . . . . . . . . . . . . . . . . . 20
Section 17. TEXAS LAW TO GOVERN . . . . . . . . . . . . . . 20
Section 18. TEXAS COURTS. . . . . . . . . . . . . . . . . . 20
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AGREEMENT made as of October 1, 1996, by and between
Environmental Plus, Inc. (hereinafter called "Buyer"), and Carl
Lewis an individual, (sometimes hereafter referred to as "Selling
Shareholder").
W I T N E S S E T H:
WHEREAS, the Selling Shareholder presently owns of record and
beneficially 10,000 shares of common stock, par value $.01 per
share (hereinafter the "Shares"), of C.T. Lewis Industries, a Texas
corporation, (hereinafter "CTL"), which Shares represent 100% of
CTL issued and outstanding shares of Common Stock; and
WHEREAS the parties hereto desire to enter into an agreement
providing that Selling Shareholder will sell and deliver to Buyer,
and providing that Buyer will acquire from Selling Shareholder, the
Shares;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Buyer and the Selling
Shareholder does hereby covenant and agree as follows:
Section 1. PURCHASE AND SALE OF SHARES.
1.1 Shares to be Conveyed. Subject to the terms,
provisions and conditions contained in this Agreement, and on the
basis of the representations and warranties herein set forth, at
the Closing (as defined in Section 1.5), the Selling Shareholder
agrees to sell and deliver to Buyer and Buyer agrees to purchase
from the Selling Shareholder the Shares.
1.2 Purchase Price. Selling Shareholder shall receive
as consideration for the Shares, the delivery of 300,000 shares of
EPI Series A Convertible Preferred Stock, $1.00 par value (the
"Preferred Stock"), issued by Buyer which shall have the
characteristics and rights as set forth in Section 1.3 herein.
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1.3 Terms of the Buyer's Series A Convertible Preferred
Stock, $1.00 Par Value. Each share of Preferred Stock will, at the
option of the Selling Shareholder, be convertible into one share of
Buyer's common stock. Buyer may, upon written thirty (30) day
notice delivered to Selling Shareholder prior to the time of
conversion of such Stock into Buyer's common stock, repurchase such
preferred stock for cash equal to two (2) times the par value of
such Preferred Stock. Shareholder may convert the Preferred Stock
into shares of common stock of Buyer at any time after the date of
issue. In the event Buyer delivers written notice to Selling
Shareholder of its intent to repurchase the Preferred Stock,
Selling Shareholder will have twenty (20) days to deliver written
notice to Buyer of their intent to convert the Preferred Stock into
Buyer's common stock.
1.4 Closing. The sale and delivery and the purchase and
acceptance of the Shares (the "Closing"), shall take place at the
office of Arter & Hadden, 1717 Main Street, Suite 4100, Dallas,
Texas 75201, at 11:00 o'clock a.m. on the Closing Date, which
shall be October 10, 1996 (or any other date, place or time prior
to October 10, 1996 agreed upon by the parties hereto) being herein
called the "Closing Date". At the Closing, Buyer shall deliver to
each Selling Shareholder 300,000 shares of Preferred Stock issued
in the name of each Selling Shareholder, against delivery by each
Selling Shareholder of a certificate or certificates duly endorsed
to Buyer representing the Shares.
1.5 Inspection and Information. Buyer may, through its
representatives, accountants and attorneys, make such investigation
of the business, properties and assets and of the financial and
legal condition of CTL as it may deem necessary or advisable and
Selling Shareholder agrees to make available to such persons such
of CTL books, tax returns, records and other data as may from time
to time be reasonably requested; provided,
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however, that such investigation shall be made only at reasonable
hours and so as not to interfere with CTL operations. Selling
Shareholder further agrees to furnish Buyer with such financial and
operating data and other information with respect to CTL business,
properties and assets and financial and legal condition as Buyer or
its representatives, accountants and attorneys shall from time to
time reasonably request.
Section 2. REPRESENTATIONS AND WARRANTIES OF
THE SELLING SHAREHOLDER.
The Selling Shareholder, represents, warrants, covenants and
agrees that:
2.1 Organization and Corporate Power. CTL is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and is duly qualified and in
good standing as a foreign corporation in each jurisdiction in
which it maintains assets or conducts business, with full power
and authority (corporate and other) to own, lease and operate its
properties and to carry on the business in which it is engaged.
From the date of this Agreement until the Closing, CTL will not
amend either its articles of incorporation or by-laws.
2.2 Due Authorization; Effect of Transaction. The
Shares to be sold to the Buyer are owned by Selling Shareholder
free and clear of any liens or encumbrances. Upon consummation of
the transactions contemplated hereby the Buyer will own the Shares
free and clear of all liens and encumbrances subject to certain
investment restrictions set forth in Section 3.4 hereof. No
provision of CTL certificate of incorporation or by-laws, or of any
agreement, indenture, instrument or understanding, or any judgment,
decree, rule or regulation, to which CTL or the Selling Shareholder
are a party or by which it or they are bound, has been or will be
violated by the execution and delivery by the Selling Shareholder
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of this Agreement or the performance or satisfaction of any
agreement or condition herein contained upon the Selling
Shareholder's part to be performed or satisfied, or the
consummation of all transactions contemplated hereby. The
execution and delivery of this Agreement by the Selling Shareholder
and the consummation of the transactions contemplated hereby do not
require the approval of CTL' Board of Directors or its
shareholders. This Agreement will upon execution and delivery be
a legal, valid and binding obligation of the Selling Shareholder,
enforceable in accordance with its terms.
2.3 Financial Statements. The Shareholder have
delivered to Buyer a balance sheet of CTL with related statements
of operations, stockholders' equity and changes in financial
position ("Financial Statements"). All of the Financial Statements
are true, correct and complete, have been prepared in accordance
with generally accepted accounting principles consistently followed
throughout the periods (except as set forth in such notes or
statements), and fairly present the financial condition of CTL and
the results of its operations as at the dates thereof or throughout
the periods covered thereby. The Financial Statements reflect or
provide for all claims against, debts and liabilities of CTL,
fixed, contingent or other, as at the dates thereof; and except as
set forth in the Financial Statements, there has not been any
change between the date of the most recent Financial Statements and
the date of this Agreement which has affected materially or
adversely the business or properties or condition, financial or
other, or results of operation of CTL, and no fact or condition
exists or, to the knowledge of the Selling Shareholder, is
contemplated or threatened, which might cause any such change at
any time in the future.
2.4 Employment Arrangements. CTL does not have any
obligation, contingent or otherwise, under any employment
agreement, collective bargaining or other
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labor agreement, any agreement containing severance or termination
pay arrangements, deferred compensation agreement, retainer or
consulting agreements, pension or retirement plan, bonus or profit-
sharing plan, stock option or purchase plan or other employee
contract.
2.5 Ordinary Course of Business. CTL, from September 1,
1996 to the date hereof, and until the Closing Date,
(a) has operated, and will continue to operate, its business
in the normal, usual and customary manner in the ordinary
and regular course of business;
(b) has not sold or otherwise disposed of, and will not sell
or otherwise dispose of or contract to sell or otherwise
dispose of, any of its properties or assets, other than
property sold or otherwise disposed of in the ordinary
course of business;
(c) except in each case in the ordinary course of business,
(i) has not amended or terminated and will not
amend or terminate any outstanding lease, contract or
agreement;
(ii) has not incurred and will not incur any
obligations or liabilities (fixed, contingent or other);
and
(iii) has not entered and will not enter into
any commitments in excess of $20,000 in the aggregate;
and
(d) has not made and will not make any additions to its
property or any purchases of machinery or equipment,
except for normal maintenance and replacements not in
excess of $20,000 in the aggregate;
(e) has not discharged or satisfied, and will not discharge
or satisfy, any lien or encumbrance or paid and will not
pay any obligation or liability (absolute or
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contingent) other than current liabilities or obligations
under contracts then existing or thereafter entered into
in the ordinary course of business, and commitments under
leases existing on that date or incurred since that date
in the ordinary course of business;
(f) has not mortgaged, pledged or subjected to, and will not
mortgage, pledge or subject to, a lien or any other
encumbrance any of its assets, tangible or intangible
except in each case in the ordinary course of business;
(g) has not sold or transferred, and will not sell or
transfer, any tangible asset or cancelled and will not
cancel any debts or claims except in each case in the
ordinary course of business;
(h) has not increased, and will not increase the number of
employees or compensation payable or to become payable to
any of its officers, employees, or agents except in the
ordinary course of business;
(i) has not suffered, and will not suffer, any material
damage, destruction or loss (whether or not covered by
insurance);
(j) has not waived, and will not waive, any rights of
substantial value;
(k) has not entered into, and will not enter into, any other
transactions which individually or in the aggregate are
material to CTL other than in the ordinary course of
business.
2.6 Litigation and Compliance with Laws. Neither CTL
nor the Selling Shareholder has been subject to, or engaged in, at
any time during the past five (5) years, any litigation or legal or
other actions, suits, arbitrations, proceedings or investigations,
at law or in equity or admiralty, or before any federal, state,
municipal or other governmental
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department, commission, board, agency or instrumentality, domestic
or foreign (including, without limitation, any voluntary or
involuntary proceedings under the Bankruptcy Code), in connection
with their own affairs or the business or affairs or properties or
assets of CTL which have not been fully disclosed to Buyer. CTL is
and at all times since its inception has been in compliance in all
material respects with all laws and governmental rules and
regulations, domestic or foreign, and all requirements of insurance
carriers, applicable to its business or affairs or properties or
assets. Neither CTL nor the Selling Shareholder is in default with
respect to any judgment, order, writ, injunction, decree, demand or
assessment issued by any court or of any federal, state, municipal
or other governmental agency, board, commission, bureau,
instrumentality or department, domestic or foreign, relating to any
aspect of CTL's business affairs.
2.7 Dividends and Distributions. From September 1, 1996
to the date hereof, CTL has not, and on or prior to the Closing
Date, CTL will not have, declared or paid any dividends or declared
or made any distribution whatsoever to its stockholders, either in
cash, stock or other property, through purchases or redemptions of
stock or otherwise.
2.8 Extraordinary Events. From June 1, 1996 to the date
hereof, neither the business nor properties nor condition,
financial or other, nor results of operations of CTL have been
materially and adversely affected in any way as the result of any
fire, explosion, accident, casualty, labor disturbance, requisition
or taking of property by any governmental body or agency, flood,
embargo, or Act of God or other public enemy, or cessation,
interruption or diminution of operations, whether or not covered by
insurance.
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2.9 Tax Returns. CTL has in accordance with applicable
law filed all federal, state, county and local income, sales, use,
occupation, excise, franchise and any other tax returns and all
real and personal property tax returns which are required to be
filed and the provision for taxes shown on the most recent balance
sheet referred to in Section 2.3 was sufficient to satisfy all
taxes of any kind of CTL, including interest and penalties in
respect thereof, whether disputed or not, and whether accrued,
contingent, due, absolute, deferred or other, for all periods ended
on or prior to the date of such balance sheet. CTL has paid all
taxes which have become due pursuant to such returns or otherwise
and has paid all installments of estimated taxes due. All taxes
and other assessments and levies which CTL is required by law to
withhold or to collect have been duly withheld and collected, and
have been paid over to the proper governmental authorities to the
extent due and payable. As of the date hereof no tax liabilities
have been assessed or proposed which remain unpaid, and CTL has not
signed any extension agreement with the Internal Revenue Service.
The Selling Shareholder are not aware of any basis upon which any
assessment for a material amount of additional federal income taxes
could be made against CTL. The information shown on the federal
income tax returns of CTL is true, accurate and complete and fairly
reflects the information purported to be shown.
2.10 Adverse Restrictions. CTL is not subject to any
charter, by-law, mortgage, lien, lease, agreement, instrument, law,
rule, regulation, order, judgment or decree, or any other
restriction of any kind or character, which now or at any time in
the future could affect materially and adversely the business or
properties or condition, financial or other, or results of
operations of CTL. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereunder are
not events which of
<PAGE>
themselves or with the giving of notice or the passage of time or
both, could constitute, on the part of either the Selling
Shareholder or CTL, a violation of or conflict with or result in
any breach of, or default under the terms, conditions or provisions
of, any judgment, law or regulation, or of CTL's certificate of
incorporation or bylaws, any agreement, indenture or instrument to
which either the Selling Shareholder or CTL is a party or by which
either is bound, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever on the
property or assets of CTL and no such event of itself or with the
giving of notice or the passage of time or both will result in the
acceleration of the due date of any obligation of CTL.
2.11 Liabilities. CTL does not at the date hereof, and
will not on the Closing Date, have any liabilities of any nature,
known or unknown, whether absolute, fixed, contingent or otherwise,
except as set forth in the most recent balance sheet referred to in
Section 2.3, other than liabilities subsequently incurred in the
ordinary course of business. CTL is not in breach or default or in
arrears in respect of the terms or conditions of any such
liabilities and no waiver or forbearance has been granted by any
holder of any such liability with respect to any such liability.
From the date hereof until Closing, Selling Shareholder shall
notify Buyer in writing, within five (5) days after the occurrence
of the event, of any loans against any lines of credit of CTL or
any other loans incurred by CTL.
2.12 Material Information. Neither this Agreement
(including the Financial Statements) nor any certificate or other
information or document furnished or to be furnished by the Selling
Shareholder to Buyer contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact
required to be stated herein or therein or necessary to make the
statements herein or therein not misleading.
<PAGE>
2.13 Capitalization. The capitalization of CTL as stated
in the Financial Statements, and all of the outstanding capital
stock of CTL is duly authorized and validly issued, fully paid and
nonassessable. The holders of CTL's Common Stock has no preemptive
or other stock acquisition rights. Between the date hereof and the
Closing, CTL will not issue or sell or purchase or agree to issue
or sell or purchase any Common Stock or any other security of CTL
(including, without limitation, any option, right or warrant to
purchase any Common Stock or other security) without the prior
written consent of Buyer. CTL does not have outstanding and has
not agreed to issue or sell any options, rights, warrants, calls or
other commitments (either in the form of convertible securities or
otherwise) pursuant to which the holder thereof has or will have
the right to purchase or otherwise acquire any common stock or any
other security of CTL. To the knowledge and belief of the Selling
Shareholder no person, firm, corporation or other entity, other
than the Selling Shareholder, owns, or controls with power to vote,
any shares of the Common Stock or any class of outstanding capital
stock of CTL.
2.14 Certain Transactions. Neither the Selling
Shareholder nor affiliate thereof is presently a party to any
transaction with CTL including, without limitation, any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from,
the Selling Shareholder or any corporation, partnership, trust or
other entity in which the Selling Shareholder or affiliate has an
equity interest, directly or indirectly, or is an officer,
director, trustee or partner, fully disclosed to Buyer.
2.15 No Governmental Authorizations or Approvals
Required. No consent, authorization or approval of, or filing with
any governmental agency, authority or other body or
<PAGE>
any third party will be required in connection with the execution
and delivery of this Agreement or the sale of the Shares by the
Selling Shareholder.
2.16 Continuing Representations. The representations and
warranties of the Selling Shareholder herein contained shall be
true and correct on and as of the Closing Date with the same force
and effect as if made on and as of that date.
Section 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents, warrants, covenants and agrees that:
3.1 Organization and Corporate Power. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and has full power and
authority (corporate and other) to execute and deliver and to carry
out the transactions contemplated by this Agreement.
3.2 Due Authorization; Effect of Transaction. No
provision of Buyer's certificate of incorporation or by-laws, or of
any agreement, instrument or understanding, or any judgment,
decree, rule or regulation, to which Buyer is a party or by which
it is bound, has been or will be violated by the execution by Buyer
of this Agreement or the performance or satisfaction of any
agreement or condition herein contained upon its part to be
performed or satisfied, and all requisite corporate and other
authorizations for such execution, delivery, performance and
satisfaction have been duly obtained. This Agreement will upon
execution and delivery be a legal, valid and binding obligation of
Buyer, enforceable in accordance with its terms.
3.3 Reservation and Status of Buyer's Common Stock. The
Buyer will, prior to the Closing Date, have authorized and reserved
for issuance sufficient shares of its common stock, $.001 par value
per share, to be issued pursuant to Sections 1.3 and 1.4 of
<PAGE>
this Agreement. Such shares, upon issuance, will be duly and
validly authorized and issued and outstanding, fully paid and
nonassessable.
3.4 Investment Representation. Buyer, at the date of
this Agreement, represents and warrants that, the Shares will be
acquired by Buyer for its own account for investment and not with
a view to or for sale in connection with any distribution thereof
or with any present intention of selling or distributing all or any
part thereof. Buyer further represents and warrants that none of
the Shares sold to it pursuant to this Agreement will be offered,
sold, assigned, transferred or otherwise disposed of except after
full compliance with all the applicable provisions of the
Securities Act of 1933, as amended, and the rules and regulations
of the Securities and Exchange Commission thereunder.
3.5 Continuing Representation. The representations and
warranties of Buyer herein contained shall be true and correct on
and as of the Closing Date with the same force and effect as if
made on and as of that date.
Section 4. DESTRUCTION OF ASSETS.
If, prior to the Closing Date any substantial part of the
properties and assets of CTL, taken as a whole, is destroyed or
damaged by fire or other casualty (whether or not such destruction
or damage is covered by insurance), then at the election of Buyer,
upon delivery of Buyer's notice to the Selling Shareholder within
five (5) business days of receipt of the Selling Shareholder's
notice of such occurrence, this Agreement and all obligations of
the parties hereunder may be terminated forthwith.
Section 5. COVENANTS.
The Selling Shareholder hereby agrees as follows:
<PAGE>
(a) Non-compete. During such time as Selling Shareholder is
holders of the securities of Buyer and/or during such time as
Selling Shareholder remains an employee of CTL, whichever is
longer, and for a period of six (6) months thereafter, the Selling
Shareholder will not contact, either directly or indirectly,
whether by telephone, correspondence or otherwise, whether for the
purposes of solicitation or competition any customers or clients of
Buyer or CTL for the purpose of soliciting, enticing, offering or
selling whether directly or indirectly any services or goods sold
or offered by Buyer or CTL.
(b) Conduct of CTL Business. Selling Shareholder and CTL
shall at all times conduct CTL's business under the name of CTL.
All CTL products and services shall bear the name CTL.
Section 6. CONFIDENTIALITY.
Whether or not the transactions contemplated hereby are
consummated, each of the parties hereto agrees to use its best
efforts to keep confidential any and all information and data with
respect to the other party which it has received as a result of any
investigation made in connection with this Agreement and which is
not otherwise available to the parties; provided, however, that
notwithstanding the foregoing each of the parties hereto shall be
free to disclose any such information or data (a) to the extent
required by applicable law and (b) during the course of or in
connection with any litigation, arbitration or other proceedings
based upon or in connection with the subject matter of this
Agreement, including, without limitation, the failure of the
transactions contemplated hereby to be consummated. All press
releases and any documents to be filed with any government agencies
in connection with the transactions contemplated by this Agreement
shall be
<PAGE>
approved in form and content by counsel for Buyer and Selling
Shareholder before being released to the press or filed with any
government agencies.
Section 7. EXPENSES.
The Selling Shareholder and Buyer shall each pay its own
expenses incident to the preparation and carrying out of this
Agreement, including all fees and expenses of counsel (whether or
not referred to by name herein) and accountants for all activities
of such counsel and accountants undertaken pursuant to the subject
matter of this Agreement, whether or not the transactions
contemplated hereby are consummated.
Section 8. NATURE AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS: ENTIRE AGREEMENT.
Neither the Selling Shareholder nor Buyer shall be liable or
bound in any manner by expressed or implied representations,
warranties, covenants, agreements or indemnifications pertaining to
the subject matter of this Agreement, or any other matter
whatsoever, made or furnished by any agent, employee, servant, or
other person representing or purporting to represent the Selling
Shareholder or Buyer unless such representations, warranties,
covenants, agreements or indemnifications are expressly and
specifically set forth herein or in any certificate or other
document delivered pursuant to the provisions of this Agreement.
Buyer and the Selling Shareholder agree that this Agreement,
including the Disclosure Documents, constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior understandings and agreements with respect
thereto. The representations, warranties, covenants, agreements and
indemnifications provided for in this Agreement shall survive the
Closing as hereinafter set forth and be unaffected by any
investigation made by or on behalf of any party hereto.
<PAGE>
Section 9. WAIVERS; AMENDMENTS; FURTHER AGREEMENTS.
Any waiver of any term or condition or of the breach of any
covenant, representation or warranty of this Agreement, in any one
instance, shall not operate as or be deemed to be or construed as a
further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term,
condition, covenant, representation or warranty, nor shall any
failure at any time or times to enforce or require performance of
any provision hereof operate as a waiver of or affect in any manner
such party's right at a later time to enforce or require performance
of such provision or of any other provision hereof; provided,
however, that no such written waiver, unless it, by its own terms,
explicitly provides to the contrary, shall be construed to effect a
continuing waiver of the provision being waived and no such waiver
in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom
such waiver is claimed in all other instances or for all other
purposes to require full compliance with such provision.
This Agreement may not be amended, nor shall any waiver,
change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against
whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
Each of the parties hereto agrees to execute all such further
instruments and documents and to take all such further actions as
any other party may reasonably require in order to effectuate the
terms and purposes of this Agreement.
Section 10. ASSIGNMENT; SUCCESSORS AND ASSIGNS.
<PAGE>
This Agreement shall not be assignable by either party without
the written consent of the other except that Buyer shall have the
right to designate a subsidiary to receive the Shares and to assume
Buyer's obligations hereunder. However, in such event, Buyer shall
not be released from its obligations under this Agreement. This
Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted
assigns.
Section 11. OTHER OFFERS.
From the date of this Agreement until Closing, Selling
Shareholder warrants, represents and agrees that neither he nor any
agent on his behalf will offer to sell any of the Shares or will
solicit any offer to buy the Shares or will approach or negotiate in
respect thereof with, any person or entity, other than Buyer. In
the event that the Selling Shareholder and/or CTL receives prior to
Closing an offer from a third party either orally or in writing to
acquire from the Selling Shareholder all of the CTL Shares which he
owns or an offer to acquire all the outstanding Shares of Common
Stock of CTL or all of CTL's assets and properties, whether by
merger or otherwise, the Selling Shareholder shall within twenty-
four (24) hours of the receipt of such offer advise Buyer in writing
of the offer.
Section 12. SEVERABILITY.
If any provision of this Agreement shall be held or deemed to
be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions,
or in all jurisdictions or in all cases, because of the conflicting
of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstances shall not have
the effect of rendering the provision or provisions in question,
invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or
<PAGE>
circumstance or of rendering any other provision or provisions
herein contained invalid, inoperative or unenforceable to the extent
that such other provisions are not themselves actually in conflict
with such constitution, statute or rule of public policy, but this
Agreement shall be reformed and construed in any such jurisdiction
or case as if such invalid, inoperative or unenforceable provision
had never been contained and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent
permitted in such jurisdiction or in such case.
Section 13. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall constitute one and the same instrument, and in
pleading or proving any provision of this Agreement it shall not be
necessary to produce more than one such counterpart.
Section 14. SECTION AND OTHER HEADING.
The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 15. NOTICES.
All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if delivered or mailed, postage prepaid, certified mail,
return receipt requested:
(a) TO THE BUYER: If to the Buyer, to:
<PAGE>
J.D. Davenport
President
Environmental Plus, Incorporated
2995 LBJ Freeway
Suite 200
Dallas, Texas 75234
(b) TO SELLING Shareholder: If to Selling Shareholder, to:
Carl Lewis
P.O. Box 2565
Longview, Texas 75606
and/or to such other person(s) and address(es) as either party shall
have specified in writing to the other.
Section 16. GENDER.
Whenever used herein, the singular number shall include the
plural, the plural shall include the singular, and the use of any
gender shall include all genders.
Section 17. TEXAS LAW TO GOVERN.
This Agreement shall be governed by and construed and enforced
in accordance with the law (other than the law governing conflict of
law questions) of the State of Texas.
Section 18. TEXAS COURTS.
Any action to enforce, arising out of, or relating in any way
to, any of the provisions of this Agreement may be brought and
prosecuted in such court or courts located within the State of Texas
as provided by law; and the parties consent to the jurisdiction of
said court or courts located within the State of Texas and to
service of process by registered mail, return receipt requested, or
by any other manner provided by law.
<PAGE>
IN WITNESS WHEREOF, the Selling Shareholder and Buyer have
caused this Agreement to be executed on this 15th day of
October, 1996, effective the 1st day of October, 1996.
Attest: ENVIRONMENTAL PLUS, INC.
/s/ George Davis By: /s/ J.D. Davenport
- -------------------------- --------------------------------
SELLING SHAREHOLDER:
By /s/ Carl Lewis
--------------------------------
Carl Lewis
<PAGE>
Exhibit 2.2
AGREEMENT
OF PURCHASE AND SALE
BY AND BETWEEN
ENVIRONMENTAL PLUS, INCORPORATED,
WAYNE FRANKLIN,
THOMAS GARNER
AND
MARSHALL SOUTHERLAND
EFFECTIVE
JUNE 1, 1996
<PAGE>
TABLE OF CONTENTS
Page
Section 1. PURCHASE AND SALE OF SHARES . . . . . . . . . . .3
1.1 Shares to be Conveyed. . . . . . . . . . . . . . . . .3
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . .4
1.3 Terms of the Buyer's Series A Convertible Preferred
Stock,
$1.00 Par Value. . . . . . . . . . . . . . . . . . . .4
1.4 Additional Buyer Shares to Selling Shareholders. . . .4
1.5 Closing. . . . . . . . . . . . . . . . . . . . . . . .5
1.6 Inspection and Information . . . . . . . . . . . . . .5
Section 2. REPRESENTATIONS AND WARRANTIES
OF THE SELLING SHAREHOLDERS. . . . . . . . . . . . . .5
2.1 Organization and Corporate Power . . . . . . . . . . .5
2.2 Due Authorization; Effect of Transaction . . . . . . .6
2.3 Financial Statements . . . . . . . . . . . . . . . . .7
2.4 Employment Arrangements. . . . . . . . . . . . . . . .7
2.5 Contracts and Arrangements . . . . . . . . . . . . . .7
2.7 Litigation and Compliance with Laws. . . . . . . . . 10
2.8 Dividends and Distributions. . . . . . . . . . . . . 10
2.9 Extraordinary Events . . . . . . . . . . . . . . . . 11
2.10 Tax Returns. . . . . . . . . . . . . . . . . . . . . 11
2.11 Adverse Restrictions . . . . . . . . . . . . . . . . 12
2.12 Liabilities. . . . . . . . . . . . . . . . . . . . . 12
2.13 Material Information . . . . . . . . . . . . . . . . 13
2.14 Capitalization . . . . . . . . . . . . . . . . . . . 13
2.15 Certain Transactions . . . . . . . . . . . . . . . . 13
2.16 No Governmental Authorizations or Approvals Required 14
2.17 Continuing Representations . . . . . . . . . . . . . 14
Section 3. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . 14
3.1 Organization and Corporate Power . . . . . . . . . . 14
3.2 Due Authorization; Effect of Transaction . . . . . . 14
3.3 Reservation and Status of Buyer's Common Stock . . . 15
3.4 Investment Representation. . . . . . . . . . . . . . 15
3.5 Continuing Representation. . . . . . . . . . . . . . 15
Section 4. DESTRUCTION OF ASSETS . . . . . . . . . . . . . 15
Section 5. COVENANTS . . . . . . . . . . . . . . . . . . . 16
Section 6. CONFIDENTIALITY . . . . . . . . . . . . . . . . 16
Section 7. EXPENSES. . . . . . . . . . . . . . . . . . . . 17
<PAGE>
Section 8. NATURE AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS: ENTIRE AGREEMENT. . . 17
Section 9. WAIVERS; AMENDMENTS; FURTHER AGREEMENTS . . . . 18
Section 10. ASSIGNMENT; SUCCESSORS AND ASSIGNS. . . . . . . 19
Section 11. OTHER OFFERS. . . . . . . . . . . . . . . . . . 19
Section 12. SEVERABILITY. . . . . . . . . . . . . . . . . . 19
Section 13. COUNTERPARTS. . . . . . . . . . . . . . . . . . 20
Section 14. SECTION AND OTHER HEADING . . . . . . . . . . . 20
Section 15. NOTICES . . . . . . . . . . . . . . . . . . . . 20
Section 16. GENDER. . . . . . . . . . . . . . . . . . . . . 21
Section 17. TEXAS LAW TO GOVERN . . . . . . . . . . . . . . 21
Section 18. TEXAS COURTS. . . . . . . . . . . . . . . . . . 21
<PAGE>
AGREEMENT made as of June 1, 1996, by and between
Environmental Plus, Inc. (formerly known as Kinlaw Energy Partners
Corporation) (hereinafter called "Buyer"), Wayne Franklin, an
individual, ("Franklin"), Thomas Garner, an individual ("Garner")
and Marshall Southerland, an individual, ("Southerland"),
(collectively sometimes hereafter referred to as "Selling
Shareholders").
W I T N E S S E T H:
WHEREAS, the Selling Shareholders presently own of record and
beneficially 10,000 shares of common stock, par value $.01 per
share (hereinafter the "Shares"), of FIRE ZAP, INC., a Texas
corporation, (hereinafter "FZI"), which Shares represent
approximately 100% of FZI's issued and outstanding shares of Common
Stock; and
WHEREAS the parties hereto desire to enter into an agreement
providing that Selling Shareholders will sell and deliver to Buyer,
and providing that Buyer will acquire from Selling Shareholders,
the Shares;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Buyer and the Selling
Shareholders do hereby covenant and agree as follows:
Section 1. PURCHASE AND SALE OF SHARES.
1.1 Shares to be Conveyed. Subject to the terms,
provisions and conditions contained in this Agreement, and on the
basis of the representations and warranties herein set forth, at
the Closing (as defined in Section 1.5), the Selling Shareholders
agree to sell and deliver to Buyer and Buyer agrees to purchase
from the Selling Shareholders the Shares.
1.2 Purchase Price. Franklin is the record and
beneficial owner of 3,333 of the Shares, Garner is the record and
beneficial owner of 3,334 of the Shares, and Southerland
<PAGE>
is the record and beneficial owner of 3,333 of the Shares. Each
Selling Shareholder shall receive as consideration for the Shares
he owns the delivery of 150,000 shares of EPI Series A Convertible
Preferred Stock, $1.00 par value (the "Preferred Stock"), issued by
Buyer which shall have the characteristics and rights as set forth
in Section 1.3 herein; the agreement of Buyer to issue up to an
aggregate additional 450,000 shares of Buyer's Series A Convertible
Preferred Stock, $1.00 par value, in accordance with the provisions
set forth in Section 1.4 herein.
1.3 Terms of the Buyer's Series A Convertible Preferred
Stock, $1.00 Par Value. Each share of Preferred Stock will, at the
option of the Selling Shareholders, be convertible into one share
of Buyer's common stock. Buyer may, upon written thirty (30) day
notice delivered to Selling Shareholders prior to the time of
conversion of such Stock into Buyer's common stock, repurchase such
preferred stock for cash equal to two (2) times the par value of
such Preferred Stock. Shareholders may convert the Preferred Stock
into shares of common stock of Buyer at any time after the date of
issue. In the event Buyer delivers written notice to Selling
Shareholders of its intent to repurchase the Preferred Stock,
Selling Shareholders will have twenty (20) days to deliver written
notice to Buyer of their intent to convert the Preferred Stock into
Buyer's common stock.
1.4 Additional Buyer Shares to Selling Shareholders. If
the total net revenues for the twelve months ending June 1, 1997
from sale of FZI products and services exceeds $900,000, Buyer
shall issue and deliver to the Selling Shareholders an additional
450,000 shares of Buyer's Preferred Stock.
1.5 Closing. The sale and delivery and the purchase and
acceptance of the Shares (the "Closing"), shall take place at the
office of Hill, Held & Metzger, L.L.P., 3878 Oak
<PAGE>
Lawn Avenue, Dallas, Texas 75219, at 11:00 o'clock a.m. on the
Closing Date, which shall be June 30, 1996 (or any other date,
place or time prior to June 30, 1996 agreed upon by the parties
hereto) being herein called the "Closing Date". At the Closing,
Buyer shall deliver to each Selling Shareholder 150,000 shares of
Preferred Stock issued in the name of each Selling Shareholder,
against delivery by each Selling Shareholder of a certificate or
certificates duly endorsed to Buyer representing the Shares.
1.6 Inspection and Information. Buyer may, through its
representatives, accountants and attorneys, make such investigation
of the business, properties and assets and of the financial and
legal condition of FZI as it may deem necessary or advisable and
Selling Shareholders agree to make available to such persons such
of FZI's books, tax returns, records and other data as may from
time to time be reasonably requested; provided, however, that such
investigation shall be made only at reasonable hours and so as not
to interfere with FZI's operations. Selling Shareholders further
agree to furnish Buyer with such financial and operating data and
other information with respect to FZI's business, properties and
assets and financial and legal condition as Buyer or its
representatives, accountants and attorneys shall from time to time
reasonably request.
Section 2. REPRESENTATIONS AND WARRANTIES OF
THE SELLING SHAREHOLDERS.
The Selling Shareholders, jointly and severally, represent,
warrant, covenant and agree that:
2.1 Organization and Corporate Power. FZI is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and is duly qualified and in
good standing as a foreign corporation in each jurisdiction in
which it maintains assets
<PAGE>
or conducts business, with full power and authority (corporate and
other) to own, lease and operate its properties and to carry on the
business in which it is engaged. From the date of this Agreement
until the Closing, FZI will not amend either its articles of
incorporation or by-laws.
2.2 Due Authorization; Effect of Transaction. The
Shares to be sold to the Buyer are owned by Selling Shareholders
free and clear of any liens or encumbrances. Upon consummation of
the transactions contemplated hereby the Buyer will own the Shares
free and clear of all liens and encumbrances subject to certain
investment restrictions set forth in Section 3.4 hereof. No
provision of FZI's certificate of incorporation or by-laws, or of
any agreement, indenture, instrument or understanding, or any
judgment, decree, rule or regulation, to which FZI or the Selling
Shareholders are a party or by which it or they are bound, has been
or will be violated by the execution and delivery by the Selling
Shareholders of this Agreement or the performance or satisfaction
of any agreement or condition herein contained upon the Selling
Shareholders' part to be performed or satisfied, or the
consummation of all transactions contemplated hereby. The
execution and delivery of this Agreement by the Selling
Shareholders and the consummation of the transactions contemplated
hereby do not require the approval of FZI's Board of Directors or
its shareholders. This Agreement will upon execution and delivery
be a legal, valid and binding obligation of the Selling
Shareholders, enforceable in accordance with its terms.
2.3 Financial Statements. The Shareholders have
delivered to Buyer a balance sheet of FZI as at Section 2.4, with
related statements of operations, stockholders' equity and changes
in financial position ("Financial Statements").
<PAGE>
All of the Financial Statements are true, correct and
complete, have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods
(except as set forth in such notes or statements), and fairly
present the financial condition of FZI and the results of its
operations as at the dates thereof or throughout the periods
covered thereby. The Financial Statements reflect or provide for
all claims against, debts and liabilities of FZI, fixed, contingent
or other, as at the dates thereof; and except as set forth in the
Financial Statements, there has not been any change between the
date of the most recent Financial Statements and the date of this
Agreement which has affected materially or adversely the business
or properties or condition, financial or other, or results of
operation of FZI, and no fact or condition exists or, to the
knowledge of the Selling Shareholders, is contemplated or
threatened, which might cause any such change at any time in the
future.
2.4 Employment Arrangements. Other than the Management
Agreement dated February 19, 1996 between Wayne Franklin, Tom
Garner and Marshall Southerland, FZI does not have any obligation,
contingent or otherwise, under any employment agreement, collective
bargaining or other labor agreement, any agreement containing
severance or termination pay arrangements, deferred compensation
agreement, retainer or consulting agreements, pension or retirement
plan, bonus or profit-sharing plan, stock option or purchase plan
or other employee contract.
2.5 Contracts and Arrangements. FZI does not have any
contract, agreement or arrangement, written or otherwise,
including, without limitation, any commitment or obligation,
contingent or otherwise, under any contract, agreement or
arrangement (i) for the purchase or sale of supplies, services or
other items in excess of $0.0 in the aggregate, (ii) for the
purchase sale or lease of any equipment or machinery in excess of
$0.0 in the aggregate, (iii)
<PAGE>
for or with respect to any franchise or license arrangement, or
(iv) for the performance of service for others in excess of $0.0 in
the aggregate. From the date hereof until the Closing Date, FZI
will not amend or terminate or will not enter into any such
contract, agreement or arrangement other than in the ordinary
course of business. FZI has performed all obligations required to
be performed under any contract, agreement or arrangement and is
not in breach or default or in arrears in any material respect or
in any other respect which would permit the other party to cancel
such contract or arrangement under the terms thereof.
2.6 Ordinary Course of Business. FZI, from June 1, 1996 to
the date hereof, and until the Closing Date,
(a) has operated, and will continue to operate, its business
in the normal, usual and customary manner in the ordinary
and regular course of business;
(b) has not sold or otherwise disposed of, and will not sell
or otherwise dispose of or contract to sell or otherwise
dispose of, any of its properties or assets, other than
property sold or otherwise disposed of in the ordinary
course of business;
(c) except in each case in the ordinary course of business,
(i) has not amended or terminated and will not
amend or terminate any outstanding lease, contract or
agreement;
(ii) has not incurred and will not incur any
obligations or liabilities (fixed, contingent or other);
and
(iii) has not entered and will not enter into
any commitments in excess of $0.0 in the aggregate; and
<PAGE>
(d) has not made and will not make any additions to its
property or any purchases of machinery or equipment,
except for normal maintenance and replacements not in
excess of $0.0 in the aggregate;
(e) has not discharged or satisfied, and will not discharge
or satisfy, any lien or encumbrance or paid and will not
pay any obligation or liability (absolute or contingent)
other than current liabilities or obligations under
contracts then existing or thereafter entered into in the
ordinary course of business, and commitments under leases
existing on that date or incurred since that date in the
ordinary course of business;
(f) has not mortgaged, pledged or subjected to, and will not
mortgage, pledge or subject to, a lien or any other
encumbrance any of its assets, tangible or intangible
except in each case in the ordinary course of business;
(g) has not sold or transferred, and will not sell or
transfer, any tangible asset or cancelled and will not
cancel any debts or claims except in each case in the
ordinary course of business;
(h) has not increased, and will not increase the number of
employees or compensation payable or to become payable to
any of its officers, employees, or agents except in the
ordinary course of business;
(i) has not suffered, and will not suffer, any material
damage, destruction or loss (whether or not covered by
insurance);
(j) has not waived, and will not waive, any rights of
substantial value;
<PAGE>
(k) has not entered into, and will not enter into, any other
transactions which individually or in the aggregate are
material to FZI other than in the ordinary course of
business.
2.7 Litigation and Compliance with Laws. Neither FZI
nor any one of the Selling Shareholders has been subject to, or
engaged in, at any time during the past five (5) years, any
litigation or legal or other actions, suits, arbitrations,
proceedings or investigations, at law or in equity or admiralty, or
before any federal, state, municipal or other governmental
department, commission, board, agency or instrumentality, domestic
or foreign (including, without limitation, any voluntary or
involuntary proceedings under the Bankruptcy Code), in connection
with their own affairs or the business or affairs or properties or
assets of FZI. FZI is and at all times since its inception has
been in compliance in all material respects with all laws and
governmental rules and regulations, domestic or foreign, and all
requirements of insurance carriers, applicable to its business or
affairs or properties or assets. Neither FZI nor the Selling
Shareholders are in default with respect to any judgment, order,
writ, injunction, decree, demand or assessment issued by any court
or of any federal, state, municipal or other governmental agency,
board, commission, bureau, instrumentality or department, domestic
or foreign, relating to any aspect of FZI's business affairs.
2.8 Dividends and Distributions. From June 1, 1996 to
the date hereof, FZI has not, and on or prior to the Closing Date,
FZI will not have, declared or paid any dividends or declared or
made any distribution whatsoever to its stockholders, either in
cash, stock or other property, through purchases or redemptions of
stock or otherwise.
2.9 Extraordinary Events. From June 1, 1996 to the date
hereof, neither the business nor properties nor condition,
financial or other, nor results of operations of FZI have
<PAGE>
been materially and adversely affected in any way as the result of
any fire, explosion, accident, casualty, labor disturbance,
requisition or taking of property by any governmental body or
agency, flood, embargo, or Act of God or other public enemy, or
cessation, interruption or diminution of operations, whether or not
covered by insurance.
2.10 Tax Returns. FZI has in accordance with applicable
law filed all federal, state, county and local income, sales, use,
occupation, excise, franchise and any other tax returns and all
real and personal property tax returns which are required to be
filed and the provision for taxes shown on the most recent balance
sheet referred to in Section 2.3 was sufficient to satisfy all
taxes of any kind of FZI, including interest and penalties in
respect thereof, whether disputed or not, and whether accrued,
contingent, due, absolute, deferred or other, for all periods ended
on or prior to the date of such balance sheet. FZI has paid all
taxes which have become due pursuant to such returns or otherwise
and has paid all installments of estimated taxes due. All taxes
and other assessments and levies which FZI is required by law to
withhold or to collect have been duly withheld and collected, and
have been paid over to the proper governmental authorities to the
extent due and payable. As of the date hereof no tax liabilities
have been assessed or proposed which remain unpaid, and FZI has not
signed any extension agreement with the Internal Revenue Service.
The Selling Shareholders are not aware of any basis upon which any
assessment for a material amount of additional federal income taxes
could be made against FZI. The information shown on the federal
income tax returns of FZI is true, accurate and complete and fairly
reflects the information purported to be shown.
2.11 Adverse Restrictions. FZI is not subject to any
charter, by-law, mortgage, lien, lease, agreement, instrument, law,
rule, regulation, order, judgment or decree, or any other
restriction of any kind or character, which now or at any time in
the future could affect
<PAGE>
materially and adversely the business or properties or condition,
financial or other, or results of operations of FZI. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereunder are not events which of
themselves or with the giving of notice or the passage of time or
both, could constitute, on the part of either the Selling
Shareholders or FZI, a violation of or conflict with or result in
any breach of, or default under the terms, conditions or provisions
of, any judgment, law or regulation, or of FZI's certificate of
incorporation or bylaws, any agreement, indenture or instrument to
which either the Selling Shareholders or FZI is a party or by which
either is bound, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever on the
property or assets of FZI and no such event of itself or with the
giving of notice or the passage of time or both will result in the
acceleration of the due date of any obligation of FZI.
2.12 Liabilities. FZI does not at the date hereof, and
will not on the Closing Date, have any liabilities of any nature,
known or unknown, whether absolute, fixed, contingent or otherwise,
except as set forth in the most recent balance sheet referred to in
Section 2.3, other than liabilities subsequently incurred in the
ordinary course of business. FZI is not in breach or default or in
arrears in respect of the terms or conditions of any such
liabilities and no waiver or forbearance has been granted by any
holder of any such liability with respect to any such liability.
From the date hereof until Closing, Selling Shareholders shall
notify Buyer in writing, within five (5) days after the occurrence
of the event, of any loans against any lines of credit of FZI or
any other loans incurred by FZI.
2.13 Material Information. Neither this Agreement
(including the Financial Statements) nor any certificate or other
information or document furnished or to be furnished by the Selling
Shareholders to Buyer contains or will contain any untrue statement
of a material
<PAGE>
fact or omits or will omit to state a material fact required to be
stated herein or therein or necessary to make the statements herein
or therein not misleading.
2.14 Capitalization. The capitalization of FZI is
$1,000, and all of the outstanding capital stock of FZI is duly
authorized and validly issued, fully paid and nonassessable. The
holders of FZI's Common Stock have no preemptive or other stock
acquisition rights. Between the date hereof and the Closing, FZI
will not issue or sell or purchase or agree to issue or sell or
purchase any Common Stock or any other security of FZI (including,
without limitation, any option, right or warrant to purchase any
Common Stock or other security) without the prior written consent
of Buyer. FZI does not have outstanding and has not agreed to
issue or sell any options, rights, warrants, calls or other
commitments (either in the form of convertible securities or
otherwise) pursuant to which the holder thereof has or will have
the right to purchase or otherwise acquire any common stock or any
other security of FZI. To the knowledge and belief of the Selling
Shareholders no person, firm, corporation or other entity, other
than the Selling Shareholders, owns, or controls with power to
vote, any shares of the Common Stock or any class of outstanding
capital stock of FZI.
2.15 Certain Transactions. Neither the Selling
Shareholders nor affiliate thereof is presently a party to any
transaction with FZI including, without limitation, any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from,
any one of the Selling Shareholders or any corporation,
partnership, trust or other entity in which any one of the Selling
Shareholders or affiliate has an equity interest, directly or
indirectly, or is an officer, director, trustee or partner.
<PAGE>
2.16 No Governmental Authorizations or Approvals
Required. No consent, authorization or approval of, or filing with
any governmental agency, authority or other body or any third party
will be required in connection with the execution and delivery of
this Agreement or the sale of the Shares by the Selling
Shareholders.
2.17 Continuing Representations. The representations and
warranties of the Selling Shareholders herein contained shall be
true and correct on and as of the Closing Date with the same force
and effect as if made on and as of that date.
Section 3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents, warrants, covenants and agrees that:
3.1 Organization and Corporate Power. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas and has full power and
authority (corporate and other) to execute and deliver and to carry
out the transactions contemplated by this Agreement.
3.2 Due Authorization; Effect of Transaction. No
provision of Buyer's certificate of incorporation or by-laws, or of
any agreement, instrument or understanding, or any judgment,
decree, rule or regulation, to which Buyer is a party or by which
it is bound, has been or will be violated by the execution by Buyer
of this Agreement or the performance or satisfaction of any
agreement or condition herein contained upon its part to be
performed or satisfied, and all requisite corporate and other
authorizations for such execution, delivery, performance and
satisfaction have been duly obtained. This Agreement will upon
execution and delivery be a legal, valid and binding obligation of
Buyer, enforceable in accordance with its terms.
<PAGE>
3.3 Reservation and Status of Buyer's Common Stock. The
Buyer will, prior to the Closing Date, have authorized and reserved
for issuance sufficient shares of its common stock, $.001 par value
per share, to be issued pursuant to Sections 1.3 and 1.4 of this
Agreement. Such shares, upon issuance, will be duly and validly
authorized and issued and outstanding, fully paid and
nonassessable.
3.4 Investment Representation. Buyer, at the date of
this Agreement, represents and warrants that, the Shares will be
acquired by Buyer for its own account for investment and not with
a view to or for sale in connection with any distribution thereof
or with any present intention of selling or distributing all or any
part thereof. Buyer further represents and warrants that none of
the Shares sold to it pursuant to this Agreement will be offered,
sold, assigned, transferred or otherwise disposed of except after
full compliance with all the applicable provisions of the
Securities Act of 1933, as amended, and the rules and regulations
of the Securities and Exchange Commission thereunder.
3.5 Continuing Representation. The representations and
warranties of Buyer herein contained shall be true and correct on
and as of the Closing Date with the same force and effect as if
made on and as of that date.
Section 4. DESTRUCTION OF ASSETS.
If, prior to the Closing Date any substantial part of the
properties and assets of FZI, taken as a whole, is destroyed or
damaged by fire or other casualty (whether or not such destruction
or damage is covered by insurance), then at the election of Buyer,
upon delivery of Buyer's notice to the Selling Shareholders within
five (5) business days of receipt of the Selling Shareholder's
notice of such occurrence, this Agreement and all obligations of
the parties hereunder may be terminated forthwith.
<PAGE>
Section 5. COVENANTS.
The Selling Shareholders hereby agree as follows:
(a) Non-compete. During such time as Selling Shareholders
are holders of the securities of Buyer and/or during such time as
Selling Shareholders remain as employees of FZI, whichever is
longer, and for a period of six (6) months thereafter, the Selling
Shareholders will not contact, either directly or indirectly,
whether by telephone, correspondence or otherwise, whether for the
purposes of solicitation or competition any customers or clients of
Buyer or FZI for the purpose of soliciting, enticing, offering or
selling whether directly or indirectly any services or goods sold
or offered by Buyer or FZI.
(b) Conduct of FZI Business. Selling Shareholder and FZI
shall at all times conduct FZI's business under the name of FZI.
All FZI products and services shall bear the name FZI.
Section 6. CONFIDENTIALITY.
Whether or not the transactions contemplated hereby are
consummated, each of the parties hereto agrees to use its best
efforts to keep confidential any and all information and data with
respect to the other party which it has received as a result of any
investigation made in connection with this Agreement and which is
not otherwise available to the parties; provided, however, that
notwithstanding the foregoing each of the parties hereto shall be
free to disclose any such information or data (a) to the extent
required by applicable law and (b) during the course of or in
connection with any litigation, arbitration or other proceedings
based upon or in connection with the subject matter of this
Agreement, including, without limitation, the failure of the
transactions contemplated hereby to be consummated. All press
releases and any documents to be filed with any government agencies
in connection with the transactions
<PAGE>
contemplated by this Agreement shall be approved in form and
content by counsel for Buyer and Selling Shareholders before being
released to the press or filed with any government agencies.
Section 7. EXPENSES.
The Selling Shareholders and Buyer shall each pay its own
expenses incident to the preparation and carrying out of this
Agreement, including all fees and expenses of counsel (whether or
not referred to by name herein) and accountants for all activities
of such counsel and accountants undertaken pursuant to the subject
matter of this Agreement, whether or not the transactions
contemplated hereby are consummated.
Section 8. NATURE AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS: ENTIRE AGREEMENT.
Neither the Selling Shareholders nor Buyer shall be liable or
bound in any manner by expressed or implied representations,
warranties, covenants, agreements or indemnifications pertaining to
the subject matter of this Agreement, or any other matter
whatsoever, made or furnished by any agent, employee, servant, or
other person representing or purporting to represent the Selling
Shareholders or Buyer unless such representations, warranties,
covenants, agreements or indemnifications are expressly and
specifically set forth herein or in any certificate or other
document delivered pursuant to the provisions of this Agreement.
Buyer and the Selling Shareholders agree that this Agreement,
including the Disclosure Documents, constitutes the entire
agreement
between the parties with respect to the subject matter hereof and
supersedes all prior understandings and agreements with respect
thereto. The representations, warranties, covenants, agreements
and
indemnifications provided for in this Agreement shall survive the
Closing as hereinafter set forth and be unaffected by any
investigation made by or on behalf of any party hereto.
<PAGE>
Section 9. WAIVERS; AMENDMENTS; FURTHER AGREEMENTS.
Any waiver of any term or condition or of the breach of any
covenant, representation or warranty of this Agreement, in any one
instance, shall not operate as or be deemed to be or construed as
a
further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term,
condition, covenant, representation or warranty, nor shall any
failure at any time or times to enforce or require performance of
any provision hereof operate as a waiver of or affect in any manner
such party's right at a later time to enforce or require
performance
of such provision or of any other provision hereof; provided,
however, that no such written waiver, unless it, by its own terms,
explicitly provides to the contrary, shall be construed to effect
a
continuing waiver of the provision being waived and no such waiver
in any instance shall constitute a waiver in any other instance or
for any other purpose or impair the right of the party against whom
such waiver is claimed in all other instances or for all other
purposes to require full compliance with such provision.
This Agreement may not be amended, nor shall any waiver,
change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against
whom enforcement of any amendment, waiver, change, modification,
consent or discharge is sought.
Each of the parties hereto agrees to execute all such further
instruments and documents and to take all such further actions as
any other party may reasonably require in order to effectuate the
terms and purposes of this Agreement.
Section 10. ASSIGNMENT; SUCCESSORS AND ASSIGNS.
This Agreement shall not be assignable by either party without
the written consent of the other except that Buyer shall have the
right to designate a subsidiary to receive the Shares and to
<PAGE>
assume Buyer's obligations hereunder. However, in such event,
Buyer
shall not be released from its obligations under this Agreement.
This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted
assigns.
Section 11. OTHER OFFERS.
From the date of this Agreement until Closing, Selling
Shareholders warrant, represent and agree that neither they nor any
agent on their behalf will offer to sell any of the Shares or will
solicit any offer to buy the Shares or will approach or negotiate
in
respect thereof with, any person or entity, other than Buyer. In
the event that the Selling Shareholders and/or FZI receive prior to
Closing an offer from a third party either orally or in writing to
acquire from the Selling Shareholders all of the FZI Shares which
they own or an offer to acquire all the outstanding Shares of
Common
Stock of FZI or all of FZI's assets and properties, whether by
merger or otherwise, the Selling Shareholders shall within twenty-
four (24) hours of the receipt of such offer advise Buyer in
writing
of the offer.
Section 12. SEVERABILITY.
If any provision of this Agreement shall be held or deemed to
be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or
jurisdictions,
or in all jurisdictions or in all cases, because of the conflicting
of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstances shall not have
the effect of rendering the provision or provisions in question,
invalid, inoperative or unenforceable in any other jurisdiction or
in any other case or circumstance or of rendering any other
provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not
themselves actually in conflict with such constitution, statute or
rule of public policy, but this Agreement shall be reformed and
construed in any such
<PAGE>
jurisdiction or case as if such invalid, inoperative or
unenforceable provision had never been contained and such provision
reformed so that it would be valid, operative and enforceable to
the
maximum extent permitted in such jurisdiction or in such case.
Section 13. COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall constitute one and the same instrument, and in
pleading or proving any provision of this Agreement it shall not be
necessary to produce more than one such counterpart.
Section 14. SECTION AND OTHER HEADING.
The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 15. NOTICES.
All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if delivered or mailed, postage prepaid, certified mail,
return receipt requested:
(a) TO THE BUYER: If to the Buyer, to:
J.D. Davenport
President
Environmental Plus, Incorporated
2995 LBJ Freeway
Suite 200
Dallas, Texas 75234
(b) TO SELLING SHAREHOLDERS: If to Selling Shareholders, to:
Thomas Garner
3445 Highland Road
Dallas, Texas 75228
<PAGE>
and/or to such other person(s) and address(es) as either party
shall
have specified in writing to the other.
Section 16. GENDER.
Whenever used herein, the singular number shall include the
plural, the plural shall include the singular, and the use of any
gender shall include all genders.
Section 17. TEXAS LAW TO GOVERN.
This Agreement shall be governed by and construed and enforced
in accordance with the law (other than the law governing conflict
of
law questions) of the State of Texas.
Section 18. TEXAS COURTS.
Any action to enforce, arising out of, or relating in any way
to, any of the provisions of this Agreement may be brought and
prosecuted in such court or courts located within the State of
Texas
as provided by law; and the parties consent to the jurisdiction of
said court or courts located within the State of Texas and to
service of process by registered mail, return receipt requested, or
by any other manner provided by law.
<PAGE>
IN WITNESS WHEREOF, the Selling Shareholders and Buyer have
caused this Agreement to be executed on this _____ day of
November, 1996, effective the 1st day of June, 1996.
Attest: ENVIRONMENTAL PLUS, INC.
- ---------------------------- By /s/ J.D. Davenport
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SELLING SHAREHOLDERS:
By /s/ Wayne Franklin
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By /s/ Marshall Southerland
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By /s/ Tom Garner
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