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EXHIBIT 10.5
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into by and between Allentate Commercial
Software, L.L.P., a Texas registered limited liability partnership ("Seller" or
"Company"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇, individuals (hereinafter
sometimes referred to as "Partners"), and EarthCare Company, a Delaware
Corporation (hereinafter referred to as "EarthCare" or "Buyer").
WITNESSETH:
WHEREAS, the Seller is the owner of certain assets used in Seller's business
(hereinafter sometimes referred to as the "Assets").
WHEREAS, Buyer desires to acquire the Assets from Seller in accordance with the
terms and conditions hereinafter provided, in exchange for shares of the common
stock, $.0001 par value of the Buyer (said shares of common stock are hereafter
sometimes referred to as the "EarthCare Common Stock").
NOW THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained in this Agreement, and for other
good and valuable consideration the mutual receipt and sufficiency of which is
hereby acknowledged by the parties hereto, THE PARTIES HERETO AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF ASSETS.
A. Upon the basis of the representations and warranties contained herein
and subject to the terms and conditions of this Agreement, at the time of
"Closing" (as hereinafter defined) Seller shall sell, convey, transfer, assign
and deliver to Buyer, and Buyer shall purchase from Seller, the Assets
specifically described on Schedule 1-A.
B. At the time of Closing, as the purchase price for the Assets, Buyer
shall transfer to Seller 75,000 shares of common stock of Buyer (the "EarthCare
Stock") less the Holdback Shares, as hereinafter defined. The EarthCare stock
shall be registered under the Securities Act of 1933, as amended, to the extent
necessary to permit disposition of such shares, provided, however, that such
shares shall be subject to certain restrictions on resale or transfer for one
year from the date of Closing, pursuant to the terms of a Lock-up Agreement, in
a form as attached hereto as Exhibit 1-B.
1. An additional 60,000 shares of unregistered EarthCare Stock
shall be delivered to Seller on the condition that, for the
twelve (12) month period following Closing (the "First
Earnout Date") the Assets have generated pre-tax earnings of
at least $416,000.
2. An additional 60,000 shares of unregistered EarthCare Stock
shall be delivered to Sellers on the condition that, for the
twelve (12) month period following the First Earnout Date,
the Assets have
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generated pre-tax earnings of at least $416,000.
3. Buyer shall retain 7,500 registered shares of EarthCare Stock
(Holdback Shares) as security for Seller's and Partners'
representations, warranties and covenants. The Holdback
Shares shall be delivered to Sellers 120 days after Closing,
provided that no breach of any such representations,
warranties and covenants has occurred.
C. Except as set forth in this Agreement, Buyer shall not assume or be
responsible for any liabilities, obligations or commitments of Seller,
contingent or otherwise, asserted or unasserted, matured or unmatured,
provided, however that Buyer shall assume liabilities of Seller in an amount
not to exceed $100,000.
i. Without limiting the foregoing, Company shall pay all current
liabilities prior to the Closing Date.
2. CLOSING. Subject to the terms and conditions of this Agreement, the
closing of the purchase and sale of the Assets (the "Closing") shall be held
August 6, 1999 at EarthCare Company, Dallas, TX or at such other time and date
as shall be mutually agreed upon by the parties hereto in writing. However, the
purchase shall be effective as of August 1,1999. (Such time and date are
sometimes hereinafter referred to as the "Closing Date" or "Closing").
3. PROCEDURE AT THE CLOSING. The parties hereto agree to take the
following steps in the order set forth below:
A. Seller shall deliver to the Buyer the Assets, and such bills of sale,
assignments and other instruments to transfer to the Buyer good and marketable
title to the Assets, free and clear of all liens, claims, taxes and
encumbrances.
B. In exchange for the Assets, Buyer shall deliver to Seller 75,000
shares of registered EarthCare Common Stock, less the Holdback Shares. C. The
parties shall also exchange other documents contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND PARTNERS. In order to
induce the Buyer to enter into this Agreement and to consummate the
transactions contemplated hereunder, the Seller and Partners hereby make the
following representations, warranties, covenants and agreements:
A. ORGANIZATION AND EXISTENCE. The Company is a registered limited
liability partnership organized and in good standing under the laws of the
State of Texas, and has all requisite power and authority to carry on its
business as now conducted. The Company is qualified to do business in the State
of Texas which is the only state which by the nature of the business of
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the Company and the character of the properties owned or leased by it requires
qualification to do business. Seller has delivered to Buyer a true and correct
copy of its Articles of Partnership and Partnership Agreement.
B. SUBSIDIARIES OR OTHER ENTITIES. Company has no investments or
ownership interests in any corporations, partnerships, joint ventures or other
business enterprises.
C FINANCIAL CONDITION. Seller has furnished to Buyer copies of the
following financial statements of the Company, all of which are true and
complete in all material respects and have been prepared in accordance with
generally accepted accounting principles consistently applied (except to the
extent otherwise reported):
1. A Balance sheet ("Balance Sheet") of the Company as of December 31,
1998.
2. Statements of income and loss of the Company for the twelve (12)
months ended December 31, 1998. (Collectively, the Balance Sheet and statements
of income and loss are hereinafter referred to as the "Financial Statements").
The Financial Statements are complete and correct and in accordance with the
books of account and records of the Company and present fairly the financial
position of the Company's business and the income, partners equity and cash
flow of the Company's business at the dates and for the periods indicated.
3. Seller and Partners warrant that current assets of the Company will be
sufficient to pay the liabilities of the Company as of the Closing Date.
4. Seller and Partners warrant that Seller's gross revenues for the year
ending December 31, 1998, based on generally accepted accounting principles,
were not less than $_________, and neither Seller nor Partners have knowledge
of any fact, event or action which would have a material adverse effect on the
Company's gross revenue for periods after December 31, 1998.
D. ASSETS.
1. The Company has good and marketable title to, and is in possession of
all the Assets, Schedule 1-A attached hereto and as shown on the Balance Sheet,
free and clear of all liabilities, mortgages, liens, pledges, security
interests, restrictions, conditional sales agreements, title retention
agreements, charges or encumbrances except as shown on the Balance Sheet.
2. Schedule 4-D-2 shall identify all assets and property of Seller which
shall be excluded from this Agreement.
E. LIABILITIES. Except as set forth in Schedule 4-E attached hereto or in
the Financial Statements submitted to Buyer, or in any other Exhibit delivered
pursuant hereto, neither the Company nor its assets or properties is subject to
any liabilities or obligations (accrued, absolute,
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contingent or otherwise), except for liabilities incurred in the ordinary
course of business affairs and the Company is not in material default in
respect of any material term or condition of any material indebtedness or
liability. The transactions contemplated by this Agreement do not and will not
subject the Company or the Buyer to any claim or liability for any obligation,
debt or contract other than as specifically disclosed in this Agreement and the
Schedules attached hereto. All required consents of creditors, if any have
been, or by closing will be, obtained for performance of this Agreement.
F. CUSTOMER ACCOUNTS, MUNICIPAL CONTRACTS AND RELATED MATTERS.
1. Customer Accounts are the commercial, industrial, municipal, and
residential accounts of the Company pursuant to which the Company provides its
services . Said Customer Accounts are listed on Schedule 4-F-1 attached hereto.
(Each of the Customer Accounts listed in Schedule 4-F shall identify the name
and address of each of the Customer Accounts and shall reflect as to each the
current monthly billing amount and frequency of service.
2. Schedule 4-F-2 is a true, accurate and complete listing of all written
service agreements, franchises, licenses or other contracts, if any, to which
the Company is a party and which relate to Customer Accounts. Original copies
of all such contracts shall be delivered by the Seller to the Buyer no later
than the Closing Date, and such copies shall be true, accurate and complete and
shall include all amendments, supplements or other modifications to such
contracts. Except as disclosed in Schedule 4-F-2, to the knowledge of the
Seller, neither the Company nor any other party to any of the Company's
municipal contracts or Customer Accounts is in material default or alleged to
be in material default thereunder and there exists no condition or event which,
after notice or the lapse of time or both, would constitute such a default. The
sale, transfer and assignment of the Assets will not result in a breach,
violation or default of any of the Company's municipal contracts or Customer
Accounts, and all of the Company's municipal contracts and Customer Accounts
will remain in full force and effect as if there had been no sale, transfer and
assignment thereof.
3. Except as otherwise disclosed in Schedule 4-F-3, neither the Partners
nor the Seller knows of no oral or written communication, fact, event or action
which exists or has occurred within 90 days prior to the date of execution of
this Agreement, which would tend to indicate that any current customers of the
Company intends to terminate its business relationship with the Company.
G. MATERIAL CONTRACTS. Attached hereto as Schedule 4-G is a list and
brief description, as of the date of this Agreement, of certain leases,
contracts, commitments, agreements and other documents to which the Company is
a party or by which it is bound and which is related to the operation of its
business. Except for contracts and documents listed in Schedule 4-G, the
Company is not a party to or bound by any written or oral (i) contracts not
made in the ordinary course of business; (ii) employment contracts, other than
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those terminable at the will of the Company; (iii) contracts with any labor
union or association; (iv) bonus, pension, profit sharing, retirement,
hospitalization, insurance or other plan providing employee benefits; (v)
leases with respect to any property, real or personal, whether as lessor or
lessee; (vi) continuing contracts for the future purchase of materials,
supplies or equipment in excess of the requirements of its business now booked;
(vii) contracts or commitment for capital expenditures; (viii) contracts
continuing over a period of more than six (6) months from its date; or (ix)
material contracts necessary to conduct the operations and business of the
Company. A true copy of each contract, commitment and agreement listed on
Schedule 4-G will be furnished to Buyer prior to Closing.
H. EMPLOYEES - LABOR MATTERS. The Company has generally enjoyed a good
employer-employee relationship with its employees. Attached hereto as Schedule
4-H is a complete list of all employees of the Company whose duties are related
to the operation of the business of the Company. Seller and Partners warrant
there exists no pending or threatened actions by any employees alleging sex,
age, race, or other discriminatory practices, no current effort to organize
these employees into collective bargaining units, and no collective bargaining
agreement is now in effect. There are no contracts, written or oral, between
the Company and any of its employees, except as specifically disclosed in
Schedule 4-H.
I. INSURANCE. The Company maintains in effect insurance covering its
assets and businesses and any liabilities relating thereto in an amount
believed adequate by the Seller, and such insurance coverage shall be
maintained by the Company through the Closing Date. Between the date hereof and
the Closing Date, the Seller shall cause the Company to furnish to the Buyer
such information as the Buyer shall reasonably request regarding the Company's
insurance. Except as set forth in Schedule 4-I attached hereto, there are no
pending material property damage or personal injury claims against the Company
or any of its assets.
J. LICENSES AND PERMITS. The Company possesses all licenses and other
required governmental or official approvals, permits or authorizations, if any,
the failure to possess which would have a material adverse effect on the
businesses, financial condition or results of operations of the Company
including, without limitation, all common carrier rights, certificates of
public need, trademarks and trade names necessary to carry on its business as
now being conducted, without known conflict with valid licenses, permits,
trademarks and trade names of others. All such licenses and permits are in full
force and effect, and no violations are or have been recorded in respect to any
thereof, and no proceeding is pending, or to the knowledge of Seller
threatened, to revoke, suspend or otherwise limit such licenses or permits. All
licenses and permits will survive the closing of the transactions contemplated
by this Agreement.
K. TAX MATTERS. The Company has timely filed all federal, state, sales
tax, franchise tax, and other tax returns which are required to
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be filed by it and has paid or has made provision for the payment of all taxes
which have or may become due pursuant to said returns. All taxes, including,
without limitation, withholding and social security taxes due with respect to
the Company's employee, federal and state income tax liabilities, corporate
franchise taxes, sales, use, excise and ad valorem taxes, due, payable or
accrued by the Company on or before the Closing Date have or will be paid. The
Company has filed all reports required to be filed by it with all such taxing
authorities. Seller shall be responsible for any tax liability attributable to
operations of the Company prior to Closing.
L. LITIGATION. Except as disclosed in Schedule 4-L attached hereto, the
Company has not received any notices of material default and is not in material
default of (i) any order, writ, injunction or decree of any court, or any
federal, state, municipal or other governmental department, commission, board,
bureau or instrumentality, or (ii) any agreement or obligation to which the
Company is a party or by which the Company is bound or to which the Company or
any of the property of the Company's may be subject. Except as disclosed in
Schedule 4-L, there are no material outstanding claims, actions, suits,
proceedings or investigations pending or, to the knowledge of Partners or
Seller, threatened against the Company or which affect the Company or any of
its assets or property, at law or in equity before or by any federal, state,
municipal court or other governmental department, authority, commission, board,
bureau, agency or instrumentality.
M. COMPLIANCE WITH LAWS. Except as otherwise disclosed in Schedule 4-M
attached hereto, the Company is in compliance in all material respects with all
federal, state, and local laws, ordinances, regulations, rules, and orders
applicable to it or to its assets including, without limitation, all laws and
regulations relating to the protection of the environment, the safe conduct of
the Company's business, anti-competitive practices, discrimination, employment,
wage and hour practices and health. The Company has not received notification
of any asserted past or present failure to comply with any of such laws or
regulations.
N. NO BROKERS' OR AGENT'S FEES. No agent, broker, finder, representative
or other person or entity acting pursuant to authority of the Seller or
Partners 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.
O. NO MATERIAL OR ADVERSE CHANGE. Except as otherwise disclosed in
Schedule 4-O attached hereto, since December 31, 1998, there has not been: (i)
any material adverse change in the financial condition, assets, liabilities,
business or results of operations of the Company; (ii) to the knowledge of the
Seller or Partners, any threatened or prospective event or condition of any
character whatsoever which could materially and adversely affect the business,
financial condition or results of operations of the Company; (iii) any sale or
other disposition of any of the Company's assets other than in the ordinary
course of business; or (iv) any damage, destruction or loss (whether or not
insured) materially and adversely affecting the property, business or prospects
of the Company.
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P. DUE AUTHORIZATION AND ABSENCE OF BREACH. This Agreement and all other
agreements of the Seller contemplated hereunder constitute valid and binding
obligations of the Seller, enforceable in accordance with their respective
terms. Neither the execution and delivery of this Agreement (or any agreement
contemplated hereunder) nor the consummation of the transactions contemplated
hereby will: (i) conflict with or violate any provision of the Articles of
Partnership or Partnership Agreement of the Company; (ii) conflict with or
violate any decree, writ, injunction or order of any court or administrative or
other governmental body which is applicable to, binding upon or enforceable
against the Company or; (iii) except as set forth on Schedule 4-P result in any
breach of or default (or give rise to any right of termination, cancellation or
acceleration) under any mortgage, contract, agreement, indenture, will, trust
or other instrument which is either binding upon or enforceable against the
Seller or the Company or its assets.
Q. AUTHORITY TO CONTRACT. Seller has the full power, right and authority
to enter into and perform this Agreement without the consent of any person,
entity or governmental agency, and the consummation of the transactions
contemplated by this Agreement will not result in the breach or termination of
any provision of or constitute a default under any lease, indenture, mortgage,
deed of trust or other agreement or instrument or any order, decree, statute or
restriction to which Seller or the Company is a party or by which the Company
is bound or which any of the properties of the Company is subject.
R. ACCURACY OF THE INFORMATION FURNISHED BY THE SELLER. No
representation, statement or information made or furnished by the Seller to the
Buyer, including those contained in this Agreement and the various exhibits
attached hereto and the other information and statements referred to herein,
contains or shall contain any untrue statement of any material fact, or omits
information necessary to make any such statement not misleading.
5. REPRESENTATION AND WARRANTIES OF BUYER. In order to induce the Seller
to enter into this Agreement and to consummate the transactions contemplated
hereunder, the Buyer hereby makes the following representations, warranties,
covenants and agreements:
A. ORGANIZATION AND EXISTENCE. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all the requisite corporate power and authority to carry on its
business as now conducted and to consummate the transactions contemplated by
this Agreement.
B. AUTHORITY TO CONTRACT. The execution, delivery and performance of this
Agreement by Buyer has been duly approved by its Board of Directors, and no
further corporate action is necessary on the part of Buyer to consummate the
transactions contemplated by this Agreement, assuming due execution of this
Agreement by the Parties.
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C. NO BROKER'S OR AGENT'S FEES. No agent, broker, finder, representative
or other person or entity acting pursuant to the authority of the Buyer will be
entitled to any commission or finder's fee in connection with the origination,
negotiation, execution or performance of the transactions contemplated under
this Agreement.
D. ACCURACY OF INFORMATION FURNISHED BY BUYER. No representation,
statement or information made or furnished by Buyer to the Seller in this
Agreement, or in connection with the transactions contemplated hereby
including, without limitation copies of the Buyer's filings with the Securities
and Exchange Commission, contains, or shall contain any untrue statement of any
material fact or omits or shall omit any material fact necessary to make the
information contained herein true.
E. REGISTRATION. The EarthCare common stock delivered to Seller on the
Closing Date has been duly registered with the Securities and Exchange
Commission on Form S-1 effective December 9, 1998, and such registration
statement is true and correct in all material respects and does not omit to
state any material information necessary to make such registration statement
not misleading.
6. ADDITIONAL AGREEMENT OF THE SELLER AND PARTNERS. The Seller further
agrees with the Buyer as follows:
A. ACCESS TO OFFICES AND RECORDS. The Seller shall cause the Company to
afford representatives of the Buyer, from and after the date of execution of
this Agreement, full access, during normal business hours and upon reasonable
notice, to all offices, books, properties, contracts, documents and records of
the Company and to furnish to the Buyer or its representatives all additional
information, including financial or operating information with respect to the
business and affairs of the Company that the Buyer or its representatives may
reasonably request. Seller acknowledges that Buyer is a publicly-traded
corporation and that Buyer will be required under the applicable securities
laws to make public disclosure of detailed financial data concerning the
Company's operations. Prior to the Closing Date, Buyer has Seller's permission
to disclose publicly: (i) the amount of the Company's revenues; and (ii) such
other information as shall be included in any press release of Buyer which
Seller approves in advance of being released; such approval shall not be
unreasonably withheld. Provided, however, that any furnishing of such
information to the Buyer and any investigation by the Buyer shall not affect
the right of the Buyer to rely solely upon the representations and warranties
made by the Seller in or pursuant to this Agreement; and provided further, that
the Buyer: (i) will hold in strict confidence all documents and information
concerning the Company so furnished; and (ii) will promptly return all such
documents and all copies to the Company if this Agreement is not closed for any
reason.
B. EXECUTION OF FURTHER DOCUMENTS BY SELLER. From and after the Closing,
upon the reasonable request of the Buyer, the Seller shall execute,
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acknowledge and deliver such documents as may be appropriate to carry out the
transactions contemplated by this Agreement.
C. INDEMNIFICATION BY SELLER AND PARTNERS.
1. The Seller and Partners will indemnify and hold the Buyer harmless
from and against any and all damage, loss, cost, deficiency, assessment,
liability or other expense (including reasonable attorney's fees, costs of
court and litigation expenses, if any) suffered, incurred or paid by the Buyer
as a result of:
(a) The untruth, inaccuracy, breach or violation of any
representation, warranty, covenant or other obligation of the Seller or
Partners set forth in or made in connection with this Agreement;
(b) The assertion against the Buyer or the Company of any material
liability or obligation of the Company or of any claim relating to the
operation of the Company's business, prior to the Closing Date, whether
absolute or contingent, matured or unmatured, known or unknown as of the
Closing Date, or
(c) The enforcement of the Buyer's right to indemnification under this
Agreement.
2. The Buyer shall give written notice to the Seller of any claim,
action, suit or proceeding relating to the indemnity herein provided by Seller
not later than ten (10) days after Buyer has received notice thereof. Seller
shall have the right, at his option, to compromise or defend, at his own
expense and by its own counsel (which counsel shall be reasonably satisfactory
to Buyer), any such action, suit or proceeding. Buyer and Seller agree to
cooperate in any such defense or settlement and to give each other full access
to all information relevant thereto.
3. The Holdback Shares shall constitute security for Seller's and
Partners' indemnification. If Buyer makes no claim of breach of any of Seller's
or Partners' representations, warranties or covenants, then the Holdback Shares
shall be delivered to Seller one hundred twenty days after the Closing Date. 4.
Except as herein expressly provided, the remedies provided in paragraph 6.D
hereof shall be cumulative and shall not preclude assertion by the Buyer of any
other rights or the seeking of any other remedies available against the Seller
at law or in equity.
7. ADDITIONAL AGREEMENT OF THE BUYER.
A. EXECUTION OF FURTHER DOCUMENTS BY BUYER. From and after the Closing,
upon reasonable request of Seller, Buyer shall execute, acknowledge and deliver
to Seller all such further documents as may be appropriate to carry out the
transactions contemplated by this Agreement.
B. INDEMNIFICATION BY BUYER.
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1. The Buyer will indemnify and hold the Seller harmless from and against
any and all damages, loss, cost, deficiency assessment, liability or other
expense (including reasonable attorney's fees, costs of court and costs of
litigation, if any) suffered, incurred or paid by the Seller as a result of:
(a) The untruth, inaccuracy, breach or violation of any
representation, warranty, covenant or other obligation of the Buyer set forth
in or made in connection with this Agreement;
(b) The assertion against the Seller of any liability or obligation of
the Buyer or the Company or of any claim relating to the operation of the
Company's business subsequent to the Closing Date (including, without
limitation, customer claims or disputes); or
(c) The enforcement of the Seller's right to indemnification under
this Agreement.
2. The Seller shall give written notice to the Buyer of any claim,
action, suit or proceeding relating to the indemnity herein provided by Buyer
not later than ten (10) days after Seller has received notice thereof. Buyer
shall have the right, at its option, to compromise or defend, at its own
expense and by its own counsel (which counsel shall be reasonably satisfactory
to Seller), any such action, suit or proceeding. Seller and Buyer agree to
cooperate in any such defense or settlement and to give each other full access
to all information relevant thereto.
3. Except as herein expressly provided, the remedies provided in
Paragraph 7.B hereof shall be cumulative and shall not preclude assertion by
the Seller of any other rights or the seeking of any other remedies available
against the Buyer at law or in equity.
8. CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligations of the Buyer
to effect the transactions contemplated by this Agreement shall be subject to
the fulfillment at or prior to the Closing Date of each of the following
conditions:
A. VALIDITY OF SELLER'S REPRESENTATIONS. All representations and
warranties of the Seller contained in this Agreement or otherwise made in
writing pursuant to this Agreement shall have been true and correct at and as
of the date hereof and they shall be true and correct at and as of the Closing
Date, with the same force and effect as though made at and as of the Closing
Date.
B. PRE-CLOSING OBLIGATIONS. The Seller shall have performed and complied
with all the obligations and conditions required by this Agreement to be
performed or complied with by Seller at or prior to the Closing Date, including
the execution and delivery of all documents and contracts required to be
delivered at or before the Closing Date pursuant to this Agreement.
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C. OPINION OF COUNSEL FOR SELLER. The Buyer shall have received a
favorable opinion from counsel for the Seller dated the date of the Closing, in
form satisfactory to counsel for the Buyer, to the effect that:
1. The Company is a registered limited liability partnership, duly
organized and legally existing under the laws of the State of Texas, 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.
2. This Agreement has been duly executed and delivered by the Seller, and
constitutes a valid, enforceable and binding obligation of the Seller pursuant
to the terms of this Agreement.
3. Except as otherwise disclosed in this Agreement, counsel does not know
of any action, suit, investigation or other legal, administrative or
arbitration proceeding pending against the Seller or which questions the
validity or enforceability of this Agreement or of any action taken or to be
taken pursuant to or in connection with this Agreement or any agreement
contemplated herein.
4. To the knowledge of such counsel, no consent, authorization, license,
franchise, permit, approval or order of any court or governmental agency or
body, other than those obtained by Seller and delivered to the Buyer prior to
or on the date of the opinion, is required for the sale of the Assets by the
Seller pursuant to this Agreement.
5. The execution and performance of this Agreement by the Seller will not
violate: (i) the Articles of Partnership or partnership agreement of the
Company, or (ii) any order of any court or other agency of government known to
said counsel.
6. The instruments of conveyance and assignments executed by the Seller
to the Buyer pursuant to this Agreement are adequate to convey the ownership to
the Assets, free and clear of all liens, claims or encumbrances known to such
counsel after conducting a UCC-1 lien search with the offices of the Secretary
of State for the State of Texas, and the offices of the County Clerk for the
County of ▇▇▇▇▇▇, in the State of Texas.
D. RECEIPT BY THE BUYER OF NECESSARY CONSENTS. All necessary consents or
approvals of third parties to any of the transactions contemplated hereby shall
have been obtained, and satisfactory evidence of such consents or approvals
shall have been delivered to the Buyer at Closing.
E. KEY EMPLOYEES. Buyer shall have entered into employment or consulting
agreements acceptable to Buyer with Seller's key employees.
9. CONDITIONS TO OBLIGATIONS OF THE
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SELLER. The obligations of the Seller to effect the transactions contemplated
by this Agreement shall be subject to the fulfillment at or prior to the
Closing Date of each of the following conditions:
A. VALIDITY OF BUYER'S REPRESENTATIONS. All representations and
warranties of the Buyer contained in this Agreement or otherwise made in
writing pursuant to this Agreement shall have been true and correct at and as
of the date hereof and they shall be true and correct at and as of the Closing
Date, with the same force and effect as though made at and as of the Closing
Date.
B. PRE-CLOSING OBLIGATIONS. The Buyer shall have performed and complied
with all the obligations and conditions required by this Agreement to be
performed or complied with by Seller at or prior to the Closing Date, including
the execution and delivery of all documents and contracts required to be
delivered on or before the Closing Date pursuant to this Agreement.
C. CORPORATE AUTHORITY OF BUYER. The execution and performance of this
Agreement by the Buyer shall have been duly and legally authorized in
accordance with applicable law, and the Buyer shall have furnished to counsel
for the Seller certified copies of resolutions adopted by the Board of
Directors of the Buyer authorizing and proving the execution and delivery of
this Agreement and performance of the transactions contemplated hereunder.
D. OPINION OF COUNSEL FOR BUYER. The Seller shall have received a
favorable opinion from counsel for the Buyer dated the date of the Closing, in
form satisfactory to counsel for the Seller, to the effect that:
1. The Buyer is a corporation, duly organized and legally existing in
good standing under the laws of the State of Delaware, and it has the corporate
power and authority to carry on its business as now being conducted and to
carry out the transactions and agreements contemplated hereby.
2. All corporate and other proceedings required to be taken by or on the
part of the Buyer in order to authorize it to perform its obligations hereunder
have been duly and properly taken, including any necessary approval or
authorization by the Board of Directors of the Buyer.
3. This Agreement has been duly executed and delivered by the Buyer and
constitutes a valid, enforceable and binding obligation of the Buyer pursuant
to the terms of this Agreement.
4. Except as otherwise disclosed in this Agreement, said counsel does not
know of any action, suit, investigation or other legal, administrative or
arbitration proceeding which questions the validity or enforceability of this
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Agreement or of any action taken or to be taken pursuant to or in connection
with this Agreement or any agreement contemplated herein.
5. The execution and performance of this Agreement by the Buyer will not
violate: (i) the Articles of Incorporation or the By-Laws of the Buyer; or (ii)
any order of any court or other agency of government known to said counsel.
10. SELLER'S NON-COMPETE AND NON-SOLICITATION AGREEMENT. As inducement to
Buyer to enter into this Agreement and perform its obligations hereunder, and
in consideration of the payments to Seller pursuant to this Agreement, the
Seller and Partners agree that neither the Partners nor the Seller will, for a
period of three (3) years from the Closing Date, directly or indirectly
(whether as owner, partner, shareholder, agent, employee, independent
contractor, consultant or otherwise): (i) engage in the business which directly
or indirectly competes with business of the Seller acquired by Buyer, or with
any subsidiary of Buyer, in each case, within any County in the State of Texas
where the Seller is currently conducting its business; (ii) solicit any party
who is or was a customer or supplier of the Company on the Closing Date or at
any time during the 12 month period immediately prior thereto for services of
any type or quality being provided by the Company; (iii) solicit for employment
any person who was or is an employee of the Company on the Closing Date, or at
any time during the 12 month period immediately prior thereto; or (iv) either
directly or indirectly, divulge, disclose, or communicate to any person, firm
or corporation in any manner whatsoever any confidential information relating
to the business of Buyer, or the Company. The term, "confidential information",
as used herein means all information of a business or technical nature relative
to the business of Buyer, the business of any customers of 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 Seller acknowledges and agrees that Buyer's and Company's remedies at law
may be inadequate in the event of a breach or threatened breach of the
covenants set forth herein, and in such event, Buyer and the Company shall be
entitled to have an injunction issued by any court of competent jurisdiction,
enjoining and restraining each and every party concerned therewith from the
creation or continuation of such breach.
11. OTHER PROVISIONS.
A. EMPLOYMENT AGREEMENTS. At Closing, Buyer will enter into written
Employment Agreements with the Partners in a form satisfactory to both parties.
Annual salary for each of the Partners shall be $144,000, and Partners shall
receive such benefits as afforded comparable executive of Buyer.
B. INCOMPLETE EXHIBITS. The parties hereto acknowledge and agree (a) that
many, if not all, of the schedules to be attached to this Agreement will
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not have been prepared by the time of execution of this Agreement, and (b) that
consummation of the transactions contemplated by this Agreement are subject to
the completion of such exhibits by Seller (to the extent that an exhibit is to
be completed by Seller, such exhibit must be reasonably acceptable to Buyer) or
Buyer ( to the extent that an exhibit is to be completed by Buyer, it must be
reasonably acceptable to Seller) as the case may be, prior to or at the
Closing, pursuant to the terms of this Agreement.
C. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, obligations and agreements of the parties contained in this
Agreement, or in any writing delivered pursuant to provisions of this
Agreement, shall survive the Closing for a period of eighteen (18) months with
the exception of representations and warranties concerning Paragraph 4.K.
hereof, Tax Matters, which will survive for as long as any claims may be
asserted under the applicable periods of limitation for violations of any tax
law, rule or regulation.
D. WAIVER OR EXTENSION OF CONDITIONS. The Seller or the Buyer may extend
the time for or waive the performance of any of the obligations of the other
party, waive any inaccuracies in the representations or warranties by the other
party, or waive compliance by the other party with any of the covenants or
conditions contained in this Agreement. Any such extension or waiver shall be
in writing and signed by the Seller and the Buyer. Any such extension or waiver
shall not act as a waiver or an extension of any other provisions of this
Agreement.
E. NOTICES. Any notice, request or other document shall be in writing and
sent by registered or certified mail, return receipt requested, postage prepaid
and addressed to the party to be notified at the following addresses, or such
other address as such party may hereafter designate by written notice to all
parties, which notice shall be effective as of the date of posting:
(i) If to the Buyer:
EarthCare Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(ii) If to the Seller
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Copy to:
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F. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Texas.
G. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns.
H. HEADINGS. The subject headings of the Sections of this Agreement are
included for purposes of convenience only and shall not affect the construction
or interpretation of any of its provisions.
I. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
J. ARBITRATION. Any controversy or claim arising out of, in connection
with, or relating to this Agreement or a breach thereof shall be settled by
binding arbitration in ____________, ____________. The arbitration panel shall
be comprised of three arbitrators. Each party shall appoint one arbitrator for
the panel and the two so appointed shall appoint a third. The panel shall
resolve the dispute within sixty (60) days of the appointment of the panel and
shall notify the parties of its findings in writing. Each party agrees to bear
its own costs of arbitrators and to split equally the cost of the third
arbitrator.
K. ENTIRE AGREEMENT; MODIFICATION. This Agreement (including the
schedules attached hereto) and the documents delivered pursuant hereto
constitute the entire agreement and understanding between the parties, and
supersede any prior agreements and understandings relating to the subject
matter hereof. This Agreement may be modified or amended by a written
instrument executed by all parties hereto.
IN WITNESS WHEREOF the parties have executed this Agreement as of the
__________ day of August, 1999.
"Seller"
Allentate Commercial Software, L.L.P.
By:
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"Partners"
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇ ▇. ▇▇▇▇
"Buyer"
EarthCare Company
By:
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