Exhibit 10.19
AGREEMENT FOR THE ACQUISITION
BY NATIONAL ENVIRONMENTAL SERVICE COMPANY
OF CERTAIN ASSETS AND THE ASSUMPTION OF
CERTAIN OBLIGATION OF NATIONAL ENVIRONMENTAL CORPORATION
This Agreement shall outline the terms and conditions of the captioned matter:
1. Consideration - National Environmental Service Company (hereafter "NESCO")
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will acquire from National Environmental Corporation (hereafter "NEC") the
assets and assume certain liabilities of NEC in exchange for a cash sum of
$50,000.00., said cash to be paid at closing and certain other items of
consideration that are described in this document. The effective date of this
transaction shall be January 1, 1999. Closing shall take place as soon as
practical thereafter but no later than the close of business on Friday, January
15, 1999. Additionally, NESCO shall hire the employees of NEC. This transaction
does not constitute a merger. NESCO is not acquiring the stock of NEC.
2. Assets Acquired -
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A. Assets shall include all assets as shown on Exhibits A and B.
B. Work in Progress - Work in Progress shall include all work as shown
on Exhibit C and such other Work in Progress that shall have begun after the
preparation of Schedule C through the date of Closing.
C. Business Property - (a) all designs, methods, inventions and know-
how related thereto, (b) all trademarks, trade names (including "National
Environmental Corporation"), service marks, and copyrights claimed or used by
Companies that have not been registered, and (c) all customer lists of
Companies, and (d) corporate names used by the NEC (collectively "Business
Property Rights"), constitute all such proprietary rights owned or held by NEC
and which are reasonably necessary to, or used in the conduct of the business of
NEC. All such methods, inventions and know-how constitute trade secrets of NEC
within the meaning of all applicable laws, and NEC has taken all necessary steps
required by law to protect these trade secrets as such. NEC owns or has valid
rights to use all Business Property Rights without conflict with the rights of
others. No person has made or threatened to
Page 2 - NESCO/NEC Agreement Dated December 18, 1998
make any claims that the operation of the business of NEC is in violation of or
infringes any Business Property Rights or any other proprietary or trade rights
of any third person. No third person is in violation of or is infringing upon
any Business Property Rights.
3. Assumption of Certain Liabilities - Schedule A reflects liabilities totaling
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$95,590.50. NESCO shall pay off these obligations as soon after closing as
practical. NESCO shall not assume any liabilities or contingent liabilities of
NEC other than those liabilities reflected on Schedule A, the assumption of the
lease on the office building located at 00000 00xx Xxxxxx Xxxxx, Xxxxx, Xxxxxxx
00000, the lease on the lease on the offices at South Charleston, West Virginia,
and the assumption of a lease on the copier as shown on Schedule A. NESCO would
determine the employees to be retained by NESCO and their positions and duties.
NEC will pay all vacation accrued as of December 31, 1998 by NEC employees.
NESCO shall not be responsible for any benefits while said employees were
employed by NEC.
4. Salaries - NESCO shall enter into employment agreements with Xxxxxxxx X.
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Xxxxxxxx and Xxxx Xxxxxxxx. While employed by NESCO, each man shall be paid a
salary of $36,000. As with any NESCO employee, continued employment will be
based in part on the performance of the employee. Xxxx Xxxxxxxx shall be
supplied a company vehicle for his use (including all maintenance, fuel,
insurance, and other expenses of operations). Xxxxxxxx X. Xxxxxxxx shall be paid
an auto allowance of $500 per month paid in arrears. Both men shall receive
hospitalization insurance, vacation, and other similar benefits, said benefits
to begin January 1, 1999.
5. Performance Bonus - Xxxxxxxx X. Xxxxxxxx and Xxxx Xxxxxxxx shall share
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equally in a performance bonus plan. This plan shall operate as follows: Net
income after taxes shall be determined for the Largo, Florida, division office
following the close of the fiscal years ending on December 31, 1999 and December
31, 2000. Xxxxxxxx X. Xxxxxxxx and Xxxx Xxxxxxxx shall receive 25% of all net
income which exceeds 10% of revenue. [For example, assume that for the fiscal
year ended December 31, 1999, the revenues for the Largo Division office was
$100,000 and the net income after reduction for income taxes was $25,000. Ten
percent of the revenue would be $10,000. The two participants would share
equally in 25% of the net income after income tax which exceeds the $10,000. The
amount by which net income exceeds $10,000 is $15,000. Therefore, the two
participants would share equally in 25% of $15,000 or $3,750.]
6. Indemnification - Xxxxxxxx X. Xxxxxxxx and NEC shall indemnify NESCO for any
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claims on work performed by Companies or its subcontractors on or prior to
December 31, 1998. Xxxxxxxx X. Xxxxxxxx and NEC shall indemnify NESCO and
Page 3 - NESCO/NEC Agreement Dated December 18, 1998
hold it harmless for all claims for a period of five (5) years after the closing
date and will pay all costs, expenses, and reasonable attorney's fees in respect
to any tax and other accrued absolute or contingent liabilities or claims
against NEC existing at the time of the Closing, or arising out of pre-closing
transactions or events. However, Xxxxxxxx and NEC will not be liable for claims
against Companies to the extent that the obligations the NEC are required to
perform after the Closing Date in the ordinary course of business, or under
agreements mentioned in or consistent with this transaction. Xxxxxxxx and NEC
shall indemnify NESCO against any and all claims from third parties made
pursuant to any laws and/or regulations covering the bulk sale of inventory and
assets.
7. Contingency - Shareholders and Companies acknowledge that NESCO's decision
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to enter into the definitive agreement is particularly dependent upon (i) the
satisfactory completion by NESCO of an investigation of the business and assets
of NEC, (ii) arrangements satisfactory to NESCO concerning the continued
employment following consummation of the Transaction of certain key employees of
NEC and (iii) approval of the Transaction by the Board of Directors of NESCO and
NEC. This Agreement will be conditioned upon, among other things, (i) approval
of the Transaction by the requisite vote of the shareholders of NEC, (ii) all
necessary governmental
approvals having been obtained, and (iii) all necessary debt holder or other
contractual consents having been obtained.
8. Access to Personnel, Books and Records and Properties - At all times prior
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to the consummation of the Transaction, NEC shall afford NESCO and its
representatives, agents, and employees full access to the personnel, books and
records, tangible assets, agreements, and licenses of NEC as may be reasonably
requested by NESCO or its representatives, agents, or employees. NEC agrees that
prior to closing the Transaction, NESCO will be furnished with such accounting
information and reports to the extent NESCO deems necessary to enable NESCO to
perform its public reporting obligations and to satisfy the disclosure
requirements under the rules and regulations of the Securities and Exchange
Commission.
9. Confidentiality - Each party shall keep confidential any information with
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respect to the other party that is not otherwise generally available to the
public or has been made available to the public by persons other than such
party, its representatives, agents, or employees, except as is necessary in
connection with the preparation of the definitive agreement relating to the
transaction or as may be required by applicable law or stock exchange rules. If
for any reason the transaction is abandoned or terminated prior to being
consummated, each party will return promptly all Page 4 -
Page 4 - NESCO/NEC Agreement Dated December 18, 1998
information containing confidential or proprietary information disclosed to the
other party.
10. Publicity - Except as may be required of NESCO by applicable law or
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securities laws or rules, neither party hereto shall make any public
announcement or any press release regarding this proposal or the transaction or
the subject matter hereof or thereof without the prior consent of the other
party.
11. Expenses - Each party hereto will separately bear its own expenses incurred
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in connection with this proposal and the transaction, regardless of whether the
transaction is consummated.
12. Interim Operations - Shareholders and NEC shall continue to operate in a
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manner which will maintain NEC's Largo office's value, customers, reputation,
and goodwill during the time period between the acceptance of this proposal and
closing date. Pending execution of the Agreement (or termination of this
proposal), Xxxxxxxx and NEC agree that they will conduct its business only in
the ordinary course and not engage in any extraordinary transaction without
NESCO's prior consent. .
13. Closing Date - The closing date shall be as soon as practical after January
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1, 1999 but not later that the close of business on Friday, January 15, 1999.
The Effective Date of the Transaction will be January 1, 1999.
AGRED & ACCEPTED: AGREED & ACCEPTED:
National Environmental Service Company National Environmental Corporation
_____________________________________ __________________________________
Xxxx Xxxxxxxxx, Chairman Xxxxxxxx X. Xxxxxxxx, President
Dated________________________________ Dated_____________________________
