EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into by and between EarthCare
Company, a Delaware Corporation (hereinafter referred to as "EarthCare" or
"Seller"), and Tempered Air Systems, Inc., a Georgia Corporation (hereinafter
referred to as "Buyer").
WITNESSETH:
WHEREAS, the Seller is the owner of all of the capital stock of the
following corporations, as well as the following assets:
x. Xxxxxx Environmental Services, Co., Inc. (hereinafter referred to as
"Environmental");
b. Xxxx Xxxxxx Plumbing Heating & Cooling, Inc. (hereinafter referred
to as "Plumbing"); (Such corporations are sometimes hereinafter
referred to as the "Companies."); and
c. Certain assets of the Atlanta service center, as hereinafter defined
(hereinafter referred to as the "assets"; the stock in the companies
and the assets to be sold being hereinafter referred to as "the
acquisition property").
WHEREAS, Seller owns all of the issued and outstanding capital stock of
the Companies, and such capital stock is hereinafter referred to as the
"Acquisition Stock."
WHEREAS, the parties hereto desire that the Buyer acquire the
acquisition property in exchange for cash and a note.
NOW THEREFORE, in consideration of the premises and the
representations, warranties, covenant 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 ACQUISITION PROPERTY.
A. Upon 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, all of the
Acquisition Property.
B. At the time of the Closing, as the purchase price for the Acquisition
Property, and in exchange therefore, Buyer shall pay to Seller $1,000,000
cash,
C. At the Closing the Buyer shall also deliver to the Company a note for
Three Hundred Thousand Dollars ($300,000.00) at 10% interest, simple, with no
interest accrued or principal service for two years, followed by a three year
monthly amortization after said two years, with 36 equal monthly payments
commencing on the first day of the twenty fifth month following closing.
D. The Atlanta service center assets to be conveyed are set out on schedule
4-F-1(a).
2. CLOSING. Subject to the terms and conditions of this Agreement, the closing
of the purchase and sale of the Acquisition Property (the "Closing") shall be
held on or before August 31, 2001, at the offices of Xxxxxxxx & Link, P.C., 000
Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx, or at such other time and date as shall be
mutually agreed upon by the parties hereto in writing. (Such time and date is
sometimes hereinafter referred to as the "Closing Date" or "Closing").
3. PROCEDURE AT THE CLOSING. The parties hereto agree to take the following
steps in the order listed:
A. Seller shall deliver to the Buyer the Acquisition Property, and such share
certificates, bills of sale, assignments and other instruments to transfer to
the Buyer good and marketable title to the Acquisition Property, free and
clear of all liens, claims, and encumbrances.
B. In exchange for the Acquisition Property, Buyer shall deliver to Seller
the purchase price as set out in Xxxxxxx 0, Xxxxxxxxxx X and C, the cash
portion to be paid by a trust check from Xxxxxxxx & Link, P.C.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. In order to induce the Buyer to
enter into this Agreement and to consummate the transactions contemplated
hereunder, the Seller hereby makes the following representations, warranties,
covenants, and agreements:
A. ORGANIZATION AND EXISTENCE.
(1) Environmental is a corporation duly organized and legally existing in
good standing under the laws of the State of Georgia, and has all
requisite corporate power to carry on its business as now conducted.
Environmental is qualified to do business in the State of Georgia which is
the only state which by the nature of the business of Environmental and
the character of the properties owned or leased by it requires
qualification to do business as a foreign corporation. Seller has
delivered to Buyer a true and correct copy of the Articles of
Incorporation of Environmental (certified by the Secretary of State of
Georgia) and ByLaws of Environmental (certified by its Secretary).
(2) Plumbing is a corporation duly organized and legally existing in good
standing under the laws of the State of Georgia, and has all requisite
corporate power to carry on its business as now conducted. Plumbing is
qualified to do business in the State of Georgia which is the only state
which by the nature of the business of Plumbing and the character of the
properties owned or leased by it requires qualification to do business as
a foreign corporation. Seller has delivered to Buyer a true and correct
copy of the Articles of Incorporation of Plumbing (certified by the
Secretary of State of Georgia) and ByLaws of Plumbing (certified by its
Secretary).
B. SUBSIDIARIES OR OTHER ENTITIES. Except as described on Schedule 4(b)
attached hereto, none of the Companies has any investments or ownership
interests in any corporations, partnerships, joint ventures or other
business enterprises.
C. CAPITALIZATION.
(1) Environmental is authorized to issue _________shares of common stock,
________ par value, of which ________shares are issued and outstanding at
the time of the execution of this Agreement. All of the issued and
outstanding shares of capital stock of Environmental have been duly
issued, are validly outstanding, are fully paid and nonassessable, and are
held of record and beneficially by Seller; there are no outstanding
subscriptions, options, warrants or rights to receive, purchase or
subscribe to, or securities convertible into or exchangeable for, any
issued or unissued share of the capital stock of Environmental.
Environmental has no liability for dividends declared and unpaid. Prior to
Closing, the Seller shall not, and shall not permit Environmental, to
issue or enter into any subscriptions, options, agreements or other
commitments in respect of the issuance, transfer, sale or encumbrance of
any shares of the Environmental capital stock.
(2) Plumbing is authorized to issue _______share of common stock,
_______par value, of which _________ shares are issued and outstanding at
the time of the execution of this Agreement. All of the issued and
outstanding shares of capital stock of Plumbing have been duly issued, are
validly outstanding, are fully paid and nonassessable, and are held of
record and beneficially by Seller; there are no outstanding subscriptions,
options, warrants or rights to receive, purchase or subscribe to, or
securities convertible into or exchangeable for, any issued or unissued
shares of the capital stock of Plumbing. Plumbing has no liability for
dividends declared and unpaid. Prior to Closing, the Seller shall not, and
shall not permit Plumbing, to issue or enter into any subscriptions,
options, agreements or other commitments in respect of the issuance,
transfer, sale or encumbrance of any shares of the Plumbing capital stock.
D. STOCK OWNERSHIP. Seller has, and at the time of Closing will have, good
and marketable title to the Acquisition Stock, and there are, and at the
time of Closing will be, no impediments to the sale and transfer of the
Acquisition Stock to Buyer. Upon delivery of the Acquisition Stock to
Buyer, the Acquisition Stock (i) shall constitute all of the issued and
outstanding shares of capital stock of the Companies, and (ii) shall be
free and clear of all security interests, liens, charges, pledges,
mortgages, encumbrances or rights of third parties whatsoever.
E. FINANCIAL CONDITION.
(1) Seller has furnished to Buyer copies of the following consolidated
financial statements of the Companies, all of which are true and complete
in all material respects and have been prepared in accordance with
generally accepted accounting
principles consistently applied (except to the extent otherwise reported):
(a) A consolidated balance sheet ("Balance Sheet") of the Companies
as of June 30, 2001; and,
(b) Consolidated statements of income and retained earnings of the
Companies for the twelve (12) months ended December 31, 2000, and
for the 6 month period ended June 30, 2001. (Collectively, the
Balance Sheet and statements of income and retained earnings are
hereinafter referred to as the "Financial Statements").
(2) The Financial Statements are complete and correct and in accordance
with the books of account and records of the Companies and present fairly
the financial position of the Companies' business and the income,
stockholders' equity and cash flow of the Companies' business at the dates
and for the periods indicated.
(3) Seller warrants that the aggregate assets of the Companies, exclusive
of goodwill, will, on the date of closing, equal or exceed the aggregate
assets of the Companies as of May 31, 2001. All term liabilities of the
Companies shall be paid on or before the Closing Date. The purchase price
shall be adjusted as set forth in paragraph 10 if either of these
representations is not correct.
(4) Seller warrants that Companies' networking capital, as of the date of
closing, will equal or exceed the amount of the company's networking
capital on May 31, 2001. If not, the purchase price shall be adjusted as
set forth in paragraph.
F. ASSETS.
(1) The Companies and/or Seller have good and marketable title to, and are
in possession of, all of the assets, equipment, vehicles, properties and
rights,
including all properties, assets, vehicles and equipment listed on
Schedule 4-F-1 and 4-F-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. Seller represents that Schedule 4-F-1 sets forth a list of
all material items of equipment, vehicles, properties, inventory,
containers, machinery, shop equipment, welders, grinders, work benches,
jacks, stands, parts, office furniture, fixtures, computer
hardware/software and equipment owned by the Companies as of the date of
this Agreement and used in connection with its business operations
(hereinafter sometimes referred to as the "Operating Equipment"); such
list identifies the Operating Equipment by size, manufacturer, model
number and serial number, where available.
(2) Except as set forth on Schedule 4-F-2, all of the Operating Equipment
is in good operating condition (normal wear and tear excepted), has been
well maintained, and is in adequate condition to service the Companies'
Customer Accounts (as herein defined) and to conduct the operations of the
Companies existing on the Closing Date.
(3) There has not been any material change in the Operating Equipment, in
the aggregate, since the inspection of such Operating Equipment by Buyer
on _________________, and there shall not be any material change in the
Operating Equipment, in the aggregate, subsequent to a final inspection of
the Operating Equipment to be performed by Buyer and Seller prior to
Closing.
(4) Schedule 4-F-4 shall identify all assets and property of the Companies
which shall
be excluded from this Agreement (Excluded Assets).
G. LIABILITIES. Except as set forth in Schedule 4-G attached hereto or in the
Financial Statements submitted to Buyer, or in any other Exhibit delivered
pursuant hereto, neither the Companies nor their assets or properties, nor
the assets of the Atlanta service center are subject to any liabilities or
obligations (accrued, absolute, contingent or otherwise), except for
liabilities incurred in the ordinary course of business affairs and none
of the Companies or Seller is 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
any of the Companies, Seller 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 the required
consents of creditors, if any, have been, or by Closing will be, obtained
for performance of this Agreement.
H. CUSTOMER ACCOUNTS, MUNICIPAL CONTRACTS AND RELATED MATTERS.
(1) Customer Accounts are the commercial, industrial, municipal, and
residential accounts of the Companies pursuant to which the Companies
provide waste removal, collections, incorporation, storage and/or
disposal. Customer accounts as to the Atlanta service center are all
commercial, industrial, municipal, and residential plumbing accounts. Said
Customer Accounts are listed on Schedule 4- H-1 and 4-H-1(a) attached
hereto. (Each of the Customer Accounts listed in said Schedules shall
identify the name and address of each of the Customer Accounts, and shall
reflect as to each the current monthly billing amount, frequency of
service and size and type of container).
(2) Schedule 4-H-2 is a true, accurate and complete listing of all written
service
agreements, franchises, licenses or other contracts, if any, to which any
of the Companies or the Atlanta service center 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-H-2, none of the Companies or any other party
to any of the Companies' municipal contracts or Customer Accounts is in
material default or alleged to be in material default thereunder and there
exists no condition or event which, after notice or the lapse of time or
both, would constitute such a default. The sale, transfer and assignment
of the Acquisition Property will not result in a breach, violation or
default of any of the Companies' municipal contracts or Customer Accounts,
and all of the Companies' 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-H-3, the Seller knows of
no oral or written communication, fact, event or action which exists or
has occurred within 30 days prior to the date of the execution of this
Agreement, which would tend to indicate that any current customers of any
of the Companies or the Atlanta service center intends to terminate their
business relationship with any of the Companies or the Atlanta service
center.
(4) Except for deminimis amounts, none of the Customer Accounts, service
agreements, franchises, licenses, or other contracts for collection and
transportation of waste, in any manner involve the collection or
transportation of
waste materials classified as special, hazardous, toxic, chemical or
radioactive under the laws of the United States or of any state or other
governmental jurisdiction in which the Companies conduct collection and
transportation operations, or under any rules or regulations promulgated
by any administrative agency thereof.
I. MATERIAL CONTRACTS. Attached hereto as Schedule 4-I is a list and brief
description, as of the date of this Agreement, of certain leases,
contracts, commitments, agreements and other documents to which any of the
Companies is a party or by which any of the Companies is bound and which
is related to the operation of its business to the best of Seller's
knowledge. Except for contracts and documents listed in Schedule 4-I, none
of the Companies is a party to or bound by any written or oral (i)
contracts not made in the ordinary course of business; (ii) employment
contracts, other than those terminable at will; (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 Companies. A true copy of each
contract, commitment and agreement listed on Schedule 4-I will be
furnished to Buyer prior to Closing.
J. EMPLOYEES-LABOR MATTERS. The Companies have generally enjoyed a good
employer- employee relationship with employees. Attached hereto as
Schedule 4-J is a complete list
of all employees of each of the Companies whose duties are related to the
operation of the business of the Companies. Seller warrants there exists
no pending or threatened actions by any employees alleging sex, age, race,
or other discriminatory practices, no current effort to organize these
employees into collective bargaining units, and no collective bargaining
agreement is in effect. There are no contracts, written or oral, between
any of the Companies and any employees, except as specifically disclosed
in Schedule 4-J.
K. INSURANCE. The Companies maintain in effect insurance covering 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 Companies through the Closing Date. Between the date hereof and the
Closing Date, the Seller shall cause the Companies to furnish to the Buyer
such information as the Buyer shall reasonably request regarding the
Companies' insurance. Except as set forth in Schedule 4-K attached hereto,
there are no pending material property damage or personal injury claims by
or against any of the Companies or assets of the Companies.
L. LICENSES AND PERMITS. The Companies possess all licenses and other
required governmental or official approvals, permits or authorizations, if
any, the failure to possess which would have a material adverse effect on
the businesses, financial condition or results of operations of the
Companies including, without limitation, all common carrier rights,
certificates of public need, waste material transportation permits,
trademarks and trade names necessary to carry on business as now being
conducted, without known conflict with valid licenses, permits,
trademarks, and trade names of others. All such licenses and permits are
in full force and effect, and 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.
M. TAX MATTERS. The Companies have timely filed all federal, state, sales
tax, franchise tax, and other tax returns which are required to be filed
and have paid or have made provision for the payment of all taxes which
have or may become due pursuant to said returns. All taxes, including,
without limitation, withholding and social security taxes due with respect
to all of the Companies' employee, federal and state income tax
liabilities, corporate franchise taxes, sales, use, excise and ad valorem
taxes, due, payable or accrued by each of the Companies on or before the
Closing Date have or will be paid. The Companies have filed all reports
required to be filed with all such taxing authorities. Seller shall be
responsible for any tax liability attributable to operations of the
Companies prior to Closing.
N. LITIGATION. Except as disclosed in Schedule 4-N attached hereto, none of
the Companies nor Seller has received any notices of material default and
none of the Companies nor Seller is in material default of (i) any order,
writ, injunction or decree of any court, or any federal, state, municipal
or other governmental department, commission, board, bureau or
instrumentality, or (ii) any agreement or obligation to which Seller or
any of the Companies is a party or by which Seller or any of the Companies
is bound to or to which Seller or any of the Companies or any of the
property of Seller or any of the Companies' may be subject. Except as
disclosed in Schedule 4-N, there are no material outstanding claims,
actions, suits, proceedings or investigations pending or threatened
against Seller or any of the Companies or which affect any of the
Companies or any assets or property of Seller or the Companies, at law or
in equity before or by
any federal, state, municipal court or other governmental department,
authority, commission, board, bureau, agency or instrumentality.
O. COMPLIANCE WITH LAWS. Except as otherwise disclosed in Schedule 4-O
attached hereto, Seller and the Companies are in compliance in all
material respects with all federal, state, and local laws, ordinances,
regulations, rules, and orders applicable to Seller or the Companies or to
assets of Seller or the Companies including, without limitation, all laws
and regulations relating to the protection of the environment, the safe
conduct of Seller's or the Companies' business, anti-competitive
practices, discrimination, employment, wage and hour practices and health.
None of the Companies nor Seller has received notification of any asserted
past or present failure to comply with any of such laws or regulations.
P. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 4-P attached
hereto, there are no claims, actions, suits, proceedings or investigations
relating to any Environmental Law (as hereinafter defined) pending or
threatened against or affecting Seller or any of the Companies. Except as
set forth on Schedule 4-P attached hereto: (i) no release of any hazardous
substance, medical waste, toxic waste or controlled substance has occurred
or is occurring as a result of the business of Seller or any of the
Companies; (ii) no hazardous substance, medical waste, toxic waste or
controlled substance is currently present at, or has been previously
generated, stored, treated or disposed of at any landfill by any of the
Companies or through the conduct of the business of Seller or any of the
Companies except deminimis amounts mixed with household waste; (iii) no
underground or partially underground storage tank has been or is currently
located at any facility of Seller or of any of the Companies; (iv) the
business, activities and processes heretofore conducted by
Seller and the Companies comply in all material respects with all
applicable Environmental Laws; (v) no facility of Seller or any of the
Companies is listed on any list, registry or other compilation of sites
that require, or potentially require, removal, remedial action or any
other response under any Environmental Law as the result of the presence,
release or potential release of any hazardous substance, medical waste,
toxic waste, or controlled substance; (vi) neither Seller nor any of the
Companies has received any notice that any of the Companies is liable or
responsible, or potentially liable or responsible, for any costs of any
removal, remedial action or other response under any Environmental Law as
the result of the presence, release or potential release of any hazardous
substance, medical waste, toxic waste, or controlled substance; and (viii)
there is no pending litigation or administrative proceeding (and neither
Seller nor any of the Companies know or has reason to know of any
potential or threatened litigation or administrative proceeding) in which
it is asserted that any of the Companies has violated or is not in
compliance with any material Environmental Law. "Environmental Law" means
all laws, statutes or acts of the United States of America, the State of
Georgia, or any political subdivision thereof, that relate to the
condition of the air, ground or surface water, land or other parts of the
environment, to the release or potential release of any substance or
radiation into the air, ground or surface water, land or other parts of
the environment, or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or other handling of substances
that might pollute, contaminate or be hazardous or toxic if present in the
air, ground or surface water, land, or other parts of the environment.
None of the Companies nor Seller has received any written notice to the
effect that the landfills and other disposal sites to which waste material
transported by
Seller or any of the Companies has been delivered are not properly
licensed pursuant to applicable Environmental Laws to receive the material
disposed of therein.
Q. NO BROKERS' OR AGENTS' FEES. No agent, broker, finder, representative or
other person or entity acting pursuant to authority of the Seller 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.
R. NO MATERIAL OR ADVERSE CHANGE. Except as otherwise disclosed in Schedule
4-R attached hereto, since June 30, 2001, there has not been: (i) any
material adverse change in the financial condition, assets, liabilities,
business or results of operations of any of the Companies; (ii) any
threatened or prospective event or condition of any character whatsoever
which could materially and adversely affect the business, financial
condition or results of operations of any of the Companies; (iii) any sale
or other disposition of any of the Companies' assets other than in the
ordinary course of business; or (iv) any damage, destruction or loss
(whether or not insured) materially and adversely affecting the property,
business or prospects of any of the Companies.
S. 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
provisions of the Articles of Incorporation or By-Laws of Seller or of any
of the Companies; (ii) conflict with or violate any decree, writ,
injunction or order of any court or administrative or other governmental
body which is applicable to, binding upon or
enforceable against any of the Companies or Seller; or (iii) except as set
forth on Schedule 4-S result in any breach of or default (or give rise to
any right of termination, cancellation or acceleration) under any
mortgage, contract, agreement, indenture, will, trust or other instrument
which is either binding upon or enforceable against the Seller or any of
the Companies or assets of the Companies.
T. 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 any of the
Companies are a party or by which any of the properties of the Companies
or the Atlanta service center is bound or to which the outstanding shares
of stock of any of the Companies or any of the properties of the Companies
is subject.
U. ACCURACY OF THE INFORMATION FURNISHED BY THE SELLER. No representation,
statement or information made or furnished by the Seller to the Buyer,
including those contained in this Agreement and the various exhibits
attached hereto and the other information and statements referred to
herein contains or shall contain any untrue statement of any material
fact.
5. REPRESENTATION AND WARRANTIES OF BUYER. In order to induce the Seller to
enter into this Agreement and to consummate the transactions contemplated
hereunder, the Buyer hereby makes the following representations,
warranties, covenants and agreements:
A. ORGANIZATION AND EXISTENCE. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Georgia 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 the Buyer to
consummate the transactions contemplated by this Agreement, assuming due
execution of this Agreement by the parties.
C. NO BROKER'S OR AGENT'S FEES. No agent, broker, finder, representative
or other person or entity acting pursuant to the authority of the Buyer
will be entitled to any commission or finder's fee 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
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.
6. ADDITIONAL AGREEMENT OF THE SELLER. The Seller further agrees with the
Buyer as follows:
A. ACCESS TO OFFICES AND RECORDS. The Seller shall cause the Companies to
afford representatives of the Buyer, from and after the date of execution
of this
Agreement, full access, during normal business hours and upon reasonable
notice, to all offices, books, properties, contracts, documents and
records of the Companies and to furnish to the Buyer or its
representatives all additional information, including financial or
operating information with respect to the business and affairs of the
Companies that the Buyer or its representatives may reasonably request.
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 Companies so furnished; and (ii) will promptly return all
such documents and all copies to the Companies if this Agreement is not
closed for any reason.
B. CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the execution
and delivery of this Agreement and until the Closing Date, except as
otherwise provided by the prior written consent or approval of the Buyer:
(1) The Seller will cause the Companies to conduct business and
operations in the manner in which the same has heretofore been conducted
and Seller will use its best efforts to cause the companies to: (i)
preserve the Companies' current business organization intact, (ii) keep
available to the Buyer the services of the Companies' and the Atlanta
service center's current employees and the Companies' agents and
distributors; and (iii) preserve the Companies' and the Atlanta service
center's current relationships with customers, suppliers
and others having business dealings with the Companies or the Atlanta
Service Center.
(2) The Seller will cause the Companies and the Atlanta service
center to maintain all its properties in customary repair, order and
condition, reasonable wear and use excepted, and will maintain its
existing insurance upon all of its properties and with respect to the
conduct of its business in such amounts and of such kinds comparable to
that in effect on the date of this Agreement.
(3) The Seller will take action to insure that none of the Companies
will: (i) pay any bonus or increase the rate of compensation of any of the
Companies' employees or enter into any new employment agreement or amend
any existing employment agreement; (ii) make any general increase in the
compensation or rate of compensation payable or to become payable to the
Companies' hourly-rated employees; (iii) sell or transfer any of the
Companies' assets; (iv) obligate itself for capital expenditures other
than in the ordinary course of business and not unusual in amount; or (v)
incur any material obligations or liabilities, which are not in the
ordinary course of business, or enter into any material transaction.
(4) The Seller shall not, and shall not permit any of the Companies
to, issue or enter into any subscriptions, options, agreements or other
commitments in respect of the issuance, transfer, sale or encumbrance of
any shares of the Acquisition Stock.
C. EXECUTION OF FURTHER DOCUMENTS BY SELLER. From and after the Closing, upon
the
reasonable request of the Buyer, the Seller shall execute, acknowledge and
deliver such documents as may be appropriate to carry out the transactions
contemplated by this Agreement.
D. INDEMNIFICATION BY SELLER.
(1) The Seller 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 representation,
warranty, covenant or other obligation of the Seller set forth in or made
in connection with this Agreement;
(b) The assertion against the Buyer or any of the Companies of any
material liability or obligation of any of the Companies or of any claim
relating to the operation of the Companies' businesses, prior to the
Closing Date, whether absolute or contingent, matured or unmatured, known
or unknown as of the Closing Date (including, without limitation, customer
claims or disputes); and
(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 its option, to compromise or
defend, at its 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 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.
(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 any of the Companies or of any claim
relating to the operation of the Companies' 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 made at and as of the
Closing Date.
B. PRE-CLOSING OBLIGATIONS. The Seller shall have performed and complied
with
all the obligations and conditions required by this Agreement to be
performed or complied with by Seller at or prior to the Closing Date,
including the execution and delivery of all documents and contracts
required to be delivered at or before the Closing Date pursuant to this
Agreement.
C. OPINION OF COUNSEL FOR SELLER. The Buyer shall have received a
favorable opinion from counsel for the Seller dated the date of the
Closing, in form satisfactory to counsel for the Buyer, to the effect
that:
(1) Each of the Companies is a corporation duly organized and
legally existing in good standing under the laws of its respective
jurisdiction and its has the corporate power and authority to carry
on its business as now being conducted and to own or hold under
lease, or otherwise, its assets
(2) This Agreement has been duly executed and delivered by the
Seller, and constitutes a valid, enforceable and binding obligation
of the Seller pursuant to the terms of this Agreement.
(3) Except as otherwise disclosed in this Agreement, counsel does
not know of any action, suit, investigation or other legal,
administrative or arbitration proceeding pending against the Seller
or any of the Companies, or which questions the validity or
enforceability of this Agreement or of any action taken or to be
taken pursuant to or in connection with this Agreement or any
agreement contemplated herein.
(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 Acquisition Property by the Seller pursuant to this Agreement.
(5) The execution and performance of this Agreement by the
Seller will not violate: (i) the Articles of Incorporation or the
By-Laws of any of the Companies, or (ii) any order of any court or
other agency of government known to said counsel.
D. RECEIPT BY THE BUYER OF NECESSARY CONSENTS. All necessary
consents or approvals of third parties to any of the transactions
contemplated hereby shall have been obtained, and satisfactory
evidence of such consents or approvals shall have been delivered to
the Buyer at Closing.
E. RESIGNATION OF OFFICERS AND DIRECTORS. Buyer shall have received
the resignations of all officers and directors of the Companies as
of the date and hour of closing.
9. CONDITIONS TO OBLIGATIONS OF THE SELLER. The obligations of the Seller
to effect the transactions contemplated by this Agreement shall be subject
to the fulfillment at or prior to the Closing Date of each of the
following conditions:
A. VALIDITY OF BUYER'S REPRESENTATIONS. All representations and
warranties of the Buyer contained in this Agreement or otherwise
made in writing pursuant to this Agreement shall have been true and
correct at and as of the date hereof and they shall be true and
correct at and as of the Closing Date, with the same force and
effect as though made at and as of the Closing Date.
B. PRE-CLOSING OBLIGATIONS. The Buyer shall have performed and
complied with all the 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 an delivery of all documents and contracts required to be
delivered at or before the Closing Date pursuant to this Agreement.
C. CORPORATE AUTHORITY OF BUYER. The execution and performance of this
Agreement by the Buyer shall have been duly and legally authorized in
accordance with applicable law, and the Buyer shall have furnished to
counsel for the Seller certified copies of resolutions adopted by the
Board of Directors of the Buyer authorizing and approving 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 Georgia, 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 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. ADJUSTMENT TO PURCHASE PRICE.
A. The Purchase Price shall be adjusted as follows:
1. If the Companies' networking capital (defined as current assets,
minus current liabilities) as of the Closing Date is less than the
Company's networking capital as of May 31, 2001, then such deficiency
shall be deducted from the cash portion of the Purchase Price.
2. As provided in Section 4, Paragraph E (3), if the Companies'
aggregate assets on the date of closing do not equal or exceed the
companies' aggregate assets as of May 31, 2001, the deficiency shall be
deducted from the cash portion of the sales price.
3. As provided in Section 4, Paragraph E (3) if all of the
Companies' term liabilities have not been paid by closing, the amount left
unpaid shall be deducted from the cash portion of the sales price, at
closing, and paid at closing.
B. Any adjustments to be made under this paragraph (other than A(3))
shall be made 30 days after the Closing Date ("the Adjustment
Date"). Current assets and liabilities shall be determined in
accordance with generally accepted accounting principles Seller
shall reimburse Buyer for any deficiencies within 10 days of the
adjustment date.
11. 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 hereby releases Xxxx X. Xxxxxx, Xx., Xxxx X. Xxxx, and any
and all other persons, corporations, partnerships, limited liability companies,
or other entity whatsoever from any and all non-compete provisions
non-solicitation provisions, non-disclosure provisions, or provisions by
whatever name or label contained in the Stock Purchase Agreement or any other
agreement, including, but not limited to, employment agreements, which limit a
releasee's ability to compete with Seller, entered into by any releasee with
Seller or any other entity pursuant to the purchase by Seller of either of the
Companies.
12. OTHER PROVISIONS.
A. INCOMPLETE EXHIBITS. The parties hereto acknowledge and agree (a) that
many, if not all, of the schedules to be attached to this Agreement will
not have been prepared by the time of the 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 the Agreement.
B. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, obligation 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 two (2) years with
the exception of representations and warranties concerning Paragraph 4.M.
hereof, Tax Matters and Paragraph 4.P. hereof, Environmental Matters,
which will survive for as long as any claims may be asserted under the
applicable periods of limitation for violations of any tax or
environmental law, rule or regulation.
C. 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 Buyer. Any such
extension or waiver shall not act as a waiver or an extension of any other
provision of this Agreement.
D. NOTICES. Any notice, request or other documents 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:
(1) If to the Buyer:
Tempered Air Systems, Inc.
000 Xxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Copy to:
Xxxxxx X. Xxxxxxxx, Esq.
000 Xxxxxx Xxxxxx
X.X. Xxx 00
Xxxxxxxxxxx, XX 00000
(2) If to the Seller:
EarthCare Company
00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Copy to:
Xxxxxx X. Xxxx, Esq.
00000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000-0000
E. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Georgia.
F. 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.
G. 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.
H. 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.
I. 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 Gainesville, Georgia. 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.
J. 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.
K. REAL PROPERTY. Specifically included in a separate agreement between
Xxxx X. Xxxxxx, Xx. and Seller is the sale of the real property located on
Calvary Church Road, consisting of approximately 7 acres of land and
includes a 10,000 square foot building. Buyer's obligation to close this
Agreement is specifically conditioned on Seller simultaneously closing the
sale of said real property with Xxxx X. Xxxxxx, Xx.
IN WITNESS WHEREOF the parties have executed this Agreement as of
the________ day of _________, 2001.
"Seller"
EarthCare Company
By:
---------------------------------
"Buyer"
Tempered Air Systems, Inc.
By:
---------------------------------
