Exhibit 2.1
ENVIRONMENTAL PLUS, INCORPORATED
(Formerly known as Kinlaw Energy Partners Corporation)
PURCHASE OF ASSETS
OF
GULF COAST COOLING TOWER SERVICE, INC.
__________________________________________
JUNE 15, 1996
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), made and
entered into effective the 15th day of June, 1996, by and between
ENVIRONMENTAL PLUS, INCORPORATED (Formerly Known as Kinlaw Energy
Partners Corporation, a public Texas corporation ("Purchaser"), and
GULF COAST COOLING TOWER SERVICE, INC., a Texas corporation ("
Seller"');
WITNESSETH:
WHEREAS, subject to the terms and conditions contained in this
Agreement, Seller desires to sell, and Purchaser desires to
purchase, certain assets specified herein;
WHEREAS, the parties wish to make certain agreements related
to such purchase and sale and certain other agreements;
NOW THEREFORE, in consideration of the mutual promises and
agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
Section I. Purchase and Sale of Assets
1.1 Purchase and Sale. Subject to the terms and conditions
contained herein, Seller hereby sells, assigns, transfers, conveys,
and delivers to Purchaser, and Purchaser hereby purchases from
Seller, all of Seller's right, title, and interest in and to the
following of Seller's assets (all of such assets being referred to
herein collectively as the "Assets"):
1.2 Assets. Without limiting the generality of Section 1.1
hereof, the Assets include the following:
(a) All of Seller's equipment, furniture, fixtures,
computer software, shop inventory, and leasehold improvements,
including but not limited to those listed on Exhibit "A"
hereto;
(b) All technical data, customer lists and records,
customer credit information, computer printouts,
correspondence, documentation relating to Seller's business;
and copies of all accounting records, inventory records, and
all other files and records of Seller's business;
(c) All of Seller's good-will, including the right to
use the current name and telephone number of "GULF COAST
COOLING TOWER" (Seller agrees to execute any documents
required to transfer said name and telephone number to
Purchaser); and
(d) All of Seller's rights under the "Assumed Contracts"
(as herein defined).
Section 2. Assumption of Liabilities
2.1 Limit on Assumed Obligations. Except as expressly
provided in Section 2.2, no obligation or liability of Seller or
relating to Seller's business or the Assets, of any nature
whatsoever (whether express or implied, fixed or contingent,
liquidated or unliquidated, known or unknown, accrued, due or to
become due), is being assumed by Purchaser, nor shall Purchaser be
liable to pay, perform or discharge any such obligation or
liability, nor shall the Assets be subject to any such obligation
or liability. Without limiting the generality of the foregoing,
except as expressly provided in Section 2.2, Purchaser has not
assumed or become liable to pay, perform or discharge, and Seller
warrants that no Asset is subject to:
(a) Any mortgage, security interest, lien or encumbrance
of any kind, other than as expressly assumed pursuant to
Section 2.2;
(b) Any obligation or liability arising from the
relationship between Seller and any of its employees or based
upon termination of such employees by Seller, including,
without limitation, any severance or vacation pay obligation
of Seller existing at the "Effective Time" (as herein defined)
or arising by reason of the termination of Seller's employees
by Seller;
(c) Any obligation or liability of Seller for or
relating to taxes of any nature or description, whenever
incurred or accrued, including, without limitation, any tax
liability for any period prior to the Effective Time;
(d) Any obligation, liability or expense arising out of
any claim made or suit brought for personal injury, death,
property damage, tortious injury or damage, breach of
fiduciary duty or trust, or errors or omissions, in any case
attributable to a cause of action arising prior to the
Effective Time;
(e) Any obligation or liability arising from a violation
or alleged violation of law, rule or regulation prior to the
Effective Time, including, without limitation, any claim,
obligation, liability, loss, damage or expense, of whatever
kind or nature, contingent or otherwise, known or unknown,
incurred or imposed or based upon any provision of federal,
state or local law or regulations or common law applicable to
Seller's business, and arising out of any act or omission of
Seller, or Seller's employees, agents or representatives
occurring prior to the Effective Time;
(f) Any obligation or liability to any shareholder of
Seller, however arising;
(g) Any obligation or liability relating to any act or
omission of Seller under, or breach by Seller of, any Assumed
Contract prior to the Effective Time;
(h) Any liability arising from the assignment to
Purchaser of any Assumed Contract without having obtained any
required consent to such assignment; or
(i) Any liability or obligation arising in connection
with any litigation, claim or proceeding to which Seller is or
becomes a party.
2.2 Assumed Obligations. Purchaser hereby assumes the
following, and only the following, liabilities and obligations of
Seller (the "Assumed Obligations"):
(a) Seller's obligations arising after, and properly
accruable to periods subsequent to, the Effective Time under
the terms of those contracts, agreements and leases listed on
Exhibit "B" hereto (the "Assumed Contracts"), to the extent,
and only to the extent, such obligations and liabilities are
set forth in the copies of the Assumed Contracts delivered to
Purchaser; and
(b) The liabilities, if any, listed on Exhibit "C"
hereto.
Section 3. Purchase Price.
The purchase price (the "Purchase Price") for the Assets shall
be Five Hundred Seventy-Four Thousand (574,000) shares of
Purchaser's Series A Convertible Preferred Stock ($1.00 par value)
("Preferred Stock"), and shall be paid at the time of Closing.
Purchaser shall make an allocation (the "Allocation") of the
Purchase Price among the Assets within a reasonable period alter
the Closing Date and promptly notify Seller in writing thereof
Purchaser and Seller shall use the Allocation in filing Form 8594
with the Internal Revenue Service, as required by Section 1060 of
the Internal Revenue Code of 1986, as amended, and in filing all
relevant federal and state income tax returns. Seller agrees to
cooperate with Purchaser to the extent necessary to comply with any
documentation or other requirements that may arise in conjunction
with filing Form 8594.
Each share of Preferred Stock will, at the option of Seller be
convertible into one share of Purchaser's common stock. Purchaser
may, upon written thirty (30) day notice delivered to Seller prior
to the time of conversion of such Stock into Purchaser's common
stock, repurchase such preferred Stock for cash equal to 200% of
the par value of such preferred stock. Seller may convert the
Preferred Stock into shares of common stock of Purchaser at any
time alter the date of issue. In the event Purchaser delivers
written notice to Seller of it's intent to repurchase the Preferred
Stock, Seller will have twenty (20) days to deliver written notice
of it's desire to convert the Preferred Stock into Purchaser's
common stock.
Section 4. Closing.
The closing (the "Closing") of the transactions contemplated
hereby will occur simultaneously with the completion and delivery
thereof to Joel Held, Esquire, in Dallas, Texas audited financial
statements (in a form acceptable for S.E.C. purposes) of the Assets
being purchased hereunder. June 15, 1996 is herein sometimes
referred to as the "Effective Time."
Section 5. Representation and Warranties of Seller.
Seller hereby represents, warrants, covenants, and agrees to
and with Purchaser as follows:
5.1 Due Organization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Texas. Seller has the corporate power and authority
to own the Assets, to conduct its business as it is now being
conducted, and to enter into and perform its obligations under this
Agreement and all other documents, instruments and agreements
delivered by Seller pursuant hereto (collectively, with this
Agreement, the "Seller Agreements").
5.2 Approval and Effect of Sale. The execution and delivery
of the Seller Agreements by Seller, the sale and delivery of the
Assets, and the performance by Seller of all obligations under the
Seller Agreements have been duly authorized by all necessary
corporate action on the part of Seller. The Seller Agreements have
been duly executed and delivered by Seller, and the Seller
Agreements constitute valid and legally binding obligations of
Seller, enforceable against Seller in accordance with their
respective terms (subject to limitations on enforceability under
normal equity principles and by applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws affecting the
rights of creditors generally), and the consummation of the
transactions contemplated herein and therein will not violate or
result in a default under the terms or provisions of Seller's
charter or bylaws. No consent or approval of any governmental
authority is required in connection with the execution and delivery
by Seller of the Seller Agreements or the consummation of the
transactions provided for herein and therein.
5.3 Title to Assets. Seller has, and has conveyed to
Purchaser pursuant hereto, good title to all of the Assets, free
and clear of any pledge, lien, security interest, encumbrance or
restriction whatsoever.
5.4 Contracts. A true, correct, and complete copy of each of
the Assumed Contracts is included in the business records located
at Seller's business. Seller has duly performed in all material
respects all obligations to be performed by it under the Assumed
Contracts at or prior to the Effective Time and has received no
notice from any other party thereto that it is in default in any
material respect under any of its obligations thereunder. To the
best knowledge of Seller, no other party to any Assumed Contract is
in default in any material respect under any of its obligations
thereunder. No condition or state of facts exists that with notice
or the passage of time, or both, would constitute a default by
Seller under any Assumed Contract, and each Assumed Contract is in
full force and effect and enforceable by Seller (and, after
assignment to Purchaser at the Effective Time, by Purchaser)
against all other parties thereto in all material respects.
5.5 Litigation: Claims. There is no ligation, action, suit,
proceeding or governmental investigation arising out of the
operations of Seller that is pending or, to the best of Seller's
knowledge, threatened, against Seller or affecting Seller or
Seller's business or any of the Assets, at law or in equity, or
before any federal, state, municipal, local, or other governmental
authority, nor does Seller know or have reason to know of any
ground for any such litigation, action, suit, proceeding, or
investigation. Seller is not subject to any order, writ, or decree
of any court or other governmental authority arising out of
Seller's business and Seller is not involved in any material
controversy with any of its employees.
5.6 Compliance with Law. Seller is in compliance in all
material respects, and has complied in every material respect, with
all laws, regulations, rules, and decrees of all governmental
authorities whatsoever that are applicable to the conduct of its
business.
5.7 Finder's Fee. Seller has done nothing to cause Purchaser
to incur any liability to any party for any brokerage or finder's
fee or agent's commission, or the like, in connection with this
Agreement or any transactions provided for herein.
5.8 Taxes. All tax returns of Seller of every kind,
including, without limitation, returns of all income taxes, real
and personal property taxes, intangibles taxes, withholding taxes,
employee compensation taxes and all other applicable taxes, due to
have been filed prior to the Effective Time have been duly filed in
accordance with applicable law. No deficiencies for any taxes have
been asserted or, to the knowledge of Seller, threatened, and no
audit of such returns is currently underway or, to the knowledge of
Seller, threatened. There are no outstanding agreements by Seller
for the extension of time for the assessment of any tax.
5.9 Material Misstatements or Omissions. No representation
or warranty made by Seller in any Seller Agreement, and no written
statement or exhibit that has been furnished to Purchaser pursuant
hereto or thereto, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
Section 6. Further Assurances.
Each of the parties shall promptly and duly execute,
acknowledge and deliver such assignments, documents, instruments
and other assurances, and shall take such other actions, as may be
from time to time reasonably necessary or desirable to carry out
more effectively the provisions of this Agreement and to establish
and protect the rights created or intended to be created in favor
of the parties hereunder.
Section 7. Survival of Representations.
All representations, warranties and covenants of Seller
contained in this Agreement shall survive the Closing Date and
shall be fully applicable and effective whether or not Purchaser
relies in fact thereon or has knowledge, acquired either before or
after the date
hereof and whether from Seller or from its own investigation, of
any fact at variance with, or of any breach of, any such
representation, warranty or covenant.
Section 8. Indemnification.
8.1 Indemnification by Seller. Seller shall defend,
indemnify, and hold Purchaser wholly harmless from and against any
and all liability, loss, cost and expense whatsoever (including
reasonable fees of legal counsel and related disbursements, whether
such fees and disbursements are incurred in connection with trial
or appellate proceedings or otherwise) that may be incurred by
Purchaser as a result of, or arising out of, or attributable to, or
based upon:
(a) Seller's failure to perform any of its agreements
contained in any Seller Agreement or Seller's failure to pay
any of its liabilities or to perform any of its obligations
other than the Assumed Obligations;
(b) Noncompliance with the Bulk Sales Article of the
Uniform Commercial Code of any applicable jurisdiction;
(c) Any breach of any representation, warranty, covenant
or agreement of Seller set forth herein;
(d) Any claim, obligation, liability, loss, damage or
expense, of whatever kind or nature, contingent or otherwise,
known or unknown, incurred or imposed or based upon any
provision of federal, state or local law or regulations or
common law, applicable to Seller's business or any similar
business and arising out of any act or omission of Seller, its
employees, agents or representatives occurring prior to the
Closing Date; or
(e) Any liability arising from the assignment to
Purchaser of any Assumed Contract without having obtained any
required consent to such assignment.
8.2 Manner of Payment of Finally Determined Claims. The
amount of any liability, loss, cost, or expense for which Seller
shall be finally determined, pursuant to the provisions of Section
8.3 hereof, to have an obligation to indemnify Purchaser pursuant
to this Section 8, shall be paid to Purchaser in immediately
available funds no later than ten (10) days after such final
determination.
8.3 Procedure for Obtaining Indemnification.
(a) In the event that Purchaser shall claim that it is
entitled to be indemnified pursuant to the terms of this
Section 8, it shall so notify Seller in writing of such claim.
Such notice shall specify the breach of representation,
warranty or agreement claimed by Purchaser and the liability,
loss, cost or expense incurred by, or imposed upon, Purchaser
on account thereof if such liability, loss, cost or expense
is liquidated in amount, the notice shall so state and such
amount shall be deemed the amount of the claim of Purchaser.
If the amount is not liquidated, the notice shall so state
and, in such event, a claim shall be deemed asserted against
Seller on behalf of Purchaser, but no payment shall be made on
account thereof until the amount of such claim is liquidated
and the claim is finally determined.
(b) If Seller shall not, within twenty (20) days alter
the receipt of such notice, advise Purchaser, in writing, that
it denies the right of Purchaser to indemnity in respect to a
claim, then the amount of such claim, at once if said claim is
liquidated, or subsequently at such time as any unliquidated
claim has become liquidated, shall be deemed to be finally
determined between the parties hereto.
(c) If Seller shall notify Purchaser that it disputes
any claim made by Purchaser, then the parties hereto shall
endeavor to settle and compromise said claim, or may agree to
submit the same to arbitration, and if unable to agree on any
settlement or compromise or submission to arbitration, such
claim for indemnification shall be settled by appropriate
litigation, and any liability established by reason of such
settlement, compromise, arbitration or litigation shall be
deemed to be finally determined and shall be paid and
satisfied in accordance with this Section 8.
(d) Purchaser shall promptly give written notice to
Seller of any claim of a third party that may reasonably be
expected to result in a claim for indemnification hereunder.
Seller may elect to settle the claim, and such settled claim
shall be deemed to be finally determined and shall be paid and
satisfied in accordance with this Section 8. If Seller does
not settle the claim, Seller shall then defend such claim at
its expense with counsel selected by Seller and reasonably
satisfactory to Purchaser. Counsel for Seller and Purchaser
shall consult and cooperate at all times in defending against
such a claim, but if the proceeding involves claims against
Purchaser in addition to the claim for which indemnification
under this Section 8 is being sought, the defense of those
claims shall be within the sole discretion of Purchaser and
its counsel.
Section 9. Miscellaneous.
9.1 Notices. All notices or other communications required or
permitted to be given hereunder shall be, as elected by the person
giving such notice, personally delivered or transmitted by postage
prepaid certified mail, to the parties as follows:
(i) If to Purchaser:
J. D. Davenport, President
P.O.Box 795517
Dallas, Texas 75379-5517
with a copy to:
Joel Held
Hill, Held & Metgzer L.L.P.
One Turtle Creek Village
3878 Oak Lawn - Fourth Floor
Dallas, Texas 75219
(ii) If to Seller:
George Davis, President
Gulf Coast Cooling Tower Service, Inc.
Rt. I, Box 41
Overton, Texas 75284
Except as otherwise specified herein, all notices and other
communications shall be deemed to have been duly given on (i) the
date of receipt if delivered personally, or (ii) five (5) days
after posting if transmitted by mail. Any party hereto may change
its address for purposes hereof by notice to all other parties
hereto.
9.2 Publicity. Except as required by law, Seller will not
make any announcement of the transactions provided for herein
except in a manner acceptable to Purchaser.
9.3 Expenses. Each party shall pay all fees for legal and
accounting services incurred by such party in connection with the
transactions provided for in this Agreement.
9.4 Binding Effect. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the successors,
legal representatives, and assigns of the parties hereto.
9.5 No Third Party Beneficiaries. Nothing in this Agreement,
whether expressed or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other
than the parties to it and their respective successors and assigns.
Nothing herein is intended to relieve or discharge the obligation
or liability of any third person to any party to this Agreement,
nor shall any provision give any third persons any right of
subrogation or action over or against any party to this Agreement.
9.6 Construction. This Agreement shall be deemed to be made
in Texas and shall in all respects be interpreted, construed, and
governed by and in accordance with the laws of the State of Texas.
No provision of any Seller Agreement shall be construed against or
interpreted to the disadvantage of any party hereto or thereto by
any court or other governmental or judicial authority by reason of
such party's or its counsel's having or being deemed to have
structured or drafted such provision.
9.7 Headings. The headings and subheadings hereof are
inserted for convenience of reference only and shall not affect the
interpretation of this Agreement.
9.8 Amendment. This Agreement may be amended only in a
writing signed by all of the parties hereto.
9.9 Entire Agreement. This Agreement (together with the
Disclosure Schedule and the Seller Agreements, all of which are
hereby incorporated herein by reference) merge all prior
negotiations between the parties and collectively embody the entire
agreement of the parties with respect to the subject matter hereof
9.10 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute and
be the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement under seal on this 15th day of June, 1996.
ENVIRONMENTAL PLUS, INCORPORATED
By:
J. D. Davenport, President
GULF COAST COOLING TOWER SERVICE,
INC.
By:
George Davis, President
EXHIBIT "A"
TRANSFERRED
ASSET VALUE
----- -----------
N/R - TRI STATE CONST. $ 76,000
N/R - LEWIS INDUSTRIES 201,369
INVENTORY 47,711
BLDG & LAND-BORGER 75,000
BLDG & LAND-LA MARQUE 30,000
22'GOOSENECK JOB TRAILER 7,425
TRI TAN 4,200
CFM AIR COMPRESSOR 1,500
125 CFM AIR COMPRESSOR 1,800
15 TON LORAIN CRANE 1,200
SIMON MANLIFT 15,000
SKY WITCH SCISSOR LIFT 7,500
CLARK LIFT TRUCK 6000# 6,000
CLARK LIFT TRUCK 6000# 6,000
TOYOTA FORK TRUCK 9000# 4,200
CHEVROLET 3/4 TON-DIESEL 18,000
KUBOTA TRACTOR 2,100
HYDRO BLASTER 10-20 NLB 9,000
CAT MOTOR GRADER 3,000
INDUMA MILLING MACHINE 1,740
BAND SAW 14" 450
BAND RESAW 36" 6,000
I8' UTILITY TRLR 10,000# 1,080
MACK DUMP TRUCK 7,000
MACK WINCH TRUCK 8,000
CASE 580D BACKHOE 12,000
TRAILER 20,000# 1,800
JOHN DEER 450 DOZER 6,000
FIAT ALLIS 21B DOZER 6,000
1991 BUICK LeSABRE 7,200
1993 FORD F-150 7,200
1993 FORD RANGER 2,700
CESSNA 182 15,000
------
TOTAL $599,185
EXHIBIT "B"
All uncompleted work and/or service contracts, if any, between
Seller and customers of Seller (work in process). All information
and records regarding same, if any, will be delivered to Purchaser
on the effective date.
End of Exhibit "B"
EXHIBIT "C"
NONE.