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Exhibit 10.7
OPERATING AND MANAGEMENT AGREEMENT
THIS OPERATING AND MANAGEMENT AGREEMENT (this "Agreement") is entered
into as of the ___ day of October, 2000, by and between STAR SERVICES GROUP,
INC., a Florida corporation, whose address is 0000 Xxxxx Xxxxxxxxx Xxxx, Xxxxxxx
Xxxxx, Xxxxxxx 00000, herein referred to as ("STAR") and PEERLESS DADE, INC,
("DADE"), PEERLESS BIG APPLE, INC., ("BIG APPLE"), and PEERLESS MIAMI AVENUE,
INC., ("MIAMI AVENUE") Florida corporations, whose address is 0000 Xxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000, (herein collectively referred to
as "PEERLESS").
RECITALS
WHEREAS, PEERLESS is the owner and operator of several construction and
demolition debris transfer stations and material recovery facilities located in
Dade County, Florida (the "FACILITIES") and the Rolloff Container Business and a
Portable Toilet Business (the "BUSINESSES"); and
WHEREAS, PEERLESS and STAR have this day entered into three (3) Asset
Purchase Agreements for the purchase and sale of certain Assets, as defined in
the Asset Purchase Agreements which include the Facilities and the assets
required to operate the Businesses; and
WHEREAS, PEERLESS at the present time no longer wishes to continue the
operation of the Facilities and the Businesses; and
WHEREAS, STAR has agreed to operate the Facilities and the Businesses
from the date of execution of this Agreement ("Interim Operating Period") until
the delivery of the Audited Financial Statements required pursuant to the Letter
Agreement between the parties dated September 26, 2000 (a copy of which is
attached hereto); and
WHEREAS, PEERLESS has all business, occupation and operating permits
and licenses and/or authorizations necessary for operation of the Facilities and
the Business ("Permits"); and
WHEREAS, STAR has agreed to operate the Facilities and the Businesses;
and
WHEREAS, STAR has experience in the management and operation of
construction and demolition debris Facilities, Rolloff Business and the Portable
Toilet Business; and
WHEREAS, PEERLESS desires that STAR operate the Facilities and
Businesses pursuant to the terms and conditions specifically set forth herein;
and
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STAR desires to operate the Facilities and Businesses pursuant to the
terms and conditions specifically set forth herein;
NOW THEREFORE, in consideration of the mutual agreements between the
parties and other good and valuable consideration, the parties hereto agree as
follows:
1. RECITALS. The above recitals are true and correct and are
incorporated herein by reference.
2. COMMENCEMENT DATE. STAR agrees to commence management and
operation of the Facilities and Businesses on October 30, 2000
(the "Commencement Date").
3. DAY TO DAY OPERATIONS. STAR shall operate the Facilities and
Businesses on a day to day basis using commercially reasonable
efforts and in compliance with all applicable federal, state
and local laws and regulations. STAR may in its sole
discretion change the prices charged at the Facilities and by
the Businesses for the services provided. STAR may also
increase the volume of material collected and received.
PEERLESS will allow STAR to use all of the Assets and
equipment which will be sold under the Asset Purchase
Agreements. In connection with its duties hereunder, STAR will
provide any other equipment it deems necessary to operate the
Facilities and Businesses to the extent allowed under the
currently existing or modified permits and agreements.
PEERLESS shall have the right to observe the day to day
operations of the Facilities and Businesses. STAR shall have
the right, without any input, or consent of PEERLESS, to
create a budget, hire and fire (with notification to PEERLESS)
employees, collect accounts receivables, establish operating
hours and contract for services with third parties as STAR may
deem necessary in its sole discretion. STAR shall be
responsible for all expenses incurred in the operation of the
Facilities and Businesses and shall be entitled to retain all
revenues generated from the Facilities and Businesses
operation during the term of this Agreement. PEERLESS will
provide STAR with all of its customer lists, books and records
("business records") required to operate the Facilities and
Businesses; any confidential business records provided to STAR
shall be maintained as confidential. PEERLESS shall provide
STAR with copies of all correspondence to and from any
regulatory agency related to the permitting of the Facilities
and Businesses and provide STAR with weekly reports of the
status of permitting.
4. EMPLOYEES. STAR shall be responsible for hiring and firing all
employees necessary to operate the Facilities and Businesses.
The employees shall be employees of PEERLESS, or an employee
leasing company, but the compensation shall be the
responsibility of STAR. STAR shall be responsible for the
payment of local, state and federal taxes required for such
employees from the commencement date.
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5. PERMITS AND PERFORMANCE BOND. Unless this Agreement is
terminated as provided in SECTION 8 hereof, PEERLESS shall be
responsible for maintaining existing Permits for the
Facilities and Businesses. STAR agrees to operate the
Facilities and Businesses in compliance with terms of the
Permits as they are currently in effect and all applicable
federal, state and local laws, rules and regulations. PEERLESS
shall be responsible for obtaining the modification to Dade's
Material Recovery Facility ("MRF") permit for tract 55 to
allow for the construction and operation of the MRF utilizing
a "Simplicity" picking line system and modifying the financial
assurance calculation to delete the existing stock pile of RSM
and reduce the volume of construction and demolition debris
stored on site.
6. DISTRIBUTION OF REVENUE. As the operator of the Facilities and
Businesses, STAR shall receive all fees generated from the
operation of the Facilities and Businesses after the
Commencement Date.
7. OPERATING EXPENSES AND INSURANCE. STAR is responsible, after
the Commencement Date, for paying all expenses associated with
the day to day operations of the Facilities and Businesses
which shall include but not be limited to rent payments,
utility charges such as electricity, water, phone service,
maintenance of the equipment, maintenance of the property,
employee costs and expenses, advertising, accounting and
bookkeeping fees. The rent payments shall include, but not be
limited to, $9,000.00 per month for the DADE MRF. PEERLESS
will at STAR'S expense continue its General Liability and
Property Damage insurance on the Facilities and Businesses
property in the amount of One Million Dollars ($1,000,000) per
occurrence. STAR shall be named as an additional insured.
PEERLESS will pay directly its equipment notes for the
equipment used in the operation of the business and STAR will
advance PEERLESS such amounts.
8. TERM. The term of this Agreement shall be for the Period
commencing upon the Commencement Date and extending to the
earlier of (i) the termination of the Letter Agreement; (ii)
the termination of the Asset Purchase Agreement; or (iii) the
Closing; The term "Closing" shall have the meaning accorded to
it under the Asset Purchase Agreements and the Letter
Agreement, the terms of which are incorporated herein by this
reference.
Upon the expiration of the term of this Agreement, STAR shall
immediately surrender the Facilities and the assets relating
to the Businesses in good order and in the same condition as
at the commencement of this Agreement. In the event STAR does
not purchase the Assets pursuant to the Asset Purchase
Agreement, STAR agrees that it shall deliver to PEERLESS all
surveys, reports, permits (or applications for permits), tests
or monitoring information and all other documents relating to
the Facilities and the assets relating to the Businesses and
any permits necessary for the Facilities and the assets
relating to the Businesses, in the
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possession of STAR or third parties retained or employed by
STAR. STAR agrees to fully cooperate with PEERLESS to obtain
any of the foregoing from such third parties (including
providing written authorization to such third parties to
release any and all such information). STAR agrees to
indemnify and hold PEERLESS harmless against any injury or
damage by reason of its management, operation or inspection of
the Facilities and Businesses (as contemplated under the Asset
Purchase Agreement) as well as any liens placed on the
Facilities and the assets relating to the Businesses for
failure of STAR to pay any third parties. Notwithstanding the
foregoing, STAR shall have no indemnification obligation or
liability for any occurrence, act or omission of PEERLESS, its
shareholders, directors, officers, employees or agents, which
occurrence, act or omission occurred prior to the Commencement
Date by reason of PEERLESS'S ownership, management and
operation of the Facilities and Businesses.
9. INDEMNIFICATION, WAIVER AND RELEASE.
A. STAR'S INDEMNIFICATION. STAR will indemnify PEERLESS, its
shareholders, officers, directors, employees and agents,
against and hold PEERLESS, its shareholders, officers,
director, agents and employees harmless from any and all
demands, claims, causes of action, fines and penalties,
damages (including consequential damages), losses,
liabilities, judgments and expenses (including, without
limitation, attorney's fees and court costs) incurred in
connection with or arising from or related to STAR'S actions,
representations and warranties under this Agreement or
incurred as a result of STAR'S operation of the Facilities and
Businesses after the effective date of this Agreement or in
connection with other events or conditions which occur after
the effective date of this Agreement and which relate to acts
or omissions of STAR, its agents, employees, guests and
invitees, excluding therefrom only such loss as is proximately
caused by the act, omission or negligence of PEERLESS. If any
action or proceeding is brought against PEERLESS, its
employees or agents, by reason of any such claims, STAR, upon
notice from PEERLESS, will defend the claim at STAR'S expense
with counsel reasonably satisfactory to PEERLESS. This
paragraph shall survive the expiration or earlier termination
of this Agreement.
B. PEERLESS' INDEMNIFICATION. PEERLESS will indemnify STAR,
its shareholders, officers, directors, employees and agents,
against and hold STAR, its shareholders, officers, directors,
agents and employees harmless from any and all demands,
claims, causes of action, fines and penalties, damages
(including consequential damages), losses, liabilities,
judgments and expenses (including, without limitation,
attorney's fees and court costs) incurred in connection with
or arising from or related to PEERLESS' actions,
representations and warranties under this Agreement or
incurred as a result of PEERLESS' operation of the Facilities
and Businesses prior to the effective date of this Agreement
or in connection with other events or conditions which occur
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before the effective date of this Agreement and which relate
to acts or omissions of PEERLESS, its agents, employees,
guests and invitees, excluding therefrom only such loss as is
proximately caused by the act, omission or negligence of STAR
during the Agreement Term. If any action or proceeding is
brought against STAR, its employees or agents, by reason of
any such claims, PEERLESS, upon notice from STAR, will defend
the claim at PEERLESS' expense with counsel reasonably
satisfactory to STAR. This paragraph shall survive the
expiration or earlier termination of this Agreement.
10. GOVERNING LAW/VENUE. This Agreement shall be governed by and
construed in accordance of the laws of the State of Florida.
The forum for any legal action arising hereunder shall be in
Dade County, Florida.
11. ATTORNEY FEES AND COSTS. In the event a dispute arises
hereunder, the prevailing party shall have the right to
collect its reasonable attorney's fees and costs incurred in
connection with such dispute, whether in pretrial, trial, on
appeal or in bankruptcy, from the non-prevailing party.
12. FORCE MAJEURE. In the event an act of God, a strike,
governmental action or other significant work stoppage, beyond
the control of STAR, occurs which prevents STAR from
performing its duties hereunder, STAR shall be excused from
performing its duties herein for as long as practically
possible after the occurrence of the same or until the end of
the same unless such happening shall be directly caused by
STAR'S failure to comply with the Permits or its obligations
under this agreement. STAR shall notify PEERLESS as soon as
practically possible of a force majeure event.
13. AGREEMENT BINDING. The terms and conditions of this Agreement
shall be binding upon the successors and assigns of the
parties hereto.
14. SURVIVAL. Termination of this Agreement shall not affect the
rights or obligations of the parties which arose prior to the
termination.
15. NOTICES. All notices required hereunder shall be delivered to
each of the parties hereto at the address first written above
by certified, U.S. Mail, return receipt requested, by a
recognized overnight courier service, or by confirmed
facsimile delivery. A copy of all notices sent to PEERLESS
shall also be sent to G. Xxxxxxx Xxxxxxx, Esq., 0000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000, and a
copy of all notices sent to STAR shall also be sent to Xxxxxx
X. Xxxxx, Esq., Xxxxx & Xxxxxxxx LLP., 00 Xxxx Xxxxxx, Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000.
16. NO JOINT VENTURE OR PARTNERSHIP. Notwithstanding anything
contained herein to the contrary, neither this Agreement nor
the operations required hereby shall be
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deemed to create any joint venture, partnership or any other
business enterprises between STAR and PEERLESS.
17. ASSIGNMENT. Neither STAR nor PEERLESS may assign this
Agreement in whole or in part to any other person or entity,
except that STAR shall have the right to assign its
performance obligations under this Agreement to one or more of
its wholly owned subsidiaries. Not withstanding any such
assignment STAR shall remain responsible for its performance
obligations under this agreement.
18. CONSTRUCTION. This Agreement shall not be construed more
strictly against one party or the other, it being recognized
that both STAR and PEERLESS have contributed substantially and
materially in preparing this Agreement.
19. COUNTERPARTS. This Agreement may be executed in several
counterparts and all so executed shall constitute one
Agreement, binding on all the parties hereto even though all
the parties are not signatories to the original or the same
counterpart.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
the day and year first written above.
The undersigned, STAR SERVICES GROUP, INC., a Florida corporation,
joins in this Agreement to guarantee the full performance of STAR in any and all
obligations of STAR under this Agreement.
STAR SERVICES GROUP, INC.
By:
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Its:
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PEERLESS DADE, INC.
PEERLESS BIG APPLE, INC.
PEERLESS MIAMI AVENUE, INC.
By:
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Its:
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