SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement"), dated as of May 25, 2006, is made
by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, not individually but solely in his capacity
as the receiver of Northshore Asset Management, LLC, a Delaware limited
liability company, and related entities, including, but not limited to, NSCT,
LLC (the "Northshore Receiver"), and Connecticut Banking Commissioner ▇▇▇▇ ▇.
▇▇▇▇▇, not individually but solely in his capacity as receiver of Circle Trust
Company ("Circle Trust"), a Connecticut state chartered trust bank (the "Circle
Receiver").
WHEREAS, each of the Northshore Receiver and the Circle Receiver has
asserted and believes that he owns and is entitled to the 1,000,000 shares of
common stock, no par value, of Startech Environmental Corporation ("Startech")
purported by the Circle Receiver to be beneficially owned by him represented on
the date hereof by certificate number 6381-8 (the "Subject Securities") and a
bona fide dispute exists over such ownership;
WHEREAS, given the limited trading volume in the common stock of Startech
in relation to the number of shares of common stock of Startech held by the
Northshore Receiver and the Circle Receiver, the parties hereto believe that a
cooperative plan for the disposition of the Subject Securities is prudent and
consistent with the fiduciary duties of each of the Northshore Receiver and the
Circle Receiver; and
WHEREAS, the parties hereto are entering into this Agreement in settlement
of their respective claims with respect to the Subject Securities.
NOW, THEREFORE, for good and valuable consideration, including the mutual
promises and agreements herein made, receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
1. REPRESENTATIONS OF THE CIRCLE RECEIVER. The Circle Receiver hereby
represents and warrants to the Northshore Receiver and agrees in favor of the
Northshore Receiver that (a) the Circle Receiver has not assigned any interest
in any matter released or purported to be released by him hereby to any other
person or entity, and (b) in the case of clauses (i) through (v) of this Section
1(b), subject to the receipt of the Connecticut Order (as defined below) in a
form reasonably acceptable to both the Northshore Receiver and the Circle
Receiver, (i) the Circle Receiver has full power and authority to execute and
deliver this Agreement and perform his obligations hereunder, (ii) the execution
and delivery of this Agreement by him, the performance by him of his obligations
hereunder and the consummation of the transaction by him contemplated by this
Agreement have been duly authorized and approved, (iii) this Agreement has been
duly executed by him and constitutes a legal, valid and binding obligation of
him, (iv) the execution and delivery of this Agreement by him, the performance
by him of his obligations hereunder and the consummation of the transactions
contemplated hereby by him do not and will not (x) violate, contravene, breach,
or constitute an event of default under, any contract, agreement, indenture or
instrument to which the Circle Receiver or Circle Trust is a party, or by which
any of their respective properties or assets are bound, or to which the Circle
Receiver or Circle Trust may be subject or (y) violate, contravene or breach any
statute, law, judgment, decree, order, regulation or rule of any court or
governmental authority applicable to
the Circle Receiver or Circle Trust and (v) the Subject Securities may be sold
or otherwise disposed of in accordance with this Agreement, without any further
receivership action on the part of the Circle Receiver or any approval of any
court or other governmental authority.
2. REPRESENTATIONS OF THE NORTHSHORE RECEIVER. The Northshore Receiver
hereby represents and warrants to the Circle Receiver and agrees in favor of the
Circle Receiver that (a) the Northshore Receiver has not assigned any interest
in any matter released or purported to be released by him hereby to any other
person or entity, and (b) in the case of clauses (i) through (v) of this Section
2(b), subject to the receipt of the US Order (as defined below) in a form
reasonably acceptable to both the Northshore Receiver and the Circle Receiver,
(i) the Northshore Receiver has full power and authority to execute and deliver
this Agreement and perform his obligations hereunder, (ii) the execution and
delivery of this Agreement by him, the performance by him of his obligations
hereunder and the consummation of the transactions contemplated by this
Agreement by him have been duly authorized and approved by all requisite
receivership actions, (iii) this Agreement has been duly executed by him and
constitutes a legal, valid and binding obligation of him, (iv) the execution and
delivery of this Agreement by him, the performance by him of his obligations
hereunder and the consummation of the transactions contemplated hereby do not
(x) violate, contravene, breach, or constitute an event of default under, any
contract, agreement, indenture or instrument to which he is a party, or by which
any of the his properties or assets are bound, or to which he may be subject or
(y) violate, contravene or breach any statute, law or judgment, decree, order,
regulation or rule of any court or governmental authority applicable to him and
(v) the Subject Securities may be sold or otherwise disposed of in accordance
with this Agreement, without any further receivership action on the part of the
Northshore Receiver or any approval of any court or other governmental
authority.
3. CONDITIONS TO EFFECTIVENESS. The effectiveness of the Circle Receiver's
and the Northshore Receiver's obligations under Sections 4, 5, 6, 7, 8, 9, 11,
12 and 13 of this Agreement is subject to, and conditioned solely upon, (a) the
receipt by the Circle Receiver of the Connecticut Order in a form reasonably
acceptable to both the Northshore Receiver and the Circle Receiver and (b) the
receipt by the Northshore Receiver of the US Order in a form reasonably
acceptable to both the Northshore Receiver and the Circle Receiver; such
Sections and the Circle Receiver's and the Northshore Receiver's obligations
thereunder shall automatically become effective upon the later of the (x)
receipt by the Circle Receiver of the Connecticut Order, in a form reasonably
acceptable to both the Northshore Receiver and the Circle Receiver, and (y)
receipt by the Northshore Receiver of the US Order, in a form reasonably
acceptable to both the Northshore Receiver and the Circle Receiver (the date on
which such Sections and obligations become effective, is referred to herein as
the "Effective Date").
The Circle Receiver agrees to file motion papers, containing a proposed
form of an order (such order included with such motion papers and issued by the
Connecticut Court on or prior to the Effective Date is referred to herein as the
"Connecticut Order"), with the Superior Court of the Judicial District of
Hartford County in Connecticut (the "Connecticut Court") as soon as practicable
after the date of this Agreement but in no event later than 10 days after the
date of this Agreement, and to use his best efforts to obtain the Connecticut
Order in a form mutually acceptable to the Northshore Receiver and the Circle
Receiver, each acting reasonably, as soon as practicable thereafter.
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The Northshore Receiver agrees to file motion papers, containing a
proposed form of an order (such order included with such motion papers and
issued by the District Court on or prior to the Effective Date is referred to
herein as the "US Order"), with the United States District Court for the
Southern District of New York (the "District Court") as soon as practicable
after the date of this Agreement but in no event later than 10 days after the
date of this Agreement, and to use his best efforts to obtain the US Order in a
form mutually acceptable to the Northshore Receiver and the Circle Receiver,
each acting reasonably, as soon as practicable thereafter.
4. DISPOSITION OF SUBJECT SECURITIES.
(a) The Circle Receiver agrees to deliver, within five days after
the Effective Date, the Subject Securities (including any stock certificates
representing the same, together with executed stock powers and other appropriate
instruments of transfer relating thereto) to the Northshore Receiver. The
Northshore Receiver shall hold the same as custodian for himself and for the
Circle Receiver until such time as he shall sell or otherwise dispose of the
same or deliver them as provided in Section 4(c). Immediately after the
Effective Date, each of the Northshore Receiver and the Circle Receiver shall
take all reasonably necessary action to cause the transfer agent for the Subject
Securities to co-register a certificate representing the Subject Securities in
the names of the Northshore Receiver and the Circle Receiver and to cancel the
current certificates, if any, representing the Subject Securities.
(b) Subject to Section 4(c) and Section 4(d), the Northshore
Receiver shall have the sole and exclusive right, on behalf of the Circle
Receiver and the Northshore Receiver, to sell or otherwise dispose of any or all
of the Subject Securities at any time or from time to time. Other than in
accordance with the immediately preceding sentence or Section 4(c) or Section
4(d), the Circle Receiver shall not, and shall cause Circle Trust not to, (x)
sell, assign, pledge, hypothecate, encumber or otherwise transfer or dispose of
any Subject Securities or (y) vote (or grant written consent) for or against any
merger, consolidation, share exchange, dissolution, liquidation,
recapitalization, reorganization, business combination or other significant
transaction involving Startech or the sale of all or substantially all of the
assets of Startech, in either the case of clause (x) or (y), without the prior
written consent of the Northshore Receiver. Subject to Section 4(c) and Section
4(d), the Northshore Receiver shall not sell or otherwise dispose of any shares
of common stock of Startech (other than the Subject Securities) until the
Northshore Receiver has sold or otherwise disposed of all the Subject
Securities; provided, however, that the Northshore Receiver shall be permitted
to sell or otherwise dispose of any shares of common stock of Startech (other
than the Subject Securities) in a sale or other disposition that includes a sale
or other disposition of all of the Subject Securities that have not previously
been sold or otherwise disposed of.
(c) Subject to the following provisions of this Section 4(c), at any
time after the date one year after the Effective Date (the "Outside Date"), the
Circle Receiver shall have the power, on behalf of the Northshore Receiver and
the Circle Receiver, to direct the sale or other disposition by the Northshore
Receiver of the Subject Securities (by delivering written instructions to the
Northshore Receiver containing reasonable details as to the manner and other
terms of the proposed sale or other disposition and consenting to the same), and
after the Outside Date, the Northshore Receiver may not sell or otherwise
dispose of the Subject Securities without the written consent of the Circle
Receiver. In the event that all of the Subject Securities
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have not been sold or otherwise disposed of at the time of the Outside Date, the
Northshore Receiver shall deliver, within five business days after the Outside
Date, the Subject Securities that have not been sold or otherwise disposed of as
of the Outside Date (including any stock certificates, and stock powers and
other appropriate instruments of transfer relating thereto) to the Circle
Receiver, who shall hold the same as custodian for himself and for the
Northshore Receiver until the sale or other disposition of the Subject
Securities (at which time, the Circle Receiver shall deliver the Subject
Securities to the Northshore Receiver to effectuate such sale or other
disposition). In connection with any sale or other disposition directed by the
Circle Receiver pursuant to this Section 4(c), the Northshore Receiver shall
retain the sole power to deliver the Subject Securities and the sole right to
receive all of the proceeds from such sale or other disposition, and upon
receipt of the proceeds of any such sale or other disposition the Northshore
Receiver shall distribute the Net Proceeds (as defined below) in accordance with
Sections 5 and 6 below; provided, that the Northshore Receiver shall follow the
Circle Receiver's directions with regards to the sale or other disposition of
the Subject Securities, and provided, further, that the Northshore Receiver
shall not be required to sell or otherwise dispose of any Subject Securities or
follow such directions (and the Circle Receiver shall not sell or otherwise
dispose of the Subject Securities) (x) if the sale or other disposition would
violate applicable law, (y) if the sale or other disposition is not registered
under the Securities Act of 1933 or exempt from the registration requirements
thereof or (z) if, in the event such sale or other disposition is made under
Rule 144 under the Securities Act of 1933, such sale or other disposition (1)
would cause the Northshore Receiver to exceed the "volume" limitations contained
within Rule 144(e) during any period with respect to all sales or other
dispositions of shares of common stock of Startech made by the Northshore
Receiver, including, without limitation, the Subject Securities, or (2) would
not be in compliance with Rule 144 under the Securities Act of 1933. On and
after the Outside Date, the Northshore Receiver shall be entitled to sell or
otherwise dispose of any shares of common stock of Startech (other than the
Subject Securities) at any time or from time to time free and clear of any
restriction contained herein, irrespective of whether the Subject Securities
have been already sold or otherwise disposed of.
(d) In the event the Northshore Receiver, prior to the Outside Date,
proposes to sell or otherwise dispose of any or all of the Subject Securities (a
"Proposed Sale") in a Proposed Sale that, after giving effect to Section 6
below, would result in the Circle Receiver receiving less than the product of
(1) the excess of (x) the Maximum Circle Proceeds (as defined below) over (y)
the amount of the Northshore Receiver Incurred Costs (as defined below) and (2)
a fraction, the numerator of which is the number of Subject Securities to be
sold or otherwise disposed of in such Proposed Sale and the denominator of which
is the number of Subject Securities, the Northshore Receiver shall deliver a
written notice (a "Proposed Sale Notice") to the Circle Receiver setting forth
the number of Subject Securities and other shares of common stock of Startech
proposed to be sold or otherwise disposed of by the Northshore Receiver in the
Proposed Sale, the price per share to be paid in the Proposed Sale and the other
principal terms of the transaction. If the Circle Receiver (i) consents by
delivering a written notice of acceptance to the Northshore Receiver to such
Proposed Sale or (ii) fails to object to such Proposed Sale by delivering a
written notice of objection to the Northshore Receiver, in each case within five
business days after the delivery to the Circle Receiver of the Proposed Sale
Notice, the Northshore Receiver may enter into and consummate such Proposed Sale
(at a price not materially less favorable to the Circle Receiver than that
described in the Proposed Sale Notice). If the Circle Receiver delivers a
written notice to Northshore Receiver objecting to such
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Proposed Sale within five business days after the delivery to the Circle
Receiver of the Proposed Sale Notice, the Northshore Receiver may not enter into
or consummate the Proposed Sale solely with respect to the Subject Securities;
however, the Northshore Receiver shall be entitled to sell or otherwise dispose
of any or all shares of common stock of Startech (other than the Subject
Securities) in the transaction described in a Proposed Sale Notice or otherwise,
notwithstanding anything to the contrary contained herein, without any
obligation to the Circle Receiver. Nothing contained herein shall obligate the
Northshore Receiver to consummate a Proposed Sale following delivery of a
Proposed Sale Notice.
(e) "Business Days" shall mean any day other than a Saturday, Sunday
or a day on which banks located in New York, New York or Hartford, Connecticut
are authorized or required by law to be closed.
(f) The Northshore Receiver shall keep the Circle Receiver
reasonably informed regarding the selling efforts by the Northshore Receiver
with respect to the Subject Securities, and, after the Outside Date, the Circle
Receiver shall keep the Northshore Receiver reasonably informed regarding the
selling efforts by the Circle Receiver with respect to the Subject Securities,
and the Northshore Receiver and the Circle Receiver will consult on a reasonable
basis with regards to such efforts.
5. ASSIGNMENT OF RIGHT TO PROCEEDS. The Northshore Receiver hereby
conveys, transfers and assigns to the Circle Receiver the right to receive a
portion of the proceeds from the sale or other disposition of the Subject
Securities as set forth in Section 6 below and the Circle Receiver acknowledges
and agrees that the Northshore Receiver shall be entitled to receive, retain
and/or use the balance of the proceeds from the sale or other disposition of the
Subject Securities, free and clear of any claim or other right of the Circle
Receiver or any of the Circle Receiver's affiliates or any other person or
entity.
6. DISTRIBUTION OF PROCEEDS. Upon a sale or other disposition of the
Subject Securities, the Northshore Receiver shall pay 50% of the Net Proceeds to
the Circle Receiver and the Northshore Receiver shall receive, retain and be
entitled to the balance of the Net Proceeds; provided, however, that under no
circumstances shall the Circle Receiver be entitled to, nor shall the Circle
Receiver receive, under this Agreement an amount in the aggregate greater than
the sum of (A) $1,028,000 plus (B) the interest that has accrued on such
$1,028,000 between June 23, 2004 and the date hereof, which amount the parties
hereto hereby agree is equal to $141,457.08, plus (C) an amount equal to the
interest accruing at the Interest Rate (as defined below) on $1,028,000 (such
amount to be reduced immediately after any sale or other disposition of Subject
Securities to equal the product of (1) $1,028,000 and (2) a fraction, the
numerator of which is the number of Subject Securities that have not been sold
or disposed of following any such sale or other disposition and the denominator
of which is the number of Subject Securities) for the period commencing on the
date of this Agreement and ending on the earlier of (x) the date of the sale or
other disposition of the Subject Securities and (y) the Outside Date (the
"Additional Interest Amount"), plus (D) an amount equal to the Northshore
Receiver Incurred Costs (the sum of the amounts indicated in (A), (B), (C) and
(D) is referred to herein as the "Maximum Circle Proceeds"). Immediately upon
receipt of any such distribution from the Northshore Receiver, the Circle
Receiver shall pay to the Northshore Receiver the Northshore Receiver Incurred
Costs or, at the Northshore Receiver's election, the Northshore Receiver shall
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be entitled to setoff against and withhold from the Net Proceeds deemed paid to
the Circle Receiver in an amount equal to the Northshore Receiver Incurred
Costs.
The "Interest Rate" means one percent above the rate which the Bank of New
York, or its successors or assigns, declares to be its "prime rate," from time
to time in effect, and to be computed on the basis of a 360-day year for the
actual number of days elapsed, but in no event to exceed the maximum amount
permitted under applicable law.
The "Net Proceeds" means the excess of (1) the actual cash proceeds
derived from the sale or other disposition of the Subject Securities over (2)
the underwriting discounts and commissions, brokerage commissions and discounts
and other selling fees and expenses payable to underwriters, brokers or other
third party selling agents (excluding amounts payable to ▇▇▇▇▇▇ Associates,
L.L.C. and ▇▇▇▇ ▇▇▇▇▇▇▇ LLP) directly associated with the sale or other
disposition of the Subject Securities (the "Expenses"). If shares of common
stock of Startech owned by the Northshore Receiver (other than the Subject
Securities) are included in the transaction in which Subject Securities are sold
or otherwise disposed of, the Expenses shall be prorated among the Subject
Securities and such other shares of common stock of Startech, based on the
number Subject Securities and other shares of common stock of Startech sold or
otherwise disposed of in such transaction.
The "Northshore Receiver Incurred Costs" means an amount equal to 5% of
the actual gross sale or other disposition proceeds for the Subject Securities.
The Northshore Receiver Incurred Costs shall be paid to (or set-off and withheld
by) the Northshore Receiver from the Net Proceeds received (or to be received)
by the Circle Receiver in accordance with the first paragraph of this Section 6
in reimbursement of certain legal and other advisory fees and expenses incurred
by the Northshore Receiver relating to the sale or other disposition of the
Subject Securities.
7. RELEASES.
(a) The Circle Receiver on behalf of (i) himself and each of his
heirs, executors, successors and assigns and (ii) Circle Trust and each of its
subsidiaries, trusts, and their respective successors and assigns (collectively,
the "Circle Releasors") hereby irrevocably releases and forever discharges (A)
the Northshore Receiver and each of his affiliates, partners, and his and their
respective heirs, executors, successors and assigns, and (B) each of the
Northshore Asset Management, LLC ("NSAM"), NSCT, LLC ("NSCT"), ▇▇▇▇▇▇▇▇ Capital
Management, L.P. ("SCM"), Ardent Research Partners, L.P. ("Ardent L.P."), Ardent
Research Partners, Ltd. ("Ardent Ltd.") and each other affiliate of NSAM that is
an entity or fund (collectively, the "Northshore Entities"), and their
respective subsidiaries, successors and assigns (collectively, the "Northshore
Releasees"), from any and all claims, proceedings, rights, demands, remedies,
contracts, agreements, debts, liabilities, orders, obligations and causes of
action whatsoever, whether known or unknown, suspected or unsuspected, at law or
in equity or otherwise, which the Circle Receiver or any of the other Circle
Releasors now has, ever had or may hereafter have against the Northshore
Receiver and/or the other Northshore Releasees or any of them due to, arising
from, or in connection with, any action, matter, thing or omission occurring or
existing on or prior to the date hereof, including, but not limited to, claims,
proceedings, rights, demands, remedies, contracts, agreements, debts,
liabilities, orders,
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obligations and causes of action under, relating to or arising from (x) the
Promissory Note, dated June 23, 2004, in the principal amount of $1,028,000,
payable by NSCT to Circle Trust and (y) the Stock Purchase Agreement, dated as
of June 18, 2004, by and among NSCT, Capital Investments Management, Ltd. and
Circle Trust and any agreement, instrument or certificate relating thereto or
delivered in connection therewith. Notwithstanding anything contained in this
Section 7(a) to the contrary, the Circle Receiver shall retain and not release
or discharge (x) any claims, proceedings, rights, demands, remedies, contracts,
agreements, debts, liabilities, orders, obligations and causes of action
whatsoever, (i) arising under or to enforce this Agreement and the Existing
Agreement (as defined below) or (ii) against any officer, director, member,
partner or employee of the Northshore Entities (excluding the Northshore
Receiver or any of his partners, employees, officers, or other representatives)
or (y) any right to defend against or dispute any claims, proceedings, rights,
demands, remedies, contracts, agreements, debts, liabilities, orders,
obligations and causes of action whatsoever not released by the Northshore
Receiver under Section 7(b).
No later than ten days after the Effective Date, the Circle
Receiver, on behalf of Circle Trust and himself, shall withdraw proof of claim
no. 99, filed on September 9, 2005, in the case (the "Receivership Proceedings")
captioned Securities and Exchange Commission v. Northshore Asset Management,
LLC, et al., Case No. 05-CV-2192 (RO), pending in the District Court in its
entirety, with prejudice and such claim shall be disallowed in its entirety and
expunged from the schedule or register of filed claims or interests in such
Receivership Proceedings. Other than the right to enforce this Agreement, the
Circle Receiver agrees it will have no claims in the Receivership Proceedings.
(b) The Northshore Receiver on behalf of (i) himself and each of his
heirs, executors, successors and assigns and (ii) the Northshore Entities and
each of their respective subsidiaries, successors and assigns (collectively, the
"Northshore Releasors") hereby irrevocably releases and forever discharges (A)
the Circle Receiver and each of his heirs, executors, successors and assigns and
(B) Circle Trust and each of its subsidiaries, and each of their respective
successors and assigns (collectively, the "Circle Releasees") from any and all
claims, proceedings, rights, demands, remedies, contracts, agreements, debts,
liabilities, orders, obligations and causes of action whatsoever, whether known
or unknown, suspected or unsuspected, at law or in equity or otherwise, which
the Northshore Receiver or any of the other Northshore Releasors now has, ever
had or may hereafter have against the Circle Receiver and/or the other Circle
Releasees or any of them, due to, arising from, or in connection with, any
action, matter, thing or omission occurring or existing on or prior to the date
hereof. Notwithstanding anything contained in this Section 7(b) to the contrary,
the Northshore Receiver and the other Northshore Entities shall retain all and
not release or discharge any claims, proceedings, rights, demands, remedies,
contracts, agreements, debts, liabilities, orders, obligations and causes of
action whatsoever arising out of or related to (x) the Northshore Receiver's
claim for the return of $9 million of investor funds transferred by NSAM or an
affiliate thereof to Circle Trust on or about August 27, 2004, (y) the common
stock of Circle Trust owned by one or more Northshore Releasors or (z) this
Agreement and/or the Existing Agreement (or any right to enforce the same).
No later than ten days after the Effective Date, the Northshore
Receiver shall amend the proof of claim (the "Ardent Claim") filed on or about
April 14, 2006 in Circle Trust's
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receivership proceeding by the Northshore Receiver as Receiver for Ardent L.P.
and Ardent Ltd., solely to eliminate any claims related to (i) NSAM's transfer
of the Subject Securities to Circle Trust and (ii) the Northshore Entities'
contribution of $3.9 million dollars to Circle Trust in August and September,
2004 in satisfaction of the Connecticut Department of Banking's request that the
Northshore Entities adequately capitalize Circle Trust.
No later than ten days after the Effective Date, the Northshore
Receiver shall withdraw the proof of claim filed on or about April 14, 2006 in
Circle Trust's receivership proceedings by the Northshore Receiver as Receiver
for NSAM, in its entirety with prejudice and such claim shall be disallowed in
its entirety and expunged from the schedule or register of filed claims or
interests in such proceedings.
Notwithstanding anything contained herein to the contrary, this
Section 7(b) shall have no effect on the proof of claim or interest (the "NSCT
Claim") filed on or about April 14, 2006 in Circle Trust's receivership
proceeding by the Northshore Receiver as Receiver for NSCT, and the Ardent
Claim, to the extent that such claim relates to Northshore's (or its
affiliates') transfer of $9,000,000 to Circle Trust (the "Remaining Ardent
Claim") and the NSCT Claim and the Remaining Ardent Claim shall survive this
Agreement in all respects and neither the Northshore Receiver or any of the
Northshore Entities releases, discharges or waives any rights, claims or causes
of action with respect thereto.
8. FURTHER ASSURANCES; AUTHORITY TO CARRY OUT AGREEMENT.
The Circle Receiver and the Northshore Receiver each hereby agree to
execute such agreements, contracts, orders, receipts, notices, requests,
certificates, endorsements, powers of attorney, authorizations or other
documents, and to take such further actions, as the Northshore Receiver or the
Circle Receiver may reasonably request in furtherance of, and in order to carry
out and give effect to, the terms of this Agreement.
Until the Outside Date and only in connection with a sale or other
disposition of some or all of the Subject Securities in which the Circle
Receiver would, under the agreement, contract or instrument relating to such
sale or other disposition, be entitled to receive an amount at the consummation
of such sale or other disposition not less than the product of (1) the excess of
(x) the Maximum Circle Proceeds over (y) the amount of the Northshore Receiver
Incurred Costs and (2) a fraction, the numerator of which is the number of
Subject Securities to be sold or otherwise disposed of in such sale or other
disposition and the denominator of which is the number of Subject Securities,
the Circle Receiver hereby irrevocably appoints the Northshore Receiver as the
Circle Receiver's attorney-in-fact with full power and authority in the name of,
and on behalf of, the Circle Receiver to sell or otherwise dispose of the
Subject Securities and to make, acknowledge, execute and deliver all agreements,
contracts, orders, receipts, notices, requests, certificates and other
instruments or documents required or deemed desirable by the Northshore Receiver
to be delivered by the Circle Receiver in connection with the sale or other
disposition of the Subject Securities and/or to effectuate the sale or other
disposition of the Subject Securities as fully as the Circle Receiver could if
personally present and acting.
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The power of attorney granted by this Section 8 shall be deemed coupled
with an interest and be irrevocable and may not be terminated by the Circle
Receiver or by operation of law, whether by death or incapacity of the Circle
Receiver or by the occurrence of any other event.
9. BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. However, no party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of the other
party hereto; provided, that this Agreement shall automatically be transferred
and the obligations hereunder delegated to any such successor receiver or other
similar official appointed, from time to time, for Circle Trust and the
Northshore Entities, respectively.
10. FURTHER ASSURANCES. Intentionally omitted.
11. KNOWLEDGE. Each of the Circle Receiver and the Northshore Receiver
have received or have had full and complete access to all the information they
consider necessary or appropriate and material to make an informed decision with
respect to the subject matter of this Agreement and the entering into this
Agreement.
12. NO OTHER REPRESENTATIONS AND WARRANTIES. Except as set forth in this
Agreement, neither the Circle Receiver nor the Northshore Receiver make any
representations or warranties to the other whether express or implied.
13. REPRESENTATION. Each of the parties to this Agreement acknowledge that
they have had access to and have been represented by competent counsel in
connection with the negotiation, execution and performance of this Agreement.
14. SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement in such jurisdiction or in any other jurisdiction. If any provision of
the Agreement is interpreted to be so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
15. NOTICES. Any notice required under this Agreement shall be in writing
and shall be given (and shall be deemed to be duly given upon receipt) by
delivery in person, by facsimile or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
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If to the Northshore Receiver:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
c/o ▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Circle Receiver:
▇▇▇▇ ▇. ▇▇▇▇▇
Department of Banking
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier:
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Israels LLP
City Place 1
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
16. NO WAIVER. A waiver by any party of any term or condition of this
Agreement in any one instance shall not be deemed or construed to be a waiver of
such term or condition for any other instance in the future (whether similar or
dissimilar) or of any subsequent breach hereof. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative and none of them shall be a limitation of any other remedy, right,
undertaking, obligation or agreement of any of the parties.
17. ENTIRE AGREEMENT. This Agreement supersedes all prior agreements
between the Northshore Receiver and the Circle Receiver with respect to the
subject matter of this Agreement (other than those contained in the Second
Co-Sale Agreement, dated as of March 31, 2006, between the Northshore Receiver
and the Circle Receiver, as amended from time to time (the "Existing
Agreement")), and constitutes (along with the additional documents referred to
in this Agreement and the Existing Agreement) a complete and exclusive statement
of the terms of the
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agreement between the Northshore Receiver and the Circle Receiver with respect
to its subject matter. The parties hereto agree that the Existing Agreement is
hereby amended and extended so that it shall not terminate and shall remain in
full force and effect until the date on which both the Connecticut Order and the
US Order, in each case in a form reasonably acceptable to each of the Northshore
Receiver and the Circle Receiver, have become final and are no longer subject to
appeal. In the event of any conflict between the Existing Agreement and this
Agreement, this Agreement shall control.
18. TIME OF ESSENCE. With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all the
counterparts together shall constitute one and the same instrument. The exchange
of copies of this Agreement and of signature pages by facsimile transmission
shall constitute effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile shall be deemed to be their
original signatures for all purposes.
20. SPECIFIC PERFORMANCE. Each of the Northshore Receiver and the Circle
Receiver acknowledges and agrees that the other would be irreparably damaged if
any of the provisions of this Agreement are not performed in accordance with
their specific terms and that any breach of this Agreement could not be
adequately compensated in all cases by monetary damages alone. Accordingly, in
addition to any other right or remedy to which any party may be entitled, at law
or in equity, each party shall be entitled to enforce any provision of this
Agreement by a decree of specific performance and to temporary, preliminary and
permanent injunctive relief to prevent breaches or threatened breaches of any of
the provisions of this Agreement, without posting any bond or other undertaking.
21. EXPENSES. Except as otherwise provided in this Agreement, each party
to this Agreement will bear its respective fees and expenses incurred in
connection with the preparation, negotiation, execution and performance of this
Agreement and the transactions contemplated thereby.
22. ADJUSTMENT. The number of Subject Securities, amounts and other terms
herein shall be equitably adjusted by the parties hereto in the event of and at
the time of any distribution payable in securities on the Subject Securities or
the subdivision or combination of the shares of common stock of Startech or
similar event concerning the shares of common stock of Startech, and this
Agreement shall apply to any securities issued in respect of (or in exchange
for) the Subject Securities (and to any successive securities issued in respect
thereof), in which case, the term Subject Securities shall include any and all
such securities.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, not individually but
solely in his capacity as Receiver of
Northshore Asset Management, LLC and
related entities
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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CONNECTICUT BANKING COMMISSIONER ▇▇▇▇ ▇.
▇▇▇▇▇, not individually but solely in his
capacity as Receiver of Circle Trust Company
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