AGREEMENT AND PLAN OF REORGANIZATION
BETWEEN
NORTH STAR HOLDING CORP.
AND
WESTSTAR ENVIRONMENTAL, INC.
B&B ENVIRONMENTAL SEPTIC SERVICES, INC.
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TABLE OF CONTENTS
1. Definitions .......................................................... 1
2. The Mergers and Related Transactions ................................. 4
(a) The Mergers ..................................................... 4
(b) The Closing ..................................................... 5
(c) Actions at the Closing .......................................... 5
(d) Effect of Mergers ............................................... 5
(e) Procedure for Exchange of Shares ................................ 6
(f) Further Assurances .............................................. 6
3. Additional Agreements ................................................ 6
(a) "Piggy-Back" Registration Rights ................................ 6
(b) Payment for Accounts Payable and Taxes of WESTSTAR and B&B ...... 6
(c) Employment Agreement of Xxxxxxx Xxxxx ........................... 7
(d) Trading of North Star Stock ..................................... 7
(e) Other Actions After Closing ..................................... 7
4. Representations and Warranties Weststar, B&B and Xxxxx ............... 7
(a) Organizations, Qualification and Power .......................... 8
(b) Authorization of Transaction .................................... 8
(c) Capitalization .................................................. 8
(d) Noncontravention ................................................ 8
(e) Financial Statements ............................................ 9
(f) Events Subsequent to May 31, 1996 ............................... 9
(g) Undisclosed Liabilities ......................................... 9
(h) Tax Matter ...................................................... 9
(i) Tangible Assets ................................................. 11
(j) Owned Real Property ............................................. 11
(k) Intellectual Property ........................................... 12
(l) Inventory ....................................................... 12
(m) Real Property leases ............................................ 12
(n) Contracts ....................................................... 13
(o) Notes and Accounts Receivable ................................... 14
(p) Power of Attorney ............................................... 14
(q) Insurance ....................................................... 14
(r) Litigation ...................................................... 14
(s) Product Warranty ................................................ 15
(t) Product Liability ............................................... 15
(u) Employees ....................................................... 15
(v) Employee Benefits ............................................... 15
(w) Guarantees ...................................................... 17
(x) Environment, Health, and Safety ................................. 17
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(aa) Marketable Title ................................................ 18
(ab) Disclosure ...................................................... 18
(ac) Investment ...................................................... 18
(ad) Licenses and Permits ............................................ 18
5. Representation and Warranties of North Star .......................... 18
(a) Organization of North Star ...................................... 18
(b) Authorization of Transaction .................................... 18
(c) Noncontravention ................................................ 18
(d) Brokers' Fees ................................................... 19
(e) Investment ...................................................... 19
6. Pre-Closing Covenants ................................................ 19
(a) Satisfaction of Conditions by the Parties ....................... 19
(b) Notices and Consents ............................................ 19
(c) Operation of Business ........................................... 20
(d) Preservation of Business ........................................ 20
(e) Full Access ..................................................... 20
(f) Notice of Developments .......................................... 20
(g) Exclusivity Neither ............................................. 20
7. Conditions to Obligation to Close .................................... 20
(a) General Obligations ............................................. 20
(b) Conditions to Obligation of North Star .......................... 21
(c) Conditions to Obligation of WESTSTAR and B&B .................... 22
8. Indemnification ...................................................... 23
9. Termination .......................................................... 24
(a) Termination of Agreement ........................................ 24
(b) Effect of Termination ........................................... 24
10. Miscellaneous ........................................................ 24
(a) Payments Received ............................................... 24
(b) Press Releases and Announcements ................................ 25
(c) No Third Party Beneficiaries .................................... 25
(d) Entire Agreement ................................................ 25
(e) Succession and Assignment ....................................... 25
(f) Counterparts and Facsimile Execution ............................ 25
(g) Headings ........................................................ 25
(h) Notices ......................................................... 25
(i) Governing Law ................................................... 26
(j) Amendments and Waivers .......................................... 26
(k) Severability .................................................... 27
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(l) Expenses ........................................................ 27
(m) Construction .................................................... 27
(n) Incorporation of Exhibits and Schedules ......................... 27
(o) Specific Performance ............................................ 27
(p) Attorneys' Fees ................................................. 28
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and
entered into as of this 29th day of April, 1997, by, between and among NORTH
STAR HOLDING CORP, a Florida corporation ("NORTH STAR"); WESTSTAR ACQUISITION
CORP., a Florida corporation ("WAC"); B&B ACQUISITION CORP., a Florida
corporation ("BAC"); WESTSTAR ENVIRONMENTAL, INC., a Florida corporation
("WESTSTAR"); B&B SEPTIC AND ENVIRONMENTAL SERVICES, INC., a Florida corporation
("B&B"); and XXXXXXX XXXXX, a resident of Florida ("XXXXX").
RECITALS
The Board of Directors of North Star and the Board of Directors and
Shareholders of WESTSTAR and B&B are of the opinion that the transactions
described herein are in the best interest of the parties and their respective
shareholders and have approved the transactions described herein. This Agreement
provides for the acquisition of WESTSTAR and B&B in separate but simultaneous
reverse triangular merger transactions (the "Mergers" or separately the
"Weststar Merger" and the B&B Merger"). The Mergers are intended to qualify as
tax-free reorganizations within the meaning of Section 368 (a)(1)(A) of the
Internal Revenue Code, as amended. The transactions contemplated herein are
subject to conditions described in this Agreement.
NOW THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agrees as
follows:
1. DEFINITIONS.
"ADVERSE CONSEQUENCES" means, with respect to WESTSTAR AND B&B, all
charges, complaints, actions, suits, proceedings, hearings, investigations,
claims demands, judgments, orders, decrees, stipulations, injunctions, damages,
dues, penalties, fines, costs, amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses, and fees, including all attorneys'
fees and court costs.
"AFFILIATED GROUP" means an affiliated group within the meaning of Code
Section 1504.
"ASSETS" means all right, title and interest in and to all of the assets of
WESTSTAR AND B&B, including all of its (a) businesses, as a going concern, and
the names WESTSTAR ENVIRONMENTAL, INC. and B&B SEPTIC AND ENVIRONMENTAL
SERVICES, INC., and any derivation of such names, and all goodwill associated
therewith (b) real property, if any, leaseholds and subleaseholds therein,
improvements, fixtures, and fitting thereon, and easements, rights-of-way, and
other appurtenants thereto (such as appurtenant rights in and to public
streets), (c) tangible personal property (such as machinery, equipment, and
inventories), (d) Intellectual Property, goodwill associated therewith, licenses
and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdiction, (e) leases, subleases, and
rights thereunder, (f) contracts, franchises, licenses, indentures, and
agreements, and mortgages for
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borrowed money, instruments of indebtedness, Security Interests, guaranties,
other similar arrangements, and rights thereunder, (g) accounts, notes and other
receivables, (h) securities, (i) claims, deposits, prepayments, refunds, causes
of action, choses in action, rights of recover, rights of set off, and rights of
recoupement (including any such item relating to the payment of Taxes), (j)
franchises, approvals, permits, licenses, orders, registrations, certificates,
variances, and similar rights obtained from governments and governmental
agencies, (k) books, records, ledgers, files, documents, correspondence, lists,
plats, architectural plans, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other printed or
written materials, (l) Cash, (m) the corporate charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of WESTSTAR
and B&B as corporations, and which assets shall include but not be limited to
all assets and properties reflected on WESTSTAR AND B&B's December 31, 1996
Balance Sheets to the extent not sold or otherwise disposed of in the Ordinary
Course of Business.
"BASIS" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.
"CASH" means cash and cash equivalents/marketable securities/short term
investments.
"CLOSING" has the meaning set forth in Section 2(b) below.
"CLOSING" Date" has the meaning set forth in Section 2(b) below.
"CODE" means the Internal Revenue code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning the business
and affairs of WESTSTAR and B&B which constitutes a trade secret or which is not
generally known to businesses which compete with WESTSTAR and B&B.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred compensation or
retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan, or (d) Employee Welfare
Benefit Plan or material fringe benefit plan or program.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA Sec.
3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"EXTREMELY HAZARDOUS SUBSTANCE" has the meaning set forth in Sec. 302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"FIDUCIARY" has the meaning set forth in ERISA Sec. 3(21).
"FINANCIAL STATEMENT" has the meaning set forth in Section 4(e) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Intellectual Property" means all (a) patents, patent applications, patent
disclosures, and improvements thereto, (b) trademarks, service marks, trade
dress, logos, trade names, and corporate names and registrations and
applications for registration thereof, (c) copyrights and registrations and
applications for registration thereof, (d) mask works and registrations and
applications for registration thereof, (e) computer software, data, and
documentation, (f) trade secrets and confidential business information,
including ideas, formulas, compositions, inventions (whether patentable or
unpatentable and whether or not reduced to practice), know-how, manufacturing
and production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial, marketing, and business data, pricing and cost
information, business and marketing plans, and customer and supplier lists and
information), (g) other proprietary rights, and (h) copies and tangible
embodiments thereof (in whatever form or medium).
"KNOWLEDGE" means actual knowledge after reasonable investigation.
"LIABILITY" means any liability (whether known or unknown, whether absolute
or contingent, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"MERGERS" means both the Weststar Merger and the B&B Merger.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"PARTY" or "PARTIES" means a party or the parties to this AGREEMENT.
"PROHIBITED TRANSACTION" has the meaning set forth in ERISA Sec. 406 and
Code Sec. 4975.
"REPORTABLE EVENT" has the meaning set forth in ERISA Sec. 4043.
"SECURITY INTEREST" means any mortgage, pledge, security interest,
encumbrance, charge, or other lien, other than (a) mechanic's materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate
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proceedings, (c) liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation, (d) liens
arising in connection with sales of foreign receivables, (e) liens or goods in
transit incurred pursuant to documentary letters of credit, (f) purchase money
liens and liens securing rental payments under capital lease arrangements, and
(g) other liens arising in the ordinary Course of Business and not incurred in
connection with the borrowing of money.
"SHARES" means the 100,000 common shares of outstanding common capital
stock of WESTSTAR and the 100,000 common shares of outstanding common capital
stock of B&B.
"SHAREHOLDERS" mean both the Weststar Shareholders and the B&B Shareholdrs.
"TAX" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2. THE MERGERS AND RELATED TRANSACTIONS.
(a) THE MERGERS. On and subject to the terms and conditions of
this AGREEMENT, at the Effective Time, WAC will merge with and into WESTSTAR
(the "WESTSTAR MERGER") and BAC will merge with and into B&B (the "B&B MERGER").
WESTSTAR and B&B will be the corporations surviving the Mergers. The Mergers
constitute a single, indivisible transactions.
(b) THE CLOSING. The closing of the transaction contemplated by
this AGREEMENT, (the "Closing") shall take place in Starke, Florida at the
office of Weststar, on April 29, 1997 (the "Closing Date") unless another place
or time is agreed upon in writing by the parties.
(c) ACTIONS AT THE CLOSING. At the Closing (i) WESTSTAR and B&B
will deliver to North Star the various certificates, instruments, and documents
referred to in Section 7(b) below; (ii) NORTH STAR will deliver to WESTSTAR and
B&B the various certificates, instruments and documents referred to in Section
7(c) below; and (iii) NORTH STAR, WESTSTAR and B&B will file with the Secretary
of State of Florida Articles of Merger to consummate the WESTSTAR MERGER and the
B&B MERGER (the "ARTICLES OF MERGER").
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(d) EFFECT OF MERGERS.
(i) GENERAL. The Mergers shall become effective at the time
(the "Effective Time") the Articles of Merger are filed with the Secretary of
State of Florida (or at such later date designated by NORTH STAR). The Mergers
shall have the effect set forth in the Florida Business Corporation Law.
WESTSTAR and B&B as the surviving corporations may, at any time after the
Effective Time, take any action (including executing and delivering any
document) in the name and on behalf of the parties to the Mergers in order to
carry out and effectuate the transactions contemplated by this Agreement.
(ii) CERTIFICATE OF INCORPORATION. The Articles of
Incorporation of each of the WESTSTAR and B&B in effect at and as of the
Effective Time will remain the Articles of Incorporation of the surviving
corporations without any modification or amendment in the Mergers.
(iii) BYLAWS. The Bylaws of each of WESTSTAR and B&B in
effect at and as of the Effective Time will remain the Bylaws of the surviving
corporations without any modification or amendment in the Mergers.
(iv) DIRECTORS AND OFFICERS. The directors and officers of
each of WAC and BAC in office at and as of the Effective Time will remain the
directors and officers of the surviving corporation (retaining their respective
positions and terms of office).
(v) CONVERSION OF COMPANY SHARES. At and as of the
Effective Time each WESTSTAR Share and each B&B Share shall be converted into
the right to receive the number of NORTH STAR Shares contained in Schedule
2(d)(v) attached hereto and made a part hereof, ("Conversion Ratio"); provided,
however, that the Conversion Ratio shall be subject to equitable adjustment in
the event of any stock split, stock dividend, reverse stock split, or similar
recapitalization. Neither WESTSTAR nor B&B Shares shall be deemed to be
outstanding or to have any rights other than those set forth above in this
Section 2(d)(v) after the Effective Time.
(vi) WAC AND BAC SHARES. Each WAC Share and BAC Share issued
and outstanding at and as of the Effective Time will remain issued and
outstanding as shares of the surviving corporation.
(e) PROCEDURE FOR EXCHANGE OF SHARES. As soon as practicable
after the Closing, NORTH STAR will furnish to each Shareholder a stock
certificate(s) (issued in the name of each Shareholder) representing the number
of NORTH STAR Shares to which each such Shareholder is entitled.
(f) FURTHER ASSURANCES. At the Closing, and from time to time
thereafter, WESTSTAR Shareholders and B&B Shareholders shall execute such
additional instruments and take such other action as NORTH STAR may request in
order more effectively to sell, transfer, and assign the transferred stock to
NORTH STAR and to confirm North Star's title thereto.
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3. ADDITIONAL AGREEMENTS.
(a) EMPLOYMENT AGREEMENT OF XXXXXXX XXXXX. At Closing, XXXXX, the
current President of WESTSTAR and B&B, will execute an employment agreement
("Employment Agreement") with NORTH STAR, or a wholly owed subsidiary of NORTH
STAR. The Employment Agreement will be comprised of the following basic terms:
x. XXXXX will be employed by NORTH STAR, ow wholly-owned
subsidiary of NORTH STAR, for the three (3) year period, beginning on the date
of Closing.
ii. XXXXX will receive a salary of $100,000.00 during the
first year of the Employment Agreement. XXXXX' salary will be increased ten
(10%) percent for each subsequent year of the Employment Agreement.
iii. XXXXX will be appointed to the Board of Directors of
NORTH STAR at the Closing. XXXXX' appointment to the Board of Directors will be
subject to the approval of shareholders of NORTH STAR, which approval will be
considered at the next annual meeting of NORTH STAR shareholders.
(b) OTHER ACTIONS AFTER CLOSING. After the Closing, but not
later than the effective date of the Initial Public Offering, North Star will
cause WESTSTAR to pay to the WESTSTAR Shareholders an amount not to exceed
$317,600 in part on account of the taxable income of Weststar prior to the
Closing Date. Further, NORTH STAR will indemnify and hold harmless any
Shareholder on account of such Shareholder personally guaranteeing a corporate
obligation of B&B or WESTSTAR.
4. REPRESENTATIONS AND WARRANTIES OF WESTSTAR, B&B AND XXXXX. WESTSTAR,
B&B AND XXXXX, jointly and severally, represent and warrant to NORTH STAR that
the statements contained in this Section 4 are correct and complete in all
material respects as of the date of this AGREEMENT and will be correct and
complete as of the Closing Date and were correct on the Effective Date (as
though made then and as though the Closing Date and Effective Date were
substituted for the date of this AGREEMENT throughout this Section 4).
(a) ORGANIZATION, QUALIFICATION AND POWER. Both WESTSTAR and B&B are
corporations duly organized, validly existing, and in good standing under the
laws of the state of its incorporation. Both WESTSTAR and B&B are duly
authorized to conduct business and are in good standing under the laws of each
jurisdiction in which the nature of its businesses or the ownership or leasing
of its properties requires such qualification. Both WESTSTAR and B&B have full
corporate power and authority to carry on the businesses in which they are
engaged and to own and use the properties owned and used by them.
(b) AUTHORIZATION OF TRANSACTION. Each of WESTSTAR and B&B have full
power and authority to execute and deliver this AGREEMENT and to perform the
obligations hereunder. Without limiting the generality of the foregoing, the
board of directors and
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Shareholder of both WESTSTAR and B&B have duly authorized the execution,
delivery, and performance of this AGREEMENT. This Agreement constitutes the
valid and legally binding obligation of WESTSTAR and B&B, enforceable in
accordance with its terms and conditions.
(c) CAPITALIZATION. The entire authorized capital of WESTSTAR consists
of 100,000 common shares, of which 100,000 are issued and outstanding. The
entire authorized capital of B&B consists of 100,000 common shares, of which
100,000 are issued and outstanding. All of the issued and outstanding Shares
have been duly authorized and are validly issues, fully paid and nonassessable.
There are no outstanding or authorized warrants, options, rights contracts,
calls puts, rights to subscribe, conversion rights or other agreements or
commitments to which either WESTSTAR OR B&B is a party or which are binding upon
either WESTSTAR OR B&B providing for the issuance, disposition or acquisition of
any of its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to WESTSTAR or B&B.
Each of the Shareholders of both WESTSTAR and B&B hold the Shares free and clear
of any restrictions on transfer (other than any restrictions under the
Securities Act of 1933) and state securities laws and the Agreement dated March
1, 1993), claims, Taxes, Security Interest, options, warrants, rights,
contracts, calls, commitments, equities and demands. No Shareholder of WESTSTAR
or B&B is a party to any option, warrant, right, contract, call, put, or other
agreement or commitment providing for the disposition or acquisition of any
capital stock of WESTSTAR or B&B (other than this AGREEMENT). No shareholder of
WESTSTAR or B&B is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of WESTSTAR or
B&B.
(d) NONCONTRAVENTION. Except as disclosed in Schedule 4(d), neither
the execution and the delivery of this AGREEMENT, nor the consummation of the
transactions contemplated hereby will (i) violate any statute, regulation, rule,
judgment, order, decree, stipulation, injunction, charge, or other restriction
of any government, governmental agency, or court to which WESTSTAR and B&B is
subject or any provision of the charter of bylaws of WESTSTAR and B&B or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any contract, lease, sublease, license,
sublicense, franchise, permit indenture, agreement or mortgage for borrowed
money, instrument of indebtedness, Security Interest, or other arrangement to
which either WESTSTAR or B&B is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any Security Interest
upon any of its assets). Neither WESTSTAR nor B&B needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this AGREEMENT.
(e) FINANCIAL STATEMENT. Attached hereto as Schedule 4(e) are the
following financial statements of WESTSTAR and B&B (collectively the "Financial
Statements"):
(i) Audited financial statements as of and for the year ended
December 31, 1995;
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(ii) Unaudited financial statements as of and for the 12 months
period ended December 31, 1996.
Except as set forth in the notes to the Financial Statements, the Financial
Statements have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby, are accurate and complete in all
materials respects, and are consistent with the books and records of WESTSTAR
and B&B (which books are records are accurate and complete in all material
respects).
(f) EVENTS SUBSEQUENT TO DECEMBER 31, 1996. Since December 31, 1996,
there has not been any adverse material change in the Assets, Liabilities,
business, financial condition, operations, results of operations, or future
prospects of WESTSTAR and B&B, except as disclosed by the Financial Statements,
the notes contained in the Financial Statements, or the Exhibits and Schedules
attached to this AGREEMENT.
(g) UNDISCLOSED LIABILITIES. Neither WESTSTAR nor B&B has any
Liability (and there is no Basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand against any
of them, giving rise to any Liability) which is not reflected in the Financial
Statements, except for Liabilities arising in the Ordinary Course of Business.
(h) TAX MATTERS. Except as Disclosed in Schedule 4(h);
(i) Each of WESTSTAR and B&B have filed all Tax Returns that it
was required to file. All such Tax Returns accurate and complete in all
materials respects. All Taxes owed by WESTSTAR & B&B as shown on any Tax Return
have been paid. Neither WESTSTAR nor B&B currently is the beneficiary of any
extension of time within which to file any Tax Return. No claim has ever been
made by an authority in a jurisdiction where WESTSTAR or B&B does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. There are
no Security Interests on any of the assets of WESTSTAR or B&B that arose in
connection with any failure (or alleged failure) to pay any Tax, except for
Security Interest, if any, with respect to Taxes not due and payable.
(ii) Each of WESTSTAR and B&B has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, creditor, independent contractor, or other third party.
(iii) Neither WESTSTAR nor B&B, nor any director or officer (or
employee responsible for tax matters) of WESTSTAR or B&B has any Knowledge that
any authority intends to assess any additional Taxes for any period for which
tax Returns have been filed. There is no dispute or claim concerning any Tax
Liability of WESTSTAR or B&B either (A) claimed or raised by any authority in
writing or (B) as to which WESTSTAR or B&B and the directors and officers (and
employees responsible for Tax matters) of WESTSTAR and B&B have Knowledge based
upon personal contact with any agent of such authority. Schedule 4(h) lists all
federal,
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state, local, and foreign income Tax Returns filed with respect to WESTSTAR and
B&B for taxable periods ended on or after December 31, 1992, indicates those Tax
Returns that have been audited, and indicates those Tax Returns that currently
are the subject of audit. WESTSTAR ad B&B have delivered to NORTH STAR accurate
and complete copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by WESTSTAR and B&B
since December 31, 1992.
(iv) Neither WESTSTAR nor B&B has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(v) Neither WESTSTAR nor B&B has been members of an Affiliated
Group other than the Affiliated Group comprised of WESTSTAR and B&B.
(vi) Schedule 4(h) sets forth the following information with
respect to each WESTSTAR and B&B: (A) the basis of WESTSTAR and B&B in their
assets; (B) the amount of any net operating loss, net capital loss, unused
investment credit or other credit; and (C) the amount of any deferred gain or
loss allocable to WESTSTAR or B&B arising out of any deferred intercompany
transaction.
(vii) Deferred taxes of WESTSTAR and B&B have been provided for in
the Financial Statement in accordance with GAAP.
(i) TANGIBLE ASSETS. Each of WESTSTAR and B&B owns or leases all
tangible assets necessary for the conduct of its businesses as presently
conducted and as presently proposed to be conducted. To the best of their
Knowledge, each such tangible asset is free from defects (patent and latent),
has been maintained in accordance with normal industry practice, is in good
operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which it presently is used, the failure of which
would have a material adverse effect WESTSTAR or B&B.
(j) OWNED REAL PROPERTY. Schedule 4(j) lists and describes briefly
all real property that WESTSTAR and B&B own. Except as disclosed in Schedule
4(j), with respect to each such parcel of owned real property:
a. the identified owner has good and marketable title to the
parcel of real property, free and clear of any Security Interest,
easement, covenant, or other restriction, except for (A) installments
of special assessments not yet delinquent and (B) recorded easements,
covenants, and other restrictions which do not impair the current use,
occupancy, or value, or the marketability of title, of the property
subject thereto;
b. there are no (A) pending or threatened condemnation
proceedings relating to the property, (B) pending or threatened
litigation or administrative actions relating to the property, or (C)
other matters affecting adversely the current use,
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occupancy, or value thereof;
c. to the best of their Knowledge, the legal description for
the parcel contained in the deed thereof describes such parcel fully
and adequately, the buildings and improvements are located within the
boundary lines of the described parcels of land, are not in violation
of applicable setback requirements, zoning laws, and ordinances (and
none of the properties or buildings or improvements thereon are
subject to "permitted non-conforming use" or "permitted non-conforming
structure" classifications), and do no encroach on any easement which
may burden the land, the land does not serve any adjoining property
for any purpose inconsistent with the use of the land, the property is
not located within any flood plan or subject to any similar type
restriction for which any permits or licenses necessary to the use
thereof have not been obtained, and access to the property is provided
by paved public right-of-way with adequate curb cuts available;
d. all facilities have received all approvals of
governmental authorities (including licenses and permits) required in
connection with the ownership or operation thereof and have been
operated and maintained in accordance with applicable laws, rules, and
regulations;
e. there are no leases, subleases, licenses, concessions, or
other agreements, written or oral, granting to any party or parties
the right of use or occupancy of any portion of the parcel of real
property;
f. there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any portion
thereof or interest therein;
g. there are no parties (other than WESTSTAR and B&B) in
possession of the parcel of real property, other than tenants under
any leases disclosed in Schedule 4(j) who are in possession of space
to which they are entitled:
h. all facilities located on the parcel of real property are
supplied with utilities and other services necessary for the operation
of such facilities, including gas, electricity, water, telephone,
sanitary sewer, and storm sewer, all of which services are adequate in
accordance with all applicable laws, ordinances, rules, and
regulations and are provided via public roads or via permanent,
irrevocable, appurtenant easements benefitting the parcel of real
property; and
i. each parcel of real property abuts on and has direct
vehicular access to public road or access to a public road via a
permanent, irrevocable, appurtenant easement benefitting the parcel of
real property.
(k) INTELLECTUAL PROPERTY. Except as set forth in Schedule 4(k),
WESTSTAR and B&B own the Intellectual Property listed and described on Schedule
4(k) free and clear of any Security Interest or restriction on transfer.
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(l) INVENTORY. The inventory of WESTSTAR and the inventory of B&B
consists of the items disclosed in Schedule 4(l). To the best of their
Knowledge, and subject to normal industry standards for inventory absolescence,
the inventory of WESTSTAR and the inventory of B&B is merchantable and fit for
the purpose of which it was procured manufactured, and is not slow-moving,
obsolete, damaged or defective in any way such that failure of which would have
adverse effect on WESTSTAR and B&B.
(m) REAL PROPERTY LEASES. Schedule 4(m) lists and describes briefly
all real property leased or subleased to WESTSTAR or B&B. WESTSTAR and B&B have
delivered to NORTH STAR accurate and complete copies of the leases and subleases
listed in Schedule 4(m) (as amended to date). Except as disclosed in Schedule
4(m), with respect to each lease and sublease listed in Schedule 4(m):
(i) the lease or sublease is legal, valid, binding, enforceable,
and in full force and effect subject to insolvency, bankruptcy and other similar
laws relating to creditors' rights and general principles of equity;
(ii) No party to the lease or sublease is in breach or default,
and no event has occurred which, with notice or lapse of time, would constitute
a breach or default or permit termination, modification, or acceleration
thereunder;
(iii) No party to the lease or sublease has repudiated any
provision thereof; and
(iv) Neither WESTSTAR nor B&B has assigned, transferred,
conveyed, mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold.
(n) CONTRACTS. Schedule 4(n) lists the following contracts,
agreements, and other written arrangements to which either WESTSTAR or B&B is a
party:
(i) any written arrangement (or group of related written arrangements
for the lease of personal property from or to third parties except for
leases entered into in the Ordinary Course of Business by WESTSTAR or B&B;
(ii) any written arrangement (or group of related written
arrangements) for the lease of personal property from or to third parties
except for leases entered into in the Ordinary Course of Business by
WESTSTAR or B&B;
(iii) any written arrangement concerning a partnership or joint
venture;
(iv) any written arrangement (or group of related written
arrangements) under which it has created, incurred, assumed, or guaranteed
(or may create, incur,
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assume, or guarantee) indebtedness (including capitalized lease
obligations) or under which it has imposed (or may impose) a Security
Interest on any of its assets, tangible or intangible;
(v) any written arrangement concerning confidentiality or
noncompetition;
(vi) any written arrangement with any of its directors, officers, and
employees in the nature of a collective bargaining agreement, employment
agreement, or severance agreement;
(vii) any written arrangements under which the consequences of a
default or termination could have a material adverse effect on the Assets,
Liabilities, business, financial condition, operations, results of
operations, or future prospect of WESTSTAR or B&B taken as a whole; or
(viii) any other written arrangement (or group of related written
arrangements) either involving more than $20,000 or not entered into in the
Ordinary Course of Business.
WESTSTAR and B&B have delivered to NORTH STAR an accurate and complete copy
of each written arrangement listed in Schedule 4(n). With respect to each
written arrangement so listed: (A) the written arrangement is legal, valid,
binding, enforceable, and in full force and effect subject to bankruptcy laws
and general principles of equity; (B) to the best of their Knowledge, no party
is in breach or default, and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination, modification,
or acceleration, under the written arrangement; and (C) to the best of their
Knowledge no party has repudiated any provision of the written arrangement.
Neither WESTSTAR nor B&B is a party in any verbal contract, agreement, or other
arrangement which, if reduced to written form, would be required to be listed in
Schedule 4(n) under the terms of this Section 4(n). No purchase order or
commitment of WESTSTAR or B&B is in excess of normal requirements, nor are
prices provided therein in excess of current market prices for the products or
services to be provided thereunder. No supplier of WESTSTAR or B&B has indicated
within the past year that it will stop, or decrease the rate of, supplying
materials, products, or services to them.
(o) NOTES AND ACCOUNTS RECEIVABLE. All notes and accounts receivable
of WESTSTAR and B&B are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, and to the best of their
Knowledge are presently current and collectible, and will be collected in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the December 31, 1996 Balance
Sheet (rather than in any notes thereto).
(p) POWERS OF ATTORNEY. There are no outstanding powers of attorney
executed on behalf of either WESTSTAR or B&B.
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(q) INSURANCE. WESTSTAR and B&B maintain current policies of
insurance, the premiums for which are paid to the Closing Date, providing
property, casualty, liability, and workers, compensation coverage and bond and
surety arrangements, if any, as may be reasonably required in the Ordinary
Course of Business. WESTSTAR and B&B have no Knowledge of any premium
adjustments for the current coverage period to the Closing Date, and know of no
liabilities as of the Closing Date to the companies providing such coverage for
the issuance of such policies.
(r) LITIGATION. Schedule 4(r) sets forth each instance in which either
WESTSTAR or B&B (i) is subject to any unsatisfied judgment, order, decree,
stipulation, injunction, or charge or (ii) is a party or is threatened to be
made a party to any charge, complain, action, suite, proceedings, hearing, or
investigation of or in any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any arbitrator.
None of the charges, complaints, actions, suits, proceedings, hearings, and
investigations set forth in Schedule 4(r) will result in any material adverse
change in the assets, liabilities, business, financial condition, operations,
results of operations, or future prospects of WESTSTAR or B&B taken as a whole.
None of the directors and officers (and employees with responsibility for
litigation matters) of WESTSTAR or B&B has any Knowledge that any such charge,
complaint, action, suit proceeding, hearing, or investigation has been
threatened against WESTSTAR or B&B.
(s) PRODUCT WARRANTY. Each product sold, leased or delivered by
WESTSTAR or B&B has been in conformity with all applicable contractual
commitments and all express and implied warranties, and neither WESTSTAR or B&B
has any Liability (and there is no basis for any present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim or demand
against them giving rise to any Liability) for replacement or repair thereof or
other damages in connection therewith, the failure of which would have a
material adverse effect on WESTSTAR or B&B. To the best of their Knowledge, all
services performed by WESTSTAR or B&B have been in conformity with all
applicable contractual commitments, and WESTSTAR and B&B have no Liability with
regard to services, the failure of which would have a material adverse effect on
WESTSTAR or B&B.
(t) PRODUCT LIABILITY. Neither WESTSTAR nor B&B has any Liability (and
there is no Basis for any present or future charge, complaint, action, suit,
proceeding, hearing, investigation, claim, or demand against any of them giving
rise to any Liability) arising out of any injury to persons or property as a
result of the ownership, possession, or use of any product manufactured, sold,
leased, or delivered by WESTSTAR or B&B or any services performed by WESTSTAR or
B&B, the failure of which would have a material adverse effect on WESTSTAR or
B&B.
(u) EMPLOYEES. No key employee or group of employees has any plans to
terminate employment with WESTSTAR or B&B. Neither WESTSTAR nor B&B is a party
to or bound by any collective bargaining agreement, nor has it experienced any
strikes, grievances, claims of unfair labor practices, or other collective
bargaining disputes. To the best of their Knowledge, neither WESTSTAR nor B&B
has committed any unfair labor practice. None of the
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directors and officers (and employees with responsibility for employment
matters) of WESTSTAR or B&B has any Knowledge of any organization effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of WESTSTAR or B&B.
(v) EMPLOYEE BENEFITS. Schedule 4(v) list all Employee Benefit Plans
that WESTSTAR and B&B maintains or to which either WESTSTAR or B&B contributes
for the benefit of any current or former employee of any of WESTSTAR or B&B.
(i) Each Employee Benefit Plan (and each related trust or
insurance contract) complies in form and in operation in all respects with the
applicable requirements of ERISA and the Code.
(ii) All required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, PBGC-1's, and Summary Plan Descriptions)
have been filed or distributed appropriately with respect to each Employee
Benefit Plan. The requirements of part 6 of Subtitle B of Title 1 of ERISA have
been met with respect to each Employee Welfare Benefit Plan.
(iii) All contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid to each
Employee Pension Benefit Plan and all contributions for any period ending on or
before the Closing Date which are not yet due have been paid to each Employee
Pension Benefit Plan or accrued in accordance with the past custom and practice
of WESTSTAR or B&B. All premiums or other payments for all periods ending on or
before the closing Date have been paid with respect to each Employee Welfare
Benefit Plan.
(iv) Each Employee Pension Benefit Plan meets the requirements of
a "qualified plan" under Code Sec. 401(a) and has received, within the last two
years, a favorable determination letter from the Internal Revenue Service.
(v) The market value of assets under each Employee Pension Benefit
Plan equals or exceeds the present value of Liabilities thereunder (determined
on a plan termination basis). No Employee Pension Benefit Plan has been
completely or partially terminated or been the subject of a Reportable Event as
to which notices would be required to be filed with the PBGC. No proceeding by
the PBGC to terminate any Employee Pension Benefit Plan has been instituted or
threatened.
(vi) There have been no Prohibited Transactions with respect to
any Employee Benefit Plan. To the best of their knowledge, no Fiduciary has any
Liability for breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of any Employee
Benefit Plans. No charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand with respect to the administration or the
investment of the assets of any Employee Benefit Plan (other than routine claims
for benefits) is pending or to the best of their knowledge, threatened. None of
the
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directors and officers (and employees with responsibility for employee benefits
matters) of WESTSTAR or B&B has any Knowledge of any Basis for any such charge,
complaint, action, suite, proceeding, hearing, investigation, claims, or demand.
(vii) WESTSTAR and B&B have delivered to NORTH STAR correct and
complete copies of (A) the plan documents and summary plan descriptions, (B) the
most recent determination letter received from the Internal Revenue Service, (C)
the most recent Form 5500 Annual Report, and (D) all related trust agreements,
insurance contracts, and other funding agreements which implement each Employee
Benefit Plan.
Neither WESTSTAR nor B&B, contributes to, ever has contributed to, or ever
has been required to contribute to any Multiemployer Plan or has any Liability
(including withdrawal Liability) under any Multiemployer Plan. Neither WESTSTAR
nor B&B has incurred, and none of the directors and officers (and employees with
responsibility for employee benefits matters) of WESTSTAR and B&B have any
reason to expect that either WESTSTAR or B&B will incur, any Liability to the
PBGC (other than PBGC premium payments) or otherwise under the Title IV of ERISA
(including any withdrawal Liability) or under the Code with respect to any
Employee Pension Benefit Plan that WESTSTAR or B&B maintains or ever has
maintained or to which any of then contributes, ever has contributed, or ever
has been required to contribute. Neither WESTSTAR nor B&B maintains or ever has
maintained or contributes, ever has contributed, or ever has been required to
contribute to any Employee Welfare Benefit Plan providing health, accident, or
life insurance benefits to former employees, their spouses, or their dependents.
(w) GUARANTIES. Except as disclosed in Schedule 4(w), neither WESTSTAR
nor B&B is a guarantor or otherwise is liable for any Liability or obligation
(including indebtedness) of any other person (other than WESTSTAR & B&B).
(x) ENVIRONMENT, HEALTH, AND SAFETY. Except as set forth in Schedule
4(X), neither WESTSTAR nor B&B has received any charge, complaint, action, suit,
proceeding, notice, claim or demand asserting any violation of or failure to
comply with any federal, state or local law (including rules or regulations
promulgated thereunder) ("Environmental Laws") concerning the environment or the
use, generation, storage, manufacture, disposition, discharge, leak, emission,
escape or release of any extremely hazardous substance or any toxic, volatile,
or hazardous waste, material, or substance and, to the best of their Knowledge,
except as set forth in Schedule 4(x), WESTSTAR and B&B are in compliance with
all Environmental Laws.
(y) LEGAL COMPLIANCE. Except as set forth in Schedule 4(y), neither
WESTSTAR nor B&B has received any charge, complaint, action, suit, proceeding,
notice, claim or demand asserting any violation of or failure to comply with any
law (including rules regulations thereunder) of any federal, state, local, or
foreign government (and all agencies thereof) and to the best of their
Knowledge, WESTSTAR and B&B are in compliance with such laws (including rules
and regulations thereunder).
(z) Brokers' Fees. Neither WESTSTAR nor B&B has any Liability or
obligation
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to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this AGREEMENT.
(aa) MARKETABLE TITLE. Except as set forth in Schedule 4(aa), each of
WESTSTAR and B&B has good an marketable title to all of the Assets, free and
clear of any Security Interest or restriction on transfer except as may be
disclosed in the Financial Statments of WESTSTAR and B&B and the notes which are
a part of those financial statements.
(ab) DISCLOSURE. The representations and warranties contained in this
Section 4 to not contain any untrue statement of a fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Section 4 not misleading.
(ac) INVESTMENT. Shareholders are not acquiring the North Star shares
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act of 1933.
(ad) LICENSES AND PERMITS. Schedule 4(ad) attached hereto and made a
part hereof lists all schedules and permit of WESTSTAR and B&B. All licenses and
permits necessary for the conduct of the businesses of WESTSTAR and B&B have
been duly obtained and are in full force and effect and there are no proceedings
pending or threatened which may result in revocation, cancellation, suspension
or adverse modifications, of any thereof. The execution, delivery and
performance of this Agreement will not result in any such violation or be in
conflict with or result in any default under any of the foregoing.
5. REPRESENTATIONS AND WARRANTIES OF NORTH STAR. NORTH STAR represents
and warrants that the statements contained in this Section 5 are correct and
complete as of the date of the AGREEMENT and will be correct and complete as of
the Closing Date and were correct on the Effectie Date (as though made then and
as though the Closing Date and Effective Date were sustituted for the date of
the AGREEMENT throughout this Section 5).
(a) ORGANIZATION OF NORTH STAR. NORTH STAR is a corporation duly
organized, validly existing, and in good standing under the laws of Florida.
NORTH STAR is duly authorized to conduct business and is in good standing under
the laws of each jurisdiction in which the nature of its businesses or the
ownership or leasing of its properties requries such qualification.
(b) AUTHORIZATION OF TRANSACTION. NORTH STAR has full power and
authority (including full corporate power and authority) to execute and deliver
this AGREEMENT and to perform its obligations hereunder. This AGREEMENT
constitutes the valid and legally binding obligation of NORTH STAR, enforceable
in accordance with its terms and conditions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
AGREEMENT, nor the consummation of the transactions contemplated hereby, will
(i) violate any statute, regulation, rule, judgment, order, decree, stipulation,
injunction, charge or other restriction of any government, governmental agency,
or court to which NORTH STAR is subject or
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any provisions of its charter or bylaws or (ii) conflict with, result in a
breach of, constitute a default under, result in the accelertion of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement, or mortgage for borrowed money, instrument of
indebtedness, Security Interest, or other arrangment to which NORTH STAR is
party or by which it is bound or to which any of its assets is subject. NORTH
STAR does not need to give any notice or to make any filing with or obtain any
authorization, consent or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
AGREEMENT.
(d) BROKERS FEES. NORTH STAR has no Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this AGREEMENT.
(c) INVESTMENT. NORTH STAR is not acquiring the Shares with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act of 1933.
6. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to the
period between the execution of this AGREEMENT and the Closing.
(a) SATISFACTION OF CONDITIONS BY THE PARTIES. The Parties will use
their respective best efforts to take all action and to do all things ncessary,
proper, or advisable to satisfy the Closing conditions set forth in Section 6
and 7 below.
(b) NOTICES AND CONSENTS. The Parties will give any notices to third
parties, and the Parties will use their respective best efforts to obtain any
third party consents, assignments and assumptions required by the holders of any
indebtedness of WESTSTAR or B&B, the lessors or lessees of any real or personal
property or assets leased by WESTSTAR or B&B, the parties to any contract,
commitment, franchise or agreement to which WESTSTAR and B&B is a party or
subject to any governmental, judicial or regulatory official, body or authority
have jurisdiction over WESTSTAR or B&B, or NORTHSTAR to the extent that their
consent or approval is required or ncessary under the pertinent debt, lease,
contract, commitment or agreement or other document or instrument or under
applicable orders, laws, rules or rgulations, for the consummation of the
transaction contemplated herein and the assumption of all such contracts,
commitments, franchises and agreements of WESTSTAR and B&B as herein provided,
shall have granted such consent or approval. All such notices, consents,
assignments and assumptions are listed on Schedule 6(b) hereof.
(c) OPERATION OF BUSINESS. Neither WESTSTAR nor B&B will engage in any
practice, take any action, embark on any course of inaction, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, (i) WESTSTAR and B&B shall use its best efforts to
conduct its business in such a manner that on the Closing Date the
representations and warranties of WESTSTAR and B&B contained in this Agreement
shall be true as though such representations and warranties were made on and as
of such date; (ii) both
144
WESTSTAR and B&B shall continue to maintain and service the tangible Assets in
the same manner as has been its consistent past practice; and (iii) WESTSTAR and
B&B shall comply with all laws, ordinances, rules, regulations, and orders
applicable to the businesses, or WESTSTAR and B&B's operations, assets or
properties in respect thereof, the noncompliance with which might materially
affect the business or the Assets.
(d) PRESERVATION OF BUSINESS. Both WESTSTAR and B&B will keep its
business and properties substantially intact, including its present operations,
physical facilities, working conditions, and relationships with lessors,
licensors, franchisors, suppliers, customers, and employees.
(e) FULL ACCESS. Both WESTSTAR and B&B will permit representatitives
of NORTH STAR to have reasonable access during normal business hours to all
premises, properties, books, records, contracts, Tax records and documents of or
pertaining to WESTSTAR or B&B and their business.
(f) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the other of any material development affecting the ability of such Party to
consummate the transactions contemplated by this AGREEMENT. No disclosure by any
Party pursuant to this section, however, shall be deemed to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.
(g) EXLUSIVITY. Neither WESTSTAR nor B&B will (i) solicit, initiate,
or encourage the submission of any proposal or offer from any person relating to
any (A) liquidation, dissolution, or recapitalization, (B) merger or
consolidation, (C) acquisition or purchase of securities or assets, or (D)
similar transaction or business combination involving WESTSTAR or B&B or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other mannner any effort or attempt by any person to do or seek any of the
foregoing. WESTSTAR and B&B will notify NORTH STAR immediately if any person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) GENERAL OBLIGATIONS.
(i) NORTH STAR' DUE DILIGENCE. The parties acknowledge that NORTH
STAR, after the execution of this AGREEMENT, will begin a due diligence process,
including but not limited to the verification through a physical inventory of
the inventories and equipment to be acquired, the completion of an environmental
audit and engineering test of the real property to be acquired, and such
financial audit and studies as NORTH STAR deems appropriate. WESTSTAR and B&B
agree to provide NORTH STAR with such detailed information as is requested by
NORTH STAR in performing its due diligence. If, after completion of the due
diligence process, NORTH STAR, in its sole discretion, is not satified with the
results of the due diligence process, NORTH
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STAR may terminate this AGREEMENT without further liability and refuse to
consummate the Mergers.
(ii) REGULATORY APPROVAL. The closing of this transaction is
contingent upon the Parties being granted the approval of any regulatory agency
having jurisdiction over the parties.
(iii) LIABILITIES OF WESTAR AND B&B. If the total assumed
liabilites of WESTSTAR and B&B at closing shall exceed $1,500,000.00 or such
other amount mutually agreed upon, NORTH STAR can terminate this AGREEMENT
without further liability and refuse to consummate the Mergers.
(b) CONDITIONS TO OBLIGATION OF NORTH STAR. The obligation of NORTH
STAR to consumate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties of WESTSTAR and B&B set
forth in this AGREEMENT shall be true and correct at and as of the Clsoing Date
and were true and correct as of the Effective Date;
(ii) WESTSTAR and B&B shall have performed and complied with all
of their covenants hereunder in all material respects through the Closing;
(iii) WESTSTAR and B&B shall have procured all of the third party
consents, assignments and asumptions specified in Section 6(b) above;
(iv) no action, suit, or proceeding shall be pending or
threatended before any court of quasi-judicial or administrative agency or any
federal, state, local, or foreign jurisdiction wherein an unfavorable judgement,
order, decree, stipulation, injunction, or charge would (A) prevent consummation
of any of the transactions contemplated by this AGREEMENT, (B) cause any of the
transactions contemplated by this AGREEMENT to be rescinded following
consummation, or (C) affect adversely the right of NORTH STAR to own, operate,
or control WESTSTAR and B&B (and no such judgement, order, decree, stipulation,
injunction, or charge shall be in effect);
(v) WESTSTAR and B&B shall have delivered to NORTH STAR a
certificate (without qualification as to Knowledge or materiality or otherwise)
to the effect that each of the conditions specified above in Section 7(b) is
satisfied in all respects;
(vi) all actions to be taken by WESTSTAR and B&B in connection
with conummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
NORTH STAR;
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(vii) NORTH STAR and Xxxxx shall have entered into the Employment
Agreement referenced in Section 3(c) of this AGREEMENT;
(viii) the business, operations, assets, properties or prospects
of WESTSTAR and B&B business shall not have been and shall not be threatended to
be materially adversely affected in any way as a result of any event or
occurrence.
NORTH STAR may waive any condition specified in this Section 7(b) if it executes
a writing so stating at or prior to the Closing.
(c) CONDITIONS TO OBLIGATIONS OF WESTSTAR AND B&B. The obligations of
WESTSTAR and B&B to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and waranties of NORTH STAR set forth in
this AGREEMENT shall be true and correct at and as of the Closing Date and were
true and correct at and as of the Effective Date;
(ii) NORTH STAR shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or admnistrative agency of any federal, state, local, or
foreign jurisdiction wherein an unfavorable judgement, order, decree,
stipulation, injunction, or charge would (A) prevent consummation of any of the
transactions contemplated by this AGREEMENT or (B) cause any ofthe transactions
contemplated by this AGREEMENT to be rescinded following conummation (and no
such judgment, order, decree, stipulation, injunction, or charge shall be in
effect) and the waiting period required by the HSR Act shall have expired or
been terminated;
(iv) NORTH STAR shall have delivered to WESTSTAR and B&B a
certificate (without qualification as to Knowledge or materiality or otherwise)
to the effect that each of the conditions specified above in Section 7(c) is
satisfied in all respect;
(v) NORTH STAR and XXXXX shall have entered into an Employment
Agreement referenced in section 3(c) of this Agreement.
8. INDEMNIFICATION.
(a) All of the representations and warranties contained in this
Agreement shall survive the closing hereunder and continue in full force and
effect forever thereafter (subject to any applicable statutes of limitations.)
(b) In the event Xxxxx breaches any of his representations,
warranties, and covenants contained herein, then Xxxxx agrees to indemnify North
Star for a period of six months
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from and against the entirety of any Adverse Consequences North Star may suffer
through and after date of the claim for indemnification (including any Adverse
Consequences North Star may suffer after the end of the applicable survival
period) resulting from, arising out of, relating to, in the nature of, or caused
by the breach.
(c) If any third party shall notify North Star with respect to any
matter which may give rise to a claim for indemnification against the Xxxxx
under this Section 8, then North Star shall notify Xxxxx thereof promptly;
PROVIDED, HOWEVER, that no delay on the part of North Star in notifying Xxxxx
shall relieve Xxxxx from any liability or obligation hereunder unless (and then
solely to the extent) Xxxxx thereby is damaged. In the event Xxxxx notifies
North Star within 15 days after North Star has given notice of the matter that
Xxxxx is assuming the defense thereof, (A) Xxxxx will defend North Star against
the matter with counsel of its choice reasonably satisfactory to North Star, (B)
North Star may retain separate co-counsel at its sole cost and expense (except
that Xxxxx will be responsible for the fees and expenses of the separate
co-counsel to the extent North Star concludes reasonably that the counsel Xxxxx
has selected has a conflict of interest), (C) North Star will not consent to the
entry of any judgment or enter into any settlement with respect to the matter
without the written consent of Xxxxx (not to be withheld unreasonably), and (D)
Xxxxx will not consent to the entry of any judgment with respect to the matter,
or enter into any settlement which does not include a provision whereby the
plaintiff or claimant in the matter releases North Star from all Liability with
respect thereto, without the written consent of North Star (not to be withheld
unreasonably). In the event Xxxxx does not notify North Star within 15 days
after North Star has given notice of the matter that Xxxxx is assuming the
defense thereof, however, North Star may defend against, or enter into any
settlement with respect to, the matter in any manner it reasonably may deem
appropriate.
(d) The parties shall make appropriate adjustment for Tax benefits and
insurance proceeds (reasonably certain of receipt and utility in each case) and
for the time cost of money in determining the amount of loss for purposes of
this Section 8.
(e) The foregoing indemnification provisions are in addition to, and
not in derogation of, any statutory or common law remedy North Star may have for
breach of representation, warranty, or covenant.
9. TERMINATION.
(a) TERMINATION OF AGREEMNT. Certain of the Parties may terminate this
AGREEMENT as provided below:
(i) The Parties hereto may terminate this AGREEMENT by mutual
consent at any time prior to the Closing;
(ii) NORTH STAR may terminate this AGREEMENT by giving written
notice to WESTSTAR or B&B any time prior to the Closing in the event WESTSTAR
and B&B is in breach, and WESTSTAR and B&B may terminate this AGREEMENT by
giving written notice to NORTH STAR
148
at any time prior to the Closing in the event NORTH STAR is in breach, of any
material representation, warranty, or covenant contained in this AGREEMENT in
any material respect;
(iii) Any Party may terminate this AGREEMENT by giving written
notice to all other Parties (provided that the terminating Party is not
otherwise in breach of this AGREEMENT) if the Closing has not occurred by April
30, 1997.
(b) EFFECT OF TERMINATION. If any Party terminates this AGREEMENT
pursuant to Section 9(a) above, all obligations of the Parties hereunder shall
terminate without any Liability of any Party to any other Party (except for any
Liability of any Party then in breach).
10. MISCELLANEOUS.
(a) PAYMENTS RECEIVED. WESTSTAR and B&B agree that after the Closing
they will hold and will promptly transfer and deliver to NORTH STAR, from time
to time as and when received by them, any cash, checks with appropriate
endorsements (using their best efforts not to convert such checks into cash), or
other property that he may receive on or after the Closing which properly
belongs to the surviving corporation, including without limitation any insurance
proceeds, and will account to the other for all such receipts. From and after
the Closing, NORTH STAR shall have the right and authority to endorse without
recourse the name of WESTSTAR or B&B on any check or any other evidences of
indebtedness received by NORTH STAR on account of the Business and the Assets.
(b) PRESS RELEASE AND ANNOUNCEMENTS. No Party shall issue any press
release or announcement relating to the subject matter of this AGREEMENT prior
to the Closing without the prior written approval of the Party; provided,
however, that any Party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing Party will advise
the other Party prior to making the disclosure).
(c) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
right or remedies upon any person other than the Parties and their respective
successors and permited assigns.
(d) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire AGREEMENT between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, that may have related in any way to the subject matter
hereof.
(e) SUCCESSION AND ASSIGNMENT. This AGREEMENT shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this AGREEMENT or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party; provided, however, that NORTH STAR may (i) assign
any or all of its rights and interests hereunder to one or more of its
affiliates and (ii) designate one or more of its affiliates to perform its
obligations hereunder (in any or all
149
of which cases NORTH STAR nonetheless shall remain liable and responsible for
the performance of all of its obligations hereunder).
(f) COUNTERPARTS AND FACSIMILE EXECUTION. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together will constitute one and the same instrument. Signed
counterparts may be delivered via facsimile transmission.
(g) HEADINGS. The section headings contained in this AGREEMENT are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this AGREEMENT.
(h) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, or by facsimile transmission, and addressed to the
intended recipient as set forth below:
IF TO THE NORTH STAR COPY TO:
Xxxxxxx X. Xxxxx, CEO and Xxxxx X. Xxxxxxx, Esquire
President Macfarlane Xxxxxxxx & XxXxxxxx
North Star Resources Corporation 000 X. Xxxxxxx - Xxxxx 0000
0000 Xxxxxxxx Xxxx Xxxxx, XX 00000
Xxxxxxxxxx Xxxxx, XX 00000 (000) 000-0000
(000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
IF TO WESTSTAR COPY TO
Xxxxxxx Xxxxx, President Xxxxx Xxxxxx, Esq.
X.X. Xxx 0000 X.X. Xxx 0000
Xxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
(000) 000-0000 (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
IF TO B&B
Xxxxxxx Xxxxx, President Xxxxx Xxxxxx, Esq.
X.X. Xxx 0000 X.X. Xxx 0000
Xxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
(000) 000-0000 (000) 000-0000
Fax: (000) 000-0000 Fax (000) 000-0000
Any Party may give any notice, requests, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy,
150
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it acutally is received by the individual for whom it is intended. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(i) GOVERNING LAW. THIS AGREEMENT shall be governed by and construed
in accordance with the internal laws (and not the law of conflicts) of the State
of Florida.
(j) AMENDMENTS AND WAIVERS. No amendment of any provision of this
AGREEMENT shall be valid unless the same shall be in writing and signed by the
Parties hereto. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(k) SEVERABILITY. Any term or provision of this AGREEMENT that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent juridiction declares that any term or provision hereof is invalid or
unenfoceable, the Parties agree that the court making the determination of
invalidity or unenforceabilty shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceble term or provision, and this AGREEMENT
shall be enforceable as so modified after the expiration of the time within
which the judgement may be appealed.
(l) EXPENSES. Each of the Parties will bear his or its own costs and
expenses (including legal fees and expenses) incurred in connection with this
AGREEMENT and the transaction contemplated hereby.
(m) CONSTRUCTION. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that ther exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty, or covenant.
(n) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this AGREEMENT are incorporated herein by reference and
made a part hereof.
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(o) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this AGREEMENT are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this AGREEMENT and to enforce specifically this
AGREEMENT and the terms and provisions hereof in any action intituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter, in addition to any other remedy to which it may be
entitled, at law or in equity.
(p) ATTORNEYS' FEES. In the event of any litigation arising out of the
enforcement or interpretation of this AGREEMENT, the prevailing party in such
litigation shall be paid by the losing party all its expenses, including
reasonable attorney's fees and all costs of litigation inccurred by it.
IN WITNESS WHEREOF, the Parties hereto have executed this AGREEMENT
effective as of the date first above written.
Attest: NORTH STAR HOLDING CORP.
By: /s/ XXXXX X. XXXXX By: /s/ X. X. XXXXX III
-------------------------- --------------------------
Name: Xxxxx X. Xxxxx Name: X. X. Xxxxx III
------------------------ ------------------------
Title: Title: CEO
------------------------ ------------------------
Attest: WESTSTAR ENVIRONMENTAL, INC.
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXX
-------------------------- --------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
------------------------ ------------------------
Title: Gen. Counsel Title: PRES/CEO
------------------------ ------------------------
Attest: B&B SEPTIC AND ENVIRONMENTAL
SERVICES, INC.
By:/s/ XXXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXX
-------------------------- --------------------------
Name: Xxxxxx X. Xxxxxx Name: XXXXXXX X. XXXXX
------------------------ ------------------------
Title: Gen. Counsel Title: PRES/CEO
------------------------ ------------------------
Attest: WESTSTAR ACQUISITION CORP.
By: /s/ XXXXX X. XXXXX By: /s/ X. X. XXXXX III
-------------------------- --------------------------
Name: Xxxxx X. Xxxxx Name: X. X. XXXXX III
------------------------ ------------------------
Title: Title: COO
------------------------ ------------------------
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Attest: B&B ACQUISITION CORP.
By: /s/ XXXXX X. XXXXX By:/s/ X. X. XXXXX III
-------------------------- --------------------------
Name: Xxxxx X. Xxxxx Name: X. X. Xxxxx III
------------------------ ------------------------
Title: Title: COO
------------------------ ------------------------
Attest: WESTSTAR ACQUISITION CORP.
By:/s/ XXXXXX X. XXXXXX /s/ XXXXXXX XXXXX
-------------------------- ----------------------------
Name: Xxxxxx X. Xxxxxx Xxxxxxx Xxxxx
------------------------
Title:
------------------------
153
