EXHIBIT 2.1
AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION
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This Agreement dated as of this 30th day of October, 2007 by and among
BlueStar Health Inc., a Colorado corporation ("Buyer"); Zeon Global Energy,
Inc., a Texas corporation ("Sub"); and Zeon Fuel Inc. a Texas corporation (the
"Company").
RECITALS
A. The respective Boards of Directors of each of the Company, Sub and
Buyer, and a majority of the issued and outstanding stock of the Company and
Sub, have approved and declared advisable: (i) the merger of the Sub with and
into Company; (ii) Company becoming a wholly-owned subsidiary of Buyer; and the
shareholders of Company will become stockholders of Buyer (the "Merger") and
approved the Merger upon the terms and subject to the conditions set forth in
this Agreement, whereby each issued and outstanding share of the common stock of
the Company (a "Company Share" or, collectively, the "Company Shares"), will be
converted into 0.001 shares of Series A Convertible Preferred shares of Buyer
and 0.001 shares of Series B Preferred Convertible Shares of Buyer (together,
"Buyer Preferred Stock") which, after giving effect to the Merger, shall equal,
in the aggregate, 20,000 shares of Buyer Preferred Stock and have the right to
convert into Common Stock of Buyer equivalent to 80% and as set forth on
Schedule 1 hereto of the total issued and outstanding common stock of Buyer at
the Effective Time (hereinafter defined) after giving full effect to conversion
of Buyer Preferred Stock as described in SECTION 1.8(c) below, subject to
adjustment as specifically provided herein .
B. The respective Boards of Directors of the Company, Sub and Buyer have
determined that the Merger is in furtherance of and consistent with their
respective long-term business strategies and is fair to and in the best
interests of their respective stockholders.
C. It is intended that, for federal income tax purposes, the Merger shall
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code");
D. For financial accounting purposes, it is intended that the Merger will
be accounted for as a "purchase".
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
The Merger; Closing; Effect of Merger
SECTION 1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement and in accordance with Colorado corporate law ("CCL")
and Texas corporate law ("TCL") as amended at the Effective Time, the Sub shall
be merged with and into Company and the separate corporate existence of the Sub
shall thereupon cease. The Company shall be the surviving corporation in the
Merger (sometimes hereinafter referred to as the "Surviving Corporation"), and
the separate corporate existence of Buyer and Company with all their rights,
privileges, immunities, powers and franchises shall continue unaffected by the
merger, except that Company shall be a wholly-owned subsidiary of Buyer, and as
otherwise set forth herein.
SECTION 1.2 Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger and the consummation of the other transactions
contemplated hereby (the "Closing") shall take place at the offices of Zeon
Fuel, Inc. at 0000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx on October 31, 2007 at
2:00 p.m. local time (or at such other date, time and place as the parties
hereto may agree).
SECTION 1.3 Effective Time. On the date of Closing, the Company, Sub and
Buyer will cause a Certificate of Merger (the "Certificate of Merger") to be
filed with the Texas Secretary of State. The Merger shall become effective at
the time when the Certificate of Merger has been filed with the Texas Secretary
of State, or, as otherwise agreed by the Company and Buyer (the "Effective
Time").
SECTION 1.4 Articles of Incorporation. The Amended and Restated Articles of
Incorporation of Buyer attached hereto as Exhibit A shall be the articles of
incorporation of the Buyer (the "Charter"), at the time of Closing and until
duly amended as otherwise provided herein or by applicable law.
SECTION 1.5 By-Laws. The by-laws of Buyer in effect immediately prior to
the Effective Time shall be the by-laws of the Surviving Corporation (the
"By-Laws"), until thereafter amended as provided therein or by applicable law.
SECTION 1.6 Directors. The directors of the Buyer shall, from and after the
Effective Time, be: (i) Xxxxx Xxxxx (Chairman of the Board); (ii) Xxxxxxx X.
Xxxxxxxxx; (iii) C. Xxxxx Xxxxx; (iv) Xxxxxx X. Xxxx; and (v) Xxxxxxx X.
Xxxxxxx.
Officers. The officers of the Buyer shall, from and after the Effective Time,
be: Xxxxxxx Xxxxxxxxx (CEO and President), C. Xxxxx Xxxxx (EVP, CFO, Secretary
and Treasurer), and Xxxx Xxxxxxx (Director of Operations).
SECTION 1.7 Effect on Capital Stock. At the Effective Time, as a result of
the Merger and without any action on the part of the holder of any capital stock
of Buyer:
(i) Merger Consideration. Each Company Share issued and
outstanding immediately prior to the Effective Time shall be converted into, and
become exchangeable for 0.001 shares of validly issued, fully paid and
non-assessable shares of Buyer Series A Convertible Preferred Stock and 0.001
shares of Series B Convertible Preferred Stock (together the " Buyer Preferred
Stock " and the "Merger Purchase Price");
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(ii) Buyer Preferred Stock shall be convertible into Common
Stock as described in SECTION 1.8 below. Each share of Buyer Preferred Stock
shall have voting rights equivalent to the number of shares of Common Stock into
which it is convertible. Should any event described in SECTION 1.8(d) occur
prior to conversion of Buyer Preferred Stock, an equitable adjustment to the
conversion ratio of Buyer Preferred Stock into Buyer Common Stock shall be made.
The full rights and preferences of Buyer Preferred Stock are set forth in
Buyer's Amended and Restated Articles of Incorporation, Exhibit A.
(iii) At the Effective Time, all Company Shares in existence
prior to the merger shall be canceled as exchanged for Buyer shares and the
Company shall then exist as a wholly owned subsidiary of Buyer, and each share
certificate (a "Certificate") formerly representing any Company Shares shall
thereafter represent only the right to receive the shares of Buyer Preferred
Stock into which such Company Shares have been converted.
SECTION 1.8 Exchange of Certificates for Shares .
(a) Exchange. At Closing, Buyer shall deliver or cause to be delivered
to each respective owner of Company Shares and in each of their respective
names, certificates representing Series A Preferred Shares and Series B
Preferred Shares into which the Company Shares that such shareholders owns are
to be converted as set forth on Schedule 1, with the exception of certain shares
to be pledged according to the terms of the Pledge Agreement attached hereto as
Exhibit B, which shall be delivered to the pledgee thereunder.
(b) Fractional Shares. No certificates or scrip representing
fractional shares of Buyer Preferred Stock shall be issued upon the surrender
for exchange of Certificates pursuant to this Article I; no dividend or other
distribution by Buyer and no stock split, combination or reclassification shall
relate to any such fractional share; and no such fractional share shall entitle
the record or beneficial owner thereof to vote or to any other rights of a
stockholder of Buyer. In lieu of any such factional share, each holder of
Company Shares who would otherwise have been entitled thereto upon the surrender
of Certificate(s) for exchange pursuant to this Article I will be paid one
additional share of Buyer Preferred Stock.
(c) Conversion of Preferred Stock. Upon shareholder approval of the
Amended and Restated Articles of Incorporation changing the Buyer's name and
increasing the number of authorized shares of Buyer Common Stock, each share of
Series A Preferred Stock shall be immediately exchangeable for 4,400 shares of
Buyer Common Stock. In the event the increased number of common shares is not
approved by shareholders at the time the merger is approved, Series A Preferred
Stock shall be exchangeable into Common Stock at the earliest opportunity
following approval of an increase in the number of authorized common shares
permitting such exchange. Series B Preferred Stock shall be convertible into
4,641.38 shares of Buyer Common Stock on the first anniversary of the Effective
Time of the Merger.
(d) Adjustments of Conversion Number. In the event that Buyer changes
the number of shares of Buyer Common Stock, issued and outstanding prior to the
Effective Time, except as otherwise expressly permitted in this Agreement, as a
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result of a reclassification, stock split (including a reverse split), dividend
or distribution, recapitalization, merger (other than the Merger, Stock Purchase
or the cancellation of options previously granted by the Company), subdivision,
or other similar transaction with the effect of increasing or decreasing the
number of shares of Buyer Common Stock, or if a record date with respect to any
of the foregoing shall occur prior to the Effective Time, the conversion number
shall be equitably adjusted.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to Buyer as follows and
acknowledges that Buyer is relying upon such representations and warranties in
connection with the Contemplated Transactions (as hereinafter defined):
SECTION 2.1 Capitalization. The outstanding and issued capital stock of the
Company consists of 100,000,000 authorized common shares with a par value of:
$0.001. There are 39,000,000 common shares outstanding as detailed on Schedule 1
which sets forth the name of each record and beneficial shareholder of the
Company (each a "Shareholder" and collectively the "Shareholders") and the
number of Company Shares held by each such person. The Company does not and, at
the Closing, the Company will not, except as disclosed on Schedule 2.1, have
outstanding any capital stock or other securities or any rights, warrants or
options to acquire securities of the Company or any convertible or exchangeable
securities and, other than Buyer pursuant to this Agreement, no person has or,
at Closing will have, any right to purchase or otherwise acquire any securities
of the Company. There are, and at Closing there will be, no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any
securities of the Company. All of the Company Shares are, and at Closing will
be, duly authorized, duly and validly issued, fully paid and non-assessable, and
none were issued in violation of any preemptive rights, rights of first refusal
or any other contractual or legal restrictions of any kind except as set forth
on Schedule 2.1.
SECTION 2.2 Title to the Shares. To the best of Company's knowledge and
information each Shareholder is the beneficial owner and holds good and valid
title to its Company Shares free and clear of any Lien. To the best of Company's
knowledge and information, upon consummation of the Contemplated Transactions
and the satisfaction of the conditions to Closing set forth herein, Buyer will
own all of the issued and outstanding shares of capital stock of the Company,
free and clear of any Lien. At the Closing, each Shareholder will deliver the
Company Shares to Buyer free and clear of any Lien, other than restrictions
imposed by the Securities Act of 1933, as amended, and applicable securities
Laws including the laws of the State of Texas.
SECTION 2.3 Authority Relative to this Agreement. Following approval of the
Shareholders of the Company, the Company will have full power, capacity and
authority to execute and deliver each document to which it is or, at Closing,
will be, a party (the "Transaction Documents") and to consummate the
transactions contemplated hereby and thereby (the "Contemplated Transactions").
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The execution, delivery and performance by the Company of each Transaction
Document and the consummation of the Contemplated Transactions to which the
Company is, or at Closing, will be, a party will have been duly and validly
authorized by the Company and no other acts by or on behalf of the Company will
be necessary or required to authorize the execution, delivery and performance by
the Company of each Transaction Document and the consummation of the
Contemplated Transactions to which it is or, at Closing, will be, a party. This
Agreement and the other Transaction Documents to which the Company is a party
have been duly and validly executed and delivered by the Company and (assuming
the valid execution and delivery thereof by the other parties thereto) will
constitute the legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their respective terms, except as such
obligations and their enforceability may be limited by applicable bankruptcy and
other similar Laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies is subject to the discretion
of the court before which any proceeding therefor may be brought (whether at law
or in equity).
SECTION 2.4 No Conflicts; Consents. The execution, delivery and performance
by the Company of each Transaction Document to which it is a party and the
consummation of the Contemplated Transactions to which the Company is a party,
upon approval of the Shareholders will not: (i) violate any provision of the
certificate of formation or memorandum of association of the Company; (ii)
require the Company to obtain any consent, approval or action of or waiver from,
or make any filing with, or give any notice to, any Governmental Body or any
other person, except as set forth on Schedule 2.4 (the "Company Required
Consents"); (iii) violate, conflict with or result in a breach or default under
(with or without the giving of notice or the passage of time or both), or permit
the suspension or termination of, any material Contract (including any Real
Property Lease) to which the Company is a party or by which it or any of its
assets is bound or subject, or to the best of Company's knowledge and
information result in the creation of any Lien upon any of the Company Shares or
upon any of the Assets of the Company; (iv) violate any Order, any Law, of any
Governmental Body against, or binding upon, the Company or upon any of their
respective assets or the Business; or (v) violate or result in the revocation or
suspension of any Permit.
SECTION 2.5 Corporate Existence and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas, and has all requisite powers, authority and all Permits required
to own and/or operate its Assets and to carry on the Business as conducted as of
the date hereof. The Company has no Subsidiaries and does not directly or
indirectly own any equity or other interest or investment in any other person.
SECTION 2.6 Charter Documents and Corporate Records. The Company has
heretofore delivered to Buyer true and complete copies of the certificate of
formation, bylaws and minute books, or comparable instruments, of the Company as
in effect on the date hereof. The stock transfer books of the Company have been
made available to Buyer for its inspection and are true and complete in all
respects in accordance with their tenor.
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SECTION 2.7 Financial Statements.
(a) Schedule 2.7A sets forth true, complete and correct copies of: (i)
the Company's reviewed financial statements as of and for the year ended
December 31, 2006 (the "Annual Statement"); (ii) the Company's interim financial
statements as of and for the year to date period ending June 30, 2007 (the
"Interim Statement"); and (iii) all management letters, management
representation letters and attorney response letters issued in connection with
the Annual Statement, (the Annual Statement and Interim Statement together
referred as "Financial Statements"). The Financial Statements present fairly and
accurately in all material respects the financial position of the Company as of
their date, and the earnings, changes in stockholders' equity and cash flows
thereof for the periods then ended in accordance with GAAP, consistently
applied. Each balance sheet contained therein or delivered pursuant hereto fully
sets forth all consolidated Assets and Liabilities of the Company existing as of
its date which, under GAAP, should be set forth therein, and each statement of
earnings contained therein or delivered pursuant hereto sets forth the items of
income and expense of the Company which should be set forth therein in
accordance with GAAP.
(b) All financial, business and accounting books, ledgers, accounts
and official and other records relating to the Company have been properly and
accurately kept and completed, and the Company has no knowledge, notice belief
or information there are any material inaccuracies or discrepancies contained or
reflected therein.
SECTION 2.8 Liabilities. The Company has not incurred any Liabilities since
June 30, 2007 (the "Latest Balance Sheet Date") except (i) current Liabilities
for trade or business obligations incurred in connection with the purchase of
goods or services in the ordinary course of the Business and consistent with
past practice, and (ii) Liabilities reflected on any balance sheet referred to
in Section 2.7(a).
SECTION 2.9 Company Receivables. Except to the extent of the amount of the
allowance for doubtful accounts reflected in the Financial Statements as of the
Latest Balance Sheet Date, all the Receivables of the Company reflected therein,
and all Receivables that have arisen since the Latest Balance Sheet Date (except
Receivables that have been collected since such date), are valid and enforceable
Claims subject to no known defenses, offsets, returns, allowances or credits of
any kind, and constitute bona fide Receivables collectible in the ordinary
course of the Business except as enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or
similar laws or principles of equity affecting the enforcement of creditors
rights generally.
SECTION 2.10 Absence of Certain Changes. (a) Since June 30, 2007 the
Company has conducted the Business in the ordinary course consistent with past
practice, except as disclosed on Schedule 2.10 hereof, and there has not been:
(i) Any material adverse change in the Condition of the
Business;
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(ii) Any damage, destruction or other casualty loss (whether or
not covered by insurance), condemnation or other taking affecting the Business
or the Assets of the Company;
(iii) Any change in any method of accounting or accounting
practice by the Company;
(iv) Except for normal increases granted in the ordinary course
of business, any increase in the compensation, commission, bonus or other direct
or indirect remuneration paid, payable or to become payable to any officer,
stockholder, director, consultant, agent or employee of the Company, or any
alteration in the benefits payable or provided to any thereof;
(v) Any material adverse change in the relationship of the
Company with its employees, customers, suppliers or vendors;
(vi) Except for any changes made in the ordinary course of
Business, any material change in any of the Company's business policies,
including advertising, marketing, selling, pricing, purchasing, personnel,
returns or budget policies;
(vii) Any agreement or arrangement whether written or oral to
do any of the foregoing.
(viii) The Company has no Liability that is past due except as
shown on the Annual Statements.
SECTION 2.11 Leased Real Property. (a) The Company has no fee interest,
purchase options or rights of first refusal in any real property and the Company
has no leasehold or other interest in any real property, except as set forth on
Schedule 2.11 (the "Leased Real Property"), and all leases including all
amendments, modifications, extensions, renewals and/or supplements thereto
(collectively, "Real Property Leases") are described on Schedule 2.11.
SECTION 2.12 Personal Property; Assets. The Company has good and valid
title to (or valid leasehold interest in) all of its personal property and
Assets, free and clear of all Liens, except the Permitted Liens and as indicated
on Schedule 2.12. The machinery, equipment, computer software and other tangible
personal property constituting part of the Assets and all other Assets (whether
owned or leased) are in good condition and repair (subject to normal wear and
tear) and are reasonably sufficient and adequate in quantity and quality for the
operation of the Business as previously and presently conducted. Schedule 2.12
contains a list and description of all tangible personal property owned or
leased by the Company with a book value (before depreciation) of $10,000 or
more. The Assets constitute all of the assets, which are necessary to operate
the Business of the Company as currently conducted.
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SECTION 2.13 Contracts. (a) Schedule 2.13 sets forth an accurate and
complete list of all Contracts to which the Company is a party or by which it or
its Assets are bound or subject that: (i) cannot be canceled upon 30 days'
notice without the payment or penalty of less than Ten Thousand Dollars
($10,000); or (ii) involve aggregate annual future payments by or to any person
of more than Fifty Thousand Dollars ($50,000). True and complete copies of all
written Contracts (including all amendments thereto and waivers in respect
thereof) and summaries of the material provisions of all oral Contracts so
listed have been made available to Buyer.
(b) All Contracts to which the Company is a party are valid,
subsisting, in full force and effect and binding upon the Company and the other
parties thereto, in accordance with their terms, except that no representation
or warranty is given as to the enforceability of any oral Contracts. To the best
of the Company's knowledge and belief, except as set forth on Schedule 2.13, the
Company is not in default (or alleged default) under any such Contract.
(c) The contracts between Company and Safe Fuel and Star Fuel, true
and accurate copies of which are appended to Schedule 2.13, are in full force
and effect, with no defaults existing on the part of either party to the
contract. Also appended to Schedule 2.13 are written consents of Safe Fuel and
Star Fuel to the acquisition of the Company by Buyer.
SECTION 2.14 Patents and Intellectual Property Rights. (a) Schedule 2.14
sets forth a list of each patent, trademark, trade name, service xxxx, brand
xxxx, brand name, and registered copyright as well as all registrations thereof
and pending applications therefore, and each license or other contract relating
thereto (collectively, the "Intellectual Property") owned or used in connection
with the Business by the Company and indicates, with respect to each item of
Company's Intellectual Property that is licensed by the Company, the name of the
licensor thereof and, with respect to oral Contracts, the terms of such license
relating thereto. To the Company's knowledge, the use of the foregoing by the
Company does not conflict with, infringe upon, violate or interfere with or
constitute an appropriation of any right, title, interest or goodwill,
including, without limitation, any intellectual property right, patent,
trademark, trade name, service xxxx, brand name, computer program, database,
industrial design, trade secret, copyright or any pending application thereto of
any other person and there have been no claims made and the Company has not
received any notice or otherwise know that any of the foregoing is invalid or
conflicts with the asserted rights of other Persons or have not been used or
enforced or have been failed to be used or enforced in a manner that would
result in the abandonment, cancellation or unenforceability of the Intellectual
Property, except as set forth on Schedule 2.14A.
(b) The Company owns or has rights to use all Intellectual Property,
know-how, formulae and other proprietary and trade rights necessary to conduct
the Business as it is now conducted. The Company has not forfeited or otherwise
relinquished any such Intellectual Property, know-how, formulae or other
proprietary right used in the conduct of the Business as now conducted.
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(c) To the extent used in the conduct of the Business by the Company,
each of the licenses or other contracts relating to the Company's Intellectual
Property (collectively, the "Intellectual Property Licenses") is in full force
and effect and is valid and enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), and there is no
notice or claim of default under any Intellectual Property License either by the
Company or, to the Company's knowledge, by any other party thereto, and to the
Company's knowledge, no event has occurred that with the lapse of time or the
giving of notice or both would constitute a default by the Company there under.
SECTION 2.15 Claims and Proceedings. There are no outstanding Orders of any
Governmental Body against or involving the Company, its Assets, the Business, or
the Company Shares. There are no actions, suits, claims or counterclaims,
examinations, Company Required Consents or legal, administrative, governmental
or arbitral proceedings or investigations (collectively, "Claims") (whether or
not the defense thereof or Liabilities in respect thereof are covered by
insurance), pending or, to the best of the Company's knowledge, threatened on
the date hereof, against or involving the Company, its Assets, the Business or
the Company Shares.
SECTION 2.16 Taxes. (a) Except as set forth in Schedule 2.16:
(i) The Company has timely filed or, if not yet due but due
before Closing, will timely file all Tax Returns required to be filed by it for
all taxable periods ending on or before the date of Closing and all such Tax
Returns are or, if not yet filed, will be, upon filing, true, correct and
complete in all material respects;
(ii) the Company has paid, or if payment is not yet due but due
before Closing, will promptly pay when due to each appropriate Tax Authority,
all Taxes of the Company shown as due on the Tax Returns required to be filed by
it for all taxable periods ending on or before the date of Closing;
(iii) the accruals for Taxes currently payable as well as for
deferred Taxes shown on the financial statements of the Company as of the date
of the Annual Statement or the date of any financial statements delivered
hereunder: (A) adequately provide for all contingent Tax Liabilities of the
Company as of the date thereof; and (B) accurately reflect, as of the date
thereof, all unpaid Taxes of the Company whether or not disputed, in each case
as required to be reflected thereon in order for such statements to be in
accordance with GAAP;
(iv) no extension of time has been requested or granted for the
Company to file any Tax Return that has not yet been filed or to pay any Tax
that has not yet been paid and the Company has not granted a power of attorney
that remains outstanding with regard to any Tax matter;
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(v) the Company has not received notice of a determination by a
Tax Authority that Taxes are currently owed by the Company (such determination
to be referred to as a "Tax Deficiency") and, to the Company's knowledge, no Tax
Deficiency is proposed or threatened;
(vi) all Tax Deficiencies have been paid or finally settled and
all amounts determined by settlement to be owed have been paid;
(vii) there are no Tax Liens on or pending against the Company
or any of the Assets, other than those which constitute Permitted Liens;
(viii) there are no presently outstanding waivers or extensions
or requests for a waiver or extension of the time within which a Tax Deficiency
may be asserted or assessed;
(ix) no issue has been raised in any examination,
investigation, Company Required Consents, suit, action, claim or proceeding
relating to Taxes (a "Tax Company Required Consents") which, by application of
similar principles to any past, present or future period, would result in a Tax
Deficiency for such period;
(x) there are no pending or threatened Tax Audits of the
Company;
(xi) the Company has no deferred intercompany gains or losses
that have not been fully taken into income for income Tax purposes;
(xii) there are no transfer or other taxes (other than income
taxes) imposed by any state on the Company by virtue of the Contemplated
Transactions; and
(xiii) no claim has been made by any Tax Authority that the
Company is subject to Tax in a jurisdiction in which the Company is not then
paying Tax of the type asserted.
Each reference to a provision of the Code in this Section 2.16 shall be treated
for state and local Tax purposes as a reference to analogous or similar
provisions of state and local law.
(b) To the Company's knowledge, the Company has collected and remitted
to the appropriate Tax Authority all sales and use or similar Taxes required to
be collected on or prior to the date of Closing and has been furnished properly
completed exemption certificates for all exempt transactions and has no
information otherwise or notice of any claim by any government or jurisdiction
with regards thereto. The Company has maintained and has in its possession all
records, supporting documents and exemption certificates required by applicable
sales and use Tax statutes and regulations to be retained in connection with the
collection and remittance of sales and use Taxes for all periods up to and
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including the date of Closing. With respect to sales made by the Company prior
to the date of Closing for which sales and use Taxes are not yet due as of the
date of Closing, all applicable sales and use Taxes payable with respect to such
sales will have been collected or billed by the Company and will be included in
the Assets of the Company as of the date of Closing.
SECTION 2.17 Compliance with Laws. The Company is not in violation of any
order, judgment, injunction, award, citation, decree, consent decree or writ
(collectively, "Orders") and to the best of the Company's knowledge, belief and
information, any Laws of any Governmental Bodies affecting the Company, the
Company Shares or the Business.
SECTION 2.18 Permits. The Company has obtained all licenses, permits,
certificates, certificates of occupancy, orders, authorizations and approvals
(collectively, "Permits"), and has made all required registrations and filings
with all Governmental Bodies, that are necessary to the ownership of the Assets,
the use and occupancy of the Leased Real Property, as presently used and
operated, and the conduct of the Business or otherwise required to be obtained
by the Company. All Permits required to be obtained or maintained by the Company
are listed on Schedule 2.18 and are in full force and effect; no violations are
or have been recorded, nor have any notices or violations thereof been received,
in respect of any Permit; and no proceeding is pending or threatened to revoke
or limit any Permit; and the consummation of the Contemplated Transactions will
not (or with the giving of notice or the passage of time or both will not) cause
any Permit to be revoked or limited.
SECTION 2.19 Environmental Matters. To the best of the Company's knowledge,
belief and information, the Company is, and at all times has been, in full
compliance with, and has not been and is not in violation of or liable under,
any Environmental Law.
SECTION 2.20 Finders Fees. Other than as set forth in Schedule 2.20, there
is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of the Company who might be
entitled to any fee or commission from the Company in connection with the
consummation of the Contemplated Transactions. Any finder's fees shall be paid
by Company's shareholders.
SECTION 2.21 Disclosure. Neither this Agreement, the Schedules hereto, nor
any reviewed or unaudited financial statements, documents or certificates
furnished or to be furnished to Buyer by or on behalf of the Company pursuant to
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading. There are no events,
transactions or other facts, which, either individually or in the aggregate, may
give rise to circumstances or conditions which would have a material adverse
effect on the general affairs or Condition of the Business.
SECTION 2.22 Business Contracts. The Company has (i) entered into contracts
for supply of its basic goods and material sufficient to fulfill contracts for
sale of its basic products such that (ii) its retail delivery contract(s) will
result in the sale of 800,000 gallons of its basic product each month for a
period of at least one year. The Company believes the underlying contracts are
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binding upon the counter-parties and the counter-parties from the Company's due
diligence are financially capable of completing the terms of the respective
contracts.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer and Sub (in this section sometimes collectively referred to as
"Buyer") represent, warrant and covenant to the Company as follows and
acknowledge that the Company is relying upon such representations and warranties
in connection with the Contemplated Transactions:
SECTION 3.1 Authority Relative to this Agreement. Buyer has full power and
authority to execute and deliver each Transaction Documents to which they are
or, at Closing, will be, a party and to consummate the Contemplated
Transactions. Following the approval of the board of directors of Buyer and Sub
and the shareholder of Sub with respect to the Contemplated Transactions, the
execution, delivery and performance by Buyer of each Transaction Document and
the consummation of the Contemplated Transactions to which they are or, at
Closing, will be, a party have been duly and validly authorized and approved by
Buyer and no other acts by or on behalf of Buyer is necessary or required to
authorize the execution, delivery and performance by Buyer of each Transaction
Document and the consummation of the Contemplated Transactions to which they are
or, at Closing, will be a party. This Agreement and the other Transaction
Documents to which Buyer is a party have been, duly and validly executed and
delivered by Buyer and (assuming the valid execution and delivery thereof by the
other parties thereto) constitutes, or will, at the Closing, constitute, as the
case may be, the legal, valid and binding agreements of Buyer enforceable
against each of them in accordance with their respective terms, except as such
obligations and their enforceability may be limited by applicable bankruptcy and
other similar Laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies is subject to the discretion
of the court before which any proceeding therefor may be brought (whether at law
or in equity).
SECTION 3.2 No Conflicts; Consents. The execution, delivery and performance
by Buyer of each Transaction Document to which it is a party and the
consummation of the Contemplated Transactions to which Buyer is a party does not
and will not: (i) violate any provision of the certificate of incorporation or
by-laws of Buyer, as the case may be; (ii) require Buyer to obtain any consent,
approval or action of or waiver from, or make any filing with, or give any
notice to, any Governmental Body or any other person, except as set forth on
Schedule 3.2 (the "Buyer Required Consents"); (iii) except as set forth in
Schedule 3.2, violate, conflict with or result in the breach or default under
(with or without the giving of notice or the passage of time), or permit the
suspension or termination of, any material Contract to which Buyer is a party or
any of them or any of their assets is bound or subject or result in the creation
or any Lien upon any of Buyer Common Stock or upon any assets of Buyer; or (iv)
violate any Order or, to Buyer's knowledge, any Law of any Governmental Body
against, or binding upon Buyer, or upon any of their respective assets or
businesses.
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SECTION 3.3 Corporate Existence and Power of Buyer. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Colorado, and has all requisite corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Sub is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, and has all
requisite corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
SECTION 3.4 The Buyer Preferred Stock. At the Closing, the Buyer Preferred
Stock will have been duly authorized by Buyer and, when issued to Shareholders
pursuant to this Agreement, will be duly issued, fully paid and non-assessable
shares of Buyer Preferred Stock. The Buyer Preferred Stock, when issued pursuant
hereto: (i) will not be issued in violation of or subject to any preemptive
rights, rights of first refusal or, other than as set forth in this Agreement,
contractual restrictions of any kind; and (ii) will vest in Shareholders,
respectively, good title to Buyer Preferred Stock free and clear of all Liens.
SECTION 3.5 Capitalization. The authorized capital stock of Buyer consists
of: (i) 40,000,000 shares of common stock, $0.001 par value; and, (ii)
10,000,000 shares of preferred stock, $0.01 par value. At the time of the
Closing Buyer will have outstanding no more than; (i) 22,603,444 shares of
common stock; and (ii) no shares of preferred stock. Except as described above,
Buyer does not, and at the Closing Buyer will not have outstanding any capital
stock or other securities or any rights, warrants or options to acquire
securities of Buyer or any convertible or exchangeable securities, or any right
to purchase or otherwise acquire any securities of Buyer. There are, and at
Closing there will be, no outstanding obligations of Buyer to repurchase, redeem
or otherwise acquire any securities of Buyer. All of Buyer Common Stock at
Closing will be, duly authorized, duly and validly issued of proper filings will
have been submitted with the appropriate state and federal agencies, fully paid
and non-assessable, and none were issued in violation of any preemptive rights,
rights of first refusal or any other contractual or legal restrictions of any
kind. Any exceptions shall be set forth on Schedule 3.5.
SECTION 3.6 Disclosure of Information. Buyer has been given the
opportunity: (i) to ask questions of, and to receive answers from, persons
acting on behalf of the Company concerning the terms and conditions of the
Contemplated Transactions and the business, properties, prospects and financial
conditions of the Company; and (ii) to obtain any additional information (to the
extent the Company or any of the Shareholders possesses such information or is
able to acquire it without unreasonable effort or expense and without breach of
confidentiality obligations) necessary to verify the accuracy of information
provided about the Company.
SECTION 3.7 SEC Filings. Buyer has or will have filed with the SEC all
forms, reports, schedules, and statements that were required to be filed by it
with the SEC within the three (3) year period ending on the Effective Time, and
previously has furnished or made available to the Company accurate and complete
copies of all the SEC Documents. As of their respective dates, the SEC Documents
were and will be prepared in accordance with the Exchange Act and the Securities
Act and did not contain any untrue statement of a material fact or omit to state
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a material fact required to be stated in those documents or necessary to make
the statements in those documents not misleading, in light of the circumstances
under which they were made. As of their respective dates, these reports and
statements will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated in them or necessary to make the
statements in them not misleading, in light of the circumstances under which
they are made and these reports and statements will comply in all material
respects with all applicable requirements of the Exchange Act and the Securities
Act.
SECTION 3.8 Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of Buyer that
are included or incorporated in the SEC Documents were and will be prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as otherwise indicated in the notes to them) and fairly present the
consolidated financial position, results of operations, and cash flows from
operating, investing, and financing activities of Buyer as of the dates and for
the periods indicated, except that the unaudited consolidated interim financial
statements in the SEC Documents are subject to normal year-end adjustments and
were prepared in accordance with the instructions to SEC Form 10-QSB and,
accordingly, omit or condense certain footnotes and other information normally
included in financial statements prepared in accordance with GAAP. The
consolidated financial statements of Buyer that are included or incorporated in
any subsequent report or statement that Buyer mails to its shareholders
generally or files with the SEC during the period after the date of this
Agreement and before the Closing Date will be prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as otherwise
indicated in them, the notes to them, or any related report of Buyer's
independent accountants) and will fairly present the financial information that
they purport to present, except that the unaudited, consolidated interim
financial statements will be subject to normal year-end adjustments and will
omit or condense certain footnotes and other information normally included in
financial statements prepared in accordance with GAAP.
SECTION 3.9 Charter Documents and Corporate Records. Buyer has heretofore
delivered to the Company true and complete copies of the articles of
incorporation, by-laws and minute books, or comparable instruments, of Buyer as
in effect on the date hereof. The stock transfer books of Buyer have been made
available to the Company for its inspection and are true and complete in all
respects.
SECTION 3.10 Liabilities. Except as set forth on Schedule 3.10, Buyer has
not incurred any Liabilities since June 30, 2007 except those incurred in the
ordinary course of business which have been discharged.
SECTION 3.11 Absence of Certain Changes. (a) Since December 31, 2006, Buyer
has conducted its business in the consistent with past practice and except as
disclosed on Schedule 3.11 hereto there has not been:
(i) Any change in any method of accounting or accounting
practice by Buyer;
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(ii) Any increase in the compensation, commission, bonus or
other direct or indirect remuneration paid, payable or to become payable to any
officer, stockholder, director, consultant, agent or employee of Buyer, or any
alteration in the benefits payable or provided to any thereof;
(iii) Any material adverse change in the relationship of Buyer
with its employees, customers, suppliers or vendors;
(iv) Except for any changes made in the ordinary course of
business, any material change in any of Buyer 's business policies, including
advertising, marketing, selling, pricing, purchasing, personnel, returns or
budget policies;
(v) Any agreement or arrangement whether written or oral to do
any of the foregoing; and
(vi) Buyer has no Liability that is past due except as shown
on the financial statements as filed with the SEC.
SECTION 3.12 Contracts. (a) Schedule 3.12 sets forth an accurate and
complete list of all Contracts to which Buyer is a party or by which it or its
assets are bound or subject that: (i) cannot be canceled upon 30 days' notice
without the payment or penalty of less than Ten Thousand Dollars ($10,000); or
(ii) involve aggregate annual future payments by or to any person of more than
Fifty Thousand Dollars ($50,000). True and complete copies of all written
Contracts (including all amendments thereto and waivers in respect thereof) and
summaries of the material provisions of all oral Contracts so listed have been
made available to the Company.
(b) All Contracts to which Buyer is a party are valid, subsisting, in
full force and effect and binding upon Buyer and the other parties thereto, in
accordance with their terms, except that no representation or warranty is given
as to the enforceability of any oral Contracts. To the best of Buyer's knowledge
and belief, except as set forth on Schedule 3.12, Buyer is not in default (or
alleged default) under any such Contract.
SECTION 3.13 Claims and Proceedings. There are no outstanding Orders of any
Governmental Body against or involving Buyer, its assets or its business. There
are no Claims (whether or not the defense thereof or Liabilities in respect
thereof are covered by insurance), pending or, to the best of Buyer 's
knowledge, threatened on the date hereof, against or involving Buyer, its assets
or its business.
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SECTION 3.14 Taxes. Except as set forth on Schedule 3.14:
(a)
(i) Buyer has filed or, if not yet due but due before Closing,
will timely file all Tax Returns required to be filed by it for all taxable
periods ending on or before the date of Closing and all such Tax Returns are or,
if not yet filed, will be, upon filing, true, correct and complete in all
material respects;
(ii) Buyer has paid, or if payment is not yet due but due
before Closing, will promptly pay when due to each appropriate Tax Authority,
all Taxes of Buyer shown as due on the Tax Returns required to be filed by it
for all taxable periods ending on or before the date of Closing;
(iii) the accruals for Taxes currently payable as well as for
deferred Taxes shown on the financial statements of Buyer as of the date of the
Interim Statements or the date of any financial statements delivered hereunder:
(A) adequately provide for all contingent Tax Liabilities of Buyer as of the
date thereof; and (B) accurately reflect, as of the date thereof, all unpaid
Taxes of Buyer whether or not disputed, in each case as required to be reflected
thereon in order for such statements to be in accordance with GAAP;
(iv) no extension of time has been requested or granted for
Buyer to file any Tax Return that has not yet been filed or to pay any Tax that
has not yet been paid and Buyer has not granted a power of attorney that remains
outstanding with regard to any Tax matter;
(v) Buyer has not received notice of a Tax Deficiency and, to
Buyer 's knowledge, no Tax Deficiency is proposed or threatened;
(vi) all Tax Deficiencies have been paid or finally settled
and all amounts determined by settlement to be owed have been paid;
(vii) there are no Tax Liens on or pending against Buyer or
any of the assets, other than those which constitute Permitted Liens;
(viii) there are no presently outstanding waivers or
extensions or requests for a waiver or extension of the time within which a Tax
Deficiency may be asserted or assessed;
(ix) no issue has been raised in any examination,
investigation, suit, action, claim or proceeding relating to Taxes which, by
application of similar principles to any past, present or future period, would
result in a Tax Deficiency for such period;
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(x) there are no pending or threatened Tax Audits of Buyer;
(xi) Buyer has no deferred inter-company gains or losses that
have not been fully taken into income for income Tax purposes;
(xii) there are no transfer or other taxes (other than income
taxes) imposed by any state on Buyer by virtue of the Contemplated Transactions;
and
(xiii) no claim has been made by any Tax Authority that Buyer
is subject to Tax in a jurisdiction in which Buyer is not then paying Tax of the
type asserted.
Each reference to a provision of the Code in this Section 3.14 shall be treated
for state and local Tax purposes as a reference to analogous or similar
provisions of state and local law.
(b) To Buyer's knowledge, Buyer has collected and remitted to the
appropriate Tax Authority all sales and use or similar Taxes required to be
collected on or prior to the date of Closing and has been furnished properly
completed exemption certificates for all exempt transactions and has no
information otherwise or notice of any claim by any government or jurisdiction
with regards thereto. Buyer has maintained and has in its possession all
records, supporting documents and exemption certificates required by applicable
sales and use Tax statutes and regulations to be retained in connection with the
collection and remittance of sales and use Taxes for all periods up to and
including the date of Closing. With respect to sales made by Buyer prior to the
date of Closing for which sales and use Taxes are not yet due as of the date of
Closing, all applicable sales and use Taxes payable with respect to such sales
will have been collected or billed by Buyer and will be included in the assets
of Buyer as of the date of Closing.
SECTION 3.15 Compliance with Laws. Buyer is not in violation of any Orders
and to the best of Buyer's knowledge, belief and information, any Laws of any
Governmental Bodies affecting Buyer or the Buyer Common Stock except as are set
forth on Schedule 3.15.
SECTION 3.16 Environmental Matters. To the best of Buyer's knowledge,
belief and information, Buyer is, and at all times has been, in full compliance
with, and has not been and is not in violation of or liable under, any
Environmental Law.
SECTION 3.17 Finders Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Buyer who might be entitled to any fee or commission from Buyer in connection
with the consummation of the Contemplated Transactions.
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ARTICLE IV
COVENANTS AND AGREEMENTS
SECTION 4.1 The Company covenants to Buyer and Buyer covenants to the
Company that:
(a) Filings and Authorizations. The parties hereto shall cooperate and
use their respective best efforts to make, or cause to be made, all
registrations, filings, applications and submissions, to give all notices and to
obtain all governmental or other third party consents, transfers, approvals,
Orders and waivers necessary or desirable for the consummation of the
Contemplated Transactions in accordance with the terms of this Agreement
including without limitation the preparation of any SEC Documents required to be
filed with the SEC by Buyer which are required by the securities laws generally
or in connection with the transactions contemplated by this Agreement; and shall
furnish copies thereof to each other party prior to such filing and shall not
make any such registration, filing, application or submission to which Buyer or
the Company, as the case may be, reasonably objects in writing. All such filings
shall comply in form and content in all material respects with applicable Law.
The parties hereto also agree to furnish each other with copies of such filings
and any correspondence received from any Governmental Body in connection
therewith.
(b) Buyer's Shareholder Approvals. Buyer shall call a special
shareholders meeting in accordance with all SEC and Colorado requirements that
would authorize by majority vote approval of the amendments to the Buyer's
articles of incorporation attached as Exhibit C which provide for the following:
(i) the increase in authorized common shares to 200,000,000
shares;
(ii) the increase in authorized preferred shares to
20,000,000
(iii) the approval of action of the shareholders by written
majority consent;
(iv) the change of Buyer's name from BlueStar Health, Inc.
to Zeon Global Energy, Inc.;
SECTION 4.2 Confidentiality. Each party hereto shall hold in strict
confidence, and shall use its best efforts to cause all of its officers,
employees, agents and professional counsel and accountants, (collectively,
"Representatives") to hold in strict confidence, unless compelled to disclose by
judicial or administrative process, or by other requirements of Law, all
information concerning any other party which it has obtained from such party
prior to, on, or after the date hereof in connection with the Contemplated
Transactions, and each party shall not use or disclose to others, or permit the
18
use of or disclosure of, any such information so obtained, and will not release
or disclose such information to any other person, except its Representatives who
need to know such information in connection with this Agreement and who shall be
advised of the provisions of this Section 4.2. The foregoing provision shall not
apply to any such information to the extent; (i) known by any party prior to the
date such information was provided to such party in connection with the
Contemplated Transactions; (ii) made known to such party from a third party not
in breach of any confidentiality requirement; or (iii) made public through no
fault of such party or any of its Representatives.
SECTION 4.3 Expenses. Buyer and the Company (for itself and on behalf of
each Shareholder) shall bear their respective expenses, in each case, incurred
in connection with the preparation, execution and performance of the Transaction
Documents and the Contemplated Transactions, including, without limitation, all
fees and expenses of their respective Representatives, and the Company shall
bear all the fees and expenses of any Company's Representatives.
SECTION 4.4 Buyer Compliance Costs. The Buyer acknowledges that the Company
has provided to Buyer $91,000, $51,000 to fund costs associated with Buyer's
completion of the audit of its financial accounting records and the preparation
and filing of reports to become current with its SEC filings and $40,000 toward
payment of a demand promissory note due an affiliated party.
SECTION 4.5 Tax Matters. The Company and Buyer shall reasonably cooperate,
and shall cause their respective Representatives reasonably to cooperate, in
preparing and filing all Tax Returns, including maintaining and making available
to each other all records necessary in connection with the preparation and
filing of Tax Returns, the payment of Taxes and the resolution of Tax Audits and
Tax Deficiencies with respect to all taxable periods. Refunds or credits of
Taxes that were paid by the Company with respect to any periods shall be for the
account of the Company.
SECTION 4.6 Further Assurances. At any time and from time to time after the
date of Closing, upon the reasonable request of any party hereto, the other
party(ies), shall do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged or delivered, all such further documents, instruments or
assurances, as may be necessary, desirable or proper to carry out the intent and
accomplish the purposes of this Agreement.
SECTION 4.7 Restricted Securities. The parties acknowledge and agree that
the Company Shares and Buyer Preferred Stock being issued or transferred
pursuant to the Contemplated Transactions and the Buyer Common Stock into which
they will be converted, are being issued or transferred pursuant to the
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act") and constitute "restricted securities" within the
meaning of the Securities Act. Such securities may not be transferred absent
compliance with the provisions of the Securities Act, other applicable Laws, and
all stock certificates evidencing such securities shall bear a legend to such
effect and to the effect that such shares are subject to the terms and
provisions of this Agreement; provided, however, that it is anticipated that for
19
purposes of Rule 144 of the Securities Act, that the holding period of Buyer
Common Stock for each shareholder of the Company shall be determined to commence
on the date of acquisition of the Company Shares (as converted pursuant to this
Agreement) for each such respective holder.
SECTION 4.8 Due Diligence. Prior to the Closing Date, Buyer agrees that the
Company shall be entitled, through its Representatives, to make such
investigation of the properties, businesses and operations of Buyer, and such
examination of the books, records and financial condition of Buyer, as the
Company reasonably deems necessary. Any such investigation and examination shall
be conducted at reasonable times, under reasonable circumstances and upon
reasonable notice. No investigation by Buyer shall diminish or obviate any of
the representations, warranties, covenants or agreements of Buyer contained in
this Agreement.
SECTION 4.9 Voting Agreement. Prior to the Closing Date, Buyer, Buyer's
shareholders named in the Voting Agreement attached hereto as Exhibit D, and
Company's shareholders named in the Voting Agreement shall have executed the
Voting Agreement.
ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.1 Conditions to the Obligations of the Parties. The obligations
of the Parties to consummate the Contemplated Transactions are subject to the
satisfaction of the following conditions:
(a) Liabilities of the Buyer. The aggregate Liabilities of the Buyer
shall not exceed $700,000. No Injunction. No provision of any applicable Law and
no Order shall prohibit the consummation of the Contemplated Transactions.
(b) No Proceedings or Litigation. No Claim instituted by any person
(other than Buyer, the Company, Shareholders or their respective Affiliates)
shall have been commenced or pending against any Shareholder, the Company, Buyer
or any of their respective Affiliates, officers or directors, which Claim seeks
to restrain, prevent, change or delay in any respect the Contemplated
Transactions or seeks to challenge any of the terms or provisions of this
Agreement or seeks damages in connection with any of such transactions.
SECTION 5.2 Conditions to the Obligations of the Company. The obligations
of the Company hereunder to consummate the Contemplated Transactions are
subject, at the option of the Company, to the fulfillment prior to or at the
Closing of each of the following further conditions:
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(a) Performance. Buyer shall have performed and complied in all
material respects with all agreements, obligations and covenants required by
this Agreement to be performed or complied with by it at or prior to the Closing
Date.
(b) Representations and Warranties. The representations and warranties
of Buyer contained in this Agreement and in any certificate or other writing
delivered by Buyer pursuant hereto shall be true in all material respects at and
as of the Closing Date as if made at and as of such time (except for those
representations and warranties made as of a specific date which shall be true in
all material respects as of the date made).
(c) No Material Adverse Change. From the date hereof through the
Closing, there shall not have occurred any event or condition that has had or
could have a material adverse effect on Buyer.
(d) Documentation. There shall have been delivered to the Company the
following:
(i) A certificate, dated the Closing Date, of the Chairman of
the Board and the President of Buyer confirming the matters set forth in Section
5.2(a) (b) and (c) hereof;
(ii) Buyer Preferred Stock certificates, registered in the name
of each Shareholder as set forth on Schedule 1 attached hereto, (with the
appropriate restrictive legends as applicable), evidencing satisfaction of the
Purchase Price in accordance with Section 1.8;
(iii) Certificate of Merger;
(iv) Guaranty, a copy of which is attached hereto as Exhibit E;
(v) Pledge Agreement; and
(vi) Voting Agreement
SECTION 5.3 Conditions to the Obligations of Buyer. All obligations of
Buyer to consummate the Contemplated Transactions hereunder are subject, at the
option of Buyer, to the fulfillment prior to or at the Closing of each of the
following further conditions:
(a) Performance. The Company shall have performed and complied in all
material respects with all agreements, obligations and covenants required by
this Agreement to be performed or complied with by them at or prior to the
Closing Date.
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(b) Representations and Warranties. The representations and warranties
of the Company, contained in this Agreement and in any certificate or other
writing delivered by the Company pursuant hereto shall be true in all material
respects at and as of the Closing Date as if made at and as of such time (except
for those representations and warranties made as of a specific date which shall
be true in all material respects as of the date made).
(c) No Material Adverse Change. From the date hereof through the
Closing, there shall not have occurred any event or condition that has had or
could have a material adverse effect on the Company.
(d) Documentation. There shall have been delivered to Buyer the
following:
(i) A certificate, dated the Closing Date, of the Chairman of
the Board, the President or Chief Financial Officer of the Company confirming
the matters set forth in Section 5.3(a) (b) and (c) hereof;
(ii) A certificate, dated the Closing Date, of the Secretary of
the Company certifying, among other things, that attached or appended to such
certificate: (i) is a true and correct copy of the Company's certificate of
incorporation and all amendments thereto, if any, as of the date thereof
certified by the Texas Secretary of State; and (ii) is a true and correct copy
of the Company's bylaws as of the date thereof;
(iii) Certificate of Merger;
(iv) Voting Agreement;
(v) Guaranty;
(vi) Pledge Agreement;
(vii) Company Share certificates representing the number of
Company Shares duly endorsed in blank or accompanied by stock powers duly
endorsed in blank and in suitable form for transfer to Buyer by delivery;
(viii) The Company has obtained the written consents for
assignment to and assumption by Buyer, of the contracts described in Section
2.13(c).
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ARTICLE VI
INDEMNIFICATION
SECTION 6.1 Survival of Representations, Warranties and Covenants.
(a) Notwithstanding any right of Buyer fully to investigate the
affairs of the Company and the rights of the Company to fully investigate the
affairs of Buyer, and notwithstanding any knowledge of facts determined or
determinable by Buyer, or the Company, pursuant to such investigation or right
of investigation, Buyer, and the Company, have the right to rely fully upon the
representations, warranties, covenants and agreements of the Company, and Buyer
respectively, contained in this Agreement, or listed or disclosed on any
Schedule or Exhibit hereto or in any instrument delivered in connection with or
pursuant to any of the foregoing. All such representations, warranties,
covenants and agreements shall survive the execution and delivery of this
Agreement and the Closing hereunder. Notwithstanding the foregoing, all
representations and warranties of the Company and Buyer respectively, contained
in this Agreement, on any Schedule or Exhibit hereto or in any instrument
delivered in connection with or pursuant to this Agreement shall terminate and
expire twelve (12) months after the date of Closing.
(b) All representations and warranties of Buyer shall terminate and
expire twelve (12) months after the date of Closing; provided, however, that the
liability of Buyer shall not terminate as to any specific claim or claims of the
type referred to in Section 6.3 hereof, whether or not fixed as to Liability or
liquidated as to amount, with respect to which Buyer has been given specific
notice on or prior to the date on which such Liability would otherwise terminate
pursuant to the terms of this Section 6.1(b), or which arise or result from or
are related to a Claim for fraud.
SECTION 6.2 Obligation of the Company to Indemnify. The Company, agrees to
indemnify, defend and hold harmless Buyer (and its respective directors,
officers, employees, Affiliates, successors and assigns) from and against all
Claims, losses, Liabilities, Regulatory Actions, damages, deficiencies,
judgments, settlements, costs of investigation or other expenses (including
Taxes, interest, penalties and reasonable attorneys' fees and fees of other
experts and disbursements and expenses incurred in enforcing this
indemnification) (collectively, the "Losses") suffered or incurred by Buyer, the
Company, or any of the foregoing persons arising out of any breach of the
representations and warranties of the Company contained in this Agreement, or of
the covenants and agreements of Company contained in this Agreement or in the
Schedules, Exhibits or any other Transaction Document.
SECTION 6.3 Obligation of Buyer to Indemnify. Buyer agrees to
indemnify, defend and hold harmless the Company (and any heirs, successor or
assignee thereof) from and against any Losses suffered or incurred by the
Company or any of the foregoing persons arising out of any breach of the
representations and warranties of Buyer, or of the covenants and agreements of
Buyer contained in this Agreement or in the Schedules, Exhibits or any other
Transaction Document.
SECTION 6.4 Notice and Opportunity to Defend Third Party Claims. (a)
Within ten (10) days following receipt by any party hereto (the "Indemnitee") of
notice of any demand, claim, circumstance or Tax Audit which would or might give
rise to a claim, or the commencement (or threatened commencement) of any action,
proceeding or investigation that may result in a Loss (an "Asserted Liability"),
the Indemnitee shall give notice thereof (the "Claims Notice") to the party or
23
parties obligated to provide indemnification pursuant to Sections 6.2, or 6.3
(collectively, the "Indemnifying Party"). The Claims Notice shall describe the
Asserted Liability in reasonable detail and shall indicate the amount
(estimated, if necessary, and to the extent feasible) of the Loss that has been
or may be suffered by the Indemnitee.
(b) The Indemnifying Party may elect to defend, at its own expense and
with its own counsel, any Asserted Liability unless: (i) the Asserted Liability
includes a Claim seeking an Order for injunction or other equitable or
declaratory relief against the Indemnitee, in which case the Indemnitee may at
its own cost and expense and at its option defend the portion of the Asserted
Liability seeking equitable or declaratory relief against the Indemnitee, or
(ii) the Indemnitee shall have reasonably, and in good faith, after consultation
with the Indemnifying Party, concluded that: (x) there is a conflict of interest
between the Indemnitee and the Indemnifying Party which could prevent or
negatively influence the Indemnifying Party from impartially or adequately
conducting such defense; or (y) the Indemnitee shall have one or more defenses
not available to the Indemnifying Party but only to the extent such defense
cannot legally be asserted by the Indemnifying Party on behalf of the
Indemnitee. If the Indemnifying Party elects to defend such Asserted Liability,
it shall within ten (10) days (or sooner, if the nature of the Asserted
Liability so requires) notify the Indemnitee of its intent to do so, and the
Indemnitee shall cooperate, at the expense of the Indemnifying Party, in the
defense of such Asserted Liability. If the Indemnifying Party elects not to
defend the Asserted Liability, is not permitted to defend the Asserted Liability
by reason of the first sentence of this Section 6.4(b), fails to notify the
Indemnitee of its election as herein provided or contests its obligation to
indemnify under this Agreement with respect to such Asserted Liability, the
Indemnitee may pay, compromise or defend such Asserted Liability at the sole
cost and expense of the Indemnifying Party. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnitee may settle or compromise any
claim over the reasonable written objection of the other, provided that the
Indemnitee may settle or compromise any claim as to which the Indemnifying Party
has failed to notify the Indemnitee of its election under this Section 6.4(b) or
as to which the Indemnifying Party is contesting its indemnification obligations
hereunder. If the Indemnifying Party desires to accept a reasonable, final and
complete settlement of an Asserted Liability so that such Indemnitee's Loss is
paid in full and the Indemnitee refuses to consent to such settlement, then the
Indemnifying Party's liability to the Indemnitee shall be limited to the amount
offered in the settlement. The Indemnifying Party will exercise good faith in
accepting any reasonable, final and complete settlement of an Asserted
Liability. In the event the Indemnifying Party elects to defend any Asserted
Liability, the Indemnitee may participate, at its own expense, in the defense of
such Asserted Liability. In the event the Indemnifying Party is not permitted by
the Indemnitee to defend the Asserted Liability, it may nevertheless participate
at its own expense in the defense of such Asserted Liability. If the
Indemnifying Party chooses to defend any Asserted Liability, the Indemnitee
shall make available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate for such defense.
Any Losses of any Indemnitee for which an Indemnifying Party is liable for
indemnification hereunder shall be paid upon written demand therefor.
SECTION 6.5 Limits on Indemnification. The Company shall not be liable to
indemnify Buyer pursuant to Section 6.2 above and Buyer Shareholder shall not be
liable to indemnify the Company pursuant to Section 6.3 above: (i) unless a
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Claims Notice describing the loss is delivered to the Indemnifying Party within
6 months after the Closing (except for Losses arising out of an Indemnifying
Party's fraud); and; (ii) with respect to special, consequential or punitive
damages; or (iii) in respect of any individual Loss of less than $10,000.
SECTION 6.6 Exclusive Remedy. The parties agree that the indemnification
provisions of this Article VI shall constitute the sole or exclusive remedy of
any party in seeking damages or other monetary relief with respect to this
Agreement and the Contemplated Transactions, provided that, nothing herein shall
be construed to limit the right of any party to seek: (i) injunctive relief for
a breach of this Agreement; (ii) legal or equitable relief for a Claim for
fraud; or (iii) indemnity under the bylaws of Buyer if they are or have been a
director or officer of Buyer.
ARTICLE VII
SPECIFIC PERFORMANCE; TERMINATION
SECTION 7.1 Specific Performance. The Company and Buyer acknowledge and
agree that, if any of the Company or Buyer fails to proceed with the Closing in
any circumstance other than those described in clauses (a), (b), (c) or (d) of
Section 7.2 below, the others will not have adequate remedies at law with
respect to such breach. In such event, and in addition to each party's right to
terminate this Agreement, each party shall be entitled, without the necessity or
obligation of posting a bond or other security, to seek injunctive relief, by
commencing a suit in equity to obtain specific performance of the obligations
under this Agreement or to xxx for damages, in each case, without first
terminating this Agreement. The Company or Buyer specifically affirms the
appropriateness of such injunctive, other equitable relief or damages in any
such action.
SECTION 7.2 Termination. This Agreement may be terminated and the
Contemplated Transactions may be abandoned at any time prior to the Closing:
(a) By mutual written consent of the Company and Buyer;
(b) By the Company if: (i) there has been a misrepresentation or
breach of warranty on the part of Buyer in the representations and warranties
contained herein and such misrepresentation or breach of warranty, if curable,
is not cured within thirty days after written notice thereof from the Company;
(ii) Buyer has committed a breach of any covenant imposed upon it hereunder and
fails to cure such breach within thirty days after written notice thereof from
the Company; or (iii) any condition to the Company's obligations under Section
5.2 becomes incapable of fulfillment through no fault of the Company and is not
waived by the Company;
(c) By Buyer, if: (i) there has been a misrepresentation or breach of
warranty on the part of the Company in the representations and warranties
contained herein and such misrepresentation or breach of warranty, if curable,
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is not cured within thirty days after written notice thereof from Buyer; (ii)
the Company has committed a breach of any covenant imposed upon it hereunder and
fails to cure such breach within thirty days after written notice thereof from
Buyer; or (iii) any condition to Buyer's or Buyer's obligations under Section
5.3 becomes incapable of fulfillment through no fault of Buyer and is not waived
by Buyer; and
(d) By the Company or by Buyer, if any condition under Section 5.1
becomes incapable of fulfillment through no fault of the party seeking
termination and is not waived by the party seeking termination.
SECTION 7.3 Effect of Termination; Right to Proceed. Subject to the
provisions of Section 7.1 hereof, in the event that this Agreement shall be
terminated pursuant to Section 7.2, all further obligations of the parties under
this Agreement shall terminate without further liability of any party hereunder
except that: (i) the agreements contained in Section 4.2 and Section 4.3 shall
survive the termination hereof; and (ii) termination shall not preclude any
party from seeking relief against any other party for breach of Section 4.2 or
Section 4.3. In the event that a condition precedent to its obligation is not
met, nothing contained herein shall be deemed to require any party to terminate
this Agreement, rather than to waive such condition precedent and proceed with
the Contemplated Transactions.
SECTION 7.4 Termination Fee. In the event the Closing does not occur due to
the failure of Company or its shareholders to perform and not due to a failure
of Buyer's performance or the obtaining of Buyer's shareholder approval for the
transaction, and Company's or its shareholders failure of performance is not
excused pursuant to the terms of this Agreement or waived by the Buyer, Company
shall make a one-time payment to Buyer within ten (10) days of receiving written
notice from Buyer of Buyer's demand, in the amount of $300,000 ("Company
Termination Fee"). In the event the Closing does not occur due to the failure of
Buyer to perform and not due to a failure of Buyer's shareholders to approve the
transactions described herein, Buyer shall make a one-time payment to Company
within ten (10) days of receiving written notice from Company of Company's
demand, in the amount of $50,000 plus all of Company's reasonable out-of-pocket
costs demonstrable to Buyer ("Buyer Termination Fee") .
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices. (a) Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier, or mailed (by registered or certified
mail, postage prepaid return receipt requested) as follows:
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If to Buyer, one copy to:
BlueStar Health, Inc.
00000 Xxxxxxxxx Xxxxxxx Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
With a copy to:
Law Office of Xxxx X. Xxxxxxxxx
00000 Xxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
If to the Company, one copy to:
Zeon Fuel, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxx
Chairman
With a copy to:
Xxxxxx X. Xxxx, Esq.
0000 Xxxxxx
Xxxxxxx, XX 000000
Each such notice or other communication shall be effective when delivered
at the address specified in Section 8.1(a). Any party by notice given in
accordance with this Section 8.1 to the other parties may designate another
address or person for receipt of notices hereunder. Notices by a party may be
given by counsel to such party.
SECTION 8.2 Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) and the collateral agreements executed in connection with the
consummation of the Contemplated Transactions contain the entire agreement among
the parties with respect to the subject matter hereof and related transactions
and supersede all prior agreements, written or oral, with respect thereto.
SECTION 8.3 Waivers and Amendments; Non-Contractual Remedies; Preservation
of Remedies. This Agreement may be amended, superseded, cancelled, renewed or
extended only by a written instrument signed by the Company, Buyer. The
provisions hereof may be waived in writing by the Company Buyer, as the case may
be. Any such waiver shall be effective only to the extent specifically set forth
in such writing. No failure or delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof. Nor shall
any waiver on the part of any party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or privilege, preclude
any other or further exercise thereof or the exercise of any other such right,
27
power or privilege. Except as otherwise provided herein, the rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity.
SECTION 8.4 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Texas applicable to agreements made
and to be performed entirely within such State without regard to the conflict of
laws rules thereof.
SECTION 8.5 Consent to Jurisdiction. Each of the parties hereto irrevocably
and voluntarily submits to personal jurisdiction in the State of Texas and in
the Federal courts in such state in any action or proceeding arising out of or
relating to this Agreement and agrees that all claims in respect of such action
or proceeding may be heard and determined in any such court. If for any reason
the Federal courts in such state will not entertain such action or proceeding,
then the parties hereto irrevocably and voluntarily submit to personal
jurisdiction in the state courts located in the State of Texas in any action or
proceeding arising out of or relating to this Agreement and agree that all
claims in respect of any action or proceeding may be heard and determined in any
such court. Each of the parties further consents and agrees that such party may
be served with process in the same manner as a notice may be given under Section
8.1. The parties hereto agree that any action or proceeding instituted by any of
them against any other party with respect to this Agreement will be instituted
exclusively in the United States District Court for the District of Houston, or
alternatively, in the State courts located therein. The Company, and Buyer
irrevocably and unconditionally waive and agree not to plead, to the fullest
extent permitted by law, any objection that they may now or hereafter have to
the laying of venue or the convenience of the forum of any action or proceeding
with respect to this Agreement in any such courts.
SECTION 8.6 Binding Effect; No Assignment. This Agreement and all of its
provisions, rights and obligations shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, heirs and legal
representatives. This Agreement may not be assigned (including by operation of
Law) by any party hereto without the express written consent of Buyer (in the
case of assignment by the Company) or the Company (in the case of assignment by
Buyer) and any purported assignment, unless so consented to, shall be void and
without effect.
SECTION 8.7 Exhibits. All Exhibits and Schedules attached hereto are hereby
incorporated by reference into, and made a part of, this Agreement.
SECTION 8.8 Severability. If any provision of this Agreement for any reason
shall be held to be illegal, invalid or unenforceable, such illegality shall not
affect any other provision of this Agreement, this Agreement shall be amended so
as to enforce the illegal, invalid or unenforceable provision to the maximum
extent permitted by applicable law, and the parties shall cooperate in good
faith to further modify this Agreement so as to preserve to the maximum extent
possible the intended benefits to be received by the parties.
SECTION 8.9 Counterparts. The Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
28
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
SECTION 8.10 Third Parties. Except as specifically set forth or referred to
herein, nothing herein express or implied is intended or shall be construed to
confer upon or give to any person other than the parties hereto and their
permitted heirs, successors, assigns and legal representatives, any rights or
remedies under or by reason of this Agreement or the Contemplated Transactions.
ARTICLE IX
POST CLOSING OBLIGATIONS
SECTION 9.1 Capital Transactions.
(a) Buyer covenants to refrain from filing any registration statement
on Form S-8 with the SEC until after the first anniversary of the Effective
Time, and shall authorize no reverse stock split of the common stock or any
other series of outstanding security or take any other actions dilutive of the
common stock of Buyer or adversely effecting the rights of Series A or Series B
preferred stock, until after the first anniversary of the Effective Time without
the unanimous approval of the board of directors of Buyer.
(b) Buyer covenants to promptly and diligently take all necessary and
appropriate actions to obtain approval of Buyer's shareholders to the Amended
and Restated Articles of Incorporation attached hereto as Exhibit A and to
effect the conditions precedent to the timely conversion of Series A and Series
B preferred shares into Buyer Common Stock.
DEFINITIONS
SECTION 9.2 Definitions. The following terms, as used herein, have the
following meanings:
"Affiliate" of any person means any other person directly or indirectly
through one or more intermediary persons, controlling, controlled by or under
common control with such person.
"Agreement" or "this Agreement" shall mean, and the words "herein",
"hereof" and "hereunder" and words of similar import shall refer to, this
agreement as it from time to time may be amended.
"Assets" shall mean all cash, instruments, properties, rights, interests
and assets of every kind, real, personal or mixed, tangible and intangible, used
or usable in the Business.
29
The term "audit" or "audited" when used in regard to financial statements
shall mean an examination of the financial statements by a firm of independent
certified public accountants in accordance with generally accepted auditing
standards for the purpose of expressing an opinion thereon.
"Business" shall mean the ownership and operation of the business of the
Company.
"Condition of the Business" shall mean the financial condition, prospects
or the results of operations of the Business, the Assets or the Company.
"Contract" shall mean any contract, agreement, indenture, note, bond,
lease, conditional sale contract, mortgage, license, franchise, instrument,
commitment or other binding arrangement, whether written or oral.
The term "control", with respect to any person, shall mean the power to
direct the management and policies of such person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"GAAP" shall mean generally accepted accounting principles in effect on the
date hereof (or, in the case of any opinion rendered in connection with an
audit, as of the date of the opinion) as set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States.
"Governmental Bodies" shall mean any government, municipality or political
subdivision thereof, whether federal, state, local or foreign, or any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body, or any court, arbitrator,
administrative tribunal or public utility.
"knowledge" with respect to: (a) any individual shall mean actual knowledge
of such individual; and (b) any corporation shall mean the actual knowledge of
the directors and executive officers of such corporation; and "knows" has a
correlative meaning. The terms "any Shareholder's knowledge," and "Shareholder's
knowledge," including any correlative meanings, shall mean the knowledge of any
Shareholder.
"Laws" shall mean any law, statute, code, ordinance, rule, regulation or
other requirement of any Governmental Bodies.
"Liability" shall mean any direct or indirect indebtedness, liability,
assessment, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, xxxxxx or inchoate, liquidated or un-liquidated, secured or
unsecured, accrued, absolute, actual or potential, contingent or otherwise
(including any liability under any guaranties, letters of credit, performance
credits or with respect to insurance loss accruals).
30
"Lien" shall mean any mortgage, lien (including mechanics, warehousemen,
laborers and landlords liens), claim, pledge, charge, security interest,
preemptive right, right of first refusal, option, judgment, title defect,
covenant, restriction, easement or encumbrance of any kind.
"person" shall mean an individual, corporation, partnership, joint venture,
limited liability company, association, trust, unincorporated organization or
other entity, including a government or political subdivision or an agency or
instrumentality thereof.
"Receivables" shall mean as of any date any trade accounts receivable,
notes receivable, sales representative advances and other miscellaneous
receivables of the Company.
"SEC" means the United States Securities and Exchange Commission.
"SEC Documents" means all forms, notices, reports, schedules, statements,
and other documents filed by Buyer with the SEC within the three years from the
Effective Time, whether or not constituting a "filed" document, and includes all
proxy statements, registration statements, amendments to registration
statements, periodic reports on Forms 10-KSB, 10-QSB, and 8-K, and annual and
quarterly reports to shareholders.
"Tax" (including, with correlative meaning, the terms "Taxes" and
"Taxable") shall mean: (i)(A) any net income, gross income, gross receipts,
sales, use, ad valorem, transfer, transfer gains, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, rent, recording,
occupation, premium, real or personal property, intangibles, environmental or
windfall profits tax, alternative or add-on minimum tax, customs duty or other
tax, fee, duty, levy, impost, assessment or charge of any kind whatsoever
(including but not limited to taxes assessed to real property and water and
sewer rents relating thereto), together with; (B) any interest and any penalty,
addition to tax or additional amount imposed by any Governmental Body (domestic
or foreign) (a "Tax Authority") responsible for the imposition of any such tax
and interest on such penalties, additions to tax, fines or additional amounts,
in each case, with respect to any party hereto, the Business or the Assets (or
the transfer thereof); (ii) any liability for the payment of any amount of the
type described in the immediately preceding clause (i) as a result of a party
hereto being a member of an affiliated or combined group with any other person
at any time on or prior to the date of Closing; and (iii) any liability of a
party hereto for the payment of any amounts of the type described in the
immediately preceding clause (i) as a result of a contractual obligation to
indemnify any other person.
"Tax Return" shall mean any return or report (including elections,
declarations, disclosures, schedules, estimates and information returns)
required to be supplied to any Tax Authority.
"Transaction Documents" shall mean, collectively, this Agreement, and each
of the other agreements and instruments to be executed and delivered by all or
some of the parties hereto in connection with the consummation of the
transactions contemplated hereby.
SECTION 9.3 Interpretation. Unless the context otherwise requires, the
terms defined in this Agreement shall be applicable to both the singular and
plural forms of any of the terms defined herein. All accounting terms defined in
31
this Agreement, and those accounting terms used in this Agreement except as
otherwise expressly provided herein, shall have the meanings customarily given
thereto in accordance with GAAP as of the date of the item in question. When a
reference is made in this Agreement to Sections, such reference shall be to a
Section of this Agreement unless otherwise indicated. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. The use of the neuter gender
herein shall be deemed to include the masculine and feminine genders wherever
necessary or appropriate, the use of the masculine gender shall be deemed to
include the neuter and feminine genders and the use of the feminine gender shall
be deemed to include the neuter and masculine genders wherever necessary or
appropriate. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
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32
IN WITNESS WHEREOF, the undersigned have executed this Stock Purchase and
Recapitalization Agreement as of the date set forth above.
BUYER:
BLUESTAR HEALTH, INC.
By: ______________________
Xxxxxxx X. Xxxxxxxxx
President and
Chief Executive Officer
COMPANY:
ZEON FUEL, INC.
By: ______________________
Xxxxx Xxxxx
Chairman
SUB:
ZEON GLOBAL ENERGY, INC.
By: ______________________
Xxxxxxx X. Xxxxxxxxx
President and
Chief Executive Officer
33
