<PAGE> 1
CURRENT REPORT FOR ISSUERS SUBJECT TO THE
1934 ACT REPORTING REQUIREMENTS
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15d of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): September 2, 1996
NORTH AMERICAN RESORTS, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-26760 84-126065
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(State of Incorporation) (Commission (I.R.S Employer
File Number) Identification No.)
315 East Robinson Street
Suite 190
Orlando, Florida 32801
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (407) 841-1917
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(Former name, former address and former fiscal year, if changed
since last report.)
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT
On September 3, 1996, North American Resorts, Inc. ("North American" or
the "Company") entered into an agreement to acquire substantially all the
assets of American Clinical Labs, Inc. ("American Clinical") in exchange for
the greater of: 41,000,000 shares of the common stock of North American, or
that number of shares of North American equivalent to 51% of the issued and
outstanding common stock of North American (the "North American Shares"). North
American intends to file a registration statement with the Securities and
Exchange Commission (the "Registration Statement") to register the North
American Shares owned by American Clinical. Upon the Registration Statement
being declared effective, American Clinical will distribute the North American
Shares to its shareholders.
In conjunction with the Agreement and Plan of Reorganization by and
between North American and American Clinical, North American has elected Max P.
Cawal and Richard Diamond to its Board of Directors, with Mr. Cawal appointed
as the new Chairman of the Board. Brian Nelson, Gary Larvison, and Holley
Rogers have resigned from the Board of Directors. Anthony Arrigoni remained a
director of the Company. North American will submit information regarding the
new directors to its shareholders as required by Section 14(f)-1 of the
Securities and Exchange Act of 1934, as amended.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 2, 1996, North American sold 100% of the stock of its
subsidiary, U.S.A. Tourist Services, Inc. ("USA") to Dreamaway Travel, Inc. for
nominal consideration. As of June 30, 1996, the liabilities of USA, $556,844
exceeded its assets, $351,996, by $204,848.
On September 3, 1996, North American entered into an agreement to acquire
substantially all the assets of American Clinical in exchange for the greater
of: 41,000,000 shares of the common stock of North American, or that number of
shares of North American equivalent to 51% of the issued and outstanding common
stock of North American. American Clinical's assets that are to be transferred
to North American consist of the following securities issued by EVRO
Corporation ("EVRO"): 130,018 shares of EVRO's common stock; 3,500 shares of
EVRO's Series E Preferred Stock; 13.44844 shares of EVRO's Series L Preferred
Stock; and promissory notes in the original principal amounts of $202,000.
North American will assume the debts, liabilities and obligations of American
Clinical of approximately $283,717. American Clinical has agreed to loan up to
$100,000 to North American prior to the closing, to be secured by assets of
North American acceptable to American Clinical. The executive officers of North
American, after the effective date of the reorganization agreement shall be:
Max P. Cawal, Chief Executive Officer; Donald R. Mastropietro, President and
Chief Financial Officer; Richard Diamond, Vice President; and Anthony Arrigoni,
Vice President.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
EXHIBITS
(a) & (b) The Company intends to file financial statements of North American,
reflecting these transactions required by Item 7(a) and (b) as soon
as practicable.
(c) Exhibits
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2.2 Capital Stock Purchase Agreement by and between
North American and Dreamaway Travel, Inc. dated
September 2, 1996
2.3 Agreement and Plan of Reorganization by and
between North American and American Clinical,
dated September 3, 1996
99.1 North American press release dated September 18,
1996
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 4, 1996
NORTH AMERICAN RESORTS, INC.
By: /s/ Donald R. Mastropietro
---------------------------
Donald R. Mastropietro
Chief Financial Officer
<PAGE> 1
EXHIBIT 2.2
CAPITAL STOCK PURCHASE AGREEMENT
Capital Stock Purchase Agreement, effective as of September 2, 1996, by
and between North American Resorts, Inc., a Colorado corporation whose
principal place of business is located at 315 E. Robinson Street, Suite 190,
Orlando, Florida 32801 (the "Seller"), and Dreamaway Travel, Inc., a Florida
corporation, whose mailing address 7116 Greyshadow Street, Orlando, Florida
32818 "Purchaser").
BACKGROUND INFORMATION
This Agreement sets forth the terms and conditions upon which the
Purchaser is acquiring from the Seller and the Seller is selling and delivering
to the Purchaser, free and clear of all liabilities, obligations, claims, liens
and encumbrances, 100 shares of the issued and outstanding common capital
stock, no par value per share (the "Shares"), of U.S.A. Tourist Services
Center, Inc., a Florida corporation ("USA Tourist"). In consideration of the
mutual agreements contained herein, the parties agree as follows:
OPERATIVE PROVISIONS
ARTICLE 1
Purchase and Sale of Shares
1.1 Shares to be Sold: The Seller hereby sells and delivers to the
Purchaser good, valid and marketable title to the Shares, free and clear of all
liabilities, obligations, claims, liens and encumbrances, by delivering to the
Purchaser a stock certificate representing the Shares, duly endorsed, and in
form for transfer satisfactory to the Purchaser.
1.2 Purchase Price of the Shares: The gross purchase price paid by the
Purchaser to the Seller for the Shares is $100 and other valuable consideration
(the "Purchase Price"), the receipt of which is hereby acknowledged by the
Purchaser.
ARTICLE 2
Representations and Warranties of Seller
The Seller represents, warrants and agrees as follows:
2.1 Organization and Standing of USA Tourist: USA Tourist is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida.
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2.2 Capitalization: The authorized capital stock of USA Tourist consists
of 100 shares of common stock, no par value. On the date hereof, 100 of those
shares are issued and outstanding and are registered in the name of the Seller
and are free and clear of any liabilities, obligations, claims, liens or
encumbrances. All outstanding shares of capital stock have been duly authorized
and validly issued and are fully paid and non-assessable. On the date hereof,
there are no outstanding rights, options, warrants, conversion privileges or
agreements of any kind for the purchase or acquisition from, or the sale or
issuance by, USA Tourist of any shares of its capital stock and no
authorization therefor has been given.
2.3 Consent: No consent, approval or authorization of or registration,
qualification, designation, declaration or filing with any governmental
authority or private person or entity on the part of the Seller or USA Tourist
is required in connection with the execution and delivery of this Agreement or
the consummation of any other transaction contemplated hereby, except as has
otherwise been taken prior to the execution of this Agreement.
2.4 Title to Shares: The Seller has good and marketable title to the
Shares, free and clear of all liens, claims, encumbrances and restrictions,
legal or equitable, of every kind. The Seller has full and unrestricted legal
right, power and authority to sell, assign and transfer its shares to the
Purchaser without obtaining the consent or approval of any other person or
governmental authority, and the delivery of such shares to the Purchaser
pursuant to this Agreement will transfer valid title thereto, free and clear of
all liens, encumbrances, claims and restrictions of every kind.
In witness whereof, the parties have executed this Agreement effective as
of the day and year first above written.
Seller
North American Resorts, Inc.
/s/ Anthony A. Arrigoni
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By: Anthony A. Arrigoni
Its: Vice President
Purchaser
Dreamaway Travel, Inc.
/s/ Patrick Tierney
-------------------------------
By: Patrick Tierney
Its: President
<PAGE> 1
EXHIBIT 2.3
===============================================================================
AGREEMENT
AND
PLAN OF REORGANIZATION
BY AND BETWEEN
NORTH AMERICAN RESORTS, INC.
AND
AMERICAN CLINICAL LABS, INC.
===============================================================================
Dated: September 3, 1996
<PAGE> 2
AGREEMENT AND PLAN OF REORGANIZATION
Agreement and Plan of Reorganization ("Agreement"), dated as of September
3, 1996, by and between North American Resorts, Inc., a Colorado corporation
whose principal place of business is located at 315 E. Robinson Street, Suite
190, Orlando, Florida 32801 ("North American") and American Clinical Labs,
Inc., a Florida corporation whose principal place of business is located at
1509 South Florida Avenue, Suite 3, Lakeland, Florida 33803 ("American
Clinical").
BACKGROUND INFORMATION
North American has agreed to acquire substantially all of the assets of
American Clinical in exchange for the common stock of North American, in a
transaction intended to qualify as a tax-free reorganization within the meaning
of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended.
Accordingly, in consideration of the promises contained herein, North American
and American Clinical adopt this plan of reorganization and agree as follows:
OPERATIVE PROVISIONS
ARTICLE 1
Transfer by American Clinical
1.1 Transfer of American Clinical's Property. At the Closing (as defined
in Article 3.1), subject in all instances to each of the terms, conditions,
provisions and limitations contained in this Agreement, American Clinical will
transfer and deliver to North American the following shares of the capital
stock of EVRO Corporation ("EVRO") owned by American Clinical: 140,018 shares
of EVRO's common stock; 3,500 shares of EVRO's Series E Convertible Preferred
Stock (which are convertible into 350,000 shares of EVRO's restricted common
stock); 13.44844 shares of EVRO's Series L Convertible Preferred Stock (which
are convertible into 672,422 shares of EVRO's restricted common stock); a
promissory note, dated September 2, 1996, payable to American Clinical by EVRO
in the original principal amount of $8,700; notes payable to American
Clinical and executed by certain agents and employees of American Clinical
totalling $90,000; and a secured promissory note, from North American to
American Clinical, dated September 3, 1996, in the original principal amount of
$25,000, secured by installment sales contracts owned by North American.
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ARTICLE 2
Payment by North American.
2.1 Transfer of North American Shares. At the Closing, North American
shall deliver to American Clinical a certificate or certificates representing
41,000,000 shares of the common capital stock of North American (the "North
American Shares"). These shares will be issued prior to the Closing and shall
be delivered by North American to Bush Ross Gardner Warren & Rudy, P.A. ("Bush
Ross"), counsel for American Clinical, and shall be held by Bush Ross until the
Closing. At the Closing, North American understands it is required to prepare
and file a Form D with the Securities and Exchange Commission, reflecting the
issuance of the North American Sales in a transaction exempt from the
registration provisions of the Securities Act of 1933, as amended. As a
condition of Closing, American Clinical will execute an irrevocable proxy, in
the form attached as Schedule 2.1, granting a proxy to D. Jerry Diamond to vote
the North American Shares. The proxy will expire on the date that American
Clinical distributes the North American Shares to the shareholders of American
Clinical.
2.2 Assumption of Liabilities. At the Closing, North American shall only
assume the liabilities of American Clinical described on Schedule 2.2 attached
hereto, in the approximate principal amount of $283,717.16. All other
liabilities of American Clinical shall remain the sole responsibility of
American Clinical.
ARTICLE 3
Closing.
3.1 Closing. The Closing, contemplated by Section 1.1, shall be held at
the offices of Bush Ross, located at 220 South Franklin Street, Tampa, Florida
33602, on or before 10:00 am, September 30, 1996 unless another place or time
is agreed upon in writing by the parties hereto (the "Closing Date").
3.2 Documents to be delivered by American Clinical. At the Closing,
American Clinical will deliver to North American (a) such instruments of
transfer (including consents and approvals of third parties) as will be
sufficient or requisite in the opinion of North American's counsel to vest in
North American, its successors and assigns, the full legal and equitable title
of American Clinical to the assets of American Clinical being transferred to
North American; and (b) the documents referred to in Article 4 hereof.
3.3 Documents to be delivered by North American. At the Closing, North
American will deliver to American Clinical (a) certificates for the North
American Shares; (b) the documents referred to in Article 4 hereof; and (c) an
instrument, satisfactory to counsel for American Clinical, evidencing the
assumption by North American of the liabilities of American Clinical as
described in Schedule 2.2.
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ARTICLE 4
Related Transactions and Additional Agreements.
4.1 Loan. After the execution of this Agreement, American Clinical shall
make a loan of $100,000, repayable on demand, to North American (from the sale
of a portion of the EVRO common shares referenced in Article 1.1), the terms
and conditions of which are set forth in the promissory note attached hereto as
Schedule 4.1. The loan shall be secured by 41,000,000 shares of North
American's common stock, and will be forgiven at the Closing, assuming that the
Closing occurs. North American authorizes American Clinical to sell that number
of shares of EVRO common stock necessary to generate net sales proceeds of
$100,000 and, American Clinical understands that North American will, at the
Closing, receive the $100,000 promissory note and the remaining shares of EVRO
common stock owned by American Clinical in lieu of receiving all of the shares
of EVRO common stock set forth in Section 1.1.
4.2 Employment and Consulting and Non-Compete Agreements. As a condition
of Closing, Tom Arrigoni and Peerless Consultants, Inc. shall execute the
employment and the consulting agreement, respectively, in the form attached
hereto as composite Schedule 4.2. As more fully set forth in such agreements,
each of Mr. Arrigoni and Peerless Consultants, Inc. will agree not to compete
with North American for the two year period following the Closing.
4.3 Employees. As it is the intention of American Clinical to liquidate as
soon as practicable after the Closing, North American agrees to hire each of
the current employees of American Clinical, although North American will have
no commitment for the continued employment of such individuals.
4.4 Registration Statement. North American will prepare and file with the
SEC a registration statement registering, for sale to the public, certain
shares of its common capital stock and all of the 41,000,000 North American
Shares to be owned by American Clinical after the Closing (the "Registration
Statement"). North American will begin preparation of the Registration
Statement upon the execution of this Agreement and North American will use its
best efforts to cause the Registration Statement to be filed on or before
January 31, 1997. North American agrees to pay for all costs associated with
the preparation and filing of the Registration Statement.
4.5 Board of Directors. At the Closing, the Board of Directors of North
American shall approve the appointment of two new persons, designated by
American Clinical, to the Board of Directors of North American. Immediately
thereafter, all of the members of the Board of Directors of North American,
other than Anthony Arrigoni and the two newly appointed members, shall resign
as directors of North American, effective as of the Closing Date. The parties
to this Agreement understand that, pursuant to Rule 14f-1 promulgated by the
SEC pursuant to the Securities and Exchange Act of 1934, ten days prior to the
date the new directors
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<PAGE> 5
take office, North American must file with the SEC and distribute to its
shareholders certain information regarding the new directors and North
American.
4.6 Reverse Stock Split of North American. It is North American's
intention to file an information statement or a proxy statement with the SEC,
for the purpose of obtaining the consent of the shareholders of North American
to the declaration of a 1:10 reverse stock split of the issued and outstanding
shares of the common capital stock of North American. It is understood and
agreed by the parties to this Agreement, that North American will begin
preparation of the information statement or proxy statement upon the execution
of this Agreement and that the parties will use there best efforts to cause the
information statement or proxy statement to be filed on or before January 31,
1997. North American agrees to pay for all costs associated with the
preparation and filing of the information statement or proxy statement and the
related shareholders meeting. North American understands that, ten days prior
to the effective date of the reverse stock split, it is required to file a
notice of the reverse stock split on Form 10(b)-17 with the National
Association of Securities Dealers, Inc. ("NASD").
ARTICLE 5
Representations and Warranties of American Clinical
American Clinical represents and warrants to North American as follows:
5.1 Organization, Power, Standing and Qualification. American Clinical is
a corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and has full corporate or other power and
authority to carry on its business as it is now being conducted and to own the
assets now owned by it. American Clinical is duly qualified to do business and
is in good standing in each and every jurisdiction where the failure to qualify
or to be in good standing would have an adverse effect upon its financial
condition, the conduct of its business or the ownership of its assets.
5.2 Authority. American Clinical has the requisite corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized and approved by
the Board of Directors of American Clinical and by the holders of a majority of
the shares of the common stock of American Clinical and no other corporate
proceedings on the part of American Clinical is necessary to approve and adopt
this Agreement or to approve the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
American Clinical and constitutes a valid and binding Agreement of American
Clinical, enforceable in accordance with its terms.
5.3 Absence of Breach; No Consents. Except as set forth in Schedule 5.3
attached hereto, the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not,
(a) conflict with, and will not result in a
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<PAGE> 6
breach of, any provision of the Articles of Incorporation or Bylaws of American
Clinical; (b) conflict with, result in a breach of or a default under, cause
the acceleration of any payments pursuant to, or otherwise impair the good
standing, validity, or effectiveness of any material agreement, contract,
indenture, loan or credit agreement, lease, mortgage, or any other material
agreement or instrument to which American Clinical is a party or by which it or
any of its material properties may be affected or bound; (c) violate any
material provision of law, rule or regulation to which American Clinical is
subject or any order, writ, judgment, injunction, decree, determination, or
award affecting or binding upon American Clinical or any of its material
properties, or cause the suspension or revocation of any authorization,
consent, permit, approval or license, presently in effect, which affects or
binds American Clinical or any of its material properties,; (d) constitute
grounds for the loss or suspension of any permits, licenses or other
authorizations material to the business, condition (financial or otherwise),
operations or prospects of American Clinical; or (e) require the authorization,
consent, approval or license of any third party of such a nature that the
failure to obtain the same would have a material adverse effect on the
business, condition (financial or otherwise), operations or prospects of
American Clinical.
5.4 Capitalization of American Clinical. American Clinical's authorized
capital stock consists of 50,000,000 shares of common stock, par value $.0001,
7,427,034 of which shares are presently outstanding, validly issued, fully paid
and non-assessable. Except as set forth on Schedule 5.4 attached hereto, there
are no outstanding options, warrants, conversion privileges, subscriptions,
calls, commitments or rights of any character relating to any authorized but
unissued capital stock of American Clinical.
5.5 Subsidiaries. Except as disclosed in Schedule 5.5 hereto, American
Clinical owns no shares of capital stock or other equity interest in any
corporation, partnership, joint venture, land trust or other business
organization or enterprise.
5.6 Title to Properties. Except as set forth in Schedule 5.6 hereto,
American Clinical has good, valid and marketable title to all of its assets,
free and clear of all mortgages, liens, pledges, security interests and other
encumbrances, except (a) mortgages, liens, pledges, security interests, and
other encumbrances disclosed in the American Clinical Interim Balance Sheet (as
defined in Section 5.7) or the notes thereto, (b) liens for current taxes not
delinquent or being contested in good faith by appropriate proceedings, (c)
deposits or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety and appeal
bonds and other obligations of like nature arising in the ordinary course of
business, (d) mechanic's, workmen's, materialmen's or other like liens arising
in the ordinary course of business with respect to obligations which are not
due or which are being contested in good faith, and (e) such imperfections of
title, lien, easements and encumbrances, if any, as are not substantial and do
not materially detract from the value, or interfere with the present use, of
any of the properties subject thereto or affected thereby, or otherwise impair
the business, operations or prospects of American Clinical.
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5.7 Financial Statements. American Clinical has delivered to North
American its audited balance sheet for each of the last three fiscal years
ending before the date of this Agreement as well as its statement of income and
loss for the same periods. In addition American Clinical will deliver to North
American, at the Closing, its unaudited balance sheet as of August 31, 1996 and
its statement of income and loss for the period ending August 31, 1996 which
have been prepared in accordance with the applicable books and records of
American Clinical and presents fairly the financial condition of American
Clinical as of August 31, 1996, and there has been no material change in such
financial condition of American Clinical since August 31, 1996 (the August 31,
1996 financial statements for American Clinical are hereinafter referred to as
the "American Clinical Interim Financial Statements").
5.8 Absence of Undisclosed Liabilities. American Clinical has no
liabilities or obligations except for those (i) reflected on the American
Clinical Interim Financial Statements; (ii) reflecting contractual liabilities
or obligations incurred in the ordinary course of business that are not
required by generally accepted accounting principles to be reflected in a
balance sheet; (iii) incurred in the ordinary course of business subsequent to
the date of the American Clinical Interim Balance Sheet and not required to be
disclosed pursuant to the terms of this Agreement; and (iv) specifically
disclosed in Schedule 5.8 attached hereto. Except as otherwise provided in this
Agreement, the term "liabilities or obligations" as used in this Agreement
shall include any direct or indirect indebtedness, claim, loss, damage,
deficiency (including deferred income tax and other net tax deficiencies),
cost, expense, obligation, guarantee, or responsibility, whether accrued,
absolute, or contingent, known or unknown, fixed or unfixed, liquidated or
unliquidated, secured or unsecured.
5.9 Certain Tax Matters. American Clinical has, except as set forth on
Schedule 5.9, duly filed all federal, state and local tax returns and reports
required to be filed by it for all periods ending on or prior to December 31,
1995 and all taxes, including income, gross receipts, and other taxes and any
penalties with respect thereto, shown thereon to be due and payable, have been
paid, withheld, or reserved for or are reflected as a liability in the American
Clinical Interim Financial Statements. American Clinical has not entered into
any agreement for the extension of time for the assessment of any tax or tax
delinquency, has not received outstanding or unresolved notices from the
Internal Revenue Service or any taxing body of any proposed examination or of
any proposed deficiency or assessment, and has properly withheld all amounts
required by law to be withheld for income taxes and unemployment taxes,
including without limitation social security and unemployment compensation,
relating to its employees, and remitted such withheld amounts to the
appropriate taxing authority as required by law.
5.10 Litigation; Compliance with Laws. Except as set forth in Schedule
5.10 attached hereto, there is no suit, action, claim, arbitration,
administrative or legal or other proceeding, or governmental investigation
pending or, to the knowledge of American Clinical, threatened against or
related to American Clinical. Except as set forth in Schedule 5.10 attached
hereto, there has been no failure to comply with, nor any default under, any
law, ordinance, requirement, regulation, or order applicable to American
Clinical or its business operations, nor any violation of or default with
respect to any order, writ, injunction, judgment, or decree of
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<PAGE> 8
any court or federal, state or local department, official, commission,
authority, board, bureau, agency, or other instrumentality issued or pending
against American Clinical which might have a material adverse effect on the
financial condition, its business, results of operations, properties or assets
of American Clinical. Except as set forth in Schedule 5.10 attached hereto,
American Clinical has obtained all permits, licenses, zoning variances,
approvals, and other authorization necessary for the operation of its business.
All such permits, licenses, approvals and authorizations are currently valid
and in full force and no revocation, cancellation or withdrawal thereof has
been effected or threatened. The execution of this Agreement and the
performance of the transactions contemplated hereby have not and will not
change in any respect, or result in the termination of, any such material
permits, licenses, certificates, zoning variances and authorizations.
5.11 No Changes. Since August 31, 1996 there has not been:
(a) Any change in the financial or other condition, assets,
liabilities or business of American Clinical, except changes described in
Schedule 5.11 hereto, none of which individually or in the aggregate has
been materially adverse to American Clinical;
(b) Any damage, destruction or loss (whether or not covered by
insurance) or any condemnation by governmental authorities which has or
may adversely affect the business or assets of American Clinical to a
material degree;
(c) Except as disclosed in writing to North American from time to
time, any declaration, setting aside or payment of any dividend or other
distribution in respect of any of the shares of American Clinical's
capital stock or any direct or indirect redemption, purchase or other
acquisition of the shares of American Clinical's capital stock or any
direct or indirect payment or incurring of fees or other transactions
between American Clinical and its shareholders; or
(d) Any increase in the compensation payable or to become payable by
American Clinical to any of its officers, employees or agents, or any
known payment or arrangement made to or with any thereof, except in the
ordinary course of business as disclosed to North American.
5.12 Veracity of Statements. No representation or warranty by American
Clinical contained in this Agreement and no statement contained in any
certificate, schedule or other instrument furnished to North American pursuant
hereto or in connection with the transactions contemplated hereby contains any
untrue statement of a material fact or omits to state a material fact necessary
to make it not misleading.
5.13 Copies of Articles and Bylaws and Stock Records. A copy of American
Clinical's Articles of Incorporation (certified by the Secretary of State of
Florida), Bylaws and stock
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<PAGE> 9
records (certified by the Secretary of American Clinical) has been delivered to
North American and each is correct and in effect as at the date of this
Agreement. Such books and records have been regularly and properly kept and are
complete, accurate and legally sufficient under applicable law.
5.14 Directors and Officers. American Clinical has delivered to North
American a true and complete list as of the date of this Agreement showing the
names of American Clinical's directors and officers, each of whom has been duly
elected.
5.15 Acquisition of North American Shares for Investment. American
Clinical is acquiring the Shares for investment purposes for its own account
and not with a view to the resale or distribution thereof in violation of any
state or federal securities laws. American Clinical shall not sell, transfer,
pledge or hypothecate any portion of the North American Shares in the absence
of registration under, or pursuant to an applicable exception from, federal and
all applicable state securities law. The parties acknowledge that it is the
intent of American Clinical to distribute the North American Shares to its
shareholders upon the effectiveness of the Registration Statement.
ARTICLE 6
Representations and Warranties of North American
North American represents and warrants to American Clinical as follows:
6.1 Organization, Power, Standing and Qualification. North American is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Colorado, and has full corporate power and authority to
carry on its business as it is now being conducted and to own and operate the
properties and assets now owned and operated by it. North American is duly
qualified to do business and is in good standing in each and every jurisdiction
where the failure to qualify or to be in good standing would have an adverse
effect upon its financial condition, the conduct of its business or the
ownership of its assets.
6.2 Authority. North American has the power and authority to execute,
deliver and perform this Agreement; and this Agreement is a valid and binding
obligation of North American, enforceable in accordance with its terms.
6.3 Validity of Contemplated Transactions. Except as set forth in Schedule
6.3 attached hereto, the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do not and will
not, (a) conflict with, and will not result in a breach of, any provision of
the Articles of Incorporation or Bylaws of North American or any of its
subsidiaries; (b) conflict with, result in a breach of or a default under,
cause the acceleration of any payments pursuant to, or otherwise impair the
good standing, validity, or effectiveness of any material agreement, contract,
indenture, loan or credit
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agreement, lease, mortgage, or any other material agreement or instrument to
which North American or any of its subsidiaries is a party or by which it or
they or any of its or their material properties may be affected or bound; (c)
violate any material provision of law, rule or regulation to which North
American or its subsidiaries is subject or any order, writ, judgment,
injunction, decree, determination, or award affecting or binding upon North
American or any of its subsidiaries or any of its or their material properties,
or cause the suspension or revocation of any authorization, consent, permit,
approval or license, presently in effect, which affects or binds North American
or any of its subsidiaries or any of its material properties; (d) constitute
grounds for the loss or suspension of any permits, licenses or other
authorizations material to the business, condition (financial or otherwise),
operations or prospects of North American; or (e) require the authorization,
consent, approval or license of any third party of such a nature that the
failure to obtain the same would have a material adverse effect on the
business, condition (financial or otherwise), operations or prospects of North
American.
6.4 Capitalization of North American. North American's authorized capital
stock consists of 100,000,000 shares of common stock, no par value, of which
34,986,907 shares are presently outstanding, validly issued, fully paid and
non-assessable, after giving effect to the conversion of all of the outstanding
shares of North American's preferred stock, other than the shares of North
American's preferred stock set forth on Schedule 6.4, and, except as otherwise
set forth on Schedule 6.4, there are no other outstanding options, warrants,
conversion privileges, subscriptions, calls, commitments or rights of any
character relating to any authorized but unissued capital stock of North
American.
6.5 Subsidiaries. North American owns no shares of capital stock or other
equity interest in any corporation, partnership, joint venture or other
business organization or enterprise, except as set forth on Schedule 6.5
attached hereto.
6.6 Financial Statements. North American has delivered to American
Clinical its audited balance sheet for the two fiscal years ending before the
date of this Agreement as well as its audited statement of income and loss for
the same period. In addition, North American will deliver to American Clinical,
at the Closing, its balance sheet for the period ending August 31, 1996 and its
statement of income and loss for the same period (collectively the "North
American Interim Financial Statements") which have been prepared in accordance
with the applicable books and records of North American and presents fairly the
financial condition of North American as of August 31, 1996, and there has been
no material change in such financial condition of North American since August
31, 1996.
6.7 Absence of Undisclosed Liabilities. North American has no liabilities
or obligations except for those (i) reflected on North American Interim
Financial Statements; (ii) reflecting contractual liabilities or obligations
incurred in the ordinary course of business that are not required by generally
accepted accounting principles to be reflected in a balance sheet; (iii)
incurred in the ordinary course of business subsequent to the date of North
American Interim Financial Statements and not required to be disclosed pursuant
to the terms of this Agreement; and (iv) specifically disclosed in Schedule 6.7
attached hereto. Except as otherwise
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provided in this Agreement, the term "liabilities or obligations" as used in
this Agreement shall include any direct or indirect indebtedness, claim, loss,
damage, deficiency (including deferred income tax and other net tax
deficiencies), cost, expense, obligation, guarantee, or responsibility, whether
accrued, absolute, or contingent, known or unknown, fixed or unfixed,
liquidated or unliquidated, secured or unsecured.
6.8 Certain Tax Matters. North American has duly filed all federal, state,
and local tax returns and reports required to be filed by it for all periods
ending on or prior to December 31, 1995 and all taxes, including income, gross
receipts, and other taxes and any penalties with respect thereto, shown thereon
to be due and payable, have been paid, withheld, or reserved for or are
reflected as a liability in the North American Interim Financial Statements.
North American has not entered into any agreements for the extension of time
for the assessment of any tax or tax delinquency, has received no outstanding
or unresolved notices from the Internal Revenue Service or any taxing body of
any proposed examination or of any proposed deficiency or assessment, and has
properly withheld all amounts required by law to be withheld for income taxes
and unemployment taxes, including without limitation social security and
unemployment compensation, relating to its employees, and remitted such
withheld amounts to the appropriate taxing authority as required by law.
6.9 Litigation; Compliance with Laws. Except as set forth in Schedule 6.9
attached hereto, there is no suit, action, claim, arbitration, administrative
or legal or other proceeding, or governmental investigation pending or, to the
knowledge of North American, threatened against or related to North American.
Except as set forth in Schedule 6.9 attached hereto, there has been no failure
to comply with, nor any default under, any law, ordinance, requirement,
regulation, or order applicable to North American or its business operations,
nor any violation of or default with respect to any order, writ, injunction,
judgment, or decree of any court or federal, state or local department,
official, commission, authority, board, bureau, agency, or other
instrumentality issued or pending against North American which might have a
material adverse effect on the financial condition, its business, results of
operations, properties or assets of North American. Except as set forth in
Schedule 6.9 attached hereto, North American has obtained all permits,
licenses, zoning variances, approvals, and other authorization necessary for
the operation of its business. All such permits, licenses, approvals and
authorizations are currently valid and in full force and no revocation,
cancellation or withdrawal thereof has been effected or threatened. The
execution of this Agreement and the performance of the transactions
contemplated hereby have not and will not change in any respect, or result in
the termination of, any such material permits, licenses, certificates, zoning
variances and authorizations. There have been no illegal kickbacks, bribes or
political contributions made by North American.
6.10 No Changes. Since August 31, 1996 there has not been:
(a) Any change in the financial or other condition, assets,
liabilities or business of North American, except changes described in
Schedule 6.10 hereto, none of which individually or in the aggregate has
been materially adverse to North American;
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(b) Any damage, destruction or loss (whether or not covered by
insurance) or any condemnation by governmental authorities which has or
may adversely affect the business or assets of North American to a
material degree;
(c) Except as disclosed in writing to American Clinical from time to
time, any declaration, setting aside or payment of any dividend or other
distribution in respect of any of North American's shares or any direct or
indirect redemption, purchase or other acquisition of North American's
shares or any direct or indirect payment or incurring of management fees
or other transactions between the shareholders of North American and North
American; or
(d) Any increase in the compensation payable or to become payable by
North American to any of its officers, employees or agents, or any known
payment or arrangement made to or with any thereof, except in the ordinary
course of business as disclosed to American Clinical.
6.11 Veracity of Statements. No representation or warranty by North
American contained in this Agreement and no statement contained in any
certificate, schedule or other instrument furnished to American Clinical
pursuant hereto or in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary to make it not misleading.
6.12 Copies of Articles, Bylaws and Stock Records. A copy of North
American's Articles of Incorporation (certified by the Secretary of State of
Colorado), Bylaws and stock records (certified by the Secretary of North
American) has been delivered to American Clinical and each is correct and in
effect as at the date of this Agreement. Such books and records have been
regularly and properly kept and are complete, accurate and legally sufficient
under applicable law.
6.13 Directors and Officers. North American has delivered to American
Clinical a true and complete list as of the date of this Agreement showing the
names of North American and its subsidiaries, directors and officers each of
whom has been duly elected.
6.14 Absence of Breach; No Consents. Except as set forth in Schedule 6.14
attached hereto, the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby do not and will not,
(a) conflict with, and will not result in a breach of, any provision of the
Articles of Incorporation or Bylaws of North American; (b) conflict with,
result in a breach of or a default under, cause the acceleration of any
payments pursuant to, or otherwise impair the good standing, validity, or
effectiveness of any material agreement, contract, indenture, loan or credit
agreement, lease, mortgage, or any other material agreement or instrument to
which North American is a party or by which it or any of its material
properties may be affected or bound; (c) violate any material provision of law,
rule or regulation to which North American is subject or any order, writ,
judgment, injunction, decree,
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determination, or award affecting or binding upon North American or any of its
material properties, or cause the suspension or revocation of any
authorization, consent, permit, approval or license, presently in effect, which
affects or binds North American or any of its material properties; (d)
constitute grounds for the loss or suspension of any permits, licenses or other
authorizations material to the business, condition (financial or otherwise),
operations or prospects of North American; or (e) require the authorization,
consent, approval or license of any third party of such a nature that the
failure to obtain the same would have a material adverse effect on the
business, condition (financial or otherwise), operations or prospects of North
American.
6.15 ERISA Matters. Schedule 6.15 attached hereto contains a complete and
accurate list of all Benefit Plans (as defined in Section 3 of the Employee
Retirement Income Security Act of 1974, as amended) and insurance policies
relating thereto sponsored by North American or to which North American, is
making contributions as of the date hereof with respect to employees of North
American; provided, however, that Schedule 6.15 is informational only and
nothing contained therein shall imply an assumption by American Clinical of any
liabilities reflected therein. North American has timely paid, or will timely
pay as soon as practicable, all employee benefits due and owing under the
Benefit Plans sponsored by North American in accordance with the terms of each
such Benefit Plan.
6.16 Proprietary Information. North American owns, possesses or lawfully
uses all trademarks, trademark applications, service marks, service mark
applications, trade names, franchises, copyrights, copyright applications and
similar intangible rights used in its business and trade secrets or other
proprietary information similarly used (collectively, the "Trademarks"), each
item of which is listed in Schedule 6.16 attached hereto, and those Trademarks
designated on Schedule 6.16 are owned exclusively by North American, are valid
and enforceable, and none infringe (nor has any claim been made that there is
any such infringement) the trademarks, service marks, trade names, copyrights
or similar intangible rights of others. After due inquiry, to the best of North
American's knowledge, there is no claim against North American that it is or
may be infringing on or otherwise acting adversely to the rights of any person
under or in respect of any trademark, service mark, trade name, copyright,
license, franchise, permission, or other intangible right. North American is
not obligated or under any liability to make any payments by way of royalties,
fees, or otherwise to any owner or licensee of, or other claimant to, any
trademark, trade name, copyright, or other intangible asset with respect to the
use thereof, in connection with the conduct of its business or otherwise.
6.17 Contracts. Except as set forth in Schedule 6.17 or in another
Schedule to this Agreement, North American is not a party to any material
contract, agreement, commitment, lease, indenture, fringe benefit or other
plan. For purposes of this Section 6.17 "material" shall mean any contract,
agreement, commitment, lease, indenture, fringe benefit or other plan entered
into which is not in the ordinary course of business or, if entered into in the
ordinary course of business, which involves a payment, commitment or
entitlement in excess of $25,000. True and correct copies of all of the
contracts, agreements, commitments, leases, indentures, fringe benefits or
other plans, documents and instruments identified in Schedule 6.17, have been
supplied to American Clinical.
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6.18 Other Transactions. Except as disclosed on Schedule 6.18 hereto,
North American has not, since August 31, 1996, (a) operated its business except
in the ordinary course of business, (b) incurred any debts, liabilities or
obligations except in the ordinary course of business, (c) discharged or
satisfied any liens or encumbrances, or paid any liens or encumbrances, or paid
any material debts, liabilities or obligations, except in the ordinary course
of business, (d) mortgaged, pledged or subjected to lien or other encumbrance
any of its assets, tangible or intangible, except in the ordinary course of
business, (e) sold or transferred any of its tangible assets having a book
value of $15,000 or more, or cancelled any debts or claims, except, in each
case, in the ordinary course of business, or (f) suffered any extraordinary
losses or waived any rights of substantial value.
6.19 Environmental Matters.
(a) Schedule 6.19 attached hereto sets forth: (i) all facts regarding
hazardous substances, hazardous wastes and constituents used, handled,
stored or disposed of on the Premises (as herein defined) by North
American, all predecessors in interest and all prior occupants of the
Premises, where such use, handling, storage or disposal may reasonably be
expected to cause an adverse effect on the business, assets, or the
financial condition of North American; (ii) all reports, studies or
documents regarding releases of hazardous substances and hazardous wastes
and constituents in, on, under or above the Premises filed with any
governmental agency by North American, and to the knowledge of North
American by all predecessors in interest and all prior occupants of the
Premises; and (iii) all studies or reports authorized by North American,
and to the knowledge of North American by all predecessors in interest and
all prior occupants of the Premises regarding environmental conditions of
the Premises.
(b) Except as set forth in Schedule 6.19 attached hereto, North
American is not aware of, nor has received notice of, any past, present or
future events, conditions, circumstances, activities, practices,
incidents, actions or plans which may reasonably be expected to interfere
with or adversely affect its business, its assets or the financial
condition of North American or prevent compliance or continued compliance
with Environmental Laws (as herein defined), or may reasonably be expected
to give rise to any liability, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, study or investigation, based
on or related to the storage, disposal, transport, or handling, or the
discharge, release or threatened release into the environment, of any
hazardous substance or hazardous wastes or constituents by North American,
all predecessors in interest and all prior occupants of the Premises.
(c) For purposes of Section 6.19 of this Agreement: (i) The term
"Environmental Laws" means the collective federal, state, and local
statutes, rules, regulations, ordinances and laws relating to
environmental conditions or hazardous substances as currently in effect;
and (ii) The term "Premises" shall mean all of the leasehold interests
held by or property owned by North American (the "Premises").
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6.20 Business of North American. North American has furnished to American
Clinical its Annual Report on Form 10-KSB for the year ending December 31, 1995
and its Quarterly Reports on Form 10-QSB for the three month periods ending
March 31, 1996 and June 30, 1996. The referenced reports described, among other
matters, certain risks associated with North American, North American's
capitalization and financial condition, the business conducted and proposed to
be conducted by North American, its management structure, principal
shareholders and the characteristics of its equity securities. There has been
no material adverse change in the business, operations, affairs or prospects of
North American from that reflected in the referenced reports except to the
extent contemplated by this Agreement.
6.21 Title to Properties, Accounts Receivable. All leases pursuant to
which North American leases real or personal property are in good standing and
are valid and effective in accordance with their respective terms and there
exists no known default or other occurrence or condition which would result in
a default or termination thereof and a list of all material leases (involving
future payments during a term certain of more than ten thousand dollars
($10,000) is set forth in a separate schedule appended hereto. All accounts
receivable shown in the financial records of North American are current and
collectible, are not contingent upon the performance by the holder of any
material obligations or contracts and are subject to no known material
counterclaims or set-offs, except as noted herein.
6.22 Employees. The list attached hereto as Schedule 6.22 constitutes a
correct identification of all individuals in the employ of North American (and
its subsidiaries) as of the date of this Agreement, their current periodic
compensation and any extraordinary compensation due them for work performed
prior to such date. None of such employees are currently unionized and except
as disclosed in a separate schedule appended hereto North American has engaged
in no discussions with respect to the establishment by any of its employees of
a collective bargaining unit or to the execution of a collective bargaining
agreement; no election with respect to the unionization of any group of North
American employees has taken place and there are not currently nor have there
been in the past, any such discussions or elections threatened or to the
knowledge of North American contemplated; North American is in material
compliance with all Federal, state and local laws respecting employment and
employment practices; terms and conditions of employment and wages and hours
and is not engaged in any unfair labor practice; there is no unfair labor
practice complaint against North American pending before the National Labor
Relations Board; and North American's labor relations with its employment force
are, to North American's best knowledge and belief, good.
6.23 Bank Accounts. Schedule 6.23 appended hereto contains a complete and
correct list of the name of each bank in which North American (and its
subsidiaries) maintains a cash account or safe deposit box together with the
identifying number of each such account or box and the name of each person
authorized to draw thereon or have access thereto; and separately the name of
each person, if any, holding a power of attorney issued by North American and a
summary statement of the terms thereof.
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6.24 Compliance with Other Instruments. North American is not in violation
of any term of its Articles of Incorporation or By-Laws or of any agreement,
instrument, judgment, decree, order, statute, rule of governmental regulation
applicable to it and the execution, delivery and performance of this Agreement
will not result in any such violation or be in conflict with or constitute a
default under any such term. There is no such term which will materially
adversely affect the business operations, affairs, prospects or condition of
North American or its properties or assets.
6.25 Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to American Clinical or on behalf of North
American in connection with the transactions contemplated hereby, within the
actual knowledge of North American, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading; and there is no fact
which materially adversely affects or in the future may (so far as North
American can now reasonably foresee) materially adversely affect the assets,
business, operations or prospects of North American which has not been set
forth herein or in a schedule or statement furnished to American Clinical.
ARTICLE 7
CONDITIONS PRECEDENT TO THE CLOSING
7.1 Obligation of North American to Close. The obligation of North
American to consummate the transactions contemplated herein on the Closing Date
shall be subject to the satisfaction or the waiver by North American of the
following conditions on or prior to the Closing Date:
(a) Representations and Warranties; Compliance with Agreement. The
representations and warranties of American Clinical set forth in this
Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date, and American Clinical shall have performed all
covenants and agreements to be performed under this Agreement on or prior
to the Closing Date; and
(b) Litigation Affecting Closing. On the Closing Date, no proceeding
shall be pending or threatened before any court or governmental agency in
which it is sought to restrain or prohibit or to obtain damages or other
relief in connection with this Agreement or the consummation of the
transactions contemplated hereby, and no investigation that might
eventuate in any such suit, action or proceeding shall be pending or
threatened.
7.2 Obligation of American Clinical to Close. The obligation of American
Clinical to consummate the transactions contemplated by this Agreement with
North American on the
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Closing Date shall be subject to the satisfaction of the following conditions
on or prior to the Closing Date:
(a) Representations and Warranties; Compliance with Agreement. The
representations and warranties of North American set forth in this
Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as
of the Closing Date, and North American shall have performed all covenants
and agreements to be performed by it under this Agreement on or prior to
the Closing Date, and North American shall have delivered to American
Clinical certificates to such effect dated the Closing Date and signed by
North American, which certificates shall be in the form attached hereto as
Schedule 7.2(a);
(b) Litigation Affecting Closing. On the Closing Date, no proceeding
shall be pending or threatened before any court or governmental agency in
which it is sought to restrain or prohibit or to obtain damages or other
relief in connection with this Agreement or the consummation of the
transaction contemplated hereby, and no investigation that might eventuate
in any such suit, action or proceeding shall be pending or threatened;
(c) Required Consents. The holders of any material indebtedness of
North American, the lessors of any material real or property or assets
leased by North American, the parties (other than North American) to any
other material contract, commitment or agreement to which North American
is a party, any governmental agency or body or any other individual or
entity which owns or has authority to grant any franchise, license,
permit, easement, right or other authorization necessary for the business
of North American and any governmental body or regulatory agency having
jurisdiction over North American, to the extent that their consent or
approval is required under the pertinent debt, lease, contract, commitment
or agreement or other document or instrument or under applicable laws,
rules or regulations for the consummation of the transactions contemplated
herein with American Clinical, shall have granted such consent or
approval;
(d) No Material damage to Business. The assets of North American
shall not have been and shall not be threatened to be materially adversely
affected in any way as a result of fire, explosion, disaster, accident,
labor dispute, any action by any governmental authority, flood, riot,
civil disturbance, uprising, activity of armed forces or act of God or
public enemy; and
(e) Opinion of Counsel. On the Closing Date, North American shall
cause there to be delivered to American Clinical an opinion of counsel, in
form and substance reasonably satisfactory to American Clinical.
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ARTICLE 8
INDEMNIFICATION
8.1 By American Clinical. From and after the Closing Date, American
Clinical shall indemnify and hold harmless North American from and against (i)
any and all damages, losses, obligations, deficiencies, liabilities, claims,
encumbrances, penalties, costs, and expenses, including reasonable attorneys'
fees (together, "Loss"), which North American may suffer or incur, resulting
from, related to, or arising out of any misrepresentation, breach of warranty,
or nonfulfillment of any of the covenants or agreements of American Clinical in
this Agreement or from any misrepresentation in or omission from any schedule
to this Agreement, certificate, financial statement, or from any other document
furnished or to be furnished to North American hereunder, (ii) any Loss based
upon injuries to persons associated with, property owned by or business
conducted by American Clinical arising out of events on or before the Closing
Date whether known or unknown, currently asserted or arising hereafter, and
(iii) any and all actions, suits, investigations, proceedings, demands,
assessments, audits, judgments and claims (including employment-related claims)
arising out of any of the foregoing; provided, however, that before North
American may assert a claim for indemnity under this Article, North American
must give or cause to be given written notice of such claim to American
Clinical as provided in Section 8.4.
8.2 By North American. From and after the Closing Date, North American
shall indemnify and hold harmless American Clinical from and against (i) any
and all Loss which American Clinical may suffer or incur, resulting from,
related to, or arising out of any misrepresentation, breach of warranty, or
nonfulfillment of any of the covenants or agreements of North American in this
Agreement or from any misrepresentation in or omission from any certificate or
document furnished or to be furnished to American Clinical hereunder; (ii) any
Loss based upon injuries to persons associated with, property owned by or
business conducted by North American arising out of events on or before the
Closing Date whether known or unknown, currently asserted or arising hereafter,
and (iii) any and all actions, suits, investigations, proceedings, demands,
assessments, audits, judgments and claims (including employment-related claims)
arising out of any of the foregoing; provided, however, that before American
Clinical may assert a claim for indemnity under this Section, American Clinical
must give or cause to be given written notice of such claim to North American
as provided in Section 8.4.
8.3 Limitation of Indemnity. Notwithstanding any provisions herein to the
contrary:
(a) Neither party shall be liable to the other party for any
misrepresentation, the breach of any warranty or the failure to fulfill
any covenant or agreement herein if such other party shall have had
"actual knowledge" of the facts upon which such misrepresentation, breach
or failure to fulfill is based at or prior to the Closing Date. For
purposes of this Section 8.3(a) "actual knowledge" on the part of North
American or American Clinical, respectively, shall mean the actual
knowledge of one or more of its executive employees.
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(b) The liability of either party computed otherwise in accordance
with this Article 8 shall be limited to the after-tax consequence to the
indemnified party (or the affiliated group of which such indemnified party
is a member) of any such damage, loss, liability, deficiency cost or
expense suffered or incurred by such indemnified party and shall be
computed after giving effect to the recovery, if any, by the indemnified
party of any applicable insurance proceeds; and
(c) Except as otherwise expressly provided in this Agreement, neither
American Clinical nor North American shall have any liability to the other
for misrepresentation, breach of warranty or failure to fulfill any
covenant or agreement to be performed at or prior to the Closing Date
except as described in this Article 8.
8.4 Notice. Promptly after acquiring knowledge of any Loss or action,
suit, investigation, proceeding, demand, assessment, audit, judgment, or claim
against which American Clinical as indemnified North American or against which
North American has indemnified American Clinical, or as to which any party may
be liable, American Clinical or North American, as the case may be, shall give
to the other party written notice thereof. Each indemnifying party shall, at
its own expense, promptly defend, contest or otherwise protect against any Loss
or action, suit, investigation, proceeding, demand, assessment, audit,
judgment, or claim against which it or he has indemnified an indemnified party,
and each indemnified party shall receive from the other party all necessary and
reasonable cooperation in said defense including, but not limited to, the
services of employees of the other party who are familiar with the transactions
out of which any such Loss or action, suit, investigation, proceeding, demand,
assessment, audit, judgment, or claim may have arisen. The indemnifying party
shall have the right to control the defense of any such proceeding unless
relieved of its or his liability hereunder with respect to such defense by the
indemnified party. The indemnifying party shall have the right, at its or his
option, and, unless so relieved, to compromise or defend, at its or his own
expense by its or his own counsel, any such matter involving the asserted
liability of the indemnified party. In the event that the indemnifying party
shall undertake to compromise or defend any such asserted liability, it or he
shall promptly notify the indemnified party of its or his intention to do so.
In the event that an indemnifying party, after written notice from an
indemnified party, fails to take timely action to defend the same, the
indemnified party shall have the right to defend the same by counsel of its or
his own choosing, but at the cost and expense of the indemnifying party.
8.5 Money Damages. If the Losses indemnified against pursuant to the
provisions of Sections 8.1 and 8.2 hereof can be compensated by the payment of
money to the other party, the indemnifying party shall, within 30 days after
receipt of a written notice of a claim pursuant to Section 8.4 deliver to the
other party either: (i) the amount of such claim by check or by wire transfer
to the bank account of that party's choosing, or (ii) a written notice stating
that it or he objects to the validity of such claim and setting forth in
reasonable detail the grounds on which it or he is contesting the validity of
the claim.
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ARTICLE 9
SURVIVAL OF REPRESENTATIONS,
WARRANTIES, GUARANTEES, AND COVENANTS
9.1 Date Certain For Survival. All representations and warranties made by
American Clinical or North American in this Agreement or pursuant hereto shall
survive the closing hereunder for a period ending on the third anniversary of
the Closing Date, except that those made by any party which were not true when
made and which were made by such party fraudulently or with intent to defraud
or mislead shall survive without limitation.
ARTICLE 10
CONDUCT OF AMERICAN CLINICAL AND NORTH AMERICAN AFTER CLOSING
10.1 Additional Actions and Cooperation. After the Closing Date, at the
request of either party and at the requesting party's expense, but without
additional consideration, the other party shall execute and deliver from time
to time such further instruments of assignment, conveyance and transfer, shall
cooperate in the conduct of litigation and the processing and collection of
insurance claims, and shall take such other actions as may reasonably be
required to confirm and perfect North American's title to the assets of
American Clinical, and otherwise to accomplish the orderly transfer to North
American the business and assets of American Clinical to North American as
contemplated by this Agreement.
ARTICLE 11
BROKERAGE; EXPENSES
None of the parties has employed or will employ any broker, agent, finder,
or consultant (collectively, "Broker") or has incurred or will incur any
liability for any brokerage fees, commissions, finders' fees, or other fees, in
connection with the negotiation or consummation of the transactions
contemplated by this Agreement, except as set forth on Schedule 11.1. American
Clinical is responsible for and hereby indemnify and hold North American
harmless against and in respect of any claim for brokerage fees, commissions,
or other finders' fees or commissions of any such Broker employed by American
Clinical and any additional such claims incurred by North American relative to
this Agreement and the transactions contemplated hereby and any attorney fees
incurred by any of these parties in relation to any such claim by a Broker.
Similarly, North American is responsible for and hereby indemnifies and holds
American Clinical harmless against and in respect of any claim for brokerage
fees, commissions, or other finders' fees or commissions of any such Broker
employed by North American and any additional such claims incurred by North
American relative to this Agreement and the transactions contemplated hereby
and any attorney fees incurred by North American in relation to any such claim
by a Broker. Except as otherwise expressly provided in this Agreement, the
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parties agree to bear their respective expenses individually, each in respect
of all expenses of any character incurred by it in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE 12
TERMINATION
12.1 Events of Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated by written notice of
termination at any time before the Closing Date only as follows:
(a) By mutual consent of American Clinical and North American;
(b) Provided that North American is not in material default
hereunder, by North American upon three days' written notice to American
Clinical, if all of the conditions precedent set forth in Section 7.1
hereof have not been met; or
(c) Provided that American Clinical is not in material default
hereunder, by American Clinical upon three days' written notice to North
American if all of the conditions precedent set forth in Section 7.2
hereof have not been met.
ARTICLE 13
GENERAL
13.1 Conflicts between Documents. In the event of any conflict between the
terms of this Agreement and the terms of any other document or instrument, the
terms of this Agreement shall control and such documents and instruments shall
be deemed amended and reformed to the extent required to eliminate any such
conflict or inconsistency.
13.2 Entire Agreement; Amendments. This Agreement constitutes the entire
understanding among the parties with respect to the subject matter contained
herein and supersedes any prior understandings and agreements among them
respecting such subject matter. This Agreement may be amended, supplemented,
and terminated only by a written instrument duly executed by all of the
parties.
13.3 Headings. The headings in this Agreement are for convenience of
reference only and shall not affect its interpretation.
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13.4 Gender; Number. Words of gender may be read as masculine, feminine,
or neuter, as required by context. Words of number may be read as singular or
plural, as required by context.
13.5 Exhibits and Schedules. Each Exhibit and Schedule referred to herein
is incorporated into this Agreement by such reference.
13.6 Severability. If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or unenforceability
will not affect any other provision hereof. This Agreement shall, in such
circumstances, be deemed modified to the extent necessary to render enforceable
the provisions hereof.
13.7 Notices. All notices and other communications hereunder shall be in
writing and shall be given to the person by sending a copy thereof by certified
mail or by telecopy. Notice shall be deemed to have been given to the person
entitled thereto when deposited in the United States mail or when transmitted.
If to North American:
North American Resorts, Inc.
315 E. Robinson Street
Suite 190
Orlando, Florida 32801
Attn: Anthony Arrigoni
If to the American Clinical:
American Clinical Labs, Inc.
1509 S. Florida Avenue
Suite 3
Lakeland, Florida 33803
Telecopier No.: (941) 686-1932
With a copy to:
John N. Giordano, Esq.
Bush Ross Gardner Warren & Rudy, P.A.
220 S. Franklin Street
Tampa, Florida 33602
Telecopier No.: (813) 224-9255
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<PAGE> 23
Notice of any change in any such address shall also be given in the manner set
forth above. Whenever the giving of notice is required, the giving of such
notice may be waived by the party entitled to receive such notice.
13.8 Waiver. The failure of any party to insist upon strict performance of
any of the terms or conditions of this Agreement will not constitute a waiver
of any of its rights hereunder.
13.9 Assignment. No party may assign any of its rights or delegate any of
its obligations hereunder without the prior written consent of the other
parties.
13.10 Successors and Assigns. This Agreement binds, inures to the benefit
of, and is enforceable by the successors and assigns of the parties, and does
not confer any rights on any other persons or entities.
13.11 Governing Law. This Agreement shall be construed and enforced in
accordance with Florida law. Venue for any such action shall be deemed proper
in Hillsborough County, Florida.
13.12 No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the parties
hereto and their successors and assigns, and they shall not be construed as
conferring and are not intended to confer any rights on any other persons.
13.13 Publicity. Prior to the Closing Date, all notices to third parties
and all other publicity relating to the transactions contemplated by this
Agreement shall be jointly planned, coordinated and agreed to by American
Clinical and North American. Except as may be required by law, prior to the
Closing Date none of the parties hereto shall act unilaterally in this regard
without the prior approval of American Clinical and North American; provided,
however, that such approval shall not be unreasonably withheld.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. The execution of this Agreement by any party hereto will not become
effective until counterparts hereof have been executed by all the parties
hereto. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
13.15 Limitations Upon Consent: Whenever, under the terms of this
Agreement, the parties hereto are called upon to give their written consent,
such written consent will not be unreasonably withheld, unless specifically
noted otherwise.
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<PAGE> 24
13.16 Form of Consent: All consents of any kind required under this
Agreement shall be in writing. Whenever, under the terms of this Agreement,
North American, and/or American Clinical are authorized to give consent, such
consent may be given and shall be conclusively evidenced by the Chairman of the
Board of Directors or the president of each respective corporation giving such
consent.
13.17 Attorneys' Fees and Court Actions: If a legal action is initiated by
any party to this Agreement against another, arising out of or relating to the
alleged performance or non-performance of any right or obligation established
hereunder, or any dispute concerning the same, any and all fees, costs and
expenses reasonably incurred by each successful party or his or its legal
counsel in investigating, preparing for, prosecuting, defending against, or
providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of and shall be paid
or reimbursed by the unsuccessful party.
13.18 Binding Effect: This Agreement shall inure to the benefit of and be
binding upon North American and American Clinical, and their successors or
assigns, including but not limited to any corporation or other business entity
which may acquire all or substantially all of North American's assets and
business, or with, or into which American Clinical and/or any American Clinical
subsidiary may be consolidated or merged, and upon the executors,
administrators and legal representatives thereof.
In witness whereof, the parties have executed this Agreement on the date
first above written.
ATTEST: North American Resorts, Inc.
/s/ Gary Larvinson By: /s/ Anthony A. Arrigoni
- -------------------------------- ----------------------------------------
Gary Larvinson, Secretary Anthony A. Arrigoni, President
ATTEST: American Clinical Labs, Inc.
/s/ Teresa B. Fannin By: /s/ D. Jerry Diamond
- -------------------------------- ----------------------------------------
Teresa B. Fannin, Secretary D. Jerry Diamond, President
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<PAGE> 1
EXHIBIT 99.1
NORTH AMERICAN RESORTS, INC.
FOR IMMEDIATE RELEASE SYMBOL: NIAR
SEPTEMBER 18, 1996 TRADED: Electronic
Bulletin Board
ORLANDO, FL -- September 18, 1996 -- NORTH AMERICAN RESORTS, INC. ("North
American"), a publicly traded vacation ownership management company located in
Orlando, Florida, announced today that it entered into an agreement on
September 3, 1996 with American Clinical Labs, Inc., a Florida corporation
located in Lakeland, Florida ("ACL"). Under the terms of the agreement, North
American has agreed to acquire substantially all of the assets of ACL in
exchange for shares of the common stock of North American. A closing is
expected to take place on or before September 30, 1996 (the "Closing").
At the Closing, ACL will transfer and deliver to North American assets
equivalent to 1,162,440 shares of common stock of EVRO Corporation, a Florida
corporation traded on NASDAQ, and various notes receivable totaling $202,000.
North American will issue to ACL common stock of North American so that ACL
will own 51% of the outstanding shares of North American after the Closing. It
is the intention of ACL to distribute the North American shares to its
shareholders at a future date.
Jerry Diamond, President of ACL, stated "The management of North American and
ACL believe this Agreement to be in the best interest of both companies as it
will provide North American sufficient liquidity, through the sale of the newly
acquired ACL assets, to move forward with its business plan to develop Cypress
Island and continue with its expansion efforts in the area of timeshare sales
and will provide the ACL shareholders with the opportunity to participate in
the anticipated growth of North American."
The corporate offices of North American are located at 315 East Robinson
Street, Suite 190, Orlando, Florida 32801.
For further information, contact: Harry Stone
Investor Relations
(800) 340-0123
# # #
315 E. Robinson Steet Suite 190 Orlando, FL 32801 phone (407)841-1917
fax (407)839-1882
