EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
DATED: AUGUST 15, 1997
TABLE OF CONTENTS
1. DEFINITIONS 2
2. PLAN OF REORGANIZATION 5
2.1 THE MERGER 5
2.2 FRACTIONAL SHARES 6
2.3 EFFECTS OF THE MERGER 7
2.4 TAX-FREE REORGANIZATION 7
2.5 PURCHASE ACCOUNTING TREATMENT 8
2.6 WAIVER OF DISSENTERS RIGHTS 8
2.7 CLOSING 8
2.8 CLOSING OBLIGATIONS 8
2.9 MANDATORY STOCK REDEMPTION 10
2.10 ▇▇▇▇▇ STOCK PURCHASE 12
3. REPRESENTATIONS AND WARRANTIES
OF SELLERS 12
3.1 ORGANIZATION AND GOOD STANDING 12
3.2 AUTHORITY; NO CONFLICT 13
3.3 CAPITALIZATION 14
3.4 FINANCIAL STATEMENTS 15
3.5 BOOKS AND RECORDS 16
3.6 TITLE TO PROPERTIES;
ENCUMBRANCES 16
3.7 CONDITION AND SUFFICIENCY
OF ASSETS 17
3.8 ACCOUNTS RECEIVABLE 17
3.9 NO UNDISCLOSED LIABILITIES 17
3.10 TAXES 18
3.11 NO MATERIAL ADVERSE CHANGE 19
3.12 EMPLOYEE BENEFITS 19
3.13 COMPLIANCE 19
3.14 LITIGATION 20
3.15 ABSENCE OF CHANGES 20
3.16 CONTRACTS; NO DEFAULTS 22
3.17 INSURANCE 23
3.18 ENVIRONMENTAL MATTERS 24
3.19 EMPLOYEES; INDEPENDENT
CONTRACTORS 25
3.20 LABOR RELATIONS; COMPLIANCE 26
3.21 INTELLECTUAL PROPERTY 26
3.22 RELATIONSHIPS WITH RELATED
PERSONS 27
3.23 BROKERS OR FINDERS 28
3.24 DISCLOSURE 28
3.25 INVESTMENT REPRESENTATION 28
4. REPRESENTATIONS AND WARRANTIES
OF TGI 28
4.1 ORGANIZATION AND GOOD STANDING 29
4.2 AUTHORITY; NO CONFLICT 29
4.3 CERTAIN PROCEEDINGS 30
4.4 BROKERS OR FINDERS 30
4.5 SEC FILINGS 30
5. COVENANTS 30
5.1 ACCESS AND INVESTIGATION 30
5.2 OPERATION OF THE BUSINESSES
OF THE COMPANY 31
5.3 NEGATIVE COVENANT 31
5.4 NOTIFICATION 31
5.5 PAYMENT OF INDEBTEDNESS
BY RELATED PERSONS 32
5.6 NO NEGOTIATION 32
5.7 BEST EFFORTS 32
5.8 ELECTION TO BOARD OF DIRECTORS 33
5.9 ASSET LEASES 33
5.10 COMPANY DISCLOSURE LETTER 33
6. CONDITIONS PRECEDENT TO TGI'S
OBLIGATION TO CLOSE 33
6.1 ACCURACY OF REPRESENTATIONS 33
6.2 SELLERS' PERFORMANCE 33
6.3 CONSENTS 34
6.4 ADDITIONAL DOCUMENTS 34
6.5 NO PROCEEDINGS 34
6.6 NO CLAIM REGARDING STOCK
OWNERSHIP OR SALE PROCEEDS 34
6.7 TGI FINANCING 35
6.8 DISCLOSURE LETTER 35
7. CONDITIONS PRECEDENT TO SELLERS'
OBLIGATION TO CLOSE 35
7.1 ACCURACY OF REPRESENTATIONS 35
7.2 TGI'S PERFORMANCE 35
7.3 CONSENTS 35
7.4 ADDITIONAL DOCUMENTS 36
7.5 NO PROCEEDINGS 36
8. TERMINATION 36
8.1 TERMINATION EVENTS 36
8.2 EFFECT OF TERMINATION 37
9. INDEMNIFICATION; REMEDIES 37
9.1 SURVIVAL; RIGHT TO
INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE 37
9.2 INDEMNIFICATION AND PAYMENT
OF DAMAGES BY SELLERS 38
9.3 INDEMNIFICATION AND PAYMENT OF
DAMAGES BY TGI 39
9.4 LIMITATIONS 39
9.5 ESCROW 39
9.6 PROCEDURE FOR INDEMNIFICATION-
-THIRD PARTY CLAIMS 40
9.7 PROCEDURE FOR INDEMNIFICATION-
-OTHER CLAIMS 42
10. GENERAL PROVISIONS 42
10.1 EXPENSES 42
10.2 PUBLIC ANNOUNCEMENTS 42
10.3 CONFIDENTIALITY 42
10.4 NOTICES 43
10.5 JURISDICTION; SERVICE OF
PROCESS 44
10.6 FURTHER ASSURANCES 45
10.7 WAIVER 45
10.8 ENTIRE AGREEMENT AND
MODIFICATION 45
10.9 DISCLOSURE LETTER 46
10.10 ASSIGNMENTS, SUCCESSORS, AND
NO THIRD-PARTY RIGHTS 46
10.11 SEVERABILITY 46
10.12 SECTION HEADINGS, CONSTRUCTION 46
10.13 TIME OF ESSENCE 47
10.14 GOVERNING LAW 47
10.15 COUNTERPARTS 47
Exhibits and Schedules
Exhibit "A" -- Certificate of Merger
Exhibit "B" -- Promissory Note
Exhibit "C" -- Employment Agreements
Exhibit "D" -- Noncompetition Agreement
Exhibit "E" -- Escrow Agreement
Exhibit "F" -- Subscription Agreement
Exhibit "G" -- Guaranty Agreement
Schedule 1 -- List of Shareholders/Stock Allocation
Schedule 2 -- Shares Subject to Redemption
Schedule 4.2 -- TGI Consents
Schedule 4.4 -- TGI Brokers
Agreement and Plan of Reorganization
This Agreement and Plan of Reorganization ("Agreement") is made
as of August 15, 1997, by Transit Group, Inc., f/k/a General
Parcel Service, Inc., a Florida corporation ("TGI"), ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Group, Inc. a Florida corporation (the "Company"),
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, each an individual resident
of Florida, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a resident of Alabama, and
the individual trusts listed on Schedule 1 hereto (individually
a "Seller" and, collectively, the "Sellers"). TGI, the Company
and the Sellers are sometimes referred to herein individually as
a "Party," and collectively as the "Parties".
RECITALS
A. The Parties intend that, subject to the terms and conditions
set forth herein, a new corporation that will be organized in
Florida as a wholly owned subsidiary of Transit Group, Inc.
("Newco") will merge with the Company in a forward triangular
merger (the "Merger"), with Newco to be the surviving
corporation of the Merger, all pursuant to the terms and
conditions of this Agreement, the Certificate of Merger
substantially in the form of Exhibit A hereto (the "Certificate
of Merger") and the applicable provisions of the laws of Florida.
B. Upon the effectiveness of the Merger, all the outstanding
capital stock of the Company will be converted into capital
stock of TGI, in the manner and on the basis determined herein
and as provided in the Certificate of Merger.
C. The Merger is intended to be treated as a "purchase" for
accounting purposes and a tax-free reorganization pursuant to
the provisions of Section 368(a)(1)(A) of the Internal Revenue
Code of 1986, as amended (the "Code"), by virtue of the
provisions of Section 368(a)(2)(E) of the Code.
▇. ▇▇▇▇▇▇▇ are the sole shareholders of the Company.
AGREEMENT
For and in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1:
"Agreement" --this Agreement and Plan of Reorganization
together with all Schedules and Exhibits hereto.
"Balance Sheet"--as defined in Section 3.4.
"Closing"--as defined in Section 2.7.
"Closing Date"--the date and time as of which the Closing
actually takes place.
"Company"--collectively the Company identified in the Recitals
to this Agreement together with each Subsidiary.
"Company's Disclosure Letter"--the disclosure letter delivered
by Sellers to TGI not later than August 22, 1997.
"Contemplated Transactions"--all of the transactions
contemplated by this Agreement, including:
(a) the Merger of Newco and the Company;
(b) the execution, delivery, and performance of the Employment
Agreements, the Noncompetition Agreements, and the Escrow
Agreement; and
(c) the performance by TGI, the Company and Sellers of their
respective covenants and obligations under this Agreement.
"Damages"--as defined in Section 9.2.
"Effective Time" --the effective time of the Merger as defined
in Section 2.1.
"Employment Agreements"--as defined in Section 2.8(a)(iii).
"Environmental Law"--any law or regulation that requires or
relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants or hazardous
substances or materials, violations of discharge limits, or
other prohibitions and of the commencements of activities, such
as resource extraction or construction, that could have
significant impact on the environment;
(b) preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the
environment;
(c) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil, or
other potentially harmful substances;
(d) cleaning up pollutants that have been released, preventing
the threat of release, or paying the costs of such clean up or
prevention; or
(e) making responsible parties pay private parties, or groups
of them, for damages done to their health or the environment, or
permitting self-appointed representatives of the public interest
to recover for injuries done to public assets.
"ERISA"--the Employee Retirement Income Security Act of 1974,
as amended, and regulations and rules issued pursuant to that
act or any successor law.
"Escrow Agreement" --as defined in Section 9.5.
"GAAP"--generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the
Balance Sheet and the other financial statements referred to in
Section 3.4 were prepared.
"Hazardous Materials"--any waste or other substance that is
listed, defined, designated, or classified as, or otherwise
determined to be, hazardous, radioactive, or toxic or a
pollutant or a contaminant under or pursuant to any
Environmental Law, including petroleum and all derivatives
thereof or synthetic substitutes therefor and asbestos or
asbestos-containing materials.
"Merger"--as defined in the Recitals hereto.
"Noncompetition Agreements"--as defined in Section 2.8(a)(iv).
"Occupational Safety and Health Law"--any law or regulation
designed to provide safe and healthy working conditions and to
reduce occupational safety and health hazards, and any program,
whether governmental or private (including those promulgated or
sponsored by industry associations and insurance companies),
designed to provide safe and healthful working conditions.
"Promissory Notes" --as defined in Section 2.1.1.
"Redemption Period" --as defined in Section 2.9.
"Redemption Request" --as defined in Section 2.9.
"Securities Act"--the Securities Act of 1933 or any successor
law, and regulations and rules issued pursuant to that act or
any successor law.
"Sellers"--as defined in the first paragraph of this Agreement.
"Stock Purchase Agreement" --the Stock Purchase Agreement
described in Section 2.10.
"Subsidiary" or "Subsidiaries"--means any company, entity,
partnership or joint venture in which the Company owns an equity
or other interest.
"TGI Disclosure Letter"--the disclosure letter delivered by TGI
to Sellers concurrently with the execution and delivery of this
Agreement.
2. PLAN OF REORGANIZATION.
2.1 THE MERGER. Subject to the terms and conditions of this
Agreement, prior to the Closing Date, TGI will incorporate and
organize Newco and will cause the Board of Directors and
shareholders of Newco to approve the Merger and perform all of
the duties of Newco set forth in this Agreement. Subject to the
terms and conditions of this Agreement, the Certificate of
Merger will be filed with the Secretary of State of the State of
Florida on the Closing Date. The date and time that the
Certificate of Merger is filed with the Florida Secretary of
State and the Merger thereby becomes effective will be referred
to in this Agreement as the "Effective Time." Subject to the
terms and conditions of this Agreement and the Certificate of
Merger, the Company will be merged with and into Newco in a
statutory merger pursuant to the Certificate of Merger and in
accordance with applicable provisions of Florida law as follows:
2.1.1 Conversion of Company Common Stock. Each share of
common stock of the Company, $1.00 par value (the "Company
Common Stock"), that is issued and outstanding immediately prior
to the Effective Time, will, by virtue of the Merger and at the
Effective Time and without further action on the part of any
holder thereof, be converted into the right to receive
2,370.1175 shares of fully paid and nonassessable common stock
of TGI, $.01 par value per share ("TGI Common Stock"). Based on
the foregoing conversion ratio, the total number of shares of
TGI Common Stock into which each Seller's shares of Company
Common Stock will be converted is set forth on Schedule 1
hereto. In addition, certain Sellers will receive a portion of
cash consideration in the amount of $2,250,000, pro rated as set
forth on Schedule 1 hereto, which amount shall be paid over a
five (5) year period pursuant to a Promissory Note in the form
of Exhibit B, to be delivered at Closing. The Sellers
acknowledge that, due to the receipt of the cash consideration
set forth above by certain Sellers, the stock consideration has
been allocated disproportionately, so that the total of the cash
and stock consideration received by each Seller is equal in
value to his pro rata share of the total merger consideration
paid by TGI. Notwithstanding the foregoing, in the event that
the closing sales price for the TGI Common Stock on the NASDAQ
Small Cap Market on the day prior to the Closing Date (the
"Closing Stock Price") is less than $3.60 per share, then the
total number of shares of TGI Common Stock into which the
Company Common Stock shall convert shall be equal to $15 million
divided by the Closing Stock Price and shall be allocated among
the Sellers based upon their percentage interest in the Company,
taking into consideration the cash consideration to be received
by such Seller, as described above.
2.1.2 Conversion of Newco Shares. Each share of Newco Common
Stock, par value $0.01 ("Newco Common Stock"), that is issued
and outstanding immediately prior to the Effective Time, will,
by virtue of the Merger and without further action on the part
of the sole shareholder of Newco, be converted into and become
one share of common stock of Newco, as the surviving
corporation, that is to be issued and outstanding immediately
after the Effective Time, which shall be the only share of Newco
Common Stock that is issued and outstanding immediately after
the Effective Time.
2.2 FRACTIONAL SHARES. No fractional shares of TGI Common
Stock will be issued in connection with the Merger.
2.3 EFFECTS OF THE MERGER. At the Effective Time: (a) the
separate existence of the Company will cease and the Company
will be merged with and into Newco and Newco will be the
surviving corporation pursuant to the terms of the Certificate
of Merger; (b) the Articles of Incorporation and Bylaws of Newco
will be the Articles of Incorporation and Bylaws of the
surviving corporation; (c) each share of Newco Common Stock
outstanding immediately prior to the Effective Time will be
converted as provided in Section 2.1.2 above; (d) the directors
of Newco in effect at the Effective Time will be the directors
of the Company as the surviving corporation, and the officers of
Newco will be the officers of the Company as the surviving
corporation; (e) each share of Company Common Stock outstanding
immediately prior to the Effective Time will be converted as
provided in Section 2.1.1; (f) Newco will change its name to
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Group, Inc."; and (g) the Merger will, at and
after the Effective Time, have all of the effects provided by
applicable law.
2.4 TAX-FREE REORGANIZATION. The Parties intend to adopt this
Agreement as a tax-free plan of reorganization and to consummate
the Merger in accordance with the provisions of Section
368(a)(1)(A) of the Code. The Parties believe that the value of
the TGI Common Stock to be received in the Merger is equal to
the value of the Company Common Stock to be surrendered in
exchange therefor. The TGI Common Stock issued in the Merger
will be issued solely in exchange for the Company Common Stock,
and no other transaction other than the Merger represents,
provides for or is intended to be an adjustment to, the
consideration paid for the Company Common Stock. TGI represents
now, and as of the Closing, that it presently intends to
continue the Company's historic business or use a significant
portion of the Company's business assets in a business. The
provisions and representations contained or referred to in this
Section 2.4 shall survive until the expiration of the applicable
statute of limitations. Sellers acknowledge that they have
received their own independent tax advice and counsel with
respect to the Merger and the transactions contemplated herein
and are not relying on representations made by TGI or its
counsel, accountants or advisors with respect thereto.
2.5 PURCHASE ACCOUNTING TREATMENT. The Parties intend that the
Merger be treated as a "purchase" for accounting purposes.
2.6 WAIVER OF DISSENTERS RIGHTS. Each of the Sellers hereby
waives any and all rights such shareholder has to dissent from
the Merger under Florida law.
2.7 CLOSING. The consummation of the Merger provided for in
this Agreement (the "Closing") will take place at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC, Suite 700, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. (local time)
on August 29, 1997, effective August 31, 1997, or at such time
and place as the Parties may agree.
2.8 CLOSING OBLIGATIONS. At the Closing:
(a) Sellers will deliver to TGI:
(i) certificates representing their shares of Company Common
Stock, duly endorsed for transfer (or accompanied by duly
executed stock powers), with signatures guaranteed by a
commercial bank;
(ii) releases and resignations from the officers and
directors of the Company and each Subsidiary duly executed by
such parties;
(iii) employment agreements substantially in the form of
Exhibit "C," executed by certain of the Sellers (collectively,
"Employment Agreements"). It is understood that the insurance
benefits provided in the Employment Agreement are under review
by the Parties and will be agreed upon no later than August 22,
1997;
(iv) noncompetition agreements in the form of Exhibit "D,"
executed by Sellers (collectively, the "Noncompetition
Agreements");
(v) an escrow agreement in the form of Exhibit "E," executed
by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇;
(vi) a subscription agreement for the shares of TGI Common
Stock to be received by the Sellers in the Merger in the form
attached hereto as Exhibit "F"; and
(vii) a certificate executed by Sellers certifying to TGI
that each of Sellers' representations and warranties in this
Agreement was accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date
as if made on the Closing Date.
(b) TGI will deliver to Sellers:
(i) share certificates representing the TGI Common Stock,
issued in the name of the Sellers in the amounts shown on
Schedule 1 (subject to adjustment as provided in Section 2.1.1);
(ii) the Promissory Notes in favor of certain Sellers;
(iii) a certificate executed by TGI to the effect that each
of TGI's representations and warranties in this Agreement was
accurate in all respects as of the date of this Agreement and is
accurate in all respects as of the Closing Date as if made on
the Closing Date;
(iv) the Employment Agreements; and
(v) the Stock Purchase Agreement referred to in Section 2.10.
2.9 MANDATORY STOCK REDEMPTION. During the six (6) year period
following the Closing Date (the "Redemption Period"), certain
Sellers as shown on Schedule 2 hereto shall have the right to
require either of T. ▇▇▇▇▇ ▇▇▇▇▇, the majority shareholder of
TGI, or TGI to redeem all or any part of his pro rata share of
an aggregate of 1,666,667 shares of TGI Common Stock for a
purchase price of $3.60 per share (for a total purchase price of
$6,000,000), if such Seller notifies T. ▇▇▇▇▇ ▇▇▇▇▇ or TGI in
writing of his election to have such shares redeemed (a
"Redemption Request"). The number of shares which each such
Seller may require T. ▇▇▇▇▇ ▇▇▇▇▇ or TGI to redeem is set forth
in Schedule 2 hereto. Both the number of shares subject to the
redemption right and the redemption price per share shall be
adjusted in the event the Closing Stock Price is less than $3.60
per share, so that the total number of shares subject to
redemption hereunder shall equal $6,000,000 divided by the
Closing Stock Price, and the purchase price on the redemption by
T. ▇▇▇▇▇ ▇▇▇▇▇ or TGI shall in such event be equal to the
Closing Stock Price, with forty-one and six tenths percent
(41.6%) of such stock being subject to redemption during the
Initial Redemption Period and fifty-eight and four tenths
percent (58.4%) of such stock being subject to redemption during
the Second Redemption Period, as such terms are defined below.
Assuming the Closing Stock Price equals or exceeds $3.60 per
share, then the Sellers granted redemption rights hereunder may
only request a redemption of an aggregate of 694,445 shares of
TGI Common Stock during the period beginning on the sixtieth
(60th) day after Closing and ending on the first (1st)
anniversary of the Closing Date (the "Initial Redemption
Period"), with each such Seller limited to his pro rata portion
thereof, as shown on Schedule 2. After the first (1st)
anniversary of the Closing Date and prior to the sixth (6th)
anniversary of the Closing Date (the "Second Redemption
Period"), such Sellers may make a Redemption Request with
respect to the remaining 972,222 shares subject to redemption by
either of ▇▇. ▇▇▇▇▇ or TGI, together with the balance of the
694,445 shares with respect to which a Redemption Request was
not made during the Initial Redemption Period.
Within ten (10) days after receipt of a Redemption Request
during the Initial Redemption Period and within sixty (60) days
after receipt of a Redemption Request during the Second
Redemption Period, if such Redemption Request is given to T.
▇▇▇▇▇ ▇▇▇▇▇, then he shall redeem such shares by paying in cash
the purchase price therefor. If such request is given to TGI,
then to the extent TGI has lawful funds available to do so, TGI
shall redeem such shares within the same time period by paying
in cash the purchase price therefor. Any Seller whose shares
are being redeemed shall surrender the certificate representing
such shares to either T. ▇▇▇▇▇ ▇▇▇▇▇ or TGI, as appropriate,
properly endorsed for transfer and cancellation. If less than
all of the shares represented thereby are being redeemed, TGI
shall cause a new certificate to be issued to such Seller,
representing the balance of the shares not redeemed. The rights
granted to the Sellers hereunder shall expire, whether or not
exercised in whole or in part, on the sixth (6th) anniversary of
the Closing Date.
The Parties acknowledge that the foregoing redemption right is
based on the desire of the Sellers to receive a minimum cash
amount for a certain number of shares of TGI Common Stock.
Therefore, notwithstanding the foregoing or anything to the
contrary herein, the number of shares which any Seller may
require T. ▇▇▇▇▇ ▇▇▇▇▇ or TGI to redeem shall be reduced by the
dollar amount of the gross proceeds resulting from any sale by
such Seller (including sales by a trust for the benefit of the
children of such Seller) of shares of TGI Common Stock during
the Redemption Period. For example, in the event a particular
Seller owns twenty percent (20%) of the stock of the Company,
such Seller may require T. ▇▇▇▇▇ ▇▇▇▇▇ or TGI to redeem an
aggregate of up to $1,200,000 in value (333,333 shares of TGI
Common Stock) during the Redemption Period, with 138,889 shares
being redeemable during the Initial Redemption Period, and the
remaining 194,444 shares being redeemable during the Second
Redemption Period. In the event that such Seller (or a trust
for the benefit of the children of such Seller) sells 100,000
shares of TGI Common Stock for a purchase price of $4.60 per
share, resulting in gross proceeds of $460,000, then the total
dollar amount to be received by such Seller in connection with
this right of redemption hereunder shall be reduced to $740,000,
and the number of shares to be redeemed shall be correspondingly
reduced to 205,556. Any such reduction in number shall be
applied first toward the number of shares subject to redemption
during the Initial Redemption Period.
2.10 ▇▇▇▇▇ STOCK PURCHASE. TGI agrees that it will obtain and
deliver to the Sellers at Closing the Stock Purchase Agreement
in the form attached hereto as Exhibit G, pursuant to which T.
▇▇▇▇▇ ▇▇▇▇▇, the majority shareholder of TGI, will agree to
purchase any shares subject to a proper Redemption Request given
to ▇▇. ▇▇▇▇▇ pursuant to Section 2.9 above, on the same terms
and conditions as set forth in Section 2.9 above. The Sellers
holding redemption rights will notify TGI in the event they send
a Redemption Request to ▇▇. ▇▇▇▇▇ by sending a copy of such
request to TGI simultaneously with the delivery to ▇▇. ▇▇▇▇▇,
and will take such actions in connection therewith as requested
by TGI as necessary to comply with applicable securities laws
with respect to such sale. Further, in order to reduce the
number of shares subject to redemption by TGI, TGI agrees to use
its reasonable efforts to accommodate a request by a Seller to
sell his shares to an independent third party purchaser, to the
extent such sale would comply with applicable securities laws
and regulations. TGI agrees to provide to Sellers, prior to
Closing, such information as reasonably requested by Sellers to
verify the financial information of T. ▇▇▇▇▇ ▇▇▇▇▇ previously
provided to Sellers.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to TGI as follows:
3.1 ORGANIZATION AND GOOD STANDING.
(a) Part 3.1 of the Company's Disclosure Letter contains a
statement of the Company's and each Subsidiary's jurisdiction of
incorporation, a list of all other jurisdictions in which it is
authorized to do business, and its capitalization (including the
identity of each stockholder and the number of shares held by
each). The Company and each Subsidiary is duly organized,
validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and
authority to conduct its business as it is now being conducted,
to own or use the properties and assets that it purports to own
or use, and to perform all its obligations under its contracts.
The Company and each Subsidiary is duly qualified to do business
as a foreign corporation and is in good standing under the laws
of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or the
nature of the activities conducted by it, requires such
qualification.
(b) Sellers have delivered to TGI copies of the Articles of
Incorporation and Bylaws of the Company and each Subsidiary, as
currently in effect.
3.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Sellers, and the Company enforceable against them
in accordance with its terms. Upon the execution and delivery
by Sellers of the Employment Agreements, the Escrow Agreement,
the Subscription Agreements and the Noncompetition Agreements
(collectively, the "Sellers' Closing Documents"), the Sellers'
Closing Documents will constitute the legal, valid, and binding
obligations of Sellers and the Company, enforceable against them
in accordance with their respective terms. Each of the Sellers
and the Company has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement
and the Sellers' Closing Documents and to perform their
respective obligations under this Agreement and the Sellers'
Closing Documents.
(b) Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without
notice or lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Articles of Incorporation or Bylaws of
the Company or any Subsidiary; or (B) any resolution adopted by
the board of directors or the stockholders of the Company or any
Subsidiary; or (C) any of the terms or requirements of, or give
any governmental body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any permit or authorization that
is held by the Company or any Subsidiary or that otherwise
relates to the business of, or any of the assets owned or used
by, the Company or any Subsidiary; or (D) any provision of, or
give any person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any contract to which the
Company or any Subsidiary is bound; or
(ii) result in the imposition or creation of any lien, claim
or encumbrance upon or with respect to any of the assets owned
or used by the Company or any Subsidiary.
(c) Except as set forth in Part 3.2 of the Company's Disclosure
Letter, neither Sellers, the Company nor any Subsidiary is or
will be required to give any notice to or obtain any consent
from any person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the
Contemplated Transactions.
3.3 CAPITALIZATION.
(a) The authorized equity securities of the Company consist of
200,000 shares of common stock, par value $1.00 per share, of
which 1758 shares are issued and outstanding (the "Shares").
Sellers are and will be on the Closing Date the record and
beneficial owners and holders of the Shares, free and clear of
all liens, claims or encumbrances. The shares are owned of
record as shown on Part 3.3 of the Company's Disclosure Letter.
With the exception of the Shares (which are owned by Sellers),
there are no other outstanding equity securities or other
securities of the Company. Other than as set forth on Part 3.3
of the Disclosure Letter, no legend or other reference to any
purported encumbrance appears upon any certificate representing
equity securities of the Company. All of the outstanding equity
securities of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. There are no
contracts relating to the issuance, sale, or transfer of any
equity securities or other securities of the Company. None of
the outstanding equity securities or other securities of the
Company was issued in violation of the Securities Act or any
other law or regulation. The Company does not own, nor does it
have any contract to acquire, any equity securities or other
securities of any person (other than the Company) or any direct
or indirect equity or ownership interest in any other business.
(b) The authorized equity securities of each Subsidiary and the
number of shares of such Subsidiary that are outstanding are set
forth on Part 3.3 of the Company's Disclosure Letter. The
Company is and will be on the Closing Date the record and
beneficial owner and holder of all of the issued and outstanding
stock of each Subsidiary, free and clear of all liens, claims or
encumbrances. With the exception of the shares owned by the
Company, there are no other outstanding equity securities or
other securities of any Subsidiary. Other than as set forth on
Part 3.3 of the Disclosure Letter, no legend or other reference
to any purported encumbrance appears upon any certificate
representing equity securities of a Subsidiary. All of the
outstanding equity securities of each Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable. There are no contracts relating to the issuance,
sale, or transfer of any equity securities or other securities
of any Subsidiary. None of the outstanding equity securities or
other securities of any Subsidiary was issued in violation of
the Securities Act or any other law or regulation. No
Subsidiary owns, nor does it have any contract to acquire, any
equity securities or other securities of any person or any
direct or indirect equity or ownership interest in any other
business.
3.4 FINANCIAL STATEMENTS. Sellers have delivered to TGI: (a)
audited balance sheets of the Company as at May 31 in each of
the years 1991 through 1997, and the related audited statements
of income, changes in stockholders' equity, and cash flow for
each of the fiscal years then ended, and (b) an unaudited
balance sheet of the Company as at June 30, 1997 (the "Balance
Sheet"). Such financial statements referenced in Section 3.4(a)
and the notes thereto fairly present the financial condition and
the results of operations, changes in stockholders' equity, and
cash flow of the Company as at the respective dates of and for
the periods referred to in such financial statements, all in
accordance with GAAP, consistently applied throughout the
periods involved. The unaudited balance sheet described in
Section 3.4(b) is accurate and fairly presents the condition of
the Company as of June 30, 1997.
3.5 BOOKS AND RECORDS. The books of account, minute books,
stock record books, and other records of the Company and each
Subsidiary, all of which have been made available to TGI, are
complete and correct and have been maintained in accordance with
applicable law. The minute books of the Company and each
Subsidiary contain accurate and complete records of all meetings
of, and corporate actions taken by, the stockholders, the Boards
of Directors, and committees of the Boards of Directors of the
Company and each Subsidiary, and no meeting of any such
stockholders or Board of Directors has been held for which
minutes have not been prepared and are not contained in such
minute books.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES. Part 3.6 of the
Company's Disclosure Letter contains a complete and accurate
list of all real property and material items of personal
property owned by the Company and each Subsidiary. The Company
and each Subsidiary owns good and marketable title to the
properties and assets located in the facilities owned or
operated by the Company or any Subsidiary or reflected as owned
in the books and records of the Company or any Subsidiary,
including all of the properties and assets reflected in the
Balance Sheet, and all of the properties and assets purchased or
otherwise acquired by the Company or any Subsidiary since the
date of the Balance Sheet. All material properties and assets
reflected in the Balance Sheet are free and clear of all liens,
claims or encumbrances and are not, in the case of real
property, subject to any use restrictions, exceptions,
variances, reservations, or limitations of any nature except,
with respect to all such properties and assets, (a) mortgages or
security interests shown on the Balance Sheet as securing
specified liabilities or obligations, with respect to which no
default (or event that, with notice or lapse of time or both,
would constitute a default) exists, and (b) zoning laws and
other land use restrictions that do not impair the present or
anticipated use of the property subject thereto. All buildings,
plants, and structures owned by the Company or any Subsidiary
lie wholly within the boundaries of the real property owned by
the Company or any Subsidiary and do not encroach upon the
property of, or otherwise conflict with the property rights of,
any other person.
3.7 CONDITION AND SUFFICIENCY OF ASSETS. The buildings,
plants, structures, and equipment owned or leased by the Company
and each Subsidiary are structurally sound, are in good
operating condition and repair, and are adequate for the uses to
which they are being put, and none of such buildings, plants,
structures, or equipment is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are
not material in nature or cost. The building, plants,
structures, and equipment owned or leased by the Company and
each Subsidiary are sufficient for the continued conduct of the
Company's and each Subsidiary's businesses after the Closing in
substantially the same manner as conducted prior to the Closing.
3.8 ACCOUNTS RECEIVABLE. All accounts receivable of the
Company and each Subsidiary as of the Closing Date represent or
will represent valid obligations arising from sales actually
made or services actually performed in the ordinary course of
business. Unless paid prior to the Closing Date, the accounts
receivable are or will be as of the Closing Date current and
collectible net of the respective reserves shown on the Balance
Sheet. Except as set forth on Part 3.8 of the Company's
Disclosure Letter, there is no contest, claim, or right of
set-off relating to the amount or validity of such accounts
receivable, except immaterial amounts arising in the ordinary
course of business.
3.9 NO UNDISCLOSED LIABILITIES. Neither the Company nor any
Subsidiary has any liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except for liabilities or obligations
reflected or reserved against in the Balance Sheet and current
liabilities incurred in the ordinary course of business since
the dates thereof.
3.10 TAXES.
(a) Except as set forth on Part 3.10 of the Company's
Disclosure Letter, the Company and each Subsidiary has filed or
caused to be filed on a timely basis all tax returns that are or
were required to be filed by or with respect to it. The Company
and each Subsidiary has paid, or made provision for the payment
of, all taxes that have or may have become due for all periods
prior to Closing.
(b) Except as set forth on Part 3.10 of the Company's
Disclosure Letter, no United States, federal or state income tax
returns of the Company or any Subsidiary have been audited by
the IRS or relevant state tax authorities during the past seven
years. Neither Sellers, the Company, nor any Subsidiary has
given or been requested to give waivers or extensions (or is or
would be subject to a waiver or extension given by any other
person) of any statute of limitations relating to the payment of
taxes of the Company.
(c) The charges, accruals, and reserves with respect to taxes
on the books of the Company are adequate (determined in
accordance with GAAP) and are at least equal to the Company's
liability for taxes (including any Subsidiary's liability).
There exists no proposed tax assessment against the Company or
any Subsidiary except as disclosed in the Balance Sheet. All
taxes that the Company or any Subsidiary is or was required to
withhold or collect have been duly withheld or collected and, to
the extent required, have been paid to the proper governmental
body or other person.
(d) All tax returns filed by the Company any each Subsidiary
are true, correct, and complete. The Company is not, and within
the five-year period preceding the Closing Date has not been, an
"S" corporation.
3.11 NO MATERIAL ADVERSE CHANGE. Since the date of the
Balance Sheet, there has not been any material adverse change in
the business, operations, properties, prospects, assets, or
condition of the Company or any Subsidiary, and no event has
occurred or circumstance exists that may result in such a
material adverse change.
3.12 EMPLOYEE BENEFITS. Part 3.12 of the Company's Disclosure
Letter contains a list of all pension, retirement, disability,
medical, dental or other health plans, life insurance or other
death benefit plans, profit sharing, deferred compensation
agreements, stock, option, bonus or other incentive plans,
vacation, sick, holiday or other paid leave plans, severance
plans or other similar employee benefit plans maintained by the
Company or any Subsidiary (the "Plans"), including, without
limitation, all "employee benefit plans" as defined in Section
3(3) of ERISA. All contributions due from the Company or any
Subsidiary with respect to any of the Plans have been made or
accrued on the Company's financial statements, and no further
contributions will be due or will have accrued thereunder as of
the Closing. Each of the Plans, and its operation and
administration, is, in all material respects, in compliance with
all applicable, federal, state, local and other governmental
laws and ordinances, orders, rules and regulations, including
the requirements of ERISA and the Internal Revenue Code. All
such Plans that are "employee pension benefit plans" (as defined
in Section 3(2) of ERISA) which are intended to qualify under
I.R.C. Section 401(a)(8) have received favorable determination
letters that such plans satisfy all qualification requirements.
In addition, the Company has not been a participant in any
"prohibited transaction," within the meaning of Section 406 of
ERISA, with respect to any employee pension benefit plan (as
defined in Section 3(2) of ERISA) which the Company or any
Subsidiary sponsors as employer or in which the Company or any
Subsidiary participates as an employer, which was not otherwise
exempt pursuant to Section 408 of ERISA (including any
individual exemption granted under Section 408(a) of ERISA), or
which could result in an excise tax.
3.13 COMPLIANCE.
(a) The Company and each Subsidiary is and at all times has
conducted its business and the ownership and use of its assets
in full compliance with all applicable laws.
(b) Part 3.13 of the Company's Disclosure Letter contains a
complete and accurate list of each permit or governmental
consent or authorization that is held by the Company and each
Subsidiary or that otherwise relates to the business of, or to
any of the assets owned or used by, the Company or any
Subsidiary. Each such permit or governmental consent or
authorization is valid and in full force and effect and
constitutes all of the governmental authorizations necessary to
permit the Company and each Subsidiary to lawfully conduct and
operate its business in the manner currently conducted.
3.14 LITIGATION.
(a) Except as set forth in Part 3.14 of the Company's
Disclosure Letter, there is no pending or to the knowledge of
the Sellers, threatened action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any
governmental body or arbitrator (i) that has been commenced by
or against the Company or any Subsidiary or that otherwise
relates to or may affect the business of, or any of the assets
owned or used by, the Company or any Subsidiary; or (ii) that
challenges, or that may have the effect of preventing, delaying,
making illegal, or enjoining, any of the Contemplated
Transactions.
(b) Except as set forth on Part 3.14 of the Company's
Disclosure Letter, there is no order or court decision to which
the Company, any Subsidiary, the Sellers, any director or
officer of the Company, or any of the assets owned or used by
the Company, is subject.
3.15 ABSENCE OF CHANGES. Except as set forth in Part 3.15 of
the Company's Disclosure Letter, since the date of the Balance
Sheet, the Company and each Subsidiary has conducted its
business only in the ordinary course and there has not been any:
(a) change in its authorized or issued capital stock; grant of
any stock option or right to purchase shares of capital stock of
the Company or any Subsidiary; issuance of any security
convertible into such capital stock; grant of any purchase,
redemption or stock retirement rights, or any acquisition by the
Company or any Subsidiary of any shares of its capital stock; or
declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock;
(b) amendment to the Articles of Incorporation or Bylaws of
the Company or any Subsidiary;
(c) payment or increase by the Company or any Subsidiary of
any bonuses, salaries, or other compensation to any stockholder,
director, officer, or employee (except normal raises in the
ordinary course of business consistent with past practices), or
entry into any employment, severance, or similar contract with
any director, officer, or employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation,
savings, insurance, pension, retirement, or other employee
benefit plan for or with any employees of the Company or any
Subsidiary;
(e) damage to or destruction or loss of any material asset or
property of the Company or any Subsidiary, whether or not
covered by insurance;
(f) entry into, termination of, or receipt of notice of
termination of any material contract or any contract or
transaction involving a total remaining commitment by or to the
Company or any Subsidiary of at least $50,000;
(g) sale, lease, or other disposition of any material asset or
property of the Company or any Subsidiary, or mortgage, pledge,
or imposition of any lien or other encumbrance on any material
asset or property of the Company or any Subsidiary;
(h) material change in the accounting methods used by the
Company; or
(i) agreement, whether oral or written, by the Company or any
Subsidiary to do any of the foregoing.
3.16 CONTRACTS; NO DEFAULTS.
(a) Part 3.16 of the Company's Disclosure Letter contains a
complete and accurate list, and Sellers have delivered to TGI
true and complete copies, of:
(i) each contract that involves performance of services or
delivery of goods or materials by or to the Company or any
Subsidiary of an amount or value in excess of $50,000;
(ii) each lease, license, installment and conditional sale
agreement, and other contract affecting the ownership of,
leasing of, title to, use of, or any leasehold or other interest
in, any real or personal property;
(iii) each collective bargaining agreement and other contract
to or with any labor union or other employee representative or a
group of employees;
(iv) each joint venture, partnership, and other contract
involving a sharing of profits, losses, costs, or liabilities by
the Company or any Subsidiary with any other person;
(v) each contract containing covenants that in any way
purport to restrict the business activity of the Company or any
Subsidiary;
(vi) each power of attorney that is currently effective and
outstanding; and
(vii) each written warranty, guaranty, and or other similar
undertaking by the Company or any Subsidiary.
(b) Each contract identified or required to be identified in
Part 3.16 of the Company's Disclosure Letter is in full force
and effect and is valid and enforceable in accordance with its
terms. The Company and each Subsidiary is, and at all times has
been, in full compliance with all applicable terms and
requirements of each contract. Each third party to any contract
with the Company or any Subsidiary is, and at all times has
been, in full compliance with all applicable terms and
requirements of such contract. Neither the Company nor any
Subsidiary has given nor received notice from any other person
regarding any actual, alleged, possible, or potential violation
or breach of, or default under, any contract, and no default or
event of default has occurred thereunder.
3.17 INSURANCE.
(a) Sellers have delivered to TGI true and complete copies of
all insurance policies to which the Company or any Subsidiary is
a party or under which the Company or any Subsidiary is or has
been covered at any time within the three (3) years preceding
the date of this Agreement, and true and complete copies of all
pending applications for policies of insurance.
(b) All policies to which the Company or any Subsidiary is a
party or that provide coverage to either Seller, the Company,
any Subsidiary or any director or officer of the Company or any
Subsidiary (i) are valid, outstanding, and enforceable; (ii) are
issued by an insurer that is financially sound and reputable;
(iii) provide adequate insurance coverage for the assets and the
operations of the Company and the Subsidiaries for all risks
normally insured against in the Company's industry; (iv) will
continue in full force and effect following the consummation of
the Contemplated Transactions; and (v) except as set forth in
Part 3.17 of the Company's Disclosure Letter, do not provide for
any retrospective premium adjustment or other experienced-based
liability on the part of the Company or any Subsidiary.
(c) Neither Seller, the Company nor any Subsidiary has received
(i) any refusal of coverage or any notice that a defense will be
afforded with reservation of rights, or (ii) any notice of
cancellation or any other indication that any insurance policy
is no longer in full force or effect or will not be renewed or
that the issuer of any policy is not willing or able to perform
its obligations thereunder.
(d) The Company and each Subsidiary has paid all premiums due,
and has otherwise performed all of its obligations, under each
policy to which it is a party or that provides coverage to it.
The Company and each Subsidiary has given notice to the insurer
of all claims that may be insured thereby.
3.18 ENVIRONMENTAL MATTERS.
(a) The Company and each Subsidiary 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. Sellers
have no basis to expect, nor have Sellers or the Company or any
Subsidiary received, any actual or threatened order, notice, or
other communication from (i) any governmental body or private
citizen, or (ii) the current or prior owner or operator of any
facilities owned or leased by the Company or any Subsidiary, of
any actual or potential violation or failure to comply with any
Environmental Law.
(b) There are no above or underground storage tanks (except
two waste oil tanks which are maintained above ground at the
Groveland, Florida, facility), landfills, land deposits, or
dumps present on or at the facilities owned or leased by the
Company or any Subsidiary or, to the knowledge of the Sellers,
at any adjoining property, or incorporated into any structure
therein or thereon. Neither the Company nor any Subsidiary has
transported Hazardous Materials in the operation of its business.
(c) Sellers have delivered to TGI true and complete copies and
results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by Sellers, the Company or any Subsidiary
pertaining to Hazardous Materials in, on, or under the
facilities owned or leased by the Company or any Subsidiary.
3.19 EMPLOYEES; INDEPENDENT CONTRACTORS.
(a) Part 3.19 of the Company's Disclosure Letter contains a
complete and accurate list of (i) each employee or director of
the Company and each Subsidiary, including each employee on
leave of absence or layoff status, his or her job title, and
current compensation; and (ii) each independent contractor of
the Company and each Subsidiary, the type of services he or she
provides and their current compensation.
(b) No employee or, to the knowledge of the Sellers, no
independent contractor of the Company or any Subsidiary is a
party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee and any
other person ("Proprietary Rights Agreement") that in any way
adversely affects or will affect (i) the performance of his
duties to the Company or any Subsidiary, or (ii) the ability of
the Company or any Subsidiary to conduct its business.
(c) All persons rendering services to the Company or any
Subsidiary have been properly characterized and treated as
either employees or independent contractors, and neither the
Company nor any Subsidiary has received notice of, nor do
Sellers believe that, such treatment will be challenged by the
IRS or otherwise.
3.20 LABOR RELATIONS; COMPLIANCE.
(a) Neither the Company nor any Subsidiary has been nor is it
now a party to any collective bargaining or other labor
contract. There is not presently pending or existing, and there
is not threatened, (a) any strike, slowdown, picketing, work
stoppage, or employee grievance process, (b) any proceeding
against or affecting the Company or any Subsidiary relating to
the alleged violation of any applicable law pertaining to labor
relations or employment matters, including any charge or
complaint filed by an employee or union with the National Labor
Relations Board, the Equal Employment Opportunity Commission, or
any comparable governmental body, organizational activity, or
other labor or employment dispute against or affecting the
Company, or (c) any application for certification of a
collective bargaining agent. There is no lockout of any
employees by the Company or any Subsidiary, and no such action
is contemplated by the Company or any Subsidiary. The Company
and each Subsidiary has complied in all respects with all legal
requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security
and similar taxes, occupational safety and health, and plant
closing.
(b) The Company and each Subsidiary 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 Occupational Safety and Health
Law. Seller has no basis to expect, nor has Seller, the Company
or any Subsidiary received, any actual or threatened order,
notice, or other communication from any person of any actual or
potential violation or failure to comply with any Occupational
Safety and Health Law.
3.21 INTELLECTUAL PROPERTY.
(a) Intellectual Property Assets. The term "Intellectual
Property Assets" includes:
(i) the Company's and each Subsidiary's name, all fictional
business names, trade names, registered and unregistered
trademarks, service marks, and applications (collectively,
"Marks");
(ii) all patents, patent applications, and inventions and
discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and unpublished
works (collectively, "Copyrights"); and
(iv) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints (collectively,
"Trade Secrets"), owned, used, or licensed by the Company or any
Subsidiary.
(b) The Intellectual Property Assets are listed on Part 3.21
of the Disclosure Letter. The Company (directly or indirectly
through its Subsidiaries) owns all right, title, and interest
in and to each of the Intellectual Property Assets, free and
clear of all liens, security interests, charges, encumbrances,
equities, and other adverse claims, and has the right to use
without payment to a third party all of the Intellectual
Property Assets.
3.22 RELATIONSHIPS WITH RELATED PERSONS. Except as set forth
on Part 3.22 of the Company's Disclosure Letter, no Seller or
any related person or affiliate of Sellers or of the Company
has, or has had, any interest in any property used in the
Company's or any Subsidiary's business. No Seller or any
related person (i.e., a spouse, parent, child, sibling, niece,
nephew, grandparent, aunt, uncle or other familial relationship
by blood or marriage, or any entity owned or controlled by any
such person) or affiliate (i.e., an entity controlled by,
controlling or under common control) of any Seller or of the
Company is, or has owned, directly or indirectly, an equity
interest or any other financial or profit interest in, an entity
that has (i) had business dealings or a material financial
interest in any transaction with the Company or any Subsidiary;
or (ii) engaged in competition with the Company or any
Subsidiary with respect to any line of the products or services
of the Company or any Subsidiary. No Seller or any related
person or affiliate of Sellers or of the Company is a party to
any contract with the Company or any Subsidiary.
3.23 BROKERS OR FINDERS. Neither the Company, Sellers or their
respective agents have incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or
agents' commissions or other similar payment in connection with
this Agreement.
3.24 DISCLOSURE. No representation or warranty of Sellers in
this Agreement and no statement in the Company's Disclosure
Letter omits to state a material fact necessary to make the
statements herein or therein, in light of the circumstances in
which they were made, not misleading. There is no fact known to
Sellers that has specific application to any Seller, the Company
or any Subsidiary (other than general economic or industry
conditions) and that materially adversely affects or, as far as
either Seller can reasonably foresee, materially threatens, the
assets, business, prospects, financial condition, or results of
operations of the Company or any Subsidiary that has not been
set forth in this Agreement or the Disclosure Letter.
3.25 INVESTMENT REPRESENTATION. Each of the Sellers is
acquiring the shares of TGI for their own account and not with a
view to their distribution within the meaning of Section 2(11)
of the Securities Act. Each Seller understands that such shares
are "restricted stock" (which means such shares may not be sold
except pursuant to a registration statement or an exemption from
the registration requirements of federal and state securities
laws) and agrees not to sell, pledge, transfer, assign or
otherwise dispose of such shares (except as provided in Section
2.9 hereof and except in accordance with applicable federal and
state securities laws and regulations).
4. REPRESENTATIONS AND WARRANTIES OF TGI
TGI has delivered to Sellers, simultaneously herewith, the TGI
Disclosure Letter. TGI represents and warrants to Sellers as
follows:
4.1 ORGANIZATION AND GOOD STANDING. TGI is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Florida.
4.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of TGI, enforceable against TGI in accordance with
its terms. Upon the execution and delivery by TGI of the
Employment Agreements and the Promissory Notes and the equipment
leases referred to in Section 5.9 hereof, such agreements will
constitute the legal, valid, and binding obligations of TGI,
enforceable against TGI in accordance with their terms. TGI has
the absolute and unrestricted right, power, and authority to
execute and deliver this Agreement, the Employment Agreements,
the Promissory Notes and the equipment leases referred to in
Section 5.9 hereof and to perform its obligations hereunder and
thereunder.
(b) Neither the execution and delivery of this Agreement by
TGI nor the consummation or performance of any of the
Contemplated Transactions by TGI will give any person the right
to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to:
(i) any provision of TGI's Articles of Incorporation or
Bylaws;
(ii) any resolution adopted by the board of directors or the
stockholders of TGI;
(iii) any legal requirement, including applicable securities
laws, or order to which TGI may be subject; or
(iv) any contract to which TGI is a party or by which TGI may
be bound.
(c) Except as set forth in Schedule 4.2 hereto, TGI is not and
will not be required to obtain any consent from any person in
connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated
Transactions.
4.3 CERTAIN PROCEEDINGS. There is no pending proceeding that
has been commenced or threatened against TGI and that
challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise enjoining, any of the Contemplated
Transactions.
4.4 BROKERS OR FINDERS. Except as set forth in Schedule 4.4,
TGI and its officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in
connection with this Agreement.
4.5 SEC FILINGS. As of its filing date, each report or
statement filed by TGI pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), since December 31,
1996, including, without limitation, TGI's Annual Report on Form
10-K for the fiscal year ended December 31, 1996 (the "Form
10-K") and Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997 (the "Form 10'Qs") did not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were
made, not misleading. Other than changes with respect to the
June 30, 1997 Form 10-Q (which will not amend the reported
operating results with respect to the second quarter of fiscal
1997), since their respective filing dates, no event has
occurred which would result in TGI's being required to amend any
such reports.
5. COVENANTS
5.1 ACCESS AND INVESTIGATION. Between the date of this
Agreement and the Closing Date, Sellers will, and will cause the
Company and its representatives to, (a) afford TGI and its
representatives and prospective lenders and their
representatives (collectively, "TGI's Advisors") full and free
access to the Company's personnel, properties, contracts, books
and records, and other documents and data, (b) furnish TGI and
TGI's Advisors with copies of all such contracts, books and
records, and other existing documents and data as TGI may
reasonably request, and (c) furnish TGI and TGI's Advisors with
such additional financial, operating, and other data and
information as TGI may reasonably request.
5.2 OPERATION OF THE BUSINESSES OF THE COMPANY. Between the
date of this Agreement and the Closing Date, Sellers will, and
will cause the Company to: (a) conduct its business (including
the business of its Subsidiaries) only in the ordinary course;
and (b) use its best efforts to preserve intact the current
business organization of the Company and its Subsidiaries, keep
available the services of their current officers, employees, and
agents, and maintain the relations and good will with their
suppliers, customers, landlords, creditors, employees, agents,
and others having business relationships with the Company or any
Subsidiary.
5.3 NEGATIVE COVENANT. Except as otherwise expressly permitted
by this Agreement, between the date of this Agreement and the
Closing Date, Sellers will not, and will cause the Company and
each Subsidiary not to, without the prior consent of TGI, take
any affirmative action, or fail to take any reasonable action
within their or its control, as a result of which any of the
changes or events listed in Section 3.15 is likely to occur.
5.4 NOTIFICATION.
(a) Between the date of this Agreement and the Closing Date,
each Seller will promptly notify TGI in writing if such Seller
or the Company becomes aware of any fact or condition that
causes or constitutes a breach of any of Sellers'
representations and warranties as of the date of this Agreement,
or if such Seller or the Company becomes aware of the occurrence
after the date of this Agreement of any fact or condition that
would cause or constitute a breach of any such representation or
warranty had such representation or warranty been made as of the
time of occurrence or discovery of such fact or condition.
(b) Between the date of this Agreement and the Closing Date,
TGI will promptly notify the Company in writing if TGI becomes
aware of any fact or condition that causes or constitutes a
breach of any of TGI's representations and warranties as of the
date of this Agreement, or if TGI becomes aware of the
occurrence after the date of this Agreement of any fact or
condition that would cause or constitute a breach of any such
representation or warranty had such representation or warranty
been made as of the time of occurrence or discovery of such fact
or condition.
5.5 PAYMENT OF INDEBTEDNESS BY RELATED PERSONS. Sellers will
cause all indebtedness owed to the Company by any Seller or any
related person or affiliate of any Seller to be paid in full in
accordance with its terms, and in the event any such payment is
not made in full when due, Sellers agree to indemnify and hold
the Company and TGI harmless with respect thereto.
5.6 NO NEGOTIATION. Until such time, if any, as this Agreement
is terminated pursuant to Section 8, Sellers will not, and will
cause the Company and each of its representatives not to,
directly or indirectly solicit, initiate, or encourage any
inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any
unsolicited inquiries or proposals from, any person (other than
TGI) relating to any transaction involving the sale of the
business or assets of the Company, or any of the capital stock
of the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company.
5.7 BEST EFFORTS. Between the date of this Agreement and the
Closing Date, Sellers will use their best efforts to cause the
conditions in Section 6 to be satisfied.
5.8 ELECTION TO BOARD OF DIRECTORS. As soon as practicable
following the Closing, TGI shall cause the Board of Directors of
TGI to be increased, if necessary, and cause ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
to be elected to the Board.
5.9 ASSET LEASES. Between the date hereof and the Closing
Date, the Sellers will cause the Company to amend its existing
leases, or enter into appropriate leases, in either case, as and
in the manner mutually agreed upon by TGI and the Company, with
each of the following entities, all of which are owned and
controlled by the Seller: Wisconsin-Pacific Express, Inc.,
Cowboy Trucking Service, Inc., Magic Trucking Service, Inc.,
Florida Brothers Trucking Corp., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Management,
Inc., and PACT Real Estate of California, Inc., each of which
leases certain specific assets to the Company.
5.10 COMPANY DISCLOSURE LETTER. On or before August 22, 1997,
Sellers will deliver to TGI the Company's Disclosure Letter.
6. CONDITIONS PRECEDENT TO TGI'S OBLIGATION TO CLOSE
TGI's obligation to consummate the Merger and to take the other
actions required to be taken by TGI at the Closing is subject to
the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by TGI, in
whole or in part):
6.1 ACCURACY OF REPRESENTATIONS. All of Sellers'
representations and warranties in this Agreement must have been
accurate in all respects as of the date of this Agreement, and
must be accurate in all respects as of the Closing Date as if
made on the Closing Date, without giving effect to any
supplement to the Company's Disclosure Letter.
6.2 SELLERS' PERFORMANCE. All of the covenants and obligations
that the Company and the Sellers are required to perform or to
comply with pursuant to this Agreement at or prior to the
Closing must have been duly performed and complied with in all
respects. The Company and TGI shall have agreed upon, and shall
execute and deliver at Closing, the lease agreements referred to
in Section 5.9 hereof.
6.3 CONSENTS. Each of the consents identified in Part 3.2 of
the Company's Disclosure Letter, and each consent identified in
Schedule 4.2, must have been obtained and must be in full force
and effect.
6.4 ADDITIONAL DOCUMENTS. Each of the following documents must
have been delivered to TGI:
(a) an opinion of counsel to the Company and the Sellers,
dated the Closing Date, in form acceptable to TGI; and
(b) such other documents as TGI may reasonably request for the
purpose of (i) enabling its counsel to provide the opinion
referred to in Section 7.4(a); (ii) evidencing the accuracy of
any of Sellers' representations and warranties; (iii) evidencing
the performance by either Seller of, or the compliance by either
Seller with, any covenant or obligation required to be performed
or complied with by such Seller; (iv) evidencing the
satisfaction of any condition referred to in this Section 6; or
(v) otherwise facilitating the consummation or performance of
any of the Contemplated Transactions.
6.5 NO PROCEEDINGS. Since the date of this Agreement, there
must not have been commenced or threatened against TGI or Seller
or the Company, or against any person affiliated with TGI or
Seller or the Company, any proceeding (a) involving any
challenge to, or seeking damages or other relief in connection
with, any of the Contemplated Transactions, or (b) that may have
the effect of preventing, delaying, or making illegal, any of
the Contemplated Transactions.
6.6 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. There
must not have been made or threatened by any person any claim
asserting that such person (a) is the holder or the beneficial
owner of, or has the right to acquire or to obtain beneficial
ownership of, any stock of, or any other voting, equity, or
ownership interest in, the Company or any Subsidiary, or (b) is
entitled to all or any portion of the merger consideration.
6.7 TGI FINANCING. TGI shall have obtained financing for its
obligations hereunder on terms and conditions acceptable to
TGI's Board of Directors.
6.8 DISCLOSURE LETTER. TGI shall be satisfied in its sole
discretion with the results of its due diligence investigation
of the Company and the contents of the Company's Disclosure
Letter to be delivered to TGI not later than August 22, 1997.
7. CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
The Company's obligation to consummate the Merger and to take
the other actions required to be taken by the Company or the
Sellers at the Closing is subject to the satisfaction, at or
prior to the Closing, of each of the following conditions (any
of which may be waived by the Company, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS. All of TGI's representations
and warranties in this Agreement must have been accurate in all
respects as of the date of this Agreement and must be accurate
in all respects as of the Closing Date as if made on the Closing
Date.
7.2 TGI'S PERFORMANCE. All of the covenants and obligations
that TGI is required to perform or to comply with pursuant to
this Agreement at or prior to the Closing must have been
performed and complied with in all respects. The Company and
TGI shall have agreed upon, and shall execute and deliver at
Closing, the lease agreements referred to in Section 5.9 hereof.
7.3 CONSENTS. Each of the consents identified in Part 3.2 of
the Disclosure Letter must have been obtained and must be in
full force and effect.
7.4 ADDITIONAL DOCUMENTS. TGI must have caused the following
documents to be delivered to Sellers:
(a) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC, dated
the Closing Date, in form acceptable to Seller; and
(b) such other documents as Sellers may reasonably request for
the purpose of (i) enabling their counsel to provide the opinion
referred to in Section 6.4(a); (ii) evidencing the accuracy of
any representation or warranty of TGI; (iii) evidencing the
performance by TGI of, or the compliance by TGI with, any
covenant or obligation required to be performed or complied with
by TGI; (iv) evidencing the satisfaction of any condition
referred to in this Section 7; or (v) otherwise facilitating the
consummation of any of the Contemplated Transactions.
7.5 NO PROCEEDINGS. Since the date of this Agreement, there
must not have been commenced or threatened against TGI or Seller
or the Company, or against any person affiliated with TGI or
Seller or the Company, any proceeding (a) involving any
challenge to, or seeking damages or other relief in connection
with, any of the Contemplated Transactions, or (b) that may have
the effect of preventing, delaying, or making illegal, any of
the Contemplated Transactions.
8. TERMINATION
8.1 TERMINATION EVENTS. This Agreement may, by notice given
prior to or at the Closing, be terminated:
(a) by either TGI or the Company if a material breach of any
provision of this Agreement has been committed by the other
party and such breach has not been waived;
(b) (i) by TGI if any of the conditions in Section 6 has not
been satisfied as of the Closing Date or if satisfaction of such
a condition is or becomes impossible (other than through the
failure of TGI to comply with its obligations under this
Agreement) and TGI has not waived such condition on or before
the Closing Date; or (ii) by Sellers, if any of the conditions
in Section 7 has not been satisfied of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other
than through the failure of Sellers to comply with their
obligations under this Agreement) and Sellers have not waived
such condition on or before the Closing Date;
(c) by mutual consent of TGI and Sellers; or
(d) by either TGI or Sellers if the Closing has not occurred
(other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations
under this Agreement) on or before September 30, 1997, or such
later date as the Parties may agree upon.
8.2 EFFECT OF TERMINATION. Each Party's right of termination
under Section 8.1 is in addition to any other rights it may have
under this Agreement or otherwise. If this Agreement is
terminated pursuant to Section 8.1, all further obligations of
the Parties under this Agreement will terminate, except that the
obligations in Sections 10.1 and 10.3 will survive.
9. INDEMNIFICATION; REMEDIES
9.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE. All representations, warranties, covenants, and
obligations in this Agreement, the Company's Disclosure Letter,
the supplements to the Company's Disclosure Letter, the
certificate delivered pursuant to Section 2.4(a)(vi),
2.4(b)(iii) and any other certificate or document delivered
pursuant to this Agreement will survive the Closing. The right
to indemnification, payment of Damages (as defined below) or
other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any
investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether
before or after the execution and delivery of this Agreement or
the Closing Date, with respect to the accuracy or inaccuracy of
or compliance with, any such representation, warranty, covenant,
or obligation.
9.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS.
Sellers, jointly and severally, will indemnify and hold harmless
TGI, the Company, and their respective representatives,
stockholders, controlling persons, and affiliates (collectively,
the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not
involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by
Sellers in this Agreement, the Company's Disclosure Letter, the
supplements to the Company's Disclosure Letter, or any other
certificate or document delivered by Sellers or the Company
pursuant to this Agreement;
(b) any breach by Sellers or the Company of any covenant or
obligation in this Agreement;
(c) any product shipped or manufactured by, or any services
provided by, the Company or any Subsidiary prior to the Closing
Date; or
(d) any claim by any person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such person with
either Seller or the Company (or any person acting on their
behalf) in connection with any of the Contemplated Transactions.
The remedies provided in this Section 9.2 will not be exclusive
of or limit any other remedies that may be available to TGI or
the other Indemnified Persons.
9.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY TGI. TGI will
indemnify and hold harmless Sellers, and will pay to Sellers the
amount of any Damages (as defined in 9.2 above) arising,
directly or indirectly, from or in connection with (a) any
breach of any representation or warranty made by TGI in this
Agreement or in any certificate delivered by TGI pursuant to
this Agreement, (b) any breach by TGI of any covenant or
obligation of TGI in this Agreement, or (c) any claim by any
person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to
have been made by such person with TGI (or any person acting on
its behalf) in connection with any of the Contemplated
Transactions.
9.4 LIMITATIONS. If the Closing occurs, Sellers will have no
liability (for indemnification or otherwise) with respect to any
representation or warranty other than those in Sections 3.3,
3.10, 3.12, 3.18 and 3.19, unless on or before the third (3rd)
anniversary of the Closing Date TGI notifies Sellers of a claim
specifying the factual basis of that claim in reasonable detail
to the extent then known by TGI. A claim with respect to
Section 3.3, or a claim for indemnification or reimbursement
based upon any covenant or obligation to be performed and
complied with prior to the Closing Date, may be made at any
time. A claim with respect to Sections 3.10, 3.12, 3.18 or 3.19
may be made at any time prior to the expiration of the
applicable statute of limitations for the cause of action giving
rise to such Damages. If the Closing occurs, TGI will have no
liability (for indemnification or otherwise) with respect to any
representation or warranty, unless on or before the third (3rd)
anniversary of the Closing Date Sellers notify TGI of a claim
specifying the factual basis of that claim in reasonable detail
to the extent then known by Sellers. Neither Party shall have
any liability for a claim hereunder unless the amount of Damages
claimed equals or exceeds $5,000.
9.5 ESCROW. At the Closing, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ will deposit
100,000 shares of TGI's Common Stock that are issued to her in
the Merger (the "Escrow Shares") with a bank or trust company
located within the State of Georgia which will act as an escrow
agent (the "Escrow Agent"), who will hold the Escrow Shares in
escrow as collateral for the indemnification obligations of the
Sellers under this Agreement. The Escrow Shares will be
released to ▇▇. ▇▇▇▇▇▇ on the first (1st) anniversary of the
date hereof, if no indemnification claims are then outstanding
and will serve as security for the Sellers' indemnity
obligations as set forth in the Escrow Agreement.
9.6 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.
(a) Promptly after receipt by an Indemnified Person of notice
of the commencement of any proceeding against it, such
Indemnified Person will, if a claim is to be made against an
indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim, but the
failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any
Indemnified Person, except to the extent that the indemnifying
party demonstrates that the defense of such action is prejudiced
by the Indemnified Person's failure to give such notice.
(b) If any proceeding referred to in Section 9.6(a) is brought
against an Indemnified Person and it gives notice to the
indemnifying party of the commencement of such proceeding, the
indemnifying party will, unless the claim involves taxes, be
entitled to participate in such proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a
party to such proceeding and the Indemnified Person determines
in good faith that joint representation would be inappropriate,
or (ii) the indemnifying party fails to provide reasonable
assurance to the Indemnified Person of its financial capacity to
defend such proceeding and provide indemnification with respect
to such proceeding), to assume the defense of such proceeding
with counsel satisfactory to the Indemnified Person and, after
notice from the indemnifying party to the Indemnified Person of
its election to assume the defense of such proceeding, the
indemnifying party will not, as long as it diligently conducts
such defense, be liable to the Indemnified Person under this
Section 9 for any fees of other counsel or any other expenses
with respect to the defense of such proceeding, in each case
subsequently incurred by the Indemnified Person in connection
with the defense of such proceeding, other than reasonable costs
of investigation. If the indemnifying party assumes the defense
of a proceeding, (i) it will be conclusively established for
purposes of this Agreement that the claims made in that
proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims
may be effected by the indemnifying party without the
Indemnified Person's consent unless (A) there is no finding or
admission of any violation of applicable laws or any violation
of the rights of any person and no effect on any other claims
that may be made against the Indemnified Person, and (B) the
sole relief provided is monetary damages that are paid in full
by the indemnifying party; and (iii) the Indemnified Person will
have no liability with respect to any compromise or settlement
of such claims effected without its consent. If notice is given
to an indemnifying party of the commencement of any proceeding
and the indemnifying party does not, within ten (10) days after
such notice is given, give notice to the Indemnified Person of
its election to assume the defense of such proceeding, the
indemnifying party will be bound by any determination made in
such proceeding or any compromise or settlement effected by the
Indemnified Person. Notwithstanding the foregoing, the filing
of an answer or taking any other action required by the
indemnifying party in order to preserve the rights of the
Indemnified Party due to a filing deadline shall not in itself
constitute its election to assume the defense of a claim
hereunder.
(c) Notwithstanding the foregoing, if an Indemnified Person
determines in good faith that there is a reasonable probability
that a proceeding may adversely affect it or its affiliates
other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the
Indemnified Person may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such
proceeding, but the indemnifying party will not be bound by any
determination of a proceeding so defended or any compromise or
settlement effected without its consent (which may not be
unreasonably withheld).
(d) Sellers hereby consent to the non-exclusive jurisdiction
of any court in which a proceeding is brought against any
Indemnified Person for purposes of any claim that an Indemnified
Person may have under this Agreement with respect to such
proceeding or the matters alleged therein, and agree that
process may be served on Sellers with respect to such a claim
anywhere in the world.
9.7 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim
may be asserted by notice to the party from whom indemnification
is sought.
10. GENERAL PROVISIONS
10.1 EXPENSES. Each Party to this Agreement will bear its
respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the
Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants.
10.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated
Transactions will be issued at such time and in such manner as
mutually agreed, except TGI may make such disclosures as it
deems necessary to comply with applicable securities laws.
Unless consented to by TGI in advance or required by applicable
law, prior to the Closing Sellers shall, and shall cause the
Company to, keep this Agreement strictly confidential and may
not make any disclosure of this Agreement to any person.
Sellers and TGI will mutually agree upon the means by which the
Company's employees, customers, and suppliers and others having
dealings with the Company will be informed of the Contemplated
Transactions, and TGI will have the right to be present for any
such communication.
10.3 CONFIDENTIALITY. Between the date of this Agreement and
the Closing Date, TGI and Sellers will maintain in confidence,
and will cause the directors, officers, employees, agents, and
advisors of TGI and the Company to maintain in confidence, any
written information stamped "confidential" when originally
furnished by another party in connection with this Agreement or
the Contemplated Transactions, unless (a) such information is
already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available
through no fault of such party, (b) the use of such information
is necessary or appropriate in making any filing or obtaining
any consent or approval required for the consummation of the
Contemplated Transactions, or (c) the furnishing or use of such
information is required by or necessary or appropriate in
connection with legal proceedings. If the Contemplated
Transactions are not consummated, each party will return as much
of such written information and all copies as the other party
may reasonably request.
10.4 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will
be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to
the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party
may designate by notice to the other parties):
Sellers: If to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to any of the trusts listed on Schedule 1 to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
In any case
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
TGI: Transit Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: G. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
10.5 JURISDICTION; SERVICE OF PROCESS. Any action or
proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought by TGI
against any of the other Parties in the courts of the State of
Georgia, County of ▇▇▇▇, or, if it has or can acquire
jurisdiction, in the United States District Court for the
Northern District of Georgia, and any action or proceeding
seeking to enforce any provision of, or based on any right
arising out of this Agreement, may be brought by Sellers against
TGI in the courts of the State of Florida, County of Lake, or if
it can acquire jurisdiction, in the United States District Court
for the Middle District of Florida. Each of the Parties
consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding
and waives any objection to venue laid therein. Process in any
action or proceeding referred to in the preceding sentence may
be served on any party anywhere in the world.
10.6 FURTHER ASSURANCES. The Parties agree (a) to furnish upon
request to each other such further information, (b) to execute
and deliver to each other such other documents, and (c) to do
such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of
this Agreement and the documents referred to in this Agreement.
10.7 WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the
failure nor any delay by any Party in exercising any right,
power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement or the documents referred to
in this Agreement can be discharged by one Party, in whole or in
part, by a waiver or renunciation of the claim or right unless
in writing signed by the other Parties; (b) no waiver that may
be given by a Party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand
on one Party will be deemed to be a waiver of any obligation of
such Party or of the right of the Party giving such notice or
demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this
Agreement.
10.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement
supersedes all prior agreements between the parties with respect
to its subject matter (including the Letter of Intent between
TGI and Sellers dated May 22, 1997, as extended) and constitutes
(along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement
executed by the Party to be charged with the amendment.
10.9 DISCLOSURE LETTER. The disclosures in the Company's
Disclosure Letter, and those in any supplement thereto, relate
only to the representations and warranties in the Section of the
Agreement to which they expressly refer. In the event of any
inconsistency between the statements in the body of this
Agreement and those in the Company's Disclosure Letter (other
than an exception expressly set forth as such in the Company's
Disclosure Letter with respect to a specifically identified
representation or warranty), the statements in the body of this
Agreement will control.
10.10 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. No
Party may assign any of its rights under this Agreement without
the prior consent of the other Parties. Subject to the
preceding sentence, this Agreement will apply to, be binding in
all respects upon, and inure to the benefit of the successors
and permitted assigns of the Parties. Nothing expressed or
referred to in this Agreement will be construed to give any
person other than the Parties to this Agreement any legal or
equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement
and all of its provisions and conditions are for the sole and
exclusive benefit of the Parties to this Agreement and their
successors and assigns.
10.11 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction,
the other provisions of this Agreement will remain in full force
and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
10.12 SECTION HEADINGS, CONSTRUCTION. The headings of Sections
in this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement
will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
10.13 TIME OF ESSENCE. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of
the essence.
10.14 GOVERNING LAW. This Agreement will be governed by the
laws of the State of Florida without regard to conflicts of laws
principles.
10.15 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an
original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same
agreement.
[EXECUTION SET FORTH ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
"TGI":
TRANSIT GROUP, INC.
f/k/a General Parcel Service, Inc.
BY:____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
THE "COMPANY":
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ GROUP, INC.
BY:____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
SELLERS:
__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
EXECUTION CONTINUED ON FOLLOWING PAGE]
[EXECUTION CONTINUED FROM PREVIOUS PAGE]
__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TRUST FOR ▇▇▇▇ ▇. ▇▇▇▇▇▇
BY: ____________________________________
____________________________, Trustee
TRUST FOR ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
BY: ____________________________________
____________________________, Trustee
TRUST FOR ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
BY: ____________________________________
____________________________, Trustee
TRUST FOR ▇▇▇▇ ▇. ▇▇▇▇▇▇
BY: ____________________________________
____________________________, Trustee
[EXECUTION CONTINUED ON FOLLOWING PAGE]
[EXECUTION CONTINUED FROM PREVIOUS PAGE]
TRUST FOR ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
BY: ____________________________________
____________________________, Trustee
TRUST FOR ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
BY: ____________________________________
____________________________, Trustee
TRUST FOR ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
BY: ____________________________________
_____________________________, Trustee
SCHEDULE 1 TO
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ GROUP, INC.
AGREEMENT AND PLAN OF REORGANIZATION
I. Additional Sellers: (Recitals p.1)
Trust for ▇▇▇▇ ▇. ▇▇▇▇▇▇
Trust for ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Trust for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Trust for ▇▇▇▇ ▇. ▇▇▇▇▇▇
Trust for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Trust for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Trust for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇. Allocation of Stock and Note Consideration
Number of Shares Dollar Amount
Name of TGI Common Stock of Promissory Note
------------------ ----------------------- --------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,459,755 $ 750,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 590,871 375,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 590,871 375,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 590,871 375,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 590,871 375,000
Trust for ▇▇▇▇ ▇. ▇▇▇▇▇▇ 49,061 --
Trust for ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ 49,061 --
Trust for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 49,061 --
Trust for ▇▇▇▇ ▇. ▇▇▇▇▇▇ 49,061 --
Trust for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 49,061 --
Trust for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 49,061 --
Trust for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 49,061 --
----------- -----------
4,166,666 $ 2,250,000
=========== ===========
SCHEDULE 2 TO
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ GROUP, INC.
AGREEMENT AND PLAN OF REORGANIZATION
Number of Number of
Dollar Value of Shares Redeemable Shares Redeemable
Name Redeemable Shares During Initial Period During Second Period
---------------------- --------------------- --------------------- --------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $ 2,102,048 138,889 445,014
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 992,150 138,889 136,708
(including the trusts
for ▇▇▇▇ ▇. ▇▇▇▇▇▇ &
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 992,150 138,889 136,708
(including the trusts
for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇ ▇. ▇▇▇▇▇▇)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 921,502 138,889 117,084
(including the trust
for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 992,150 138,889 136,708
(including the trusts --------------- ------------- --------------
for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇)
$6,000,000 694,445 972,222