ASSET PURCHASE AGREEMENT, dated as of March 7, 2001, among SUREWAY
WORLDWIDE, LLC, a New York limited liability company (the "Purchaser") and
wholly owned subsidiary of Global Delivery Systems, LLC, a New York limited
liability company ("GDS"), GDS, SUREWAY AIR TRAFFIC CORPORATION (the "Seller"),
a New York corporation and wholly owned subsidiary of CD&L, Inc., a Delaware
corporation ("CD&L"), and CD&L.
W I T N E S S E T H:
WHEREAS, the Seller is engaged in the next flight out air delivery
business and other related national and international ground and air delivery
services (the "Business"); and
WHEREAS, the Seller desires to sell and transfer to the Purchaser, and
the Purchaser desires to purchase the Purchased Assets and assume the Assumed
Liabilities from the Seller, all as more specifically provided herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound, the Seller, CD&L, GDS and the
Purchaser agree as follows:
ARTICLE I
Certain Definitions
Section 1.1 Certain Definitions. As used in this Agreement, the
following terms have the respective meanings set forth below.
"Affiliate" of any Person means any other Person that Controls, is
Controlled by, or is under common Control with such Person.
"Agreement" means this Asset Purchase Agreement.
"Assumed Liabilities" means (i) all Liabilities of the Seller other
than Excluded Liabilities and (ii) all liabilities of CD&L incurred for the
benefit of the Seller and which CD&L liabilities are set forth on Schedules 3.8,
3.9 or 3.10. Assumed Liabilities include, but are not limited to all liabilities
under the Leases for the Leased Premises, all liabilities due to employees or
former employees of Seller pursuant to Section 5.2, all liabilities under the
Equipment Leases, software licenses included as part of the Purchased Assets or
others which are set forth on Schedule 3.10, all Liabilities under the vehicle
finance arrangements described on Schedule 3.7, Liabilities to be paid after
Closing for the claims listed on Schedule 3.19 (as further set forth in Section
7.4), all Liabilities under agreements with franchisees or joint venturers as
listed on Schedule 3.24 and all Liabilities under any contracts with customers,
suppliers, airlines or other third parties assigned to the Purchaser
notwithstanding any language in such contracts or agreements which prohibits
assignment or conditions assignment on consent or other condition.
"Balance Sheet Date" means December 31, 2000.
"Business Day" means a day, other than a Saturday or Sunday, on which
commercial banks in New York are open for the general transaction of business.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations issued thereunder.
"Control" means the direct or indirect power affirmatively to direct
the management and policies of a Person, whether through the ownership of voting
securities, by agreement or otherwise. "Controls," "Controlled" and
"Controlling" shall have corresponding meanings.
"Encumbrance" means any lien, security interest, mortgage, pledge,
conditional sales agreements, charges, claims, options, conditions, easements,
restrictions of record or other encumbrance of any kind or nature whatsoever.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way to
any Environmental Law or any permit issued under any such Environmental Law,
(for purposes of this definition, "Claims") including, without limitation (i)
any and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims, by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local statute, law,
rule, regulation, ordinance, code, guideline, policy or rule of common law in
effect and in each case as amended as of the date hereof and the Closing Date,
and any judicial or administrative interpretation thereof as of the date hereof
and the Closing Date, including any judicial or administrative order, consent
decree or judgment, relating to the environment, health safety or Hazardous
Materials, including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section
9601 et seq.; the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Section 6901 et seq.; the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 ▇.▇.▇.▇▇. 2601
et seq.; the Clean Air Act, 42 ▇.▇.▇.▇▇. 7401 et seq.; the Safe Drinking Water
Act, 42 ▇.▇.▇.▇▇. 300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C.ss.2701
et seq; and their state and local counterparts and equivalents.
"Equipment Leases" means any and all leases of personal property as to
which the Seller is the lessee, or as to which CD&L is the lessee but as to
which the equipment is principally used by the Seller and which are listed in
Schedule 3.8, and any immaterial lease properly excluded from Schedule 3.8
including vehicle leases under $25,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" means the following assets of the Seller, none of
which shall be a part of the Purchased Assets:
(a) Tax Returns and tax records of the Seller and all rights of
the Seller to any claims for any federal, state, local or
foreign tax refunds relating to the operation of the
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Business or the ownership of the Purchased Assets during
periods prior to the Closing Date, but only to the extent such
claims for refunds are excluded for purposes of calculating
Net Asset Value;
(b) All books, files, papers and records (including without
limitation, minute books and stock transfer records) relating
solely to general corporate affairs of the Seller and any
records or instruments relating solely to Excluded Assets
(provided, however, that the Seller may maintain a copy of any
such records which CD&L or it need); and
(c) All rights under any insurance policies maintained by Seller
or by CD&L on behalf of Seller and all rights to
reimbursements, refunds or prepaid insurance premiums from any
insurance companies or under any insurance policies maintained
by the Seller or by CD&L on behalf of the Seller;
(d) All cash and cash equivalents;
(e) Intercompany Assets; and
(f) permits that are non-transferable under applicable law.
"Excluded Liabilities" shall mean each of the following, each of which
shall remain the sole obligation and responsibility of the Seller, its
Affiliates or predecessors, as applicable:
(a) Liabilities in respect of Taxes, or any reporting requirement
or estimated Tax payable with respect thereto resulting from
or with respect to the Purchased Assets prior to the Closing,
except to the extent such Tax liability is included for
purposes of calculating Net Asset Value;
(b) any Intercompany Debts;
(c) any liabilities for overdrawn bank accounts, if any (subject
to uncleared checks being dealt with in Section 2.4);
(d) all liabilities under ERISA at the Closing Date that arise
from CD&L's 401(k) plan;
(e) the liability of (i) CD&L to the Trust created under Paragraph
Third of the Last Will and Testament of ▇▇▇▇▇▇▇ Gold (the
"Trust") dated February 16, 1999 in the original principal
amount of $1,650,000 issued puruant to the Gold Wings
Agreement, (ii) the Seller to such Trust for the earn-out
pursuant to Section 2.4 of an Asset Purchase Agreement dated
as of February 16, 1999 among CD&L, the Seller, the Trust,
▇▇▇▇▇▇▇ ▇▇▇▇ and certain other parties (the "Gold Wings
Agreement"), and (iii) any other liability of the Seller or
CD&L to ▇▇▇▇▇▇▇ ▇▇▇▇, the Trust or an Affiliate of theirs
related to the Gold Wings Agreement annexed
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as Schedule 1.1(e), each issued in consideration for the
purchase of the Gold Wings business in February 1999; and
(f) any liability of the Seller to indemnify the Purchaser
pursuant to Article VIII hereof.
"GAAP" means generally accepted United States accounting principles,
applied on a consistent basis throughout the respective periods.
"Governmental Authority" means any national, federal, state,
provincial, county, municipal or local government, foreign or domestic, or the
government of any political subdivision of any of the foregoing, or any entity,
authority, agency, ministry or other similar body exercising executive,
legislative, judicial, regulatory or administrative authority or functions of or
pertaining to government, including any authority or other quasi-governmental
entity established to perform any of such functions.
"Hazardous Materials" means (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(ii) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," or words of similar import, under any applicable
Environmental Law; and (iii) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any governmental authority.
"Intercompany Assets" means any indebtedness for borrowed money of CD&L
or any of its Affiliates owed to the Seller or any other amounts owed to the
Seller by CD&L or any of its Affiliates.
"Intercompany Debt" means any indebtedness for borrowed money of the
Seller owed to CD&L or any of its Affiliates and any guarantees or obligations
by the Seller of any indebtedness of CD&L or to reimburse CD&L or any of its
Affiliates under any letter of credit or similar obligation, and any interest,
fee, prepayment premium and other amount payable in respect thereof; provided,
however, that checks issued by Seller which have not cleared CD&L's accounts by
the close of business on the Closing Date shall not be "Intercompany Debt".
"Laws" means any law, statute, code, treaty, rule, directive, plan,
regulation, promulgation, decree, ruling, injunction or order of any
Governmental Authority, or any common law principle, doctrine or judgment
relating thereto or interpreting the application thereof.
"Leases" means the real estate leases of the Leased Premises.
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"Liability" means any liability, obligation, loss or contingency,
whether known or unknown, asserted or unasserted, absolute or conditional,
accrued or unaccrued, liquidated or unliquidated, and whether due or to become
due, regardless of when asserted or arising.
"Losses" means any and all losses, damages or expenses (including,
without limitation, reasonable attorneys' fees and expenses incurred in
connection therewith).
"Net Asset Value" means the book value of the Purchased Assets, less
the book value of the Assumed Liabilities, each as determined in accordance with
GAAP and in a manner consistent with the policies and principles used by the
Seller in connection with the preparation of the Financial Statements.
"Permits" means all material licenses, permits, waivers and other
governmental authorizations currently in existence for the conduct of the
operations of the Seller and its subsidiaries, including material fuel permits,
operating authorities (including any necessary DOT or ICC operating
authorities), state operating licenses or registrations and other interstate or
intrastate regulatory licenses or authorizations.
"Person" means an individual, partnership, corporation, joint stock
company, unincorporated organization or association, trust or joint venture, or
a governmental agency or political subdivision thereof.
"Purchased Assets" means all of the right, title and interest in and to
all of the tangible and intangible assets owned by Seller, except the Excluded
Assets, including without limitation the following:
(a) the list of customers of the Seller (the "Customer List");
(b) all books, records, files and papers relating to the customers
on the Customer List;
(c) computer and other equipment used in the Business that the
Seller has identified on Schedule 1.1(c), (or assignment of
any listed computer leases); (d) all computer software and
licenses used in the Business that are proprietary to the
Seller or that the Seller has the right to transfer (the
"Seller Software"), including but not limited to the Seller's
rights in any software under development by Computer
Associates for the Seller pursuant to an agreement dated
February 19, 1999, as amended (the "CA Software");
(e) if and to the extent transferable, all authorizations,
consents, approvals, licenses, orders, permits, exemptions of,
filings or registrations with, any Governmental Authority
which are necessary or desirable to conduct the Business;
(f) all real estate and equipment leases, including those listed
on Schedules 3.8 and 3.9;
(g) all accounts receivable except Intercompany Assets;
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(h) the machinery and equipment and business machines,
automobiles, trucks, trailers, fork-lift trucks and other
vehicles, furniture, fixtures, office equipment, leasehold
improvements, supplies, capital improvements in process, tools
and all other tangible personal property employed in the
conduct of the Business and owned by the Seller, including the
vehicles listed on Schedule 1.1(h-v) and the machinery,
equipment and furniture listed on Schedule 1.1(h-m);
(i) all inventories, including supplies and packaging and shipping
materials;
(j) all subsidiaries or interests in joint ventures or
partnerships (which subsidiaries are listed on
Schedule 1.1(j));
(k) all contract rights, including contracts with franchisees,
subject to all obligations in connection therewith or related
thereto;
(l) all trademarks, service marks, trademark and service ▇▇▇▇
registrations and applications therefor, trade names and logos
owned by Seller and using the "Sureway" name as shown on
Schedule 1.1(l) (Purchaser shall have no right to use the
"CD&L" name or any variation or derivation therefrom);
(m) all of the Seller's right and interest in any agreement
pursuant to which a Person has agreed not to compete with the
Business or the Seller or not to solicit any employees or
customers of the Seller (provided that if both CD&L and Seller
have rights under such an agreement, the assignment to
Purchaser shall not diminish the rights of CD&L and its
Affiliates in any such agreement, and both Purchaser and CD&L
may enforce rights under such an agreement against such
Person);
(n) all of the Seller's right and interest in any agreement
pursuant to which a Person has received information of a
confidential or proprietary nature from the Seller pertaining
to the Business and such Person is restrained from further
disseminating such information, including any of Seller's
rights, to the extent assignable, pursuant to a
confidentiality agreement dated January 24, 2001 with Quick
International, Inc. (provided that if both CD&L and Seller
have rights under such an agreement, the assignment to
Purchaser shall not diminish the rights of CD&L and its
Affiliates in any such agreement, and both Purchaser and CD&L
may enforce rights under such agreement against such Person);
(o) all prepaid expenses and deposits, except insurance deposits,
tax expenses and those other deposits listed on
Schedule 1.1(o); and
(p) all telephone and facsimile numbers in the name of the Seller
and used in the Business.
"Representative" of any Person means any of the officers, directors,
employees, shareholders, partners, members, agents, advisors and representatives
of such Person and the heirs, executors, successors or assigns of the foregoing.
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"Seller Property" means any real property and improvements leased by
the Seller.
"Straddle Period" means any Tax Period of the Seller that begins before
and ends on or after the Closing Date.
"Tax" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated or other tax
of any kind whatsoever, including any interest, penalty or addition thereto,
whether disputed or not.
"Tax Period" means any taxable year or any other period that is treated
as a taxable year with respect to which any Tax may be imposed under any
applicable statute, rule or regulation.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
Section 1.2 Cross References. The following terms shall have the
meaning assigned to such term in the respective section.
Assumption Agreement...........................6.1 Leased Premises................................3.9
▇▇▇▇ of Sale...................................6.1 Note...........................................2.3
Business..................................Recitals Permitted Encumbrances.........................3.7
CA Software...............def. of Purchased Assets Proceeding.....................................8.2(a)
Closing Date...................................2.8 Proprietary Rights.............................3.16
Closing........................................2.8 Purchase Price.................................2.2
Confidentiality Agreement......................5.1 Required Consents..............................3.4
Employee Benefit Plan..........................3.11 Survival Period................................8.1
Financial Statements...........................3.12 Seller Employee................................3.11
Guarantees.....................................5.10 Seller Software...........def. of Purchased Assets
Indemnified Party..............................8.2(c) Third-Party Claim..............................8.3
Indemnifying Party.............................8.2(c)
Intellectual Property..........................3.16
Section 1.3 Interpretation. Unless otherwise indicated to the contrary
herein by the context or use thereof: (i) the words, "herein," "hereto,"
"hereof" and words of similar import refer to this Agreement as a whole and not
to any particular Section or paragraph hereof; (ii) words importing the
masculine gender shall also include the feminine and neutral genders, and vice
versa; and (iii) words importing the singular shall also include the plural, and
vice versa.
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ARTICLE II
Purchase and Sale of Assets; Assumption of Liabilities
Section 2.1 Purchase and Sale of Assets and Assumption of Liabilities.
Upon the terms and subject to the conditions of this Agreement at the Closing,
the Seller shall sell, assign, transfer, convey and deliver to the Purchaser all
of the Seller's right, title and interest in and to the Purchased Assets free
and clear of any and all Encumbrances and the Purchaser shall purchase such
Purchased Assets from the Seller and assume the Assumed Liabilities.
Section 2.2 Purchase Price. The total purchase price (the "Purchase
Price") to be paid by the Purchaser for the Purchased Assets shall be the sum of
THIRTEEN MILLION, SIX HUNDRED FIFTY THOUSAND DOLLARS ($13,650,000), but
increased pursuant to Section 2.4 below.
Section 2.3 Payment of Purchase Price. The Purchase Price shall be
payable as follows: (a) One Hundred Twenty Five Thousand ($125,000) Dollars in
cash by wire transfer to Seller on the date this Agreement is signed, (b) Twelve
Million Twenty Five Thousand ($12,025,000) Dollars in cash by wire transfer to
Seller on the Closing Date and (c) One Million Five Hundred Thousand
($1,500,000) Dollars by delivery of a non-negotiable (but assignable)
subordinated promissory note of Purchaser, with GDS as guarantor (consistent
with the financing referenced in Section 5.15) with a five (5)-year term bearing
interest at the rate of ten percent (10%) per annum, payable interest-only
monthly with all principal and accrued but unpaid interest due at maturity. The
Note shall be substantially in the form of Exhibit A (the "Note") subject to
Section 5.15
Section 2.4 Adjustment of Purchase Price. (a) At the Closing, the
Seller shall deliver to the Purchaser a list of all checks issued by Seller
which have not cleared CD&L's accounts prior to Closing and which checks if and
when cleared would satisfy or reduce the Assumed Liabilities. From the date
hereof until the Closing Date, the Seller and CD&L shall use best efforts to
cause the aggregate amount of such checks to be less than $500,000. The Seller
shall permit Representatives of the Purchaser to observe and consult in the
issuance of checks to pay accounts payable from the date hereof through the
Closing Date and to observe and consult about the payee, timing and amount of
payment for accounts payable; provided that such consultation and observation
rights do not interfere with the operation of the Seller's business in the
ordinary course. The Seller and CD&L will permit all of such checks to be
honored and paid; provided, however, that the $13.65 million Purchase Price will
be increased by a sum equal to the aggregate amount of such checks.
(b) The increase to the Purchase Price pursuant to Section
2.4(a) shall be paid by increasing the principal amount of the Note, provided
that if the aggregate increase under Section 2.4(a) increases the Purchase Price
by more than $500,000, the Purchaser and/or GDS shall promptly pay to CD&L the
excess above $500,000 in cash. Failure to make such payment shall be an event of
default under the Note. (For example, if the aggregate amount of the uncleared
checks is $600,000, then $500,000 shall be added to the principal amount of the
Note
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so that the Note shall be in the principal amount of $2.0 million, and $100,000
shall be immediately paid by the Purchaser or GDS to CD&L.)
Section 2.5 Assumption of Liabilities and Leases. The Purchaser hereby
agrees to assume all of the Assumed Liabilities. The Purchaser and the Seller at
the Closing shall enter into written assignments and a general assumption
agreement as set forth in Exhibit B. The Purchaser and GDS shall use reasonable
commercial efforts prior to the Closing to obtain all necessary consents from
any lessor or third party for such assumptions of Leases and other agreements
and to cause all lessors and third parties to release the Seller (and CD&L, if
CD&L is a guarantor) from being responsible on each lease or other agreement
that is a Purchased Asset or Assumed Liability, it being understood that the
Purchaser shall not be required to pay any amount to obtain such release other
than amounts due under the lease or agreement for obligations arising subsequent
to the Closing (other than Assumed Liabilities). If the Purchaser and GDS are
unable to obtain any such consents and releases prior to the Closing, they shall
continue to use commercially reasonable efforts to obtain such consents and
releases after Closing, and indemnify, defend and hold CD&L and the Seller
harmless from and against all liabilities thereunder or related thereto.
Section 2.6 Secured Creditor. Other than Permitted Encumbrances, First
Union Commercial Credit Corporation holds the only Lien on the Purchased Assets,
which Lien shall be released at Closing. The Seller, CD&L and the Purchaser
agree to provide First Union with all agreements and documents reasonably
requested by First Union to effect this transaction and to release such Lien. At
the Closing, the Seller shall provide the Purchaser with evidence of the release
of such Lien.
Section 2.7 Allocation of the Purchase Price. The Purchase Price shall
be allocated as set forth in Schedule 2.7 hereto or as hereafter agreed by the
parties in good faith. The Purchaser and the Seller shall use such allocation in
filing its respective Internal Revenue Service Form 8594.
Section 2.8 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of White & Case, LLP,
1155 Avenue of the Americas, New York, New York on or before March 21, 2001 (the
"Closing Date"). The Closing shall be effective as of 11:59 p.m. on the Closing
Date.
ARTICLE III
Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser as follows:
Section 3.1 Organization and Qualification of the Seller. The Seller is
a corporation duly organized, validly existing and in good standing under the
laws of the State of New York, with full power and authority, corporate and
other, to own or lease its property and assets and to carry on the Business as
presently conducted.
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Section 3.2 Authorization. The Seller has full power and authority,
corporate and other, to execute and deliver this Agreement, the instruments of
transfer and other documents referred to herein and to perform its obligations
hereunder and thereunder, all of which have been duly authorized by all
requisite corporate action. Each of this Agreement and each such instrument of
transfer has been or, at the time of delivery will be, duly authorized, executed
and delivered by the Seller and constitutes or, at the time of delivery will
constitute, a valid and binding obligation of the Seller enforceable against the
Seller in accordance with its terms.
Section 3.3 No Conflict. Neither the execution and delivery of this
Agreement by the Seller, nor the performance by the Seller of its obligations
hereunder, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's or any of the Seller's subsidiaries'
Certificate of Incorporation, By-Laws, any Law applicable to it, any of its
subsidiaries or any of their respective properties or assets, or any order,
writ, injunction, judgment or decree of any Governmental Authority or any
arbitration award applicable to it, any of its subsidiaries or any of their
respective properties or assets.
Section 3.4 No Contract Conflict. Subject to obtaining the consents
required under Section 2.6 above and listed in Schedule 3.4 (the "Required
Consents"), neither the execution and delivery of this Agreement by the Seller,
nor the performance by the Seller of its obligations hereunder, will conflict
with, result in a breach of, or constitute a default (or an event that, with
notice or lapse of time, or both, would constitute a default) under, or give
rise to any right of termination, cancellation or acceleration, result in the
creation of any material Encumbrance upon any of the Purchased Assets or require
any authorization, consent, approval, exemption or other action by or notice to
any court or other Governmental Authority or any other Person under (i) any of
the terms, conditions or provisions of any material indenture, lease, mortgage,
loan agreement, contract or other agreement to which the Seller or any of its
Affiliates is bound or that constitutes a Purchased Asset or (ii) any material
permit, law, rule or regulation of any Governmental Authority, or any judgment,
order, writ, injunction or decree of any court, arbitrator or Governmental
Authority to which the Seller or any of its subsidiaries may be subject.
Section 3.5 Litigation. Except as set forth on Schedules 3.5 or 3.19,
there is no action, suit or proceeding pending or, to the Seller's knowledge,
threatened against the Seller before any Governmental Authority.
Section 3.6 No Consents. Except as set forth on Schedule 3.6, no notice
to, filing with, or authorization, registration, consent or approval of any
Governmental Authority or other Person is necessary for the execution, delivery
or performance of this Agreement or the consummation of the transactions
contemplated hereby by the Seller.
Section 3.7 Title to Purchased Assets; Encumbrances. Except as set
forth in Schedule 3.7 and except for such properties and assets that have been
sold or otherwise disposed of in the ordinary course of business, all Purchased
Assets are either owned by the Seller or leased under an agreement indicated on
Schedule 3.8. The Seller has good and valid title in and to all of its property
reflected in the Balance Sheet, all assets purchased by the Seller and its
subsidiaries
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since the Balance Sheet Date and all Purchased Assets, other than assets that
the Seller or its subsidiaries have disposed of in the ordinary course of
business since the Balance Sheet Date, subject to no Encumbrances except for (i)
Encumbrances reflected in the Financial Statements, (ii) Encumbrances for
current taxes, assessments or governmental charges or levies on property not yet
due and delinquent, (iii) Encumbrances arising by operation of law (iv)
Encumbrances arising under the Equipment Leases, (v) purchase money lien on
assets acquired after the Balance Sheet Date and (vi) Encumbrances described in
Schedule 3.7 (Encumbrances of the types described in clauses (i), (ii), (iii),
(iv), (v) and (vi), "Permitted Encumbrances").
Section 3.8 Personal Property. The Seller has delivered to the
Purchaser, true copies of current leases for all material personal property used
in the operation of the Business and for material equipment leased by the Seller
or its subsidiaries, excluding motor vehicle leases under $25,000 per annum and
incurred in the ordinary course of business, which are listed on Schedule 3.8.
Schedule 3.8 also lists material assets leased by the Seller (including its
subsidiaries) from any Affiliate of the Seller. All leases set forth on Schedule
3.8 are in full force and effect and constitute valid and binding agreements of
the parties (and their successors) thereto in accordance with their respective
terms.
All machinery, equipment, furniture, fixtures and other personal
property used in the business of the Company is accepted by Purchaser in an "AS
IS" condition. ALL WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURCHASE OR USE ARE EXCLUDED, DISCLAIMED AND
NEGATED.
Section 3.9 Leases and Real Property. The Seller has delivered true and
complete copies of its leases for real property to the Purchaser (the "Leased
Premises"), all of which are listed on Schedule 3.9. Neither the Seller nor any
landlord is in default on such lease, and the Seller has not received notice
that it is in default under any such lease, and, to the knowledge of the Seller,
there exists no event, occurrence, condition or act (including the consummation
of the transactions contemplated hereby) that, with the giving of notice, lapse
of time or happening of any event or condition would become a default by the
Seller. The Seller has paid all rents and costs due to each landlord through the
date hereof and shall continue to do so and to comply with all other terms and
conditions of the Leases through the Closing Date. The Seller owns no real
property.
Section 3.10 Material Customers, Contracts and Commitments. Except as
set forth in Schedule 3.9 and Schedule 3.10, the Seller does not have nor is
bound by (i) any agreement, contract or commitment that involves the performance
of services or the delivery of goods and/or materials by the Seller of an amount
or value in the aggregate in excess of $25,000, (ii) any agreement, contract or
commitment not in the ordinary course of business, (iii) any agreement, contract
or commitment relating to capital expenditures in excess of $25,000, (iv) any
agreement, indenture or instrument relating to indebtedness, liability for
borrowed money or the deferred purchase price of property in excess of $25,000
(excluding trade payables in the ordinary course of business), (v) any loan or
advance to, or investment in, any Person, any agreement, contract or commitment
relating to the making of any such loan, advance or investment or any
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agreement, contract or commitment involving a share of profits, (vi) any
management service, consulting or any other similar contract, (vii) any
agreement, contract or commitment limiting the ability of the Seller to engage
in the Business or to compete with any Person, or (viii) any warranty, guaranty,
or other similar undertaking with respect to contractual performance extended by
the Seller other than in the ordinary course of business. Except as set forth on
Schedule 3.10, each contract or agreement set forth thereon is in full force and
effect and, to the knowledge of Seller, there exists no material default or
event of default thereunder.
Section 3.11 Employment Matters; No Collective Bargaining Agreement.
(a) Set forth on Schedule 3.11(a) is a complete and accurate
list, as of the date of this Agreement, of (i) all of the employees of Seller
("Seller Employees"), including each such Seller Employees' current rate of
compensation and title. Except as described on Schedule 3.11(a), all Seller
Employees are actively at work (or on vacation) and no Seller Employee is
currently on a leave of absence, layoff, suspension, sick leave, workers
compensation, short or long term disability, family leave, military leave, or
otherwise not actively performing his or her work during all normally scheduled
business hours (other than vacation).
(b) The Seller has not entered into any collective bargaining
agreements with respect to the Seller Employees, and to the best of Seller's
knowledge, (i) there is no labor strike, dispute, slowdown or work stoppage or
lockout pending or threatened against or affecting the Business, (ii) no union
organization campaign is in progress with respect to any of the Seller
Employees, and (iii) there is no unfair labor practice, charge or complaint
pending or threatened against the Seller arising out of the conduct of the
Business.
(c) Schedule 3.11(c) contains a list of all "employee benefit
plans" (as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) and any other material plan, contract, or
other benefit or compensation arrangement, including all bonus, stock option,
stock purchase, deferred compensation plans or arrangements and other employee
fringe benefit plans, maintained, sponsored or contributed to or participated
in, by Seller or any of its affiliates for the benefit of any Seller Employee or
any former employee of Seller (to the extent that any former employee is
eligible for, or is being provided, benefits thereunder as of the Closing) (each
of the foregoing being herein called an "Employee Benefit Plan"). Seller has
delivered to Purchaser true copies of (i) each Employee Benefit Plan, and any
amendments thereto, and (ii) the most recent determination letter issued by the
Internal Revenue Service with respect to any Employee Benefit Plan.
(d) Except as otherwise set forth in Schedule 3.5, there are
no actions or claims existing or pending (other than routine claims for
benefits) or threatened with respect to any Employee Benefit Plan that could
have an effect on the transaction contemplated by this Agreement, and Seller has
not been notified of any audit or investigation of an Employee Benefit Plan by
any governmental entity that could effect this transaction, result in liability
to the Purchaser or result in the imposition of a lien or other claim against
any of the assets of the Business.
-12-
(e) No Employee Benefit Plan is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code. There are no multiemployer plans
(as defined in ERISA Section 4001(a)(3)) to which Seller or any ERISA Affiliate
is or has been required to make a contribution or other payment with respect to
the Seller Employees or the Business. "ERISA Affiliate" means any entity trade
or business that would be treated as under common control with Seller or as a
member of a controlled group including any Seller within the meaning of Section
414 of the Code or Section 4001 of ERISA. Since 1996, neither the Seller or any
ERISA Affiliate has ever maintained or contributed to any such employee benefit
plan subject to Section 302 or Title IV of ERISA or Section 412 of the Code or
that is a multiemployer plan.
(f) The Seller and each ERISA Affiliate has paid and
discharged promptly when due all liabilities and obligations arising under ERISA
or the Code of a character which if unpaid or unperformed could result in the
imposition of a lien or any other claim against any of the Purchased Assets.
(g) Except as described on Schedule 3.11(g), or as otherwise
provided in this Agreement, assuming each Seller Employee is hired by the
Purchaser immediately after the Closing as required by this Agreement,
(regardless of whether such employment is thereafter continued), the sale of the
Purchased Assets contemplated by this Agreement in and of itself will not: (i)
entitle any Seller Employee to severance pay, unemployment compensation or
similar payment; (ii) increase the amount of compensation payable to any Seller
Employee; or (iii) entitle any Seller Employee to an "excess parachute payment"
within the meaning of Section 280G of the Code.
Section 3.12 Financial Statements. Set forth on Schedule 3.12 is a copy
of the Seller's unaudited balance sheet as of December 31, 2000 and the related
unaudited statement of earnings and cash flows for the twelve-month period then
ended (collectively, the "Financial Statements"). The Financial Statements have
been prepared in conformity with GAAP consistently applied and present fairly
the financial condition and results of operations of the Seller as of and for
the periods included therein. Except as would not have a material adverse effect
on the condition of the Seller and its subsidiaries taken as a whole, the Seller
has no outstanding claims, liabilities or indebtedness, contingent or otherwise,
except as set forth in the Financial Statements or in the Schedules to this
Agreement, other than liabilities to trade creditors incurred subsequent to the
Balance Sheet Date in the ordinary course of business not involving borrowings
by the Seller.
Section 3.13 Governmental Authorizations. Except as described on
Schedule 3.13, the Business has been operated in compliance in all material
respects with all applicable laws, rules, regulations, codes, ordinances,
orders, policies and guidelines of all Governmental Authorities. The Seller has
all material permits, licenses, approvals, certificates, titles, fuel permits,
franchises, operating authorities, state operating licenses or registrations and
other interstate or intrastate regulatory licenses and other authorizations
(listed on Schedule 3.13), and has made all notifications, registrations,
certifications and filings with all Governmental Authorities, necessary for the
operation of the Business as currently conducted by the Seller, except for those
which, individually or in the aggregate could not reasonably be expected to
result in a material adverse
-13-
effect on the Seller. There is no action, case or proceeding pending or, to the
Seller's knowledge, threatened by any Governmental Authority with respect to (i)
any alleged violation by the Seller of any law, rule, regulation, code,
ordinance, order, policy or guideline of any Governmental Authority, or (ii) any
alleged failure by the Seller to have any permit, license, approval,
certification or other authorization required in connection with the operation
of the Business.
Section 3.14 Taxes. Except as set forth on Schedule 3.14 hereto:
(a) All Tax Returns required to be filed by the Seller with
any governmental authority on or prior to the Closing Date by or with respect to
Seller and/or its business, operations and/or assets have been timely filed,
except Tax Returns for which requests for extensions have been timely filed and
all such filed Tax Returns are true, complete and correct in all material
respects. Following the Closing Date, the Seller will timely file all Tax
Returns required to be filed with any governmental authority after the Closing
Date with respect to the Seller and/or its business, operations and/or assets
for any Straddle Period and Taxable Period that ends prior to the Closing Date
but the Tax Return for which is not due (whether because of extensions or
otherwise) until after the Closing Date.
(b) The Seller has timely and fully paid (i) all Taxes
required to have been paid by it prior to the Closing Date including with
respect to its business, operations and/or assets (including the Purchased
Assets) whether or not required to be shown on any Tax Return and (ii) all Taxes
shown as due and payable on any Tax Return referred to in Section 3.14(a) that
is or was required to be filed on or prior to the Closing Date.
(c) The Seller has established adequate reserves on its books
and records for all Taxes of its business and/or in respect of any of its assets
(including any of the Purchased Assets) for which it is liable that could result
in liability to the Purchaser or any of its members or Affiliates or that could
affect any of the Purchased Assets or have a material adverse effect on the
Purchaser, any of its members or Affiliates or any of the Purchased Assets.
(d) There are no federal, state, local or foreign audits,
examinations, inquiries or other administrative or court proceedings or actions
presently pending or, to the knowledge of the Seller, threatened or contemplated
by any governmental authority with regard to any Tax Returns or Taxes of the
Seller or in respect of the Seller's business, operations and/or assets
(including any of the Purchased Assets).
(e) There are no liens for any Taxes on any of the Purchased
Assets or other assets of the Seller's business.
(f) The Seller has withheld from each payment to any of its
officers, directors, employees, creditors or to any other Person all amounts
which it is or was required by the laws to which it is subject to withhold or
deduct, has timely remitted all amounts so withheld or deducted to the proper
recipients thereof in the manner required by such laws and has made adequate
provision in its books for all such amounts which it is not yet required to
remit.
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(g) To the Seller's knowledge, no claim has ever been received
from an authority in a jurisdiction where the Seller does not file Tax Returns
that it is or may be subject to taxation by that jurisdiction.
Section 3.15 Brokers. The Seller has not retained, and has no
obligation to, any broker, investment banker or other Person entitled to any
commission or similar compensation in connection with this Agreement or the
transactions contemplated by this Agreement.
Section 3.16 Permits and Intangibles. (a) Set forth on Schedule 3.16(a)
is an accurate list of all licenses, permits and other governmental
authorizations held by the Seller or any of its subsidiaries material to the
conduct of its business, including permits, titles, fuel permits, licenses,
operating authorities (including ICC operating authorities), state operating
licenses or registrations and other interstate or intrastate regulatory licenses
and other governmental authorizations and certificates owned or held by the
Seller or any of its subsidiaries, copies of which have been provided to the
Purchaser if requested. The licenses, permits and other governmental
authorizations listed on Schedule 3.16(a) are valid, and neither the Seller nor
any of its subsidiaries has received any notice that any Governmental Authority
intends to cancel, terminate or not renew any such license, permit or other
governmental authorization. The Seller and its subsidiaries hold all licenses,
permits and other governmental authorizations the absence of any of which would
have a material adverse effect on the Business. The Seller and its subsidiaries
have conducted and are conducting the Business in substantial compliance with
the requirements, standards, criteria and conditions set forth in applicable
permits, licenses, orders, approvals, variances, rules and regulations and are
not violation of any of the foregoing that would have a material adverse effect
on the Business. Neither the US Department of Transportation (the "DOT") nor any
state regulatory agency has issued the Seller or any subsidiary a safety rating
of "unsatisfactory."
(b) The Seller's and its subsidiaries' material patents,
patent registrations, patent applications, trademarks, service marks, trademark
and service ▇▇▇▇ registrations and applications therefor, copyrights, copyright
registrations, copyright applications, trade names and corporate names (the
"Intellectual Property") are listed on Schedule 3.16. Except as disclosed on
Schedule 3.16, (i) the Seller and its subsidiaries own and possess all right,
title and interest in the Intellectual Property and permits, licenses or other
agreements to or from third parties regarding the Intellectual Property and (ii)
the Seller and its subsidiaries own and possess all right, title and interest in
the Seller's technology, inventions, computer software and programs, data and
documentation (including electronic media), product drawings, trade secrets,
know-how, customer lists, processes, other intellectual property and proprietary
information or rights, or permits, licenses or other agreements to or from third
parties regarding the foregoing (collectively with the Intellectual Property,
the "Proprietary Rights"). The transactions contemplated by this Agreement will
have no material adverse effect on the Seller's or any of its subsidiaries'
right, title and interest in the Proprietary Rights.
(c) No claim by any third party contesting the validity,
enforceability, use or ownership of any Proprietary Right has been made, is
currently pending or, to the Seller's knowledge, is threatened. To the knowledge
of the Seller, neither it nor any of its subsidiaries
-15-
has received any notice of, nor is any of them aware of any fact that indicates
a likelihood of, any infringement or misappropriation by, or conflict with, any
third party with respect to any of the Proprietary Rights. To the knowledge of
the Seller, neither it nor any of its subsidiaries has infringed,
misappropriated or otherwise conflicted with any rights of any third parties,
nor is the Seller aware of any infringement, misappropriation or conflict that
will occur as a result of the continued operation of the Business.
(d) ALL SELLER SOFTWARE INCLUDING THE CA SOFTWARE IS
TRANSFERRED "AS IS" AND ANY AND ALL WARRANTIES AS TO THE SELLER SOFTWARE,
INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE OR USE ARE HEREBY SPECIFICALLY EXCLUDED, DISCLAIMED AND NEGATED. THE
SELLER HEREBY DISCLAIMS ANY WARRANTY (1) REGARDING THE ACCURACY OR COMPLETENESS
OF THE SELLER SOFTWARE OR (II) THAT THE SELLER SOFTWARE IS APPROPRIATE FOR THE
BUSINESS PURPOSES OR THAT IT IS ERROR-FREE. PURCHASER ACKNOWLEDGES THAT THE
DEVELOPMENT OF THE CA SOFTWARE IS NOT COMPLETE AND MAY NEVER BE COMPLETE AND
THAT IT IS OF SUCH COMPLEXITY THAT IT MAY HAVE INHERENT DEFECTS.
Section 3.17 Environmental Laws and Regulations. Except as set forth in
Schedule 3.17, to the knowledge of the Seller:
(a) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Seller Property by
Seller;
(b) Hazardous Materials have not at any time been released by
Seller on any Seller Property;
(c) The Seller and its subsidiaries are in material compliance
with all Environmental Laws and the requirements of any permits issued under
such Environmental Laws with respect to any Seller Property; and
(d) There are no past, pending or threatened Environmental
Claims against the Seller or any of its subsidiaries;
Section 3.18 Material Customers, Contracts and Commitments. The Seller
has delivered to the Purchaser an accurate list, which is set forth on Schedule
3.18, of (i) all material customers (i.e. those customers and persons or
entities affiliated with those customers representing 5% or more of the Seller's
2000 revenues) and (ii) all material contracts, commitments and similar
agreements to which the Seller is a party or by which it is bound, including,
but not limited to, contracts with material customers, joint venture or
partnership agreements, contracts with any labor organizations, loan agreements,
indemnity or guaranty agreements, bonds, mortgages, options to purchase land,
liens, pledges or other security agreements, contracts restricting the Seller
and its subsidiaries from doing business in any areas or in any way limiting
competition, contracts which call for aggregate payments by the Seller and its
subsidiaries in excess of $25,000 and that are not terminable without cost or
liability on notice of 45 days or less, contracts
-16-
requiring the Seller or its subsidiaries to perform services for others over a
period in excess of 90 days from the date of such contract and all commitments
to enter into any such contracts, leases or obligations, (a) as of the Balance
Sheet Date and (b) entered into since the Balance Sheet Date, and in each case
has delivered or made available true copies of such agreements to the Purchaser.
Except to the extent set forth on Schedule 3.18, since the Balance Sheet Date,
(i) none of the Seller's material customers have canceled or substantially
reduced or, to the knowledge of the Seller, are currently attempting or
threatening to cancel or substantially reduce their level of business with the
Seller and (ii) the Seller has substantially complied with all material
commitments and obligations pertaining to it, and is not in default under any
such contracts and agreements and no notice of default has been received.
Section 3.19 Insurance. The Seller has delivered to the Purchaser an
accurate list, which is set forth on Schedule 3.19, as of the date hereof, of
all insurance policies carried by the Seller and its subsidiaries and has
delivered to the Purchaser an accurate list of all insurance loss runs or
workmen's compensation claims received since January 1, 1997 (which is annexed
to Schedule 3.19). The Seller has previously provided to the Purchaser true
copies of all policies currently in effect. Such insurance policies are
currently in full force and effect shall remain in full force and effect through
the Closing Date.
Section 3.20 Government Contracts. Except as set forth on Schedule
3.20, the Seller is not a party to any governmental contracts subject to price
redetermination or renegotiation.
Section 3.21 Absence of Changes. Since the Balance Sheet Date, except
as set forth on Schedule 3.21 there has not been:
(i) any material adverse change in the business, financial
condition or results of operations of the Seller and the its
subsidiaries taken as a whole;
(ii) any damage, destruction or loss (whether or not covered
by insurance) that has had a material adverse effect on the business,
financial condition or results of operations of the Seller and its
subsidiaries taken as a whole;
(iii) any material increase in the compensation, bonus, sales
commissions or fee arrangement payable or to become payable by the
Seller to any of its officers, directors, stockholders, employees,
consultants or agents (except for ordinary and customary bonuses and
salary increases for employees in accordance with past practice);
(iv) any work interruptions or to the Seller's knowledge,
labor grievances or claims filed that has had a material adverse effect
on the business, financial condition or results of operations of the
Seller;
(v) any sale or transfer, or any agreement to sell or
transfer, any material assets, property or rights of the Seller to any
person;
(vi) any plan, agreement or arrangement granting any
preferential rights to purchase or acquire any interest in any of the
material assets, property or rights of the
-17-
Seller (including its subsidiaries) or requiring consent of any party
to the transfer and assignment of any such assets, property or rights;
(vii) any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any material property, rights or
assets outside of the ordinary course of the Seller's business;
(viii) any cancellation of indebtedness owed to the Seller by
any non-Affiliate or any other waiver of any material rights or claims
of the Seller; provided that the Seller may negotiate and adjust bills
in the course of good faith disputes with customers in a manner
consistent with past practice;
(ix) any dividend, advance or loan to CD&L or any of its
Affiliates;
(x) any material breach, amendment or termination of any
material contract, agreement, license, permit or other right to which
the Seller is a party; or
(xi) to the Seller's knowledge, any material transaction by
the Seller outside the ordinary course of its business.
Section 3.22 [Intentionally Omitted]
Section 3.23 Services. Schedule 3.23 sets forth is a list of all
material services currently provided by the Seller to an Affiliate of the
Seller, or by an Affiliate of the Seller to the Seller on a continuing basis in
respect of the Business. No such services will be continued after the closing
except pursuant to the Transition Services Agreement.
Section 3.24 Authorized Dealers. Schedule 3.24 to this Agreement lists
all franchise/dealership agreements the Seller has entered into, or is in the
process of entering into, wherein the Seller or any of its subsidiaries is the
franchisor or principal. The Seller has provided to each franchisee or dealer
under the agreements listed on Schedule 3.24 all information regarding the
Seller required to be delivered pursuant to the applicable franchise or
dealership agreement, has made all filings and has taken all steps required to
comply with the applicable federal and state laws and regulations covering such
arrangements. The Seller is not in default under any franchise or dealership
agreement. Except as listed on Schedule 3.24, the Seller is not a franchisor or
franchisee under any contract or agreement.
Section 3.25 Affiliate Contracts. Schedule 3.25 sets forth a true and
complete list of all contracts between the Seller and any Affiliate of the
Seller relating to the Business.
Section 3.26 Accounts Receivable. Except for the Excluded Assets, all
accounts and notes receivable of the Seller represent or will represent valid
obligations arising from sales actually made in the ordinary course of business,
and to Seller's knowledge, are not being contested, subject to reserves.
-18-
ARTICLE IIIA
Representations and Warranties of CD&L
CD&L represents and warrants to the Purchaser as follows:
Section 3A.1 Organization. CD&L is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with full power and authority, corporate and other, to own or lease its property
and assets and to carry on its business as presently conducted.
Section 3A.2 Authorization. CD&L has full power and authority,
corporate and other, to execute and deliver this Agreement and other documents
referred to herein and to perform its obligations hereunder and thereunder, all
of which have been duly authorized by all requisite corporate action. This
Agreement has been duly authorized, executed and delivered by CD&L and
constitutes a valid and binding obligation of CD&L enforceable against CD&L in
accordance with its terms.
Section 3A.3 No Conflict. Neither the execution and delivery of this
Agreement by CD&L, nor the performance by CD&L of its obligations hereunder,
will conflict with or result in a breach of any of the terms, conditions or
provisions of CD&L's or any of CD&L's subsidiaries' (other than the Seller)
Certificate of Incorporation, By-Laws, any Law applicable to it, any of its
subsidiaries or any of their respective properties or assets, or any order,
writ, injunction, judgment or decree of any Governmental Authority or any
arbitration aware applicable to it, any of its subsidiaries or any of their
respective properties or assets.
Section 3A.4 No Contract Conflict. Subject to the Seller's obtaining
the Required Consents, neither the execution and delivery of this Agreement by
CD&L, nor the performance by CD&L of its obligations hereunder, will conflict
with, result in a breach of, or constitute a default (or an event that, with
notice or lapse of time, or both, would constitute a default) under, or give
rise to any right of termination, cancellation or acceleration, result in the
creation of any material Encumbrance upon any of the material assets of CD&L or
require any authorization, consent, approval, exemption or other action by or
notice to any court or other Governmental Authority or any other Person under
(i) any of the terms, conditions or provisions of any material indenture, lease,
mortgage, loan agreement, contract or other agreement to which CD&L or any of
its Affiliates is bound or (ii) any material permit, law, rule or regulation of
any Governmental Authority, or any judgment, order, writ, injunction or decree
of any court, arbitrator or Governmental Authority to which CD&L or any of its
subsidiaries (including the Seller) may be subject.
Section 3A.5 Litigation. Except as set forth on Schedule 3.5 or with
respect to litigation being defended by CD&L's insurance carriers, there is no
action, suit or proceeding pending or, to CD&L's knowledge, threatened against
CD&L, that would be reasonably likely to interfere with CD&L's ability to
consummate this Agreement or the transactions contemplated hereby.
-19-
Section 3A.6 No Consents. Except as set forth on Schedule 3.6, no
notice to, filing with, or authorization, registration, consent or approval of
any Governmental Authority or other Person is necessary for the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby by CD&L.
Section 3A.7 Ownership of the Seller. CD&L owns one hundred percent
(100%) of the issued and outstanding capital stock of the Seller.
Section 3A.8 Brokers. CD&L has not retained, and has no obligation to,
any broker, investment bank or other Person entitled to any commission or
similar compensation in connection with this Agreement or the transactions
contemplated by this Agreement.
ARTICLE IV
Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Seller as follows:
Section 4.1 Organization. The Purchaser is a limited liability
corporation duly organized, validly existing and in good standing under the laws
of the State of New York and has full power and authority, corporate and other,
to own its properties and assets and to carry on its business as presently
conducted.
Section 4.2 Authorization. The Purchaser has full power and authority,
corporate and other, to execute and deliver this Agreement and to perform its
obligations hereunder, all of which have been duly authorized by all requisite
corporate action. This Agreement, has been duly authorized, executed and
delivered by the Purchaser and constitutes a valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
Section 4.3 No Conflict. Neither the execution and delivery of this
Agreement by the Purchaser, nor the consummation by the Purchaser of the
transactions contemplated hereby, will conflict with or result in a breach of
any of the terms, conditions or provisions of the Purchaser's membership
agreement or other organizational instruments, any Law applicable to it, any of
its Affiliates or any of their respective properties or assets, or any order,
writ, injunction, judgment or decree of any Governmental Authority or any
arbitration award applicable to it, any of its Affiliates or any of their
respective properties or assets, that would be reasonably likely to have a
material adverse effect on the Purchaser or to interfere with the Purchaser's
ability to consummate this Agreement or the transactions contemplated hereby.
Section 4.4 No Contract Conflict. Neither the execution and delivery of
this Agreement by the Purchaser, nor the consummation by the Purchaser of the
transactions contemplated hereby or thereby will conflict with, or result in a
breach or give rise to a default or violation on the Purchaser's or any of its
Affiliate's part under any obligation, lease, license, agreement, contract,
plan, or other arrangement, which would be reasonably likely to have a material
adverse
-20-
effect on the Purchaser or to interfere with the Purchaser's ability to
consummate this Agreement or the transactions contemplated hereby or thereby.
Section 4.5 Litigation. There is no action, suit or proceeding pending
or, to the Purchaser's knowledge, threatened against or affecting the Purchaser
or any of its Affiliates or any of their respective properties or assets, at law
or in equity, or before any Governmental Authority, which would be reasonably
likely to have a material adverse effect on the Purchaser or to interfere with
the Purchaser's ability to execute and deliver this Agreement or consummate the
transactions contemplated hereby.
Section 4.6 No Consents. No notice to, filing with, or authorization,
registration, consent or approval of any Governmental Authority or other Person
is necessary for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby by the Purchaser.
Section 4.7 Purchaser's Financial Capacity. No bankruptcy proceedings
are pending or contemplated by or, to the Purchaser's knowledge, threatened
against the Purchaser.
Section 4.8 Access to Information. The Purchaser has had an opportunity
to discuss the business, condition, management and financial affairs of the
Seller with its management, and the opportunity to review the properties,
operations, liabilities, obligations, books, accounts, records, contracts and
documents of the Seller. The Purchaser has not relied on any representations,
statements or warranties of Seller, its agents or employees except as
specifically set forth in this Agreement.
Section 4.9 Brokers. Except for ▇▇▇▇▇▇ & ▇▇▇▇▇▇, whose fees and
expenses are the obligation of the Purchaser and GDS, the Purchaser has not
retained, and has no obligation to, any broker, investment banker or other
Person entitled to any commission or similar compensation in connection with
this Agreement or the transactions contemplated by this Agreement.
ARTICLE IVA
Representations and Warranties of GDS
GDS represents and warrants to the Seller as follows:
Section 4A.1 Organization. GDS is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
New York, with full power and authority, corporate and other, to own or lease
its property and assets and to carry on its business as presently conducted.
Section 4A.2 Authorization. GDS has full power and authority, corporate
and other, to execute and deliver this Agreement and other documents referred to
herein and to perform its obligations hereunder and thereunder, all of which
have been duly authorized by all requisite corporate action. This Agreement has
been duly authorized, executed and delivered by GDS and
-21-
constitutes a valid and binding obligation of GDS enforceable against GDS in
accordance with its terms.
Section 4A.3 No Conflict. Neither the execution and delivery of this
Agreement by GDS, nor the performance by GDS of its obligations hereunder, will
conflict with or result in a breach of any of the terms, conditions or
provisions of GDS's or any of GDS's Subsidiaries' (other than the Purchaser)
Certificate of Formation, Operating Agreement, any Law applicable to it, any of
its subsidiaries or any of their respective properties or assets, or any order,
writ, injunction, judgment or decree of any Governmental Authority or any
arbitration aware applicable to it, any of its subsidiaries or any of their
respective properties or assets.
Section 4A.4 No Contract Conflict. Neither the execution and delivery
of this Agreement by GDS, nor the performance by GDS of its obligations
hereunder, will conflict with, result in a breach of, or constitute a default
(or an event that, with notice or lapse of time, or both, would constitute a
default) under, or give rise to any right of termination, cancellation or
acceleration, result in the creation of any material Encumbrance upon any of the
material assets of GDS (other than liens created by the purchase financing) or
require any authorization, consent, approval, exemption or other action by or
notice to any court or other Governmental Authority or any other Person under
(i) any of the terms, conditions or provisions of any material indenture, lease,
mortgage, loan agreement, contract or other agreement to which GDS or any of its
Affiliates is bound or (ii) any material permit, law, rule or regulation of any
Governmental Authority, or any judgment, order, writ, injunction or decree of
any court, arbitrator or Governmental Authority to which GDS or any of its
subsidiaries may be subject.
Section 4A.5 Litigation. There is no action, suit or proceeding pending
or, to GDS's knowledge, threatened against GDS that would be reasonably likely
to have a material adverse effect on GDS or to interfere with the GDS's ability
to consummate this Agreement or the transactions contemplated hereby.
Section 4A.6 No Consents. No notice to, filing with, or authorization,
registration, consent or approval of any Governmental Authority or other Person
is necessary for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby by GDS.
Section 4A.7 Ownership of the Purchaser. GDS owns one hundred percent
(100%) of the issued and outstanding membership interests of the Purchaser. GDS
has no other subsidiaries, and Purchaser has no subsidiaries.
Section 4A.8 Brokers. Other than ▇▇▇▇▇▇ and ▇▇▇▇▇▇, GDS has not
retained, and has no obligation to, any broker, investment bank or other Person
entitled to any commission or similar compensation in connection with this
Agreement or the transactions contemplated by this Agreement.
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ARTICLE V
Covenants and Agreements
Section 5.1 Confidentiality. (a) The provisions of the Confidentiality
Agreement, dated as of May 10, 2000, between ▇▇▇▇▇▇ & ▇▇▇▇▇▇ and CD&L, and the
Confidentiality Agreement dated as of February 6, 2001 between GDS and CD&L
(collectively, the "Confidentiality Agreement") (the first of which Purchaser
agrees is binding on Purchaser as a disclosed principal) shall survive the
execution and delivery of this Agreement and shall apply to any information
regarding the Seller disclosed to or obtained by the Purchaser, any of its
Affiliates or any of their respective Representatives in connection with the
transactions contemplated hereby. Without limiting the obligations of any party
pursuant to the Confidentiality Agreement, in the event that the transactions
contemplated by this Agreement are not consummated for any reason, the parties
will promptly, upon the request of the disclosing party, deliver to such party a
certification that all such confidential information disclosed to or obtained by
such party, its Affiliates or their respective Representatives has been
destroyed or returned to such party. After the Closing, except as otherwise
provided herein, the Purchaser shall be free to disclose any Evaluation Material
(as defined in the Confidentiality Agreement) to the extent such Evaluation
Material relates exclusively to the Seller.
(b) For a period of one year after the Closing Date, CD&L and Seller
shall not disclose to any non-Affiliate third party any of the confidential
customer lists, pricing lists or other confidential information of the Seller
acquired by the Purchaser hereunder, except to the extent disclosure of any such
information is required by law or authorized by GDS or the Purchaser (which
authorization shall not be unreasonably withheld or delayed); provided that CD&L
and Seller may continue to use all of such information in their existing
business consistent with current practice and CD&L and Seller may disclose such
information to any prospective purchaser of all or any material part of their
businesses so long as such prospective purchaser has signed a confidentiality
agreement with CD&L.
Section 5.2 Certain Employee Matters.
(a) The Purchaser and GDS shall indemnify, defend and hold
CD&L and Seller harmless from any and all liabilities due or which may become
due to, or in respect of, any Seller Employee, (except for liabilities under
ERISA at the Closing Date which arise from CD&L's 401(k) plan) whether arising
prior to, at or after the Closing, including but not limited to any liability
arising from or related to his termination of employment by Seller or Purchaser
of any Seller Employee and/or any reduction in the compensation, benefits, terms
or conditions of his employment.
(b) From and after the Closing, the Purchaser shall credit
Seller Employees for all service with the Seller and its Affiliates prior to the
Closing for purposes of eligibility and vesting under all employee benefit
plans, programs, policies, and fringe benefits of the Purchaser in which they
become participants on or after the Closing. With respect to any medical or
dental benefit plan in which Seller Employees participate after the Closing,
Purchaser shall waive or cause to be waived any waiting periods, pre-existing
condition exclusions and actively-at-work
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requirements (provided, however, that no such waiver shall apply to a
pre-existing condition of any Seller Employee who was, as of the Closing,
excluded from participation in the Seller's medical and/or dental plan by virtue
of such pre-existing condition), and shall provide that any covered expenses
incurred on or before the Closing by a Seller Employee or a Seller Employee's
covered dependent shall be taken into account for purposes of satisfying
applicable deductible, coinsurance and maximum out-of-pocket provisions after
the Closing to the same extent as such expenses are taken into account for the
benefit of similarly situated employees of Purchaser.
(c) As of the Closing, all Seller Employees shall cease active
participation in all employee benefit plans and arrangements of Seller or its
Affiliates.
(d) (i) Effective upon the Closing, the Purchaser shall be
solely responsible and liable for providing "COBRA" coverage to all Seller
Employees and their qualifying beneficiaries who experience a "qualifying event"
on or after the Closing and for providing (or continuing to provide) COBRA
coverage with respect to any former employee of the Seller and their qualifying
beneficiaries who experience or experienced a "qualifying event" before, on or
after the Closing. For purposes of this paragraph, COBRA coverage refers to
continued health coverage in accordance with the provisions of Section 4980B of
the Code and Section 601 et. seq. of ERISA and the term "qualifying event" shall
have the meaning given such term under such Sections.
(ii) If the Purchaser is unable to cause the Seller Employees
to have COBRA coverage on reasonable financial terms, such Seller Employees
shall remain on the Seller's plan if (x) the Seller's plan so permits and (y)
the Purchaser pays to CD&L the full cost of having any Seller Employee on
Seller's plan prior to such Seller Employee being put on Seller's plan. The
Purchaser and GDS shall indemnify, defend and hold CD&L and the Seller harmless
from any and all liabilities due or that may become due to, or in respect of,
any Seller Employee in connection with COBRA.
(e) Without limitation of any other provision of this
Agreement:
(i) Purchaser assumes liability for any earned and
unused vacation time of each Seller Employee accrued as of the Closing,
and shall pay such accrued unused vacation pay or provide such accrued
unused vacation days following the Closing on the same terms as were in
effect under Seller's vacation policy with respect to such Seller
Employees prior to the Closing; and
(ii) Purchaser assumes liability for any and all
disability benefits payable on or after the Closing with respect to any
former employee of Seller who terminated employment prior to the
Closing (as set forth on Schedule 5.2(e) which may be updated at the
Closing).
(f) The Purchaser agrees to assume the employment agreements
between the Seller and ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, (copies of which are
set forth in Schedule 5.2(f))and to indemnify, defend, and hold Seller and CD&L
harmless with respect to any claims by such individuals (including but not
limited to claims under any employment contract) and to
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indemnify, defend and hold harmless CD&L and the Seller for any liabilities due
to or incurred in favor of the Seller Employees or such individuals from events
occurring prior to, on or after the Closing.
Section 5.3 Access to Information. Until the Closing, the Seller shall
afford Purchaser and its Representatives, access, during normal business hours
and upon reasonable notice, to all of the books, records and agreements of the
Seller, and shall furnish to the Purchaser and its Representatives such
information regarding the Seller as the Purchaser may reasonably request;
provided, however, that any such investigation shall be conducted in such a
manner as not to interfere unreasonably with the operation of the business of
the Seller or of CD&L.
Section 5.4 Conduct of Business of the Seller. During the period from
the date of this Agreement to the Closing Date, the Seller shall, and CD&L shall
cause Seller to, conduct its operations in the ordinary course of business; use
its reasonable best efforts to preserve intact its current business
organization, keep available the services of its current officers, employees and
agents, and maintain its relations and goodwill with suppliers, customers,
landlords, creditors, licensors, developers, employees, agents and others having
business relationships with it. Prior to the Closing Date, except as may be
first approved by the Purchaser or as is otherwise permitted or required by this
Agreement, the Seller shall (a) refrain from paying or increasing any bonuses,
salaries, or other compensation to any director, officer, employee or
stockholder out of the ordinary course of business or entering into any
employment, severance, or similar agreement with any director, officer, or
employee, (b) refrain from the adopting or increasing of any profit sharing,
bonus, deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any employees of the Seller, (c) refrain from
entering into any material contract or commitment except material contracts and
commitments in the ordinary course of business, (d) refrain from increasing its
indebtedness for borrowed money, except current borrowings in the ordinary
course of business, (e) refrain from canceling or waiving any claim or right of
substantial value which individually or in the aggregate is material to the
Seller, (f) refrain from issuing or selling any shares of capital stock or any
other securities, or issuing any securities convertible into, or options,
warrants or rights to purchase or subscribe to, or entering into any arrangement
or contract with respect to the issue and sale of, any shares of its capital
stock or any other securities, or making any other changes in its capital
structure, (g) refrain from paying dividends, or making any loans or advances,
to CD&L or its Affiliates, (h) refrain from selling, leasing or otherwise
disposing of any material asset or property of the Seller other than sales of
inventory or sales in the ordinary course of business, (i) make any capital
expenditure or commitment therefor, except in the ordinary course of business,
(j) refrain from writing off as uncollectible any notes or accounts receivable
from unaffiliated third parties, except write-offs in the ordinary course of
business charged to applicable reserves, none of which individually or in the
aggregate is material to the Seller, and (k) refrain from agreeing in writing to
do any of the foregoing.
Section 5.5 Exclusive Dealing. During the period from the date of this
Agreement to the earlier of the date of termination of this Agreement or the
Closing Date, neither the Seller, CD&L nor any Affiliate thereof nor any
Representative of any of them, shall take any action, directly or indirectly, to
encourage, initiate or engage in discussions or negotiations with, or
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provide any information to, any Person, other than the Purchaser and its
Representatives, concerning any purchase of the Purchased Assets or stock of the
Seller or any merger or similar transaction involving the Seller. Promptly after
the execution hereof, the Seller and CD&L will, and will cause their respective
Affiliates and Representatives to, cease all discussion with third parties
concerning any transaction involving a sale of the Purchased Assets or the
Seller, ask for the immediate return of any information previously provided to
third parties (other than the Purchaser and its Representatives) concerning such
a transaction and agree to enforce the confidentiality provisions of any
confidentiality agreement or understanding into which it may have entered.
Section 5.6 Intercompany Accounts. Except as otherwise expressly
contemplated by this Agreement and the agreements executed and delivered in
connection herewith or as set forth on Schedule 5.6, all agreements,
arrangements and understandings between the Seller, on one hand, and CD&L and
any of its Affiliates (other than the Seller), on the other hand, whether or not
in writing, shall automatically be terminated and of no further force and
effect, as of the Closing Date (notwithstanding any contrary provision therein).
Section 5.7 Consents of Others. Each party shall use its reasonable
efforts prior to the Closing to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable to consummate
and make effective as promptly as practicable the transactions contemplated
hereby, and to cooperate with the other in connection with the foregoing, to
obtain all authorizations, consents, licenses, permits, approvals and permits
required of them to permit them to consummate the transactions contemplated by
this Agreement; provided that as to consents and financing, the Seller's and the
Purchaser's obligations shall be limited to commercially reasonable efforts.
Section 5.8 Transition Services. The parties shall negotiate in good
faith to reach an agreement on the provision of transition services, allocation
of shared space and resources and any other necessary or convenient interparty
arrangements prior to the Closing (the "Transition Services Agreement").
Section 5.9 Publicity. During the period from the date hereof to the
Closing Date, except as required by Law, the parties shall consult in advance of
all public announcements in respect of the subject matter of this Agreement. The
content of any such announcements shall require the agreement of the parties
prior to publication, such agreement not to be unreasonably withheld, delayed or
conditioned in the context of announcements that are required to be made in
order to comply with any applicable Law or any listing agreement with, or the
rules or regulations of, any securities exchange on which securities of a party
or any of its Affiliates are listed or traded or any other regulatory
requirements. CD&L will issue a press release upon execution of this Agreement,
provided that it has complied with the provisions of this Section 5.9.
Section 5.10 Replacement of Guarantees. (a) During the period from the
date hereof to the Closing Date, the parties shall cooperate and use their
commercially reasonable effort, in order to cause the Purchaser or its
Affiliates to be substituted in all respects for CD&L or any
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Affiliate, effective as of the Closing Date, in respect of all Liabilities and
other obligations of CD&L and any Affiliate under any guarantees, Lease (if of
the Leased Premises), Equipment Leases, indemnities, letters of credit, letters
of comfort, surety bonds, bid bonds, performance bonds and other obligations
obtained or issued by CD&L or any of its Affiliates (other than the Seller) for
the benefit of the Seller or any of its subsidiaries or by which CD&L or any of
its Affiliates is bound, provided that the underlying obligation guaranteed or
the Lease, Equipment Lease, etc. is an Assumed Liability, and provided further
that neither GDS nor Purchaser shall be required to pay any costs incurred in
connection with such actions other than payments due under the underlying leases
or agreements arising subsequent to Closing (other than Assumed Liabilities).
Such guarantees, Leases, Equipment Leases, indemnities, letters of credit,
letters of comfort, surety bonds, bid bonds, performance bonds and other
obligations are set forth in Schedule 5.10 (collectively, the "Guarantees"), but
failure to list any such obligation shall not negate the Purchaser's obligation
to cause the release of CD&L and any Affiliates. With respect to any Guarantees
that are not, as of the Closing Date, so replaced with guarantees of the
Purchaser or its Affiliates in a manner reasonably satisfactory to CD&L or with
respect to which CD&L or any of its Affiliates is not fully released and
discharged, the parties shall continue to use their commercially reasonable
efforts to replace such Guarantees and to cause CD&L and its Affiliates to be
fully released and discharged from their respective Liabilities and other
obligations thereunder. Notwithstanding the foregoing provisions of this Section
5.10, the Purchaser will not contact any party to any Guarantee or any
underlying obligation without the prior consent of CD&L. The Purchaser shall
indemnify, defend and hold CD&L and its Affiliates harmless from all obligations
under any Guarantee.
(b) Refund of Premiums. All funds in respect of premiums that
are refunded by the issuer of any letter of credit, surety bond or other
instrument constituting one or more of the Guarantees on account of the
replacement by the Purchaser of such letter of credit, surety bond or other
instrument as provided by this Section 5.10(a), to the extent not included in
the calculation of Closing Net Asset Value, shall be for the account of CD&L and
its Affiliates. In accordance with Section 5.10(a), the Purchaser shall pay over
to CD&L any such refunds received by the Purchaser after the Closing promptly
upon receipt of such refunds by the Purchaser.
(c) No Amendment of Guarantees. Without limiting the
foregoing, after the Closing, the Purchaser will not renew, extend, amend or
supplement any loan, contract, lease or other obligation that is covered by a
Guarantee without providing CD&L with evidence reasonably satisfactory to CD&L
that CD&L's and its Affiliates' Guarantee has been fully released and
discharged.
Section 5.11 Treatment of Leases and Equipment Leases. In the event
that the parties are not able to effect the substitution of the Purchaser for
CD&L, the Seller or any of CD&L's other Affiliates, and the full release and
discharge of CD&L and its Affiliates, or to obtain any required consent (other
than consents of First Union and Paribas), with respect to the agreements listed
on Schedule 5.11, real estate leases listed on Schedule 3.9, the equipment
leases listed in Schedule 3.8 or any vehicle lease for vehicles under $25,000
(the "Equipment Leases") of the Seller as of the Closing, if the Closing occurs,
the Purchaser nonetheless shall
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assume and be liable for all obligations and other Liabilities arising under or
related to each Lease, each Equipment Lease and each other agreement scheduled
on Schedule 5.11. If CD&L or Seller remains the lessee of any such Leases and/or
Equipment Leases, the Purchaser shall provide CD&L with immediately available
funds at least seven business days prior to the date any payment (including
payments due upon termination of any Lease or Equipment Lease, payments arising
in connection with restoration or disposition of any equipment subject to any
Equipment Lease, or payments arising in respect of any other obligation pursuant
to any Lease or Equipment Lease) is due under any Lease or Equipment Lease so
that CD&L or the Seller can make payments to the respective obligors thereof,
and CD&L hereby agrees to hold all such amounts in trust and to use such funds
solely to make the required payments in accordance with the terms of such Lease
or Equipment Lease. CD&L and its Affiliates shall have no obligation to make any
payment or to satisfy any other obligation under any Lease or Equipment Lease
unless CD&L shall have timely received funds in accordance with this Section
5.11. The Purchaser and GDS shall indemnify CD&L for any failure to make a
payment required hereunder or assumed by the Purchaser, and CD&L shall indemnify
the Purchaser for failure to make any payment for which it has been advanced
funds by the Purchaser. The Purchaser and CD&L shall provide each other with
information regarding any material communications with any obligee under any
Lease or Equipment Lease, including any communications relating to the condition
or disposition of any equipment and the obligations of any party upon
termination of any Lease or Equipment Lease. CD&L shall not amend, extend,
terminate or otherwise modify any Lease or Equipment Lease without the prior
consent of the Purchaser.
Section 5.12 Transfer and Property Taxes. (a) The Purchaser shall pay
any sales or transfer tax arising out of or resulting from the purchase of the
Purchased Assets. The Purchaser shall prepare and file the required Tax Returns
and other required documents with respect to the sales or transfer taxes and
fees required to be paid by the Purchaser pursuant to the preceding sentence.
(b) The Seller or CD&L shall (i) prepare and file all Tax
Returns attributable to the Purchased Assets or the operation of the Business
for all periods ending on or prior to the Closing Date, (ii) be responsible for
the conduct of all tax examinations relating to the Tax Returns referred to in
(i) above, and (iii) pay all Taxes attributable to the sale of Purchased Assets
or the operation of the Business due with respect to the Tax Returns referred to
in (i) above. The Purchaser shall prepare and file all Tax Returns reporting the
income attributable to the ownership of the Purchased Assets and the operation
of the Business for all periods beginning on or after the Closing Date and shall
be liable for and pay all taxes due in respect of such tax returns.
Section 5.13 Litigation. Promptly following the Closing, the Purchaser
shall substitute for Seller as a party in all litigation listed on Schedule 3.5
and assume all of Seller's liabilities and obligations thereunder.
Section 5.14 Financing. The Purchaser has provided the Seller with a
copy of a commitment letter (the "Commitment Letter") it has received from the
Chase Manhattan Bank (the "Bank") (pursuant to which the Bank will provide the
Purchaser with financing for this
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transaction). The Purchaser agrees to give the Seller notice within 24 hours if
the Bank withdraws or terminates the commitment letter.
Section 5.15 Subordination of Note. The Seller shall consent to any
reasonable requests for the amendment of any of terms of the form of the Note as
requested by the Bank.
Section 5.16 Collection of Purchased Assets. From and after the
Closing, the Purchaser shall have the right and authority to collect all
receivables and other items transferred and assigned to the Purchaser by the
Seller hereunder and to endorse with the name of the Seller any checks received
on account of such receivables or other items, and each of the Seller and CD&L
agrees that it will, within three (3) business days after receipt thereof,
transfer or deliver to the Purchaser, any cash or other property that it may
receive with respect to any claims, contracts, licenses, leases, commitments,
sales orders, purchase orders, receivables of any character, or any other item
included in the Purchased Assets. From time to time after the Closing, the
parties agree to provide each other with details of the accounts relating to
such Purchased Assets and, upon request. Reasonable (in both frequency and
intrusion) access to the other's books and records to verify collections and
payments and compliance with the provisions hereof.
ARTICLE VI
Conditions Precedent To The Closing
Section 6.1 Conditions to the Purchaser's Obligations. The obligation
of the Purchaser to effect the transactions contemplated by this Agreement are
conditioned upon satisfaction, at or prior to the Closing, of the following
conditions:
(a) Truth of Representations and Warranties. The
representations and warranties of the Seller and CD&L contained in this
Agreement shall be true and correct on and as of the Closing Date in all
material respects, and each of the Seller and CD&L shall have delivered to the
Purchaser an officer's certificate, dated the Closing Date, to such effect.
(b) Performance of Agreements. The agreements of the Seller
and CD&L to be performed prior to the Closing pursuant to the terms of this
Agreement shall have been duly performed in all material respects, and each of
the Seller and CD&L shall have delivered to the Purchaser an officer's
certificate, dated the Closing Date, to such effect.
(c) No Litigation Threatened. No action or proceedings shall
have been instituted or, to the knowledge of the Seller and CD&L, threatened
before a court or other government body or by any public authority to restrain
or prohibit any of the transactions contemplated hereby, and each of the Seller
and CD&L shall have delivered to the Purchaser an officer's certificate, dated
the Closing Date, to such effect.
(d) Additional Agreements. The Seller shall have executed and
delivered to the Purchaser (i) a ▇▇▇▇ of sale substantially in the form of
Exhibit A hereto (the "▇▇▇▇ of Sale"), (ii) an assignment and assumption
agreement substantially in the form of Exhibit B hereto (the "Assumption
Agreement"), (iii) a certificate of good standing of the Seller issued by the
Secretary of State of New York, dated within five (5) days of the Closing Date
and (iv) such other
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documents or instruments as the Purchaser reasonably requests to effect the
transactions contemplated hereby.
(e) Release of Security Interests. The Seller shall have
provided a payoff letter or other evidence reasonably reasonable satisfactory to
the Purchaser of the release of all Encumbrances upon the Purchased Assets
except Permitted Encumbrances, and shall cause First Union to provide UCC-3
termination statements at the Closing.
(f) No Material Adverse Change. No material adverse effect
shall have occurred with respect to the Seller since the Balance Sheet Date. For
purposes of this Section 6.1(f), any adverse effects on the Seller resulting
from general economic or financial conditions shall not be taken into account in
determining whether a material adverse effect has occurred under this Section
6.1(f), nor shall information disclosed to the Purchaser in the Schedules
annexed hereto be taken into effect.
(g) Financial Condition. The Seller shall have provided
evidence satisfactory to the Purchaser that (i) Net Asset Value of the Seller as
at December 31, 2000 shall be not less than $11,500,000 and (ii) gross revenues
of the Seller for the twelve-month period ending on December 31, 2000, as
disclosed on the December 31, 2000 Financial Statements shall be not less than
90% of the gross revenues of the Seller for the twelve-month period ending on
December 31, 1999.
(h) Financing. The Purchaser shall have funds available to it
to pay the cash portion of the Purchase Price substantially upon the financial
terms set forth in the Commitment Letter.
(i) Parent Lender Approval. CD&L shall have provided evidence
reasonably satisfactory to the Purchaser that the consummation of the
transactions contemplated by this Agreement has been approved by CD&L's board of
directors and has been approved pursuant to its Senior Subordinated Loan
Agreement dated as of January 29, 1999.
Section 6.2 Conditions to the Seller's Obligations. The obligations of
the Seller and CD&L to effect the transactions contemplated by this Agreement
are conditioned upon satisfaction, at or prior to the Closing, of the following
conditions:
(a) Truth of Representations and Warranties. The
representations and warranties of the Purchaser and GDS contained in this
Agreement shall be true and correct on and as of the Closing Date in all
material respects, and the Purchaser and GDS shall have delivered to the Seller
an officer's certificate, dated the Closing Date, to such effect.
(b) Performance of Agreements. The agreements of the Purchaser
and GDS to be performed prior to the Closing pursuant to the terms of this
Agreement shall have been duly performed in all material respects, and the
Purchaser and GDS shall have delivered to the Seller an officer's certificate,
dated the Closing Date, to such effect.
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(c) No Litigation Threatened. No actions or proceedings shall
have been instituted or, to the knowledge of the Purchaser, threatened before a
court or other government body or by any public authority to restrain or
prohibit any of the transactions contemplated hereby, and the Purchaser shall
have delivered to the Seller an officer's certificate, dated the Closing Date,
to such effect.
(d) Approvals. All consents required from CD&L's secured and
unsecured lenders (First Union and Paribas) have been obtained.
(e) Additional Deliveries. The Purchaser shall have paid the
Purchase Price and any amounts due pursuant to Section 2.4 by wire transfer and
executed and delivered to the Seller (i) the Note, (ii) the Assumption
Agreement, (iii) a certificate of good standing of the Purchaser issued by the
Secretary of State of the State of New York, dated within five (5) days of the
Closing Date, and (iv) such other documents or instruments as the Seller
reasonably requests to effect the transactions contemplated hereby.
ARTICLE VII
Post-Closing Agreements and Other Matters
Section 7.1 Exchange Act and Other Filings. On and after the Closing
Date, in order to assist CD&L in the preparation of all documents and reports
required to be filed by CD&L under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, and all tax returns, the
Purchaser shall prepare and provide to CD&L, within the time frames reasonably
required by CD&L in accordance with CD&L's past practices, such information and
data as CD&L may reasonably request (including reasonable access to books,
records and personnel) in order for the operations of CD&L to be properly
reported in such filings and returns. As part of such obligation, within 30 days
after the Closing Date, GDS and the Purchaser shall provide to CD&L a monthly
operating report, on CD&L's standard financial reporting package, for operations
of Seller from the period from March 1, 2001 through the Closing Date. In
addition, so long as any CD&L or Seller tax return remains open to audit, the
Purchaser and GDS shall make available to CD&L all information and data
necessary or desirable for CD&L to prepare or amend any such returns or to
respond to any such audit. The Purchaser and GDS shall not dispose of any books,
records, tax returns or any other information or data transferred to it by
Seller until the expiration of all tax audit periods without CD&L's consent.
Section 7.2 Further Assurances. The parties shall execute such further
documents, and perform such further acts, as may be necessary to effect the
transactions contemplated hereby, on the terms herein contained and otherwise to
comply with the terms of this Agreement; provided, that, except as contemplated
by this Agreement, no party shall be required to waive any right or incur any
obligation in connection therewith.
Section 7.3 Use of Name. Each of the Seller and CD&L agrees that it
will not, nor will it permit any of its Affiliates directly or indirectly to
initiate or support the initiation of any legal proceeding, use any name
containing the word "Sureway" except in connection with disclosure obligations
of CD&L) or take any other action, the intent or effect of which is to
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interfere with the Purchaser's use of the term "Sureway" at any time after the
date of this Agreement. The Seller agrees to file immediately after the Closing
an amendment to its certificate of incorporation changing its name to another,
dissimilar name.
Section 7.4 Insurance.
(a) Insurance Coverage after Closing. The parties hereto agree
and acknowledge that no insurance policy maintained by CD&L and its Affiliates
(including the Seller) shall be available to or cover the Purchaser or its
assets, properties, operations, employees and liabilities after the Closing Date
(including in respect of any pre-Closing periods), all benefits and coverage
under each such insurance policy shall terminate as of the Effective Time and
none of the Purchaser or any of its Affiliates will seek any recoveries
thereunder for Losses occurring thereafter. As of the Closing Date, the
Purchaser shall be responsible for obtaining and maintaining any and all
insurance policies and coverages in respect of the Seller and the transferred
assets, properties, operations, employees and liabilities. Purchaser shall be
solely responsible for any and all cost or expense (including but not limited to
settlements, judgments and attorney's fees) occurring after the Closing Date
which arise out of or which relate to any pre-Closing insurance claims of the
Seller; provided that if the amount of such costs and expenses exceed the stop
loss cap of the policies in effect on the date hereof, the Purchaser's liability
shall be limited to such amount if the Seller has coverage under its stop loss
policies that will respond to such claims. By way of example, if in the week
before Closing, either (x) one of Seller's Employees visits a doctor or (y) one
of Seller's Employees has an automobile accident, but the doctor's ▇▇▇▇ or body
shop ▇▇▇▇, as the case may be, has not been paid prior to Closing, such bills
shall become the responsibility and liability of the Purchaser. The Purchaser
shall reimburse the Seller for any amounts paid by CD&L or Seller (i) with
respect to the claims listed on Schedule 3.19 (as such Schedule is amended at
Closing for claims arising between the date hereof and the closing Date) and
(ii) for amounts which may be refunded by the insurer. Any such reimbursement
shall be paid by Purchaser (or GDS) within five (5) business days after delivery
of notice by CD&L that such payment was made. The parties hereto further agree
that any and all premiums or deposits paid by CD&L and its Affiliates (including
Seller) prior to the Closing Date under any insurance maintained by CD&L and its
Affiliates on behalf of the Seller shall be for the account of and retained by
or paid to CD&L. The foregoing paragraph shall apply to all insurance, including
but not limited to automobile, casualty, medical and dental.
(b) Treatment of Certain Pre-Closing Claims. All insurance
recoveries in respect of premiums or other payments made by CD&L or Seller prior
to the Closing Date shall be for the account of CD&L. In accordance with Section
7.4(a), the Purchaser agrees to hold in trust for the benefit of the CD&L and
its Affiliates any insurance recoveries it obtains that it is not entitled to
retain hereunder. CD&L shall be entitled to control all claims under any
insurance policies in effect on or prior to the Closing and the Purchaser shall
cooperate with CD&L in connection therewith.
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ARTICLE VIII
Survival of Representations and Warranties; Indemnification
Section 8.1 Survival of Representations and Warranties. Except as set
forth below, the representations and warranties provided for in this Agreement
shall survive the Closing for fifteen (15) months from the Closing Date;
provided, that the representations and warranties set forth in Sections 3.1,
3.2, 3.7 and 3.14 shall survive for the relevant statute of limitations period
(the "Survival Period").
Section 8.2 Indemnification. (a) The Purchaser and GDS shall, jointly
and severally, indemnify and defend CD&L and its Affiliates for and hold CD&L
and its Affiliates harmless from and against, and pay and reimburse CD&L and its
Affiliates for, any and all Losses resulting from or arising out of (i) any
breach by the Purchaser or GDS of its covenants or agreements under this
Agreement, (ii) any breach by the Purchaser or GDS of any representation or
warranty made by it in this Agreement, (iii) any Assumed Liability, (iv) any
Losses related to any Guarantees, including any of the foregoing arising out of
or relating to a payment by, or any other Losses of, CD&L or any of its
Affiliates under any such Guarantee, including any draw made by any beneficiary
of any letter of credit or surety bond after the Closing Date, or (v) any
action, suit, claim, investigation or proceeding, whether involving a court of
law, administrative body, Governmental Authority, arbitrator, or alternative
dispute resolution mechanism ("Proceeding") arising out of or relating to any
Assumed Liability or Guarantee.
GDS also guarantees payment and performance of all
other obligations and liabilities of the Purchaser under any Section of this
Agreement.
(b) CD&L and Sureway shall, jointly and severally, indemnify
and defend the Purchaser and its Affiliates for and hold the Purchaser and its
Affiliates harmless from and against, and pay and reimburse the Purchaser and
its Affiliates for, any and all Losses resulting from or arising out of (i) any
breach by the Seller or CD&L of its covenants or agreements under this
Agreement, (ii) any breach by the Seller or CD&L of any representation or
warranty made by such Person under this Agreement, (iii) any Excluded Liability
or (iv) any Proceeding arising out of any Excluded Liability. In the event of
any Loss suffered by the Purchaser or one of its Affiliates under Section 8.2,
or if any of the Purchaser or any of its Affiliates is entitled to be
indemnified by, or receive any payments from, CD&L or Sureway under any other
provision of this Agreement, the Purchaser shall be entitled to set-off such
Loss against the principal amount of the Note; provided, however, that the
foregoing shall not limit the obligation of CD&L or such Affiliate to make
payments to the Purchaser.
(c) Any Person providing indemnification pursuant to the
provisions of this Section 8.2 is hereinafter referred to as an "Indemnifying
Party" and any Person entitled to be indemnified pursuant to the provisions of
this Section 8.2 is hereinafter referred to as an "Indemnified Party."
Section 8.3 Procedures for Third-Party Claims. In the case of any claim
for indemnification arising from a claim of a third party (a "Third-Party
Claim"), an Indemnified Party shall give prompt written notice to the
Indemnifying Party of any claim or demand of which
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such Indemnified Party has knowledge and as to which it may request
indemnification hereunder. The Indemnifying Party shall have the right to defend
and to direct the defense against any such Third-Party Claim, in its name or in
the name of the Indemnified Party, as the case may be, at the expense of the
Indemnifying Party, and with counsel selected by the Indemnifying Party.
Notwithstanding anything in this Agreement to the contrary, the Indemnified
Party, at the expense of the Indemnifying Party, shall cooperate with the
Indemnifying Party, and keep the Indemnifying Party fully informed, in the
defense of such Third-Party Claim. The Indemnified Party shall have the right to
participate in the defense of any Third-Party Claim with counsel employed at its
own expense; provided, however, that, in the case (i) such Third-Party Claim
seeks an order, injunction or other equitable relief against the Indemnified
Party, (ii) the Indemnified Party shall have reasonably concluded that (x) there
is a conflict of interest between the Indemnified Party and the Indemnifying
Party in the conduct of the defense of such Third-Party Claim or (y) the
Indemnified Party has one or more defenses not available to the Indemnifying
Party or (iii) the Indemnifying Party shall not in fact have employed counsel to
assume the defense of such claim, the reasonable fees and disbursements of such
counsel shall be at the expense of the Indemnifying Party. The Indemnifying
Party shall have no indemnification obligations with respect to any claim or
demand which shall be settled by the Indemnified Party without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, conditioned or delayed.
Section 8.4 Procedures for Inter-Party Claims. In the event that an
Indemnified Party determines that it has a claim for Losses against an
Indemnifying Party hereunder (other than as a result of a Third-Party Claim),
the Indemnified Party shall give prompt written notice thereof to the
Indemnifying Party, specifying the amount of such claim and any relevant facts
and circumstances relating thereto. The Indemnified Party shall provide the
Indemnifying Party with reasonable access to its books and records for the
purpose of allowing the Indemnifying Party a reasonable opportunity to verify
any such claim for Losses. The Indemnified Party and the Indemnifying Party
shall negotiate in good faith regarding the resolution of any disputed claims
for Losses. Promptly following the final determination of the amount of any
Losses claimed by the Indemnified Party, the Indemnifying Party shall pay such
Losses to the Indemnified Party by wire transfer of immediately available funds
to the account designated by the Indemnified Party. In the event that the
Indemnified Party is required to institute legal proceedings in order to recover
Losses hereunder, the cost of such proceedings (including costs of investigation
and reasonable attorneys' fees and disbursements) shall be allocated among the
parties as determined in the sole discretion of the court.
Section 8.5 Remedies Limited. (a) No claim may be made for
indemnification for breach by any party of a particular representation or
warranty after the expiration of the Survival Period for such representation or
warranty. Claims for indemnification asserted prior to the end of the Survival
Period shall survive until final resolution thereof.
(b) No claim for indemnification for breach of a
representation or warranty shall be made unless the aggregate amount of all
Losses exceeds $250,000, and thereafter only for the amount of Losses in excess
of $250,000.
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(c) The aggregate liability of the Seller and CD&L under this
Article VIII for all claims made for the failure of any representation or
warranty of either of them contained in this Agreement to have been true in all
respects when made and as of the Closing Date shall be limited to a maximum
aggregate liability of $1,500,000.
(d) The limitations of paragraphs (b) and (c) above shall not
apply to breaches of Seller's representations and warranties concerning Tax
Liabilities or ERISA.
(e) The parties shall make appropriate adjustments for tax
benefits and insurance coverage in determining Losses for purposes of Article
VIII.
(f) The parties acknowledge and agree that the foregoing
indemnification provision in this Article VIII shall be the exclusive remedy of
the Purchaser and its Affiliates with respect to the Seller and the transactions
contemplated by this Agreement.
ARTICLE IX
Termination
Section 9.1 Termination. Anything contained in this Agreement other
than in this Section 9.1 to the contrary notwithstanding, this Agreement may be
terminated in writing at any time before the Closing:
(a) by mutual consent of the Purchaser and the Seller;
(b) (i) by the Seller if the Closing shall not have occurred
on or prior to March 21, 2001, unless the Closing shall not have
occurred on or prior to such date because of a material breach of any
representation, warranty, obligation, covenant or agreement set forth
in this Agreement on the part of the Seller or CD&L;
(ii) by the Purchaser if the Closing shall not have
occurred on or prior to April 15, 2001, unless the Closing shall not
have occurred on or prior to such date because of a material breach of
any representation, warranty, obligation, covenant or agreement set
forth in this Agreement on the part of the Purchaser or GDS;
(c) by either the Purchaser or the Seller if a court of
competent jurisdiction shall have issued an order, decree or ruling
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree,
ruling or other action shall have become final and nonappealable;
(d) by the Purchaser, if the Seller shall have breached any of
its representations, warranties or obligations hereunder in any
material respect and such breach shall not have been cured or waived
and the Seller shall not have provided reasonable assurance that such
breach will be cured on or prior to the Closing Date;
(e) by the Seller, if the Purchaser shall have breached any of
its representations, warranties or obligations hereunder in any
material respect and such breach
-35-
shall not have been cured or waived and the Purchaser shall not have
provided reasonable assurance that such breach will be cured on or
before the Closing Date; or
(f) by the Purchaser, if the Closing shall not have occurred
on or prior to March 21, 2001 by reason of the failure of the condition
in Section 6.1(h) to be timely satisfied or to be reasonably likely to
be timely satisfied.
If Seller wishes to terminate this Agreement pursuant to
Section 9.1(b)(i) above, it must send notice of such termination either
within three (3) business days after March 21, 2001 (i.e. by the close
of business on March 26, 2001) or on or after April 15, 2001, unless
otherwise agreed by the parties.
Section 9.2. Effect of Termination. In the event that this Agreement
shall be terminated pursuant to Section 9.1, all further obligations of the
parties hereto under this Agreement (other than pursuant to Sections 5.1, 5.9,
10.1, 10.2 and 10.4 which shall continue in full force and effect) shall
terminate without further liability or obligation of any party to the other
parties hereunder; provided, however, that no party shall be released from
liability hereunder if this Agreement is terminated and the transactions
abandoned by reason of (i) willful failure of such party to have performed its
obligations hereunder or (ii) any intentional misrepresentation made by such
party of any matter set forth herein; and provided further, that, if this
Agreement is terminated by (x) the Seller under Section 9.1(b)(i) (and if in
such case Seller has satisfied or is capable of satisfying all of the conditions
to be satisfied by it under Section 6.1 except Section 6.1(h)), or (y) by the
Seller under 9.1(e), or (z) by the Purchaser pursuant to Section 9.1(f), then
the Seller, in addition to any other remedy to which it may be entitled, shall
be entitled to retain the Deposit as a break-up fee. Seller shall be entitled to
the break-up fee upon a termination pursuant to Section 9.1(f) even if the Bank
properly terminates the Commitment Letter, such as by reason of the Bank's due
diligence condition. If this Agreement is terminated other than pursuant to
Sections 9.1(b)(i), (e) or (f), the Deposit shall be returned by the Seller to
the Purchaser.
ARTICLE X
Miscellaneous
Section 10.1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered personally, by
facsimile or sent by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally, or by facsimile, or if
mailed, five days after the date of mailing, as follows:
If to the Seller: CD&L, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, General Counsel
-36-
With a copy to: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
If to the Purchaser: Global Delivery Systems, LLC
▇▇▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
With a copy to: White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Section 10.2 Expenses. Regardless of whether the transactions provided
for in this Agreement are consummated, except as otherwise provided herein, each
party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated herein, including all professional fees.
Section 10.3 Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New York, without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction
of the courts of the State of New York sitting in New York City and the United
States District Court for the Southern District of New York. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by law, any objection
it may have to the laying of venue in such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 10.4 Assignment; Successors and Assigns; No Third Party Rights.
This Agreement may not be assigned by operation of law or otherwise, and any
attempted assignment shall be null and void; provided, that this Agreement shall
remain binding notwithstanding any sale of the business of CD&L. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, permitted assigns and legal representatives. This
Agreement shall be for the sole benefit of the parties to this Agreement and
their respective successors, permitted assigns and legal representatives and is
not intended, nor shall be construed, to give any Person, other than the parties
hereto and their respective successors, assigns and legal representatives, any
legal or equitable right, remedy or claim hereunder.
-37-
Section 10.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument.
Section 10.6 Titles and Headings. The headings and table of contents in
this Agreement are for reference purposes only, and shall not in any way affect
the meaning or interpretation of this Agreement.
Section 10.7 Entire Agreement. This Agreement, including the Schedules
and Exhibits attached hereto and referred to herein, constitutes the entire
agreement among the parties with respect to the matters covered hereby and
supersedes all previous written, oral or implied understandings among them with
respect to such matters.
Section 10.8 Amendment and Modification. This Agreement may only be
amended or modified in writing signed by the party against whom enforcement of
such amendment or modification is sought.
Section 10.9 Waiver. Any of the terms or conditions of this Agreement
may be waived at any time by the party or parties entitled to the benefit
thereof, but only by a writing signed by the party or parties waiving such terms
or conditions.
Section 10.10 Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
Section 10.11 No Strict Construction. Each of the Purchaser and the
Seller acknowledges that this Agreement has been prepared jointly by the parties
hereto, and shall not be strictly construed against any party.
[Signature page follows]
-38-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SUREWAY WORLDWIDE, LLC
By:
---------------------------------------
Name:
Title:
SUREWAY AIR TRAFFIC CORPORATION
By:
---------------------------------------
Name:
Title:
GLOBAL DELIVERY SYSTEMS, LLC
By:
---------------------------------------
Name:
Title:
CD&L, INC.
By:
---------------------------------------
Name:
Title:
-39-
Execution Copy
Asset Purchase Agreement
Dated as of
▇▇▇▇▇ ▇, ▇▇▇▇
▇▇ and Among
Sureway Worldwide, LLC,
Sureway Air Traffic Corporation
CD&L, Inc.
And
Global Delivery Systems, LLC
Schedules and Exhibits
Exhibits
A - Note
B - Assignment and General Assumption Agreement
Commitment Letter
Schedules
Schedule 1.1(c) Computer and Other Equipment Used in the Business
Schedule 1.1(e) The Gold Wings Agreement
Schedule 1.1(j) Subsidiaries, Joint Ventures and Partnerships
Schedule 1.1(h-v) Vehicles
Schedule 1.1(h-m) Machinery, Equipment and Furniture
Schedule 1.1(l) Trademark and Service ▇▇▇▇
Schedule 1.1(o) Prepaid Expenses and Deposits
Schedule 2.7 Allocation of the Purchase Price
Schedule 3.4 Required Consents
Schedule 3.5 Litigation
Schedule 3.6 No Consents
Schedule 3.7 Title to Purchased Assets; Encumbrances
Schedule 3.8 Personal Property
Schedule 3.9 Leased Premises
Schedule 3.10 Material Customers, Contracts and Commitments
Schedule 3.11 Employment Matters
Schedule 3.12 Financial Statements
Schedule 3.13 Governmental Authorizations
Schedule 3.14 Taxes
Schedule 3.16 Permits and Intangibles; Intellectual Property
Schedule 3.17 Environmental Law and Regulations
Schedule 3.18 Material Customers, Contracts and Commitments
Schedule 3.19 Insurance
Schedule 3.20 Government Contracts
Schedule 3.21 Absence of Changes
Schedule 3.23 Services
Schedule 3.24 Authorized Dealers
Schedule 3.25 Affiliate Contracts
Schedule 5.2 Certain Employee Matters
Schedule 5.6 Intercompany Accounts
Schedule 5.10 Guarantees
Schedule 5.11 Treatment of Leases and Other Agreements
-i-
TABLE OF CONTENTS
Page
ARTICLE I
Certain Definitions .............................................................................................1
Section 1.1 Certain Definitions................................................................1
Section 1.2 Cross References...................................................................7
Section 1.3 Interpretation.....................................................................7
ARTICLE II
Purchase and Sale of Assets; Assumption of Liabilities............................................................8
Section 2.1 Purchase and Sale of Assets; Assumption of Liabilities.............................8
Section 2.2 Purchase Price.....................................................................8
Section 2.3 Payment of Purchase Price..........................................................8
Section 2.4 Adjustment of Purchase Price.......................................................8
Section 2.5 Assumption of Liabilities and Leases...............................................9
Section 2.6 Secured Creditor...................................................................9
Section 2.7 Allocation of the Purchase Price...................................................9
Section 2.8 Closing............................................................................9
ARTICLE III
Representations and Warranties of the Seller......................................................................9
Section 3.1 Organization and Qualification of the Seller.......................................9
Section 3.2 Authorization.....................................................................10
Section 3.3 No Conflict.......................................................................10
Section 3.4 No Contract Conflict..............................................................10
Section 3.5 Litigation........................................................................10
Section 3.6 No Consents.......................................................................10
Section 3.7 Title to Purchased Assets; Encumbrances...........................................10
Section 3.8 Personal Property.................................................................11
Section 3.9 Leases and Real Property..........................................................11
Section 3.10 Material Customers, Contracts and Commitments....................................11
Section 3.11 Employment Matters; No Collective Bargaining Agreement...........................12
Section 3.12 Financial Statements.............................................................13
Section 3.13 Governmental Authorizations......................................................13
Section 3.14 Taxes............................................................................14
Section 3.15 Brokers..........................................................................15
Section 3.16 Permits & Intangibles............................................................15
Section 3.17 Environmental Laws and Regulations...............................................16
Section 3.18 Material Customers, Contracts and Commitments....................................16
(i)
Page
Section 3.19 Insurance........................................................................17
Section 3.20 Government Contracts.............................................................17
Section 3.21 Absence of Changes...............................................................17
Section 3.22 [Intentionally Omitted]..........................................................18
Section 3.23 Services.........................................................................18
Section 3.24 Authorized Dealers...............................................................18
Section 3.25 Affiliate Contracts..............................................................18
Section 3.26 Accounts Receivable..............................................................18
ARTICLE IIIA
Representations and Warranties of CD&L...........................................................................19
Section 3A.1 Organization.....................................................................19
Section 3A.2 Authorization....................................................................19
Section 3A.3 No Conflict......................................................................19
Section 3A.4 No Contract Conflict.............................................................19
Section 3A.5 Litigation.......................................................................19
Section 3A.6 No Consents......................................................................20
Section 3A.7 Ownership of the Seller..........................................................20
Section 3A.8 Brokers..........................................................................20
ARTICLE IV
Representations and Warranties of the Purchaser..................................................................20
Section 4.1 Organization......................................................................20
Section 4.2 Authorization.....................................................................20
Section 4.3 No Conflict.......................................................................20
Section 4.4 No Contract Conflict..............................................................20
Section 4.5 Litigation........................................................................21
Section 4.6 No Consents.......................................................................21
Section 4.7 Purchaser's Financial Capacity....................................................21
Section 4.8 Access to Information.............................................................21
Section 4.9 Brokers...........................................................................21
ARTICLE IVA
Representations and Warranties of GDS............................................................................21
Section 4A.1 Organization.....................................................................21
Section 4A.2 Authorization....................................................................21
Section 4A.3 No Conflict......................................................................22
Section 4A.4 No Contract Conflict.............................................................22
Section 4A.5 Litigation.......................................................................22
Section 4A.6 No Consents......................................................................22
Section 4A.7 Ownership of the Purchaser.......................................................22
(ii)
Page
Section 4A.8 Brokers..........................................................................22
ARTICLE V
Covenants and Agreements.........................................................................................23
Section 5.1 Confidentiality...................................................................23
Section 5.2 Certain Employee Matters..........................................................23
Section 5.3 Access to Information.............................................................25
Section 5.4 Conduct of Business of the Seller.................................................25
Section 5.5 Exclusive Dealing.................................................................25
Section 5.6 Intercompany Accounts.............................................................26
Section 5.7 Consents of Others................................................................26
Section 5.8 Transition Services...............................................................26
Section 5.9 Publicity.........................................................................26
Section 5.10 Replacement of Guarantees........................................................26
Section 5.11 Treatment of Equipment Leases....................................................27
Section 5.12 Transfer and Property Taxes......................................................28
Section 5.13 Litigation.......................................................................28
Section 5.14 Financing........................................................................28
Section 5.15 Subordination of Note............................................................29
Section 5.16 Collection of Purchased Assets...................................................29
ARTICLE VI
Conditions Precedent To The Closing..............................................................................29
Section 6.1 Conditions to the Purchaser's Obligations.........................................29
Section 6.2 Conditions to the Seller's Obligations............................................30
ARTICLE VII
Post-Closing Agreements and Other Matters........................................................................31
Section 7.1 Exchange Act and Other Filings....................................................31
Section 7.2 Further Assurances................................................................31
Section 7.3 Use of Name.......................................................................31
Section 7.4 Insurance.........................................................................32
ARTICLE VIII
Survival of Representations and Warranties; Indemnification......................................................33
Section 8.1 Survival of Representations and Warranties........................................33
Section 8.2 Indemnification...................................................................33
Section 8.3 Procedures for Third Party Claims.................................................33
Section 8.4 Procedures for Inter-Party Claims.................................................34
Section 8.5 Remedies Limited..................................................................34
(iii)
Page
ARTICLE IX
Termination......................................................................................................35
Section 9.1 Termination.......................................................................35
Section 9.2. Effect of Termination............................................................36
ARTICLE X
Miscellaneous....................................................................................................36
Section 10.1 Notices..........................................................................36
Section 10.2 Expenses.........................................................................37
Section 10.3 Governing Law; Consent to Jurisdiction...........................................37
Section 10.4 Assignment; Successors and Assigns; No Third Party Rights........................37
Section 10.5 Counterparts.....................................................................38
Section 10.6 Titles and Headings..............................................................38
Section 10.7 Entire Agreement.................................................................38
Section 10.8 Amendment and Modification.......................................................38
Section 10.9 Waiver...........................................................................38
Section 10.10 Severability....................................................................38
Section 10.11 No Strict Construction..........................................................38
(iv)