PURCHASE OF ASSETS AGREEMENT
PURCHASE OF ASSETS AGREEMENT (the "Agreement"), dated this 10th
day of November, 2000 between MATLACK LEASING CORPORATION, a Delaware
corporation ("Seller"), and MATLACK LEASING, LLC, a Pennsylvania
limited liability company ("Buyer").
WITNESSETH
WHEREAS, Seller is the owner of certain equipment known as
International Standards Organization (ISO) tank containers ("ISO Tank
Containers") and Tank Trailers ("Tank Trailers") (collectively the
ISO Tank Containers and Tank Trailers are the "Equipment") and
desires to sell the Equipment; and
WHEREAS, Seller has leased to customers certain of Seller's
Equipment ("Customer Leases"); and desires to assign the Customer
Leases; and
WHEREAS, Buyer desires to purchase the Equipment and to accept
assignment of the Customer Leases; and
WHEREAS, Buyer desires to have the right to use the name
"Matlack Leasing" for a limited period and Seller is willing to
convey such right subject to certain indemnification of Seller by
Buyer.
NOW, THEREFORE, in consideration of the aforesaid premises and
in consideration of the promises, covenants, warranties and
representations hereinafter set forth, the parties hereto agree as
follows:
1. Sale and Purchase of Assets; License; Rent of Space Etc.
(A) On the date of Closing (as hereinafter defined),
Seller and/or Matlack, Inc. agrees to sell, convey, assign, transfer
and deliver to Buyer and Buyer agrees to purchase from Seller and/or
Matlack, Inc., subject to the terms and conditions hereinafter set
forth, all of Seller's Equipment listed on Exhibit A hereto, and the
rights of Seller and/or Matlack, Inc. as lessor under the Customer
Leases listed on Exhibit B attached hereto, a list of customers and
related customer data (collectively "Customer Data"), the Container
Lease Management Agreement between Seller and International Tank
Containers Limited ("ITC") dated December 12, 1996 (the "ITC
Agreement") (subject to written consent of ITC to the assignment) the
web site the E-Mail address of Matlackleasing.com and Seller's rights
in the 800 telephone number utilized by Seller. The Equipment, the
Customer Leases, the Customer Data, the ITC Agreement, the web site,
the E-Mail address and Seller's rights in the 800 telephone number
are hereinafter sometimes collectively referred to as the "Assets".
Except for the Customer Leases, and as provided in Section 4 (B)(1),
the sale of the Seller's and/or Matlack, Inc.'s Assets, hereunder
shall, on the date of Closing, be, to the best of Seller's knowledge,
made free and clear of any and all liens or encumbrances on title.
Buyer shall not assume any liabilities of Seller and/or Matlack, Inc.
by virtue of this Agreement or otherwise, other than the Customer
Leases.
(B) For a period of six (6) months after closing as
defined in Section 3 herein, and so long as Buyer is not in breach of
this Agreement, Buyer shall have the right to use the name "Matlack
Leasing", provided further that Buyer does not through such use
suggest or imply to any third party that Buyer has an affiliation
with Seller or any affiliate of Seller.
(C) So long as Buyer is not in breach of this
Agreement, Seller agrees to: (i) lease space and computers for four
(4) persons, and two (2) automobiles through December 31, 2000 for
$1,000.00; (ii) lease four (4) phones and phone lines through
December 31, 2000, all charges to be paid by Buyer; and (iii) forward
the four (4) phone lines for up to six (6) months from January 1,
2001, all charges to be paid by Buyer. The space, computers, phones
and automobiles are to be turned over to Seller by December 31, 2000.
2. Purchase Price.
For and in consideration of the transfer and conveyance by
Seller and/or Matlack, Inc. of the Assets on the date of Closing,
Buyer shall pay to Seller the total amount determined and set forth
in Section 2.1 (the "Purchase Price"), subject to adjustment as
provided in Section 5.
(A) On the date of Closing, Buyer shall pay by wire
transfer to such accounts as Seller shall instruct Buyer in writing,
an amount equal to Twelve Million and 00/100 Dollars
($12,000,000.00), less Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00) paid to Seller as a Deposit into an escrow pursuant to
an escrow agreement as set forth in Exhibit C ("Down Payment Escrow")
and less Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00)
paid into an Escrow pursuant to an escrow agreement as set forth in
Exhibit D ("Indemnification Escrow"), and less a credit to Buyer not
to exceed One Hundred Twenty-Five Thousand and 00/100 dollars
($125,000.00) for unrepaired damages to the Equipment which has been
returned by Customers as set forth in Buyer's Affidavit attached as
Exhibit E.
(B) Buyer shall prepare as Exhibit E, an exhibit in
the form of an affidavit certifying the estimated cost of repairs and
required testing to Seller's Equipment which Buyer attests has
sustained damage while on Customer Lease. Buyer will, at Seller's
request, supply back up data describing the damage and an estimate of
the cost of repairs. Seller shall give Buyer a credit at Closing for
the cost of unrepaired damage for which it has been paid by
Customer(s) in an amount not to exceed One Hundred Twenty-Five
Thousand Dollars ($125,000.00).
(C) On the date of Closing, Buyer shall assume and agrees
to be responsible for and shall perform and discharge all obligations
of Seller which arise after Closing under the Customer Leases and the
ITC Agreement.
3. Closing.
The Closing hereunder shall be held at Seller's offices in
Wilmington, Delaware on or before the 15th day of November, 2000, or
at such place and time as Buyer and Seller shall mutually agree (the
"Closing"). If the Closing is consummated in all respects, the
transfer of Assets shall be deemed effective as of the close of
business on the day of Closing (the "Effective Time of Closing").
Time is of the essence. This Agreement may be terminated by Buyer or
Seller in the event the Closing has not taken place on or before the
15th day of November, 2000 (if not due to the fault of the party
seeking termination) or pursuant to the terms of Sections 7, 8, 9 and
19 hereof.
4. Representations and Warranties by Seller.
Seller represents, warrants and agrees with Buyer that as
of the date of this Agreement and as of the date of Closing:
(A) Corporate.
(1) Corporate Standing. Seller is a corporation duly
organized, validly existing and in current status under the laws of
the State of Delaware with full corporate authority to own its
properties and conduct its business.
(2) Board of Directors. Seller's Board of Directors
has authorized the execution of this Agreement, the sale, conveyance,
assignment, transfer and delivery to the Buyer of the Assets and the
other transactions contemplated herein. The execution and delivery
of this Agreement and any other documents in connection with the
transactions contemplated herein (a) constitute valid and binding
obligations of Seller, enforceable against Seller in accordance with
their respective terms, (b) does not violate any contract, agreement
or other instrument to which Seller is a party or which would result
in a creation of any lien or encumbrance upon any of the Assets, and
(c) will not violate any law, order, writ, injunction, regulation or
decree of any governmental authority.
(B) Title, Condition, etc.
(1) Title. Seller and/or Matlack, Inc. has and will
cause to be delivered good and marketable title to all of the
Equipment subject to no indebtedness, mortgage, security interest,
lien, pledge, conditional sale agreement, charge or encumbrance, as
of the Closing except for the Customer Leases and except as set forth
in Exhibit F.
(2) Condition. In connection with Seller's sale of
the Equipment, to Buyer as contemplated by this Agreement, other than
as set forth in Section 4 (B)(1), SELLER MAKES NO EXPRESS OR IMPLIED
WARRANTIES OF ANY KIND WITH RESPECT TO THE EQUIPMENT, INCLUDING BUT
NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT
INFRINGEMENT.
(C) Broker. There is and will be no obligation for
brokerage fees or other such compensation owed by Seller to any
person whatsoever for which Buyer would be responsible, nor has
Seller imposed any obligation of any nature upon Buyer, to any person
whatsoever, for services rendered as a broker or finder in relation
to the transactions covered by this Agreement.
(D) Taxes. All federal, state and local taxes
attributable to the ownership, use or possession of the Assets, due
on or before the date of Closing or measured by any event or period
of time prior thereto, have been fully paid or will be fully paid by
Seller other than those being contested in good faith by appropriate
proceedings, and the benefits thereof shall accrue to Buyer to the
extent permitted by law. Seller has filed, or will file on a timely
basis, with appropriate governmental agencies, all tax returns
required to be filed with such agencies, and all taxes, assessments,
fees and other governmental charges shown to be due thereon have been
paid or will be paid. Notwithstanding the foregoing, any taxes owing
on the sale, transfer, registration, re-registration and/or similar
taxes payable as a result of the transfer to Buyer of the Equipment
being sold under this Agreement ("Sales Tax") shall be split equally
between Seller and Buyer, provided that such Sales Tax shall be paid
initially by Buyer within six (6) months following Closing (the "Six
(6) Month Anniversary"). Seller will reimburse Buyer for one half
(1/2) of the Sales Tax from the Indemnification Escrow pursuant to
the terms thereof and upon submission of proof of payment within the
Six (6) Month Anniversary by Buyer to Seller. Buyer shall indemnify
Seller pursuant to Section 5 (B)(4) for its one half (1/2) share of
the Sales Tax which are paid by Seller prior to the Six (6) Month
Anniversary and upon submission of proof of payment and for all Sales
Tax due and/or owing thereafter, without regard to whether there is
joint and/or several liability of Seller to the taxing authority.
(E) Bulk Sales. Neither the sale nor transfer of the
Assets to be acquired pursuant to this Agreement will result in or be
the subject to:
(1) Any law pertaining to bulk sales or transfers
which either (a) make such sales or transfers ineffective as to
creditors of Seller or (b) exposes Buyer to liabilities asserted by
creditors of Seller; or
(2 ) Any federal, Delaware or local sales, use,
transfer, excise or license tax, fee or charge to the extent they
arise from bulk sales or transfer laws applicable to any of the
Assets to be acquired. Seller has complied with all applicable bulk
sales or UCC laws relating to the sale or transfer of the Assets.
(F) Litigation. To Seller's knowledge, there is no
material action, arbitration, audit, hearing, investigation,
litigation or suit which has been commenced by or against Seller with
respect to any of the Assets or that in any way may affect the sale
and transfer of the Assets contemplated hereunder.
(G) Intellectual Property. To Seller's knowledge,
Seller's use and sale of the Assets does not infringe or conflict
with any rights of patent, copyright, trademark or trade secret of
any other party.
5. Indemnification.
(A) Seller agrees to indemnify and hold harmless Buyer
against and in respect of the following:
(1) Breach. Any and all damage, loss, deficiency,
cost or expense resulting from a breach by Seller of any
representation or warranty in this Agreement, or from nonfulfillment
of any obligations hereunder on the part of Seller.
(2) Lawsuits. Any and all actions, suits,
proceedings, demands, assessments, outstanding orders, judgments,
costs and reasonable legal and other expenses incident to the
foregoing.
(3) Liens. Any and all liens or encumbrances on
title for Seller's Assets except for any liens or encumbrances
created by the Customer Leases.
(4) Damage to Equipment After Closing. Damages
to the Equipment sustained after the Closing while the Equipment is
on the property of Seller or an affiliate of Seller, and caused by
Seller or an affiliate of Seller.
(B) Buyer agrees to indemnify and hold harmless Seller
against and in respect of the following:
(1) Breach. Any and all damage, loss, deficiency,
cost or expense resulting from a breach by Buyer of any
representation or warranty in this Agreement, or from nonfulfillment
of any obligations hereunder on the part of Buyer.
(2) Lawsuits. Any and all actions, suits,
proceedings, demands, assessments, outstanding orders, judgments,
costs and reasonable legal and other expenses incident to the
foregoing.
(3) Use of Matlack Leasing Name. Any and all
actions, suits, proceedings, demands, assessments, outstanding
orders, judgments, costs and reasonable legal and other expenses
arising out of or in any way connected with Buyer's use of the name
"Matlack Leasing" or any derivation thereof.
(C) Survival. The indemnification obligations of Seller
and Buyer contained in this Section 5 and the representation and
warranties set forth in Sections 4 and 6 shall expire two (2) years
from the date of Closing, except for those arising from taxes
pursuant to Section 4 (D), which will expire upon the expiration of
the statute of limitations on any such tax deficiency, and except for
any lawsuit relating to property damage claims or personal injury
claims which shall expire on the date the matter is settled with no
further right of appeal or the statute of limitations has run, and
except for Seller's indemnification for damage to Equipment after
Closing which will expire six (6) months from the date of Closing,
and except for Seller's indemnification for its share of the Sales
Tax which will expire six (6) months from the date of Closing.
(D) Provisions Regarding Indemnities; Indemnification
Escrow.
(1) The indemnified party shall promptly notify
the indemnifying party in writing, in reasonable detail of any claim,
demand, action or proceeding for which indemnification will be sought
under Section 5 of this Agreement. If such claim, demand, action or
proceeding is a third party claim, demand, action or proceeding (a
"Third Party Claim"), the indemnifying party will have the right at
its expense to assume the defense thereof using counsel reasonably
acceptable to the indemnified party. The indemnified party shall
have the right to participate, at its own expense, with respect to
any such Third Party Claim. In connection with any such Third Party
Claim, the parties shall cooperate with each other and provide each
other with access to relevant books and records in their possession.
No such Third Party Claim shall be settled without the prior written
consent of the indemnified party, which consent shall not be
unreasonably withheld.
(2) In all instances set forth under subsection (1)
above, the indemnifying party shall have thirty (30) days from the
date of receipt of the indemnified party's claim to object in writing
to such claim. If the indemnifying party does not so notify the
indemnified party in writing of its objection within said thirty (30)
day period, the indemnified party's claim shall be deemed valid. If
the indemnifying party objects to such claim, the dispute, at the
indemnified party's option, shall be submitted by the indemnified
party to binding arbitration pursuant to the rules of Commercial
Arbitration of the American Arbitration Association within thirty
(30) days of the indemnifying party's objection and the arbitrator
shall be required to render his decision within thirty (30) days of
the close of the hearing. In the event the indemnified party elects
not to subject the claim to arbitration in accordance with the
foregoing, the claim shall be deemed properly denied by the
indemnifying party. The indemnified party shall be entitled to
interest on the amount of the arbitrator's award from the date of the
arbitrator's award to the date it is paid by the indemnifying party
at the legal rate of interest then in effect in the Federal District
Court for the District of Delaware. The decision of the arbitrator
shall be final and binding and not subject to appeal.
(3) The parties' indemnification obligation under the
provisions of Section 5 are subject to the following limitations: (a)
neither party shall be entitled to any consequential or punitive
damages; and (b) any indemnification owed by the other party
hereunder shall be reduced by any amounts paid to the other party
from third parties (excluding such party's own insurers).
(4) The indemnity provisions of this Section 5 shall
constitute the sole remedy of the parties hereto against one another
with respect to any claims relating to or arising out of this
Agreement.
(5) As a source of funds for indemnification of
Seller and Buyer, the sum of Two Hundred Fifty Thousand dollars
($250,000.00) shall be paid by Buyer into the Indemnification Escrow.
No funds shall be disbursed from the Indemnification Escrow until the
six (6) month anniversary of the Closing. The amount of valid claims
of Buyer under the Indemnification Escrow ("Escrow Disbursement")
shall be reduced by the amount Buyer is required to indemnify Seller
under this Section 5. The Indemnification Escrow shall terminate six
(6) months from the date of Closing and the remaining balance (after
reduction of the Escrow Disbursement, which sum shall be paid to
Buyer), including interest, paid to Seller.
(E) Misuse of Matlack Leasing Name. Notwithstanding
the foregoing indemnification procedures, Buyer acknowledges and
agrees that money damages would not be a sufficient remedy for any
breach of this Agreement by Buyer insofar as the use of the name
"Matlack Leasing" or any derivation thereof. Accordingly, in the
case of such breach by Buyer, Seller shall be entitled to specific
performance and injunctive relief as remedies for any such breach by
Buyer. Such remedies shall not be deemed to be exclusive remedies
for the breach by Buyer, but shall be in addition to all other
remedies available at law or in equity, including, but not limited
to, termination and money damages.
6. Representations and Warranties by Buyer.
Buyer represents, warrants and agrees with Seller that as
of Closing:
(A) Corporate Standing. Buyer is a limited liability
company duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania. The execution and
delivery of this Agreement by Buyer and the consummation by Buyer of
all of the transactions contemplated hereby will not violate any
provisions of, or result in the acceleration of any obligation under
any loan agreement, mortgage, lien, lease agreement, instrument,
arbitration award, judgment, or decree to which Buyer is a party or
by which it is bound.
(B) Authorization of this Agreement. Buyer has all
requisite power to enter into this Agreement and to consummate the
transactions contemplated hereby, and Buyer has taken all action
required to be taken by it by law, its Certificate of Organization or
Operating Agreement, or otherwise to authorize or ratify the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
(C) No Violation or Conflict. The execution, delivery and
performance of this Agreement and each of the documents and
instruments required hereby by Buyer do not and will not conflict
with or violate any law, or any contract or agreement to which Buyer
is a party or by which it is bound.
(D) The damages and estimates of repair cost and
testing respecting the Equipment as set forth in Exhibit E are true
and correct.
(E) Broker. There is and will be no obligation for
brokerage fees or other such compensation owed by Buyer to any person
whatsoever for which Seller would be responsible, nor has Buyer
imposed any obligation of any nature upon Seller, to any person
whatsoever, for services rendered as a broker or finder in relation
to the transactions covered by this Agreement.
7. Conditions Precedent.
The obligations of Buyer set forth in this Agreement are
subject to the fulfillment prior to or at the Closing, of each of the
following conditions:
(A) Not later than November 15, 2000, Buyer shall have
obtained acquisition financing in an amount at least equal to Twelve
Million and 00/100 Dollars ($12,000,000.00), and working capital
financing and/or equity contribution in an amount at least equal to
One Million and 00/100 Dollars ($1,000,000.00), both upon such terms
and conditions as are reasonably acceptable to Seller.
8. Conditions Precedent to Buyer's Obligations.
The obligation of Buyer to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction
of the following conditions (none of which constitute representations
or warranties which survive Closing), any of which may be waived by
Buyer:
(A) Accuracy of Representations and Warranties. The
representations and warranties made by Seller in this Agreement shall
be true and correct as of the Closing.
(B) Condition. Excluding the Equipment listed in Exhibit
E prepared by and within the knowledge of Buyer, to the best of
Seller's knowledge, a material number of Seller's Equipment which is
not under Customer Leases is, as of the Closing, in good working
order, and free of material damage or defect and with respect to
Seller's Equipment which is under Customer Leases, to the best of its
knowledge, Seller has no notice from Customers of material damage or
material defect thereto.
(C) Leases. Each Customer Lease, a copy of which has been
identified and submitted to Buyer for inspection, is genuine, valid
and subsisting, has not been subsequently amended, and is currently
in full force and effect according to the terms thereof. To the best
of its knowledge, Seller is, and at all times has been, in material
compliance with applicable terms or requirements of each of the
Customer Leases. To the best of Seller's knowledge, no event has
occurred or circumstance exists that (with or without notice or lapse
of time) may contravene, conflict with or result in a material
violation or material breach of or give Seller or any other person or
entity the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or to cancel,
terminate, or modify any Customer Lease. Seller has not given to or
received from any other person or entity any notice or other
communication (whether oral or written) regarding any actual,
alleged, possible, or potential violation or breach of, or default
under any Customer Lease.
(D) Financial Information. To the best of Seller's
knowledge, the financial information delivered by Seller to Buyer
fairly, completely and accurately presents the net revenues and gross
profit for the operation of the Assets for the periods covered
thereby, in all material respects.
(E) Litigation. No order shall be in effect forbidding or
enjoining the consummation of the transactions contemplated hereby
and no action shall be pending or threatened which, if adversely
determined, would result in any such order.
(F) Covenants. Seller shall have performed and complied
in all material respects with all covenants and agreements required
by this Agreement to be performed by Seller prior to or at the
Closing.
(G) Deliveries. Seller shall have delivered to Buyer the
documents required by Section 11.
9. Conditions Precedent to Seller's Obligations.
The obligation of Seller to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction
of the following conditions, any of which may be waived by Seller:
(A) Truth of Representations and Warranties. The
representations and warranties made by Buyer in this Agreement shall
be true and correct as of the Closing.
(B) Litigation. No order shall be in effect forbidding or
enjoining the consummation of the transactions contemplated hereby
and no action shall be pending or threatened which, if adversely
determined, would result in any such order.
(C) Covenants. Buyer shall have performed and complied in
all material respects with all covenants and agreements required by
this Agreement to be performed by Buyer prior to or at the Closing.
(D) Deliveries. Buyer shall have delivered to Seller the
payment and documents required by Section 10.
10. Events of Closing.
At the Closing, the following events shall take place, and
no documents or monies shall be deemed delivered by either party
hereto unless all documents and monies to be delivered by the other
party are tendered:
(A) Seller and/or Matlack, Inc. shall deliver to Buyer
certified copies of the resolutions adopted by its Board of Directors
authorizing the execution and delivery of this Agreement and the
consummation of all transactions contemplated hereunder;
(B) Seller and/or Matlack, Inc. shall deliver to Buyer a
Bill of Sale in the form of Exhibit G attached hereto conveying to
Buyer the Equipment.
(C) Seller (as assignor) and Buyer (as assignee) shall
deliver to each other an executed agreement in the form of Exhibit H
attached hereto, which agreement shall evidence Seller's assignment
of all its right, title and interest in and to the Customer Leases as
lessor, and shall evidence Buyer's acceptance of such assignment and
assumption of Seller's obligations and liabilities under the Customer
Leases.
(D) Subject to the terms and conditions set forth herein,
Buyer shall pay the Purchase Price by wire transfer to such accounts
as Seller shall instruct Buyer in writing, less Two Hundred Fifty
Thousand and 00/100 Dollars ($250,000.00) paid to Seller as down
payment into the Down Payment Escrow simultaneous with the execution
of this Agreement and less Two Hundred Fifty Thousand and 00/100
Dollars ($250,000.00) paid into the Indemnification Escrow, and less
the credit not to exceed One Hundred Twenty-Five Thousand Dollars
($125,000.00) to Buyer for unrepaired damage to the Equipment as set
forth in Exhibit E.
(E) Buyer shall deliver to Seller copies of authorizations
authorizing the execution and delivery of this Agreement and the
transactions contemplated hereunder.
11. Possession and Further Assurances.
Unless otherwise agreed to between the parties, legal title
to the Assets shall be delivered to Buyer at the Effective Time of
Closing. Seller agrees that it will, from time to time after the
Closing, upon the request of Buyer, do, execute, acknowledge and
deliver all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may reasonably be
required to transfer to and vest in Buyer, and protect the right,
title and interest of Buyer in, all of the Assets transferred and
conveyed pursuant to this Agreement free of liens and encumbrances.
12. Non-Competition
(A) Subject to the provisions of Section B below, for
a period of two (2) years from the date of Closing, and as long as
Buyer is not in default, Matlack Systems, Inc., for itself,
subsidiaries and its affiliates agrees not to engage as a lessor in
the business of leasing ISO tank containers or tank trailers to third
parties, or engage in the business of selling ISO tank containers or
tank trailers to third parties. Nothing in the foregoing shall
prohibit Seller from (and Seller is affirmatively authorized to
undertake) engaging in the sale to affiliated companies, purchase,
maintenance, cleaning, and repairing of ISO tank containers or tank
trailers, and the leasing of ISO tank containers or tank trailers by
Seller as lessee, the transportation of commodities in ISO tank
containers or tank trailers for third parties and all other
associated and affiliated activities relating to the use of ISO tank
containers or tank trailers, and the leasing of ISO tank containers
or tank trailers to customers of Matlack, Inc. or its affiliates
where such leasing is ancillary to the provision of other
transportation services.
(B) Seller has the right to designate ISO tank
containers and tank trailers as surplus equipment ("Surplus
Equipment"). Seller will notify Buyer of Surplus Equipment that
Seller is willing to lease to third parties. Buyer will undertake to
lease the Surplus Equipment on behalf of Seller on terms acceptable
to Seller, and pursuant to leases between Seller and the third
parties, and manage the lease relationship (invoicing,
administration, inspection services, insurance, inventory and the
like) pursuant to a lease management agreement to be entered into
between Seller and Buyer. In such event, Buyer shall be entitled to
fifteen percent (15%) of the gross rental revenues and shall pay
eighty-five percent (85%) to Seller. The provisions of this Section
B shall be in effect for two (2) years from the date of Closing, and
as long as Buyer is not in default.
12. Risk of Loss.
Prior to the Effective Time of Closing, and as between
Seller and Buyer only, Seller shall bear:
(A) All costs and expenses pertaining to the Equipment;
and
(B) The risk of destruction, theft, loss or damage to the
Equipment.
After the Effective Time of Closing, Buyer shall bear the
risks and obligations set forth above.
14. Allocation of Costs and Revenues.
All revenue derived from the Customer Leases attributable
to lease periods prior to the Effective Time of Closing shall be the
property of and/or for the account of Seller. This revenue includes
accounts receivable billed to Customers and due and payable following
Closing. All revenue derived from the Customer Leases attributable
to lease periods after the Effective Time of Closing shall be the
property of and/or for the account of Buyer. After the date of
Closing, Seller shall pay to Buyer promptly, after receipt thereof,
any and all amounts received by Seller in respect to services
rendered by Buyer relating to the Customer Leases after the Effective
Time of Closing. Similarly, after the Effective Time of Closing,
Buyer shall pay Seller promptly, after the receipt thereof, any and
all amounts received by Buyer in respect to services rendered by
Seller relating to the Customer Leases prior to the Effective Time of
Closing. This Section shall not, however, obligate either party to
collect any accounts receivable on behalf of the other party, and
each party is responsible only for application of payments on
accounts receivable in accordance with this Section. Seller remains
free to engage in collection efforts against Customers and to enforce
any of the provisions of the Customer Leases for collection of
revenues due Seller. Notwithstanding the foregoing, in the event
that Closing occurs on or before November 15, 2000, Buyer shall be
entitled to revenues derived from Customer Leases attributable to the
lease period beginning November 1, 2000 to the Effective Time of
Closing.
Seller will assign to Buyer the outstanding invoices, if
any, for the time period after the Effective Time of Closing and for
revenues which are to the account of Buyer as set forth herein which
Seller billed prior to Closing.
15. Documents.
In all material respects, Seller shall turn over to Buyer
all records, original contracts, correspondence, business forms,
customer lists, maintenance records, insurance certificates, original
Customer Leases and other pertinent documents or records pertaining
to the Assets within its possession. Notwithstanding the foregoing,
Seller shall retain and shall not turn over to Buyer all books and
records which Seller shall be required to retain pursuant to any
statute, rule, regulation or ordinance, all income records and income
tax returns, and any other books and records which do not reasonably
pertain to the Assets. Copies of such documents which pertain to the
Assets will be provided to Buyer.
16. Certain Taxes.
Seller agrees to pay all sales, use and personal property
taxes pertaining to or arising from the operation of the Assets prior
to the Effective Time of Closing. Any taxes or licenses which have
been prepaid shall inure to the benefit of Buyer.
17. Amendments.
This Agreement cannot be changed or terminated orally and
no waiver of compliance with any provision or condition hereof and no
consent provided for herein shall be effective unless evidenced by an
instrument in writing duly executed by the party hereto sought to be
charged with such waiver or consent.
18. Effect of this Agreement.
This Agreement sets forth the entire understanding of the
parties and supersedes any and all prior agreements, arrangements and
understandings relating to the subject matter hereof. No
representation, promise, inducement or statement of intention has
been made by any party which is not embodied in this Agreement, and
no party shall be bound by, or be liable for, any alleged
representations, promise, inducement, or statement of intention
except as specifically provided herein. The Article and Section
Headings of this Agreement are for convenience of reference only and
do not form a part hereof and do not in any way modify, interpret, or
construe the intentions of the parties. This Agreement may be
executed in two or more counterparts, and all such counterparts shall
constitute one and the same instrument.
19. Termination.
Notwithstanding anything to the contrary in this Agreement,
it is mutually covenanted, stipulated and agreed that this Agreement
and any obligation of Buyer to consummate this Agreement are
expressly conditioned upon the examination and verification by Buyer,
through its duly authorized representative or representatives, of the
Equipment, the Customer Leases and books and records of Seller
pertaining to the foregoing (which right of examination and
verification is hereby granted by Seller to Buyer) for any reason
whatsoever.
(A) Buyer must complete its investigation not later than
November 10, 2000.
(B) Buyer may terminate this Agreement, not later than
November 10, 2000 if it is not satisfied with any of the matters
referred to above. If Buyer elects to terminate this Agreement, the
same shall become absolutely null and void and have no further force
and effect.
20. Notice.
Any notice, report, demand, waiver or consent required or
permitted hereunder shall be in writing and shall be given personally
or by prepaid telegram or prepaid registered or certified mail, with
a return receipt requested, addressed, until further notice, as
follows:
IF TO SELLER:
Matlack Leasing Corp.
2200 Concord Pike
Wilmington, DE 19803
Attn: Michael B. Kinnard, President
With a copy to:
Klaus M. Belohoubek, Vice President & General Counsel
IF TO BUYER:
Matlack Leasing, LLC
163 Hooton Road
Mt. Laurel, NJ 08054
Attn: Richard Parrillo, President
With a copy to:
MacElree Harvey
17 West Miner Street
P.O. Box 660
West Chester, PA 19381-0660
Attn: Harry J. DiDonato
A notice shall be deemed received upon the date of delivery
if given personally or, if given by mail, three days after it is
deposited in the United States mail properly addressed with postage
prepaid as herein provided. Any party may change its address for the
purpose of notice by giving notice in accordance with the provisions
of this Section.
21. Severability.
The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other
provision of this Agreement.
22. Expenses of the Parties.
All expenses incurred by or on behalf of Seller or Buyer in
connection with the authorization, preparation and consummation of
this Agreement, including without limitation, all fees and expenses
of agents, representatives, counsel and accountants employed by
Seller or Buyer in connection with the authorization, preparation,
execution and consummation of this Agreement shall be borne solely by
either Seller or Buyer as the case may be.
23. Interpretation and Construction.
The Agreement shall be deemed to have been made in Delaware
and shall in all respects be interpreted, construed and governed by
and in accordance with the laws of the State of Delaware. Each
Section, subsection and lesser section of this Agreement constitutes
a separate and distinct undertaking, covenant, and/or provision
hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed
to be severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
24. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding
upon the parties hereto, and their respective successors and assigns,
provided, however, that neither party may make any assignment of this
Agreement or any interest therein without the prior written consent
of the other party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, Buyer shall have the right to assign
this Agreement to Summit Business Capital Corp.
25. Remedies.
No remedy or right conferred upon or reserved by either
party hereunder by this Agreement shall exclude any other remedy or
right, but each such remedy or right shall be cumulative and shall be
in addition to every other remedy or right hereunder or available at
law or in equity. Neither party shall be deemed to have waived any
remedy or right unless such waiver shall be in writing, nor shall the
waiver of any remedy or right be deemed or construed to be a waiver
of any other remedy or right or as a waiver of the same remedy or
right on a different occasion.
26. Rights of Others.
Nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person, firm or corporation,
other than the parties hereto, and their respective successors and
assigns, or personal representatives, any right or remedies under or
by reason of this Agreement.
27. Public Announcement
Seller and Buyer shall agree on the terms of any press
release to be issued upon the execution of this Agreement and shall
consult with each other before issuing any other press releases with
respect to this Agreement and the transactions contemplated hereby,
including any termination of this Agreement for any reason.
28. Exclusivity.
Prior to the termination of this Agreement, neither Seller
nor Buyer shall enter into any negotiations with any third party
relative to the Equipment or Customer Leases.
29. Terminals.
Seller, for itself, its affiliates, successors and assigns,
hereby grants to Buyer the right to store the Equipment purchased
hereunder and hereafter acquired by Buyer at the terminals of Seller
located at 2700 Appelt Drive, Houston, Texas; and 5911 Commonwealth
Avenue, Jacksonville, Florida' and 99 Lafayette Street, Carteret, New
Jersey. Buyer shall have the continuing right to store its equipment
at such terminals until such time as Seller provides Buyer with a
90-day notice of termination of this right, so long as Seller has the
exclusive right to effect repairs on said Equipment. Upon receiving
a notice of termination by Seller, Buyer shall remove the Equipment
from such terminals to which the termination applies within 90 days
after the notice. Buyer shall at all times retain sole and exclusive
title to the Equipment. Neither Seller nor its affiliates shall in
any manner whatsoever represent or claim that it is the owner or
partial owner of the Equipment, or that it has any lien, right or
claim in or to the Equipment or any modifications, replacements,
additions, alterations, substitutions or any other accessories
thereto. Notwithstanding the foregoing, in the event it enters into
an agreement to sell one or more of the aforestated terminals, Seller
is only required to provide Buyer with a 30-day notice of
termination.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written in any
number of counterpart copies, each of which fully executed
counterpart shall be deemed an original for all purposes.
MATLACK LEASING CORPORATION
ATTEST: /s/ John R. Jenchura BY: /s/ Klaus M. Belohoubek
Name:
Title:
MATLACK LEASING, LLC
ATTEST: /s/ John R. Jenchura BY: /s/ Richard Parrillo
Name: Richard Parrillo
Title: President
For Purposes of Transfer of Assets For Purposes of Section 12 Only:
Pursuant to Section 1(A) and the
Representation With Respect to MATLACK SYSTEMS, INC.
Title in Section 4 (B)(1)
BY: /s/ Klaus M. Belohoubek
Name:
Title:
MATLACK, INC.
BY: /s/ Klaus M. Belohoubek
Name:
Title:
EXHIBIT LIST
A Seller's ISO Tank Containers and Tank Trailers
B Customer Leases
C Down Payment Escrow Agreement
D Indemnification Escrow Agreement
E Equipment Damage
F Title Exceptions
G Bill of Sale
H Assignment and Assumption
EXHIBIT A
SELLER'S ISO TANK CONTAINERS AND TANK TRAILERS
EXHIBIT B
CUSTOMER LEASES
EXHIBIT C
DOWN PAYMENT ESCROW AGREEMENT
EXHIBIT D
INDEMNIFICATION ESCROW AGREEMENT
EXHIBIT E
EQUIPMENT DAMAGE
EXHIBIT F
TITLE EXCEPTIONS
EXHIBIT G
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS:
FOR VALUE RECEIVED, Seller and Matlack, Inc. hereby sells,
conveys, transfers and assigns to Buyer the Equipment referred to in
the Purchase of Assets Agreement dated the 10th day of November,
2000, ("the Agreement") and Exhibit A therein, between Matlack
Leasing Corporation ("Seller") and Matlack Leasing, LLC ("Buyer"),
and the Customer Leases referred to in Exhibit B of the Agreement;
all such personalty being hereafter collectively called "Assets".
Seller and Matlack, Inc. hereby represent and warrant that they
are the legal and equitable owners of the Equipment, free and clear
of any and all liens or encumbrances on title, except as set forth in
Exhibit F and that this Bill of Sale will vest in Buyer complete,
good, and marketable title to the Equipment. Otherwise the Assets
are sold subject to any existing liabilities, claims or obligations.
IN WITNESS WHEREOF, Seller has caused this instrument to be
executed by its duly authorized corporate officer as of this 16th day
of November, 2000.
MATLACK LEASING CORPORATION
ATTEST: BY:
Name:
Title:
MATLACK, INC.
ATTEST: BY:
Name:
Title:
EXHIBIT H
ASSIGNMENT OF LEASES AND ASSUMPTION OF PERFORMANCE BY ASSIGNEE
KNOW ALL MEN BY THESE PRESENTS:
Matlack Leasing Corporation ("Assignor") and Matlack, Inc.
for good and valuable consideration paid by MATLACK LEASING, LLC
("Assignee"), pursuant to a Purchase of Assets Agreement
("Agreement") between Assignor and Assignee dated the 10th day of
November, 2000, (the "Agreement"), the receipt and sufficiency of
which consideration is hereby acknowledged, hereby sells, transfers,
assigns, and conveys to the Assignee all of the Assignor's rights,
title, obligations, and interests as "Lessor" under the Customer
Leases identified in Exhibit B to such Agreement ("Customer Leases").
TO HAVE AND TO HOLD the Leases unto the Assignee, and its
successors and assigns, from the 10th day of November, 2000 for the
entire balance of the Customer Leases' respective terms and all
extensions thereof, if any, subject to all covenants, conditions, and
provisions therein contained.
The Assignor represents and warrants as follows:
1. The Customer Leases are genuine, valid, subsisting, and in all
respects what they purport to be;
1. Assignor has a good right to make this Assignment and as of the
date of this Agreement, Assignor has not alienated, assigned, or
otherwise disposed of any Customer Leases or any interest therein;
1. Assignor has complied with all terms of the Customer Leases
required to be met by Assignor.
IN WITNESS WHEREOF, this Assignment has been duly executed and
sealed by the Assignor as of this 16th day of November, 2000.
MATLACK LEASING CORPORATION
ATTEST: ____________________ BY: ______________________________
Name: ______________________
Title: _______________________
MATLACK, INC.
ATTEST: BY:
Name:
Title:
EXHIBIT H CONTINUED
ASSUMPTION OF PERFORMANCE BY ASSIGNEE
The undersigned, as Assignee, does hereby assume the above
described Customer Leases as of the 16th day of November, 2000 and
agrees to perform and be bound by all of the terms, conditions, and
covenants thereof after such date, with the same force and effect as
though originally the Lessor under the Customer Leases therein named.
IN WITNESS WHEREOF, the Assumption has been duly executed and
sealed by Assignee as of this 16th day of November, 2000.
MATLACK LEASING, LLC
ATTEST: ____________________ BY: ___________________________
Name: ___________________
Title: ____________________