EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
BETWEEN
GENERAL PARCEL CORPORATION
"BUYER"
AND
TRANSIT GROUP, INC.
"SELLER"
EFFECTIVE AS OF
SEPTEMBER 30, 1997
TABLE OF CONTENTS
Page
ARTICLE I
SALE AND PURCHASE OF ASSETS
1.1 Transfer of Assets.........................................1
1.2 Purchased Assets...........................................1
1.3 Excluded Assets............................................2
1.4 Liabilities................................................2
ARTICLE II
CONSIDERATION
2.1 Assumption of Assumed Liabilities..........................2
2.2 Seller Stock to Buyer......................................3
2.3 Allocation.................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.1 Organization and Good Standing.............................3
3.2 Authority..................................................3
3.3 Effect of Agreement........................................4
3.4 Financials; Books..........................................4
3.5 Title to Purchased Assets..................................4
3.6 Real Estate................................................4
3.7 Tangible Property..........................................4
3.8 Contracts..................................................4
3.9 Intellectual Property......................................5
3.10 Litigation.................................................5
3.11 Compliance with Laws; Permits..............................5
3.12 Environmental Protection...................................5
3.13 Insurance..................................................5
3.14 Employees; Benefits........................................5
3.15 Absence of Changes.........................................6
3.16 Seller's Shares............................................6
3.17 Taxes......................................................6
3.18 No Hart-Scott-Rodino Filings...............................7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1 Organization and Good Standing.............................7
4.2 Authority..................................................7
4.3 Accredited Investor Status.................................8
4.4 Effect of Agreement........................................8
(i)
TABLE OF CONTENTS (Con't.)
Page
4.5 No Hart-Scott-Rodino Filings...............................8
ARTICLE V
COVENANTS OF BUYER
5.1 Employment.................................................8
5.2 WARN Act...................................................8
5.3 Insurance Benefits.........................................8
ARTICLE VI
COVENANTS OF SELLER
6.1 Stock Plan.................................................8
ARTICLE VII
COVENANTS OF BUYER AND SELLER
7.1 Interim Management.........................................9
ARTICLE VIII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
8.1 Representations, Warranties and Covenants..................9
8.2 Absence of Litigation......................................9
8.3 Consents and Approvals.....................................9
8.4 Legal Opinion..............................................9
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
9.1 Representations, Warranties and Covenants.................10
9.2 Absence of Litigation.....................................10
9.3 Consents and Approvals....................................10
9.4 Legal Opinion.............................................10
ARTICLE X
CLOSING
10.1 Closing...................................................10
10.2 Deliveries by Seller......................................10
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification by Seller.................................12
11.2 Indemnification by Buyer..................................12
(ii)
TABLE OF CONTENTS (Con't.)
Page
11.3 Notice of Claim...........................................12
11.4 Defense...................................................13
11.6 Certain Limitations of Seller.............................13
11.8 Reduction by Insurance Proceeds...........................14
11.9 Reduction by Tax Benefit..................................14
ARTICLE XII
MISCELLANEOUS
12.1 Further Assurances........................................14
12.2 Termination...............................................14
12.3 Risk of Loss..............................................15
12.4 Brokers...................................................15
12.5 Tax Filings...............................................15
12.6 Expenses..................................................15
12.7 Publicity.................................................15
12.8 Notices...................................................15
12.9 Governing Law.............................................16
12.10 Counterparts..............................................16
12.11 Assignment................................................17
12.12 Third Party Beneficiaries.................................17
12.13 Headings..................................................17
12.14 Amendments................................................17
12.16 Severability..............................................17
12.17 Entire Agreement..........................................17
(iii)
SCHEDULES
Schedule 1.2 Purchased Assets
Schedule 1.3(c) Excluded Assets
Schedule 2.1(a) Capital Equipment Leases
Schedule 2.1(b) Facility Leases
Schedule 2.1(c) Other Assumed Liabilities
Schedule 2.3 Allocation
Schedule 3.1 Foreign Qualifications
Schedule 3.3 Required Consents
Schedule 3.8(a) Contracts
Schedule 3.8(b) Defaults
Schedule 3.9 Intellectual Property
Schedule 3.10 Litigation
Schedule 3.11 Licenses
Schedule 3.13 Insurance
Schedule 3.14 Employees; Benefits
Schedule 3.15 Absence of Changes
EXHIBITS
Exhibit "A" Opinion of Seller's Counsel
Exhibit "B" Opinion of Buyer's Counsel
(iv)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (together with all Schedules and
Exhibits hereto, this "Agreement"), effective as of September 30, 1997, is
entered into by and between TRANSIT GROUP, INC., a Florida corporation
("Seller"), and GENERAL PARCEL CORPORATION, a Florida corporation ("Buyer").
R E C I T A L S:
1. Seller is the owner and operator of a next-day parcel
delivery business operating in the States of Florida and Georgia, and is in
possession of assets in the States of North Carolina (including the North
Carolina courier business conducted by GPS Acquisition Corp.) and South Carolina
(the "Business").
2. Seller desires to sell, and Buyer desires to buy, certain
of the assets of Seller used in or relating to the operation of the Business, on
the terms and conditions set forth in this Agreement.
THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
SALE AND PURCHASE OF ASSETS
1.1 Transfer of Assets. Seller agrees to sell, assign,
transfer and deliver to Buyer, and Buyer agrees to purchase and accept from
Seller, at the Closing (as defined in Section 10.1) all of the assets and
properties of Seller of every kind and description used by Seller in connection
with the operations of the Business, but excluding certain assets described in
Section 1.3. The assets being sold hereunder are collectively referred to as the
"Purchased Assets," and the assets described in Section 1.3 are collectively
referred to as the "Excluded Assets."
1.2 Purchased Assets. The Purchased Assets specifically
include all of Seller's assets and properties of every kind and description used
in the Business, including, without limitation, all vehicles, equipment,
machinery, business records, inventory, customer lists, tradenames, trademarks,
intellectual property, all rights of Seller (including rights to security and
similar deposits) under the Capital Equipment Leases and the Facility Leases
(each as defined below), accounts receivable and all items set forth on Schedule
1.2 hereto, but excluding the Excluded Assets described below.
Upon reasonable notice to Buyer, Seller shall have access to,
and opportunity to copy at its own expense, any or any part of the business
records relating to the Business and the Purchased Assets for a period of seven
(7) years from the Closing Date.
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1.3 Excluded Assets. The following assets shall be excluded from the
Purchased Assets and shall be retained by Seller:
(a) Cash. All cash on hand and on deposit in banks, cash
equivalents and investments as of September 30, 1997.
(b) Certain Records. Minute books, stock books or other
corporate records of Seller.
(c) Other Assets. The assets listed on Schedule 1.3(c).
(d) Stock, Assets and Truckload Hauling Operations of Seller's
Subsidiaries. All stock, assets and going business of Seller's
truckload hauling operations and each of Seller's subsidiaries which
are engaged in such business.
(e) Notes Receivable from Seller's Subsidiaries. All notes
receivable from Seller's subsidiaries.
1.4 Liabilities. The Purchased Assets shall be sold and
conveyed to Buyer free and clear of all liabilities, obligations, liens,
security interests and encumbrances whatsoever (collectively, "Liens", or
individually, a "Lien"), except for Assumed Liabilities (as defined below);
provided, however, that Buyer will assume at Closing the obligations under the
Contracts (as defined in Section 3.8) that are unperformed as of the Effective
Time (as defined in Section 10.1).
ARTICLE II
CONSIDERATION
2.1 Assumption of Assumed Liabilities. As consideration for
the Purchased Assets, Buyer shall:
(a) Assume Seller's obligations which are outstanding at or
which arise after the Effective Time under the equipment lease
agreements of Seller relating to the Business including, but not
limited to, the equipment lease agreements set forth on Schedule 2.1(a)
(collectively, the "Capital Equipment Leases"), provided that Buyer
shall have the right, in its sole discretion, not to assume, and
instead to prepay, on the Closing Date any or all of the obligations
which otherwise are to be assumed by the Buyer under the Capital
Equipment Leases, and provided, further, that Buyer shall cause Seller
to be fully released and discharged from the liabilities and
obligations under the Capital Equipment Leases.
(b) Assume Seller's obligations which are outstanding at or
which arise after the Effective Time under the facility leases of
Seller relating to the Business including, but not limited to, the
facility leases set forth on Schedule 2.1(b) (collectively, the
"Facility Leases"), provided that Buyer shall cause Seller to be fully
released and discharged from the liabilities and obligations under the
Facility Leases.
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(c) Assume all of Seller's liabilities which are outstanding
at or which arise after the Effective Time (including liabilities
relating to the North Carolina courier business conducted by GPS
Acquisition Corp.) relating to the Business including, but not limited
to, the liabilities set forth on Schedule 2.1(c) (collectively, along
with the obligations assumed by Buyer under the Capital Equipment
Leases and the Facility Leases, the "Assumed Liabilities").
2.2 Seller Stock to Buyer. Seller shall issue Eight Hundred
Seventy Thousand (870,000) shares of Seller's common stock to Buyer on the
Closing Date, such shares to be restricted shares, bearing the legend
hereinafter set forth:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
THE FEDERAL AND STATE SECURITIES LAWS. THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED,
EXCEPT IN A TRANSACTION WHICH IS REGISTERED UNDER, EXEMPT
FROM, OR OTHERWISE IN COMPLIANCE WITH THE FEDERAL AND STATE
SECURITIES LAWS, AS TO WHICH THE ISSUER HAS RECEIVED SUCH
ASSURANCES AS THE ISSUER MAY REQUEST, WHICH MAY INCLUDE A
SATISFACTORY OPINION OF COUNSEL.
2.3 Allocation. The Assumed Liabilities shall be allocated
among the Purchased Assets as set forth in Schedule 2.3 hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization and Good Standing. Seller is a corporation
duly organized, validly existing and its status is active under the laws of the
State of Florida. Seller has all requisite power and authority to own, operate
and lease the Purchased Assets and to conduct the operations of the Business as
presently conducted. Except where the failure to be so qualified would not have
a material adverse effect on the operation of the Business or the Purchased
Assets, Seller is duly qualified to do business as a foreign corporation and is
in good standing in the jurisdictions in which it is required to be so qualified
and such jurisdictions are listed on Schedule 3.1.
3.2 Authority. Seller has all requisite power and authority to
execute and deliver this Agreement and to perform the transactions contemplated
hereby. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller and constitutes a valid
and binding obligation of Seller, enforceable against Seller in accordance with
its terms, except that the
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enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting creditor's rights generally and by principles of
equity regarding the availability of remedies.
3.3 Effect of Agreement. The execution, delivery and
performance of this Agreement do not and will not: (a) conflict with the
Articles of Incorporation or Bylaws of Seller; (b) to the best knowledge of
Seller, violate any law or any rule or regulation of any governmental body or
administrative agency, or conflict with any judicial or administrative order or
decree relating to Seller or the Purchased Assets; (c) constitute a breach or
default under any Contract or any other agreement or instrument by which Seller
is bound or the Purchased Assets are affected, except as set forth in Schedule
3.3; (d) create any Lien on any of the Purchased Assets; or (e) except as set
forth on Schedule 3.3, require any consent, notice to or filing with any
governmental authority or administrative agency or any private person or firm on
behalf of Seller, except (i) with respect to clauses (c) and (d), any of the
foregoing which do not and will not have a material adverse effect on the
condition (financial or otherwise) of the Business or the Purchased Assets
(hereinafter a "Material Adverse Effect") and (ii) with respect to clause (e),
such consents or notices as the failure to obtain or give would not have a
Material Adverse Effect. The matters described on Schedule 3.3 are referred to
as the "Required Consents."
3.4 Financials; Books. The unaudited balance sheets of Seller
as of June 30, 1997 and audited balance sheets as of December 31, 1996 and 1995,
and statements of income and cash flows of Seller for each of the years (or
portions thereof) then ended are hereinafter referred to as the "Financial
Statements." The Financial Statements (a) are in accordance with the books and
records of the Seller; (b) present fairly the assets, liabilities and financial
condition of Seller as of the respective dates thereof and the results of
operations for the periods then ending; and (c) the audited financials have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved. Seller has no material
liability or obligation that is not reflected or reserved against in the
Financial Statements, except for those that are not required by generally
accepted accounting principles to be included therein. The books and records of
Seller relating to the Purchased Assets have been maintained in all material
respects in accordance with generally accepted accounting principles applied on
a consistent basis.
3.5 Title to Purchased Assets. Seller has good and marketable
title to all of the Purchased Assets, free and clear of any Liens, other than
Assumed Liabilities. The Purchased Assets constitute all of the assets required
to operate the Business in the manner presently operated by Seller.
3.6 Real Estate. Schedule 2.1(b) contains a true and correct
listing of all real property leased by Seller and used in connection with the
Business.
3.7 Tangible Property. All tangible property included in the
Purchased Assets is being sold "AS IS, WHERE IS" and Seller makes no warranties
whatsoever with respect thereto, and EXPRESSLY DISCLAIMS all implied warranties
of MERCHANTABILITY and FITNESS FOR A PARTICULAR PURPOSE and all other
warranties, express or implied, with respect thereto.
3.8 Contracts. Schedule 3.8(a) lists all contracts,
commitments, agreements, leases, licenses, understandings and obligations,
whether written or oral, to which Seller is party or by which
4
Seller or the Purchased Assets is bound or affected, that are material to the
operation of the Business (collectively, the "Contracts"). Seller has delivered
to Buyer true and complete copies of all written Contracts and true and complete
memoranda of all oral Contracts, including any and all amendments thereto. Each
of the Contracts is valid, binding and enforceable in accordance with its terms
(except that enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by principles of equity regarding the availability of remedies), and is in full
force and effect. Except as set forth on Schedule 3.8(b), there are no existing
defaults, and to the best of Seller's knowledge no events or circumstances have
occurred which, with or without notice or lapse of time or both, would
constitute defaults, under any of the Contracts and which would have a Material
Adverse Effect. The assignment of the Contracts by Seller to Buyer will not,
with respect to any Contract, (i) constitute a default or accelerate the
obligations thereunder, (ii) require the consent of any person or party, except
for the Required Consents, or (iii) affect the continuation, validity and
effectiveness thereof or the terms thereof.
3.9 Intellectual Property. In addition to Seller's common law
rights to the corporate logo relating to General Parcel Service, Schedule 3.9
lists all other intellectual property rights used in connection with the
Business, and, with respect to the marks, a list of services with which such
marks are used, the date of first use of such marks and United States
registrations related thereto. To the best of Seller's knowledge, the marks have
been in continuous use since the date of first use set forth in Schedule 3.9,
and the marks are now used in interstate and intrastate commerce.
3.10 Litigation. Except as set forth on Schedule 3.10, there
are no claims, actions, or suits pending, or to the best knowledge of Seller,
threatened, against Seller or the Business or affecting the Purchased Assets,
which would, in the aggregate, if resolved adversely to Seller, have a Material
Adverse Affect.
3.11 Compliance with Laws; Permits. There is no outstanding
or, to the best knowledge of Seller, threatened, any order or decree of any
court, governmental agency or arbitration tribunal against or involving Seller,
the Business or the Purchased Assets. Seller is currently in compliance with all
laws, rules, regulations and licensing requirements of all federal, state, local
and foreign authorities applicable to the properties and operations of the
Business, except for any instances of non-compliance which do not have a
Material Adverse Effect. Seller has obtained all permits, certificates and
licenses required for the conduct of the Business and the ownership of the
Purchased Assets, (except for those the absence or violation of which does not
have a Material Adverse Effect), all of which are described on Schedule 3.11.
3.12 Environmental Protection. To Seller's knowledge, the
ownership or use of its premises and the Purchased Assets, Seller's occupancy
and operation thereof, and the conduct of the Business has been and are in
compliance in all material respects with all applicable federal, state and local
laws, ordinances and regulations relating to safety, health, pollution,
environmental protection, hazardous substances and related matters.
3.13 Insurance. Schedule 3.13 describes all insurance policies
maintained by Seller with respect to the Business and the Purchased Assets.
5
3.14 Employees; Benefits. Schedule 3.14 sets forth a complete
and accurate list of all employees of the Seller involved in the Business who
will be hired as of the Effective Time by Buyer, and a description of their
salaries, wages and benefits. Except as set forth on Schedule 3.14, there are no
Plans, as defined below, contributed to, maintained or sponsored by Seller, to
which Seller is obligated to contribute or with respect to which Seller has any
liability or potential liability, whether direct or indirect, including all
Plans contributed to, maintained or sponsored by each member of the controlled
group of companies, within the meaning of Sections 414(b), 414(c), and 414(m) of
the Internal Revenue Code of 1986, as amended, of which Seller is a member to
the extent Seller has any potential liability with respect to such Plans. For
purposes of this Agreement, the term "Plans" shall mean: (a) employee benefit
plans as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), whether or not funded and whether or not
terminated, (b) employment agreements, and (c) personnel policies or fringe
benefit plans, policies, programs and arrangements, whether or not subject to
ERISA, whether or not funded, and whether or not terminated, including without
limitation, stock bonus, deferred compensation, pension, severance, bonus,
vacation, travel, incentive, and health, disability and welfare plans.
3.15 Absence of Changes. Except as set forth on Schedule 3.15,
since the date of the most recent Financial Statements and the date of this
Agreement, Seller has conducted the operations of the Business only in the
ordinary course, and has not:
(a) Suffered any uninsured damage to any asset of the Business
that would have a Material Adverse Effect;
(b) Sold or disposed of any assets used in the operation of
the Business, except for (i) assets consumed or disposed of in the
ordinary course of business, (ii) assets disposed of in connection with
the acquisition of replacement property of equivalent kind and value;
or (iii) assets that are no longer used or useful in the operations of
the Business;
(c) Made any general wage increase for its employees as a
group;
(d) Amended or terminated any Contract;
(e) Incurred any material obligation or liability, except
normal trade or business obligations incurred in the ordinary course of
business; or
(f) Introduced any new method of management, operations or
accounting.
3.16 Seller's Shares. Seller's shares being delivered at
Closing have been validly issued, and are fully paid and non-assessable and
authorized for listing on the Nasdaq Stock Market. No consent, approval or
filing with any person or entity is required in connection with the issuance of
Seller's shares and the issuance of Seller's shares will not trigger preemptive
rights with respect to any person or entity.
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3.17 Taxes. For the purposes of this Agreement, the term
"taxes" shall include all federal, state, local and foreign taxes, fees and
other governmental charges, and interest and penalties with respect thereto, and
any payment required under any tax allocation or sharing agreement. All tax and
information returns and reports of Seller and of any member of any affiliated
group of corporations (within the meaning of Section 1504 of the Internal
Revenue Code of 1986, as amended, as in effect at the time of the due date for
the filing of such returns and reports) of which Seller is or was a member
required by law to be filed have been duly filed, and are accurate, true and
complete in all material respects. All taxes upon Seller or for which Seller may
be liable, or in respect of any of the assets, income or franchises of Seller,
have been paid by it, except for any taxes which are not yet due and payable and
except as set forth on Schedule 2.1(c), there are no tax liens upon any of the
properties or assets of Seller and no foreign, federal, state, local or other
taxing authority has provided Seller or any member of any affiliated group of
corporations of which Seller is or was a member with any notice of any questions
relating to, or claims asserted for, taxes for which Seller may be liable.
Neither Seller nor any member of any affiliated group of corporations (as
defined above) of which Seller is or was a member has granted or been requested
to grant waivers of any statutes of limitations applicable to any claim for
taxes or has agreed to any extension of time with respect to any tax assessment
or deficiency for taxes for which Seller may be liable. Except as set forth on
Schedule 2.1(c), all taxes which Seller is required by law to withhold or
collect have been duly withheld or collected and, to the extent required, have
been paid over to the proper governmental authorities in a timely manner. None
of the returns filed by or on behalf of Seller has been or is being audited by
any federal, state, local, foreign or other taxing authority which audit has not
been concluded. The accruals and reserves for taxes reflected on the Seller's
financial statements are adequate to cover all liabilities for all accrued or
unpaid taxes for which Seller has any liability.
3.18 No Hart-Scott-Rodino Filings. The size and nature of the
transactions contemplated by this Agreement do not require any filing or
notification to be made by any party under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or any successor law, and regulations and
rules issued by the U.S. Department of Justice or the Federal Trade Commission
pursuant to that act or any successor law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization and Good Standing. Buyer is a corporation
duly incorporated, validly existing and its status is active under the laws of
the State of Florida. Buyer is, or will be at the Closing, duly qualified to do
business as a foreign corporation and in good standing in all other
jurisdictions in which the ownership of the Purchased Assets or the operation of
the Business make such qualification necessary.
4.2 Authority. Buyer has all requisite power and authority to
execute and deliver this Agreement and to perform the transactions contemplated
hereby. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, have been duly and validly
authorized by all necessary corporate and shareholder action on the part of
7
Buyer. This Agreement has been duly executed and delivered by Buyer and
constitutes a valid and binding obligation of Buyer, enforceable against Buyer
in accordance with its terms except that the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting creditor's rights generally and by principles of equity regarding the
availability of remedies.
4.3 Accredited Investor Status. Buyer is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.
4.4 Effect of Agreement. The execution, delivery and
performance of this Agreement do not and will not (a) conflict with the Articles
of Incorporation or Bylaws of Buyer; (b) to the best knowledge of Buyer, violate
any law or any rule or regulation of any governmental body or administrative
agency, or conflict with any judicial or administrative order or decrees
relating to Buyer; (c) constitute a breach or default under any contract or any
other agreement or instrument by which Buyer is bound; or (d) to the best
knowledge of Buyer, require any consent, notice to or filing with any
governmental authority or administrative agency or any private person or firm on
behalf of Buyer.
4.5 No Hart-Scott-Rodino Filings. The size and nature of the
transactions contemplated by this Agreement do not require any filing or
notification to be made by any party under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or any successor law, and regulations and
rules issued by the U.S. Department of Justice or the Federal Trade Commission
pursuant to that act or any successor law.
ARTICLE V
COVENANTS OF BUYER
5.1 Employment. Buyer shall hire as of the Effective Time all
employees of the Seller involved in the Business at base salaries or hourly
wages not less than that paid by Seller immediately prior to the Effective Time.
Except for Seller's Anniversary Stock Award Plan, Employee Stock Purchase Plan
and Incentive Stock Option Plan, Buyer shall assume Seller's obligations for
employee health insurance and other benefits including, but not limited to,
vested and unused vacation pay.
5.2 WARN Act. Buyer shall be responsible for providing the
notifications, if any, required by the Worker Adjustment and Retraining
Notification Act of 1988 (the "WARN Act") with respect to employees who
experience an employment loss within the meaning of the WARN Act following the
Effective Time, and Buyer shall be responsible for and assumes any liability
arising from any failure to provide such notifications. Buyer further covenants
that it has no present intention of closing any plants or causing any mass
layoff, as defined in the WARN Act, within sixty (60) days following the
Effective Time.
5.3 Insurance Benefits. As of the Effective Time, Buyer shall
assume Seller's Blue Cross Blue Shield of Florida insurance plan and shall
provide identical coverage to Buyer's employees, without any gaps, such that no
notice pursuant to the Congressional Omnibus Budget Reconciliation Act ("COBRA")
shall be required.
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ARTICLE VI
COVENANTS OF SELLER
6.1 Stock Plan. Seller shall be responsible for terminating
the participation in Seller's Anniversary Stock Award Plan, Employee Stock
Purchase Plan, Incentive Stock Option Plan of General Parcel Service, Inc. and
any other investment-type plan of all employees of Seller involved in the
Business. Any notices or stock, cash or other financial consideration that may
be required to be given in connection with the termination of such plans shall
be the sole and exclusive obligation of Seller.
ARTICLE VII
COVENANTS OF BUYER AND SELLER
7.1 Interim Management. Buyer agrees to operate the Business
and Seller agrees to allow Buyer to operate the Business from the Effective Time
of this Agreement through the Closing Date (the "Interim Management Period"). In
consideration of Buyer's operation of the Business, Buyer shall assume the
liabilities of the Business including, but not limited to, the liabilities set
forth in Schedules 2.1(a), 2.1(b) and 2.1(c). As the operator of the Business,
Buyer shall have and shall enjoy all profits and losses of the Business during
the Interim Management Period and shall be free to: (a) hire or terminate
employees; (b) add or terminate customers; (c) pay and/or negotiate the
liabilities set forth on Schedules 2.1(a), 2.1(b) and 2.1(c); and (d) perform
all other functions normally associated with the ownership of a business except
Buyer shall not retitle, sell or encumber any of the assets of the Business
without the prior written consent of Seller.
ARTICLE VIII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of Buyer to consummate the transactions
contemplated by this Agreement are subject to the satisfaction of the following
conditions on or before the Closing Date:
8.1 Representations, Warranties and Covenants. The
representations and warranties of Seller contained in this Agreement shall have
been true and correct in all material respects on the date of this Agreement and
shall be true and correct in all material respects on the Closing Date as though
made on and as of the Closing Date, and Seller shall have duly performed and
complied in all material respects with all covenants and obligations required by
this Agreement to be performed or complied with by it on or prior to the
Closing.
8.2 Absence of Litigation. No action or proceeding shall be
pending by or before any court or other governmental body or agency seeking to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement.
8.3 Consents and Approvals. All (a) Required Consents and (b)
orders or notifications of, or registrations, declarations or filings with, or
expiration of waiting periods imposed by, any applicable governmental or
judicial authority shall have been made or obtained or shall have occurred.
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8.4 Legal Opinion. Buyer shall have received from Womble
Carlyle Sandridge & Rice, PLLC, counsel to Seller, an opinion, dated the Closing
Date, in the form of Exhibit "A".
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to the satisfaction of each of the
following conditions on or before the Closing Date:
9.1 Representations, Warranties and Covenants. The
representations and warranties of Buyer contained in this Agreement shall have
been true and correct in all material respects on the date of this Agreement,
and shall be true and correct in all material respects on the Closing Date as
through made on and as of the Closing Date, and Buyer shall have duly performed
and complied in all material respects with all covenants and obligations
required by this Agreement to be performed or complied with by it on or before
the Closing Date.
9.2 Absence of Litigation. No action or proceeding shall be
pending by or before any court or other governmental body or agency seeking to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement.
9.3 Consents and Approvals. All (a) Required Consents and (b)
orders or notifications of, or registrations, declarations or filings with, or
expiration of waiting periods imposed by, any applicable governmental or
judicial authority shall have been made or obtained or shall have occurred.
9.4 Legal Opinion. Seller shall have received from LeBoeuf,
Lamb, Greene & MacRae L.L.P., counsel to Buyer, an opinion, dated the Closing
Date, in the form of Exhibit "B".
ARTICLE X
CLOSING
10.1 Closing. If this Agreement is not terminated pursuant to
Section 12.2, the closing of the sale of the Purchased Assets (the "Closing")
shall take place at the offices of Buyer at 10:00 a.m., local time, on the fifth
(5th) business day after the satisfaction of the conditions in Articles VIII and
IX hereof, or such other time and date as may be mutually agreed upon by the
parties hereto (the "Closing Date"). Except as set forth in this Agreement, for
purposes of passage of title, risk of loss, allocation of expenses and other
economic effects, the Closing when completed shall be deemed to have occurred at
12:01 a.m., local time, on September 30, 1997 (the "Effective Time").
10.2 Deliveries by Seller. At the Closing, Seller shall
deliver or cause to be delivered to Buyer the following:
(a) Certificates of title, duly endorsed for
transfer, with respect to all motor vehicles included in the
Purchased Assets.
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(b) Notarized Bill of Sale.
(c) Assignment and Assumption Agreement relating to
the Capital Equipment Leases.
(d) Assignment and Assumption Agreement relating to
the Facility Leases.
(e) Such other instruments of transfer as Buyer may
reasonably request to convey and vest in Buyer all of Seller's
right, title and interest in and to all of the remaining
Purchased Assets.
(f) Assignment of Trademarks and such other
instruments of assignment as may be necessary to file with the
appropriate governmental agencies to transfer to Buyer all
rights in the trademarks.
(g) Evidence that all Required Consents have been
obtained.
(h) The legal opinion referred to in Section 8.4.
(i) An incumbency certificate containing a certified
copy of all corporate resolutions of the Seller authorizing
the execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated herein,
accompanied by the certification of the Secretary of Seller to
the effect that such resolutions are true and correct, in full
force and effect and have not been amended, modified or
rescinded.
10.3 Deliveries by Buyer. At the Closing, Buyer shall deliver
or cause to be delivered to Seller the following:
(a) Notarized Bill of Sale.
(b) Assignment and Assumption Agreement relating to
the Capital Equipment Leases.
(c) Assignment and Assumption Agreement relating to
the Facility Leases.
(d) Assignment and Assumption Agreement relating to
the other Assumed Liabilities.
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(e) Such other instruments of transfer as Seller may
reasonably request to convey and vest in Buyer all of Seller's
right, title and interest in and to all of the remaining
Purchased Assets.
(f) The legal opinion referred to in Section 9.4.
(g) An incumbency certificate containing a certified
copy of all corporate resolutions of the Buyer authorizing the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated herein,
accompanied by the certification of the Secretary of Buyer to
the effect that such resolutions are true and correct, in full
force and effect and have not been amended, modified or
rescinded.
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification by Seller. Subject to Section 11.6,
Seller shall indemnify, defend and hold harmless Buyer and its officers,
directors and affiliates (the "Buyer Indemnitees") from, against, and with
respect to any and all loss, damage, claim, obligation, liability, cost and
expense (including without limitation reasonable attorneys' fees and costs and
expenses incurred in investigating, preparing, defending against or prosecuting
any litigation, claim, proceeding or demand), of any kind or character (a
"Loss") arising out of or in connection with any of the following:
(a) Any breach of the representations or warranties
of Seller contained in this Agreement.
(b) Any failure by Seller to perform or observe any
covenant, agreement or condition to be performed or observed
by it pursuant to this Agreement.
11.2 Indemnification by Buyer. Buyer shall indemnify, defend
and hold harmless Seller and its officers, directors and affiliates (the "Seller
Indemnitees") from, against and with respect to any Loss arising out of or in
connection with any of the following:
(a) Buyer's ownership and operation of the Business
and the Purchased Assets including, but not limited to, any
and all of the Assumed Liabilities.
(b) Any breach of the representations and warranties
of Buyer contained in this Agreement.
(c) Any failure by Buyer to perform or observe any
covenant, agreement or condition to be performed or observed
by it pursuant to this Agreement, other than those covered by
Section 11.2(a) above.
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11.3 Notice of Claim. Any party seeking to be indemnified
hereunder (the "Indemnified Party") shall, within fifteen (15) days following
discovery of the matters giving rise to a Loss, notify the party from whom
indemnity is sought (the "Indemnity Obligor") in writing of any claim for
recovery, specifying in reasonable detail the nature of the Loss and the amount
of the liability estimated to arise therefrom. If the Indemnified Party does not
so notify the Indemnity Obligor within said fifteen (15) days, such claim shall
be barred, and the Indemnity Obligor shall have no obligation with respect
thereto. The Indemnified Party shall provide to the Indemnity Obligor as
promptly as practicable thereafter all information and documentation requested
by the Indemnity Obligor to verify the claim asserted.
11.4 Defense. If the facts pertaining to a Loss arise out of
the claim of any third party, or if there is any claim against a third party
available by virtue of the circumstances of the Loss, the Indemnity Obligor may,
by giving written notice to the Indemnified Party within thirty (30) days
following its receipt of the notice of such claim, elect to assume the defense
or the prosecution thereof, including the employment of counsel or accountants
at its cost and expense; provided, however, that during the interim the
Indemnified Party shall use its best efforts to take all action (not including
settlement) reasonably necessary to protect against further damage or loss with
respect to the Loss. The Indemnified Party shall have the right to employ
counsel separate from counsel employed by the Indemnity Obligor in any such
action and to participate therein, but the fees and expenses of such counsel
shall be at the Indemnified Party's own expense. Whether or not the Indemnity
Obligor chooses so to defend or prosecute such claim, all the parties hereto
shall cooperate in the defense or prosecution thereof. The Indemnity Obligor
shall not be liable for any settlement of any such claim effected without its
prior written consent. In the event of payment by the Indemnity Obligor to the
Indemnified Party in connection with any Loss arising out of a third party
claim, the Indemnity Obligor shall be subrogated to and shall stand in the place
of the Indemnified Party with respect to such Indemnified Matter. The
Indemnified Party shall cooperate with the Indemnity Obligor in prosecuting any
subrogated claim.
11.5 Time for Claims. The representations and warranties
contained in Sections 3.12, 3.14 and 3.17 shall survive the execution and
delivery of this Agreement and the Closing until the expiration of all
applicable statutes of limitation (including, without limitation, all periods of
extension, whether automatic or permissive) affecting such representations or
warranties. All other representations and warranties of the parties hereto
contained in this Agreement or otherwise made in writing in connection with the
transactions contemplated hereby shall survive two (2) years after the Closing
Date. Except for claims made in connection with Sections 3.12, 3.14 and 3.17,
any claim asserted with respect to the items in Section 11.1 must be submitted
to the Indemnity Obligor in writing as set forth in Section 11.3, or invoked in
official proceedings, within sixty (60) days after the expiration of all
applicable statutes of limitation (including, without limitation, all periods of
extension, whether automatic or permissive) affecting such representations and
warranties.
11.6 Certain Limitations of Seller. Notwithstanding the
provisions of Section 11.1, Seller shall not have any indemnification obligation
under this Agreement unless and until the aggregate amount of the Losses of the
Indemnified Party exceeds $125,000 in the aggregate, whereupon Seller shall be
liable to indemnify the Indemnified Party for all of such Losses. In no event
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shall the aggregate amount for which Seller shall be liable as an Indemnity
Obligor hereunder exceed $1,000,000. In addition, notwithstanding the provisions
of Section 11.1, Seller shall not have any indemnification obligation under this
Agreement in the event of a Change of Control of Buyer. A "Change of Control"
shall be deemed to have occurred on the earliest of the following dates:
(a) The date any entity or person shall have become the
beneficial owner of, or have obtained voting control over,
fifty percent (50%) or more of the outstanding common stock of
Buyer;
(b) The date the shareholders of Buyer approve a definitive
agreement (i) to merge or consolidate Buyer with or into
another corporation, in which Buyer is not the continuing or
surviving corporation or pursuant to which any shares of
common stock of Buyer would be converted into cash, securities
or other property of another corporation, other than a merger
or consolidation of Buyer in which holders of common stock
immediately prior to the merger or consolidation have the same
proportionate ownership of common stock of the surviving
corporation immediately after the merger as immediately
before, or (ii) to sell or otherwise dispose of all or
substantially all the assets of Buyer; or
(c) The date there shall have been a change in a majority of
the Board of Directors of Buyer within a 12-month period
unless the nomination for election by Buyer's shareholders of
each new director was approved by the vote of two-thirds of
the directors then still in office who were in office at the
beginning of the 12-month period.
11.7 Certain Limitations of Buyer. Buyer shall not have any
indemnification obligation under Sections 11.2(b) or 11.2(c) of this Agreement
unless and until the aggregate amount of the Losses of the Indemnified Party
exceeds $75,000 in the aggregate, whereupon Buyer shall be liable to indemnify
the Indemnified Party only to the extent that such Losses exceed $75,000. In no
event shall the aggregate amount for which Buyer shall be liable as an Indemnity
Obligor hereunder exceed $1,000,000.
11.8 Reduction by Insurance Proceeds. The amount payable by an
Indemnity Obligor to an Indemnified Party with respect to a Loss shall be
reduced by the amount of any insurance proceeds received by the Indemnified
Party with respect to the Loss, and each of the parties hereby agrees to use its
best efforts to collect any and all insurance proceeds to which it may be
entitled in respect of any Loss.
11.9 Reduction by Tax Benefit. The amount payable by an
Indemnity Obligor with respect to a Loss shall be net of any federal, state or
local tax benefit realized by the Indemnified Party with respect to the Loss.
11.10 Prior Investigation. Any furnishing of information to
Buyer by Seller pursuant to, or otherwise in connection with, this Agreement,
including without limitation, any
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information contained in any document, contract, book or record of Seller to
which Buyer shall have access or any information obtained by, or made available
to, Buyer as a result of any investigation made by or on behalf of Buyer prior
to or after the date of this Agreement, shall not affect or be deemed a waiver
of Buyer's right to rely on any written statement, representation, warranty,
covenant or agreement made or deemed made by Seller.
ARTICLE XII
MISCELLANEOUS
12.1 Further Assurances. Each party shall take all such
actions as may reasonably be requested by any party hereto in order to carry out
the transactions contemplated by this Agreement and, after the Closing Date,
will cooperate and make available to each other all books and records that any
party may reasonably require. Seller shall reimburse Buyer $15,000 for Seller's
use of Buyer's employees from October 1, 1997 through January 31, 1998. Seller
may not use Buyer's employees after January 31, 1998 without the express
approval of Buyer's President.
12.2 Termination. This Agreement (other than the obligations
contained in Section 12.6 and Section 12.7) may be terminated as to all parties
hereto and the transactions contemplated herein abandoned at any time prior to
the Closing by:
(a) the mutual consent of all parties hereto;
(b) Buyer at any time after September 30, 1998, if at such
time the conditions set forth in Article VIII hereof have not been
satisfied through no fault of Buyer, failure to satisfy such conditions
has a Material Adverse Effect, and Buyer gives Seller notice of such
fact; or
(c) Seller at any time after September 30, 1998, if at such
time the conditions set forth in Article IX hereof have not been
satisfied through no fault of Seller, failure to satisfy such
conditions has a Material Adverse Effect, and Seller gives Buyer notice
of such fact.
12.3 Risk of Loss. The risk of loss, damage or condemnation of
any of the Purchased Assets from any cause whatsoever shall be borne by Buyer at
all times.
12.4 Brokers. Each party represents and warrants to the other
(a) that no brokers or agents have been retained or employed by it, and (b) that
there are no claims for any brokerage commission, finder's fee or similar
payment due or claimed to be due from it with respect to this transaction.
12.5 Tax Filings. Each of the parties acknowledges its
understanding of the requirement under Section 1060 of the Internal Revenue Code
of 1986, as amended, for the filing by each of Form 8594 for its respective tax
year in which the Closing occurs. Each of Seller and
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Buyer agrees to allocate the Assumed Liabilities among the Purchased Assets in
accordance with Schedule 2.3 hereto.
12.6 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expense, whether or not the sale of the Purchased
Assets is consummated. Other than sales taxes or recording, transfer and filing
fees that are associated with the transfer of title of the motor vehicles of
Seller to Buyer, sales taxes, if any, and recording, transfer and filing fees on
the transfer of the Purchased Assets shall be borne by Buyer. Seller shall
reimburse Buyer for all sales taxes and recording, transfer and filing fees that
are associated with the transfer of title of the motor vehicles of Seller to
Buyer.
12.7 Publicity. Seller may make such press releases and
announcements concerning the transactions contemplated by this Agreement as
necessary to comply with applicable laws and the rules of any securities
exchange or quotation system on which its shares are listed. Seller shall give
Buyer advance notice of any such press releases.
12.8 Notices. All notices, demands and other communications
made hereunder shall be in writing and shall be given either by personal
delivery, by nationally recognized overnight courier (with charges prepaid) or
by telecopy (with telephone confirmation), and shall be deemed to have been
given or made when personally delivered, the day following the date deposited
with such overnight courier service or when transmitted to telecopy machine and
confirmed by telephone, addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
If to the Seller:
Transit Group, Inc.
2859 Paces Ferry Road, Suite 1740
Atlanta, Georgia 30339
Attention: Wayne N. Nellums, Executive Vice President
Telephone: (770) 444-0240
Telecopy: (770) 444-0246
With a copy (which shall not constitute notice) to:
Womble Carlyle Sandridge & Rice, PLLC
1275 Peachtree Street, N.E.
Suite 700
Atlanta, Georgia 30309-3574
Attention: G. Donald Johnson, Esq.
Telephone: (404) 888-7456
Telecopy: (404) 888-7490
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If to Buyer:
General Parcel Corporation
8923 Western Way, Suite 22
Jacksonville, Florida 32256
Attention: Paul K. Saffell, President
Telephone: (904) 363-0089
Telecopy: (904) 363-8866
With a copy (which shall not constitute notice) to:
LeBoeuf, Lamb, Greene & MacRae L.L.P.
50 North Laura Street, Suite 2800
Jacksonville, Florida 32202
Attention: Michael B. Kirwan, Esq.
Telephone: (904) 630-5306
Telecopy: (904) 353-1673
12.9 Governing Law. This agreement shall be governed by the
laws of the State of Florida applicable to agreements made and to be performed
entirely within such state.
12.10 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.11 Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned by any of the parties
hereto without the prior written consent of all other parties hereto, and any
purported assignment without such consent shall be void.
12.12 Third Party Beneficiaries. None of the provisions of
this Agreement or any document contemplated hereby is intended to grant any
right or benefit to any person or entity which is not a party to this Agreement.
12.13 Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of this
Agreement and shall not in any way affect the meaning or interpretation of this
Agreement.
12.14 Amendments. Any waiver, amendment, modification or
supplement of or to any term or condition of this Agreement shall be effective
only if in writing and signed by all parties hereto, and the parties hereto
waive the right to amend the provisions of this Section orally.
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12.15 Knowledge. Whenever used herein with respect to a party,
the term "knowledge" or "best knowledge" shall mean actual knowledge, without
independent investigation, of such party's officers and directors.
12.16 Severability. In the event that any provision in this
Agreement shall be determined to be invalid, illegal or unenforceable in any
respect, the remaining provisions of this Agreement shall not be in any way
impaired, and the illegal, invalid or unenforceable provision shall be fully
severed from this Agreement and there shall be automatically added in lieu
thereof a provision as similar in terms and intent to such severed provision as
may be legal, valid and enforceable.
12.17 Entire Agreement. This Agreement and the Schedules and
Exhibits hereto constitute the entire contract between the parties hereto
pertaining to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings between the parties with respect
to such subject matter including, without limitation, the Letter Agreement dated
September 29, 1997 by and between Seller and T. Wayne Davis, which is hereby
expressly terminated.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by its duly authorized officer as of the date first above
written.
TRANSIT GROUP, INC.
By:/s/ Wayne N. Nellums
Wayne N. Nellums, Executive Vice President
GENERAL PARCEL CORPORATION
By:/s/ T. Wayne Davis
Name: T. Wayne Davis
Title: Chairman
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