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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 1998
(December 10, 1998)
LANDAIR CORPORATION
(Exact name of registrant as specified in its charter)
TENNESSEE 000-24615 62-1743549
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
430 AIRPORT ROAD
GREENEVILLE, TENNESSEE 37745
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (423) 636-7000
N/A
(Former name or former address if changed since last report)
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ITEM 5. OTHER EVENTS
On December 10, 1998, Landair Transport, Inc. ("Landair Transport"), a
wholly-owned subsidiary of Landair Corporation, entered into an Asset Purchase
Agreement to acquire certain assets of Laker Express, Inc. ("Laker"). Closing of
the transaction is scheduled to occur on January 6, 1999. Laker is a truckload
dry van carrier based in Indianapolis, Indiana and operates predominately in the
Midwest in the short to medium haul market.
Under the terms of the Asset Purchase Agreement, attached hereto as
Exhibit 2.1, Landair Transport will acquire 225 tractors, 560 trailers and
certain other assets used in connection with the Laker operations. In addition,
the Company's press release announcing the acquisition is attached hereto as
Exhibit 99.1.
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ITEM 7(C) EXHIBITS
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No.
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2.1 Asset Purchase Agreement between Landair Transport, Inc.,
Laker Express, Inc. and Dennis Pressler (Schedules and other
exhibits to this document are omitted from this filing but the
Company will furnish supplemental copies of the omitted
materials to the Securities and Exchange Commission upon
request.)
99.1 Press Release dated December 11, 1998
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LANDAIR CORPORATION
Date: December 22, 1998 By: /s/ Eddie R. Brown
------------------------------
Eddie R. Brown
President
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ASSET PURCHASE AGREEMENT
AMONG
LAKER EXPRESS, INC.,
ITS SOLE SHAREHOLDER,
DENNIS PRESSLER,
AND
LANDAIR TRANSPORT, INC.
DECEMBER 10, 1998
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TABLE OF CONTENTS
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1. Purchase and Sale.............................................................................................1
1.1 Agreement to Sell...............................................................................1
1.2 Agreement to Purchase...........................................................................1
1.3 Description of Assets; Excluded Assets..........................................................2
1.3.1 Assets to Be Acquired..................................................................2
1.3.2 Excluded Assets........................................................................3
1.4 Purchase Price, Payment, Allocation, and Liabilities............................................4
1.4.1 Purchase Price.........................................................................4
1.4.2 Payments...............................................................................4
1.4.3 Delivery of Title......................................................................4
1.4.4 Purchase Price Adjustments.............................................................4
1.4.5 No Assumption of Liabilities...........................................................6
1.4.6 Procedures for Adjustments to Purchase Price...........................................7
1.5 Indianapolis Terminal...........................................................................8
1.6 Lease of Rolling Stock..........................................................................8
1.7 Customer Contacts...............................................................................9
1.8 Transfer of Possession of Assets................................................................9
1.8.1 In Transit Assets......................................................................9
1.8.2 Certain Costs and Expenses............................................................10
1.8.3 Use of Office Space, Equipment and Systems............................................10
2. Closing......................................................................................................10
3. Representations And Warranties...............................................................................10
3.1 Representations and Warranties of the Seller...................................................10
3.1.1 Corporate Existence and Organization..................................................11
3.1.2 Corporate Power; Authorization; Enforceable Obligations...............................11
3.1.3 Safety Rating.........................................................................11
3.1.4 Validity of Contemplated Transactions.................................................11
3.1.5 Capitalization, Ownership of Shares and Third Party Options...........................11
3.1.6 Financial Statements..................................................................12
3.1.7 Accounts Receivable...................................................................12
3.1.8 Inventory.............................................................................12
3.1.9 Tax and Other Returns and Reports.....................................................12
3.1.10 Books of Account......................................................................13
3.1.11 Existing Condition....................................................................13
3.1.12 Title to Properties...................................................................14
3.1.13 Condition of Tangible Assets; Availability of Assets..................................14
3.1.14 Compliance with Law; Authorizations...................................................15
3.1.15 Insurance.............................................................................15
3.1.16 Contracts and Commitments.............................................................15
3.1.17 Additional Information................................................................16
3.1.18 Labor Matters.........................................................................16
3.1.19 Employee Benefit Plan and Arrangements................................................16
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3.1.20 Intellectual Property Matters.........................................................17
3.1.21 Software..............................................................................17
3.1.22 Environmental Matters.................................................................17
3.1.23 Real Property.........................................................................18
3.1.24 Availability of Documents.............................................................19
3.1.25 Restrictions..........................................................................19
3.1.26 Conditions Affecting Seller...........................................................19
3.1.27 Completeness of Disclosure............................................................19
3.1.28 Customers.............................................................................19
3.1.29 Drivers...............................................................................19
3.2 Representations and Warranties of Purchaser....................................................19
3.2.1 Corporate Existence...................................................................19
3.2.2 Corporate Power and Authorization.....................................................19
3.2.3 Validity of Contemplated Transactions.................................................20
3.2.4 Financial Ability.....................................................................20
3.2.5 Safety Rating.........................................................................20
3.3 Survival of Representations and Warranties.....................................................20
4. Agreements Pending the Asset Possession Date and the Closing.................................................20
4.1 Agreements of Seller Pending the Asset Possession Date and the Closing.........................20
4.1.1 Conduct of Business...................................................................20
4.1.2 Maintenance of Physical Assets........................................................21
4.1.3 Employees and Business Relations......................................................21
4.1.4 Maintenance of Insurance..............................................................21
4.1.5 Maintenance of Authorizations.........................................................21
4.1.6 Compliance with Laws..................................................................21
4.1.7 Updated Schedules.....................................................................21
4.1.8 Information Regarding Assets..........................................................21
4.1.9 Cooperative Efforts...................................................................21
4.1.10 Sale of Assets........................................................................21
4.1.11 Access................................................................................22
4.1.12 Press Releases........................................................................22
4.1.13 WARN Notice...........................................................................22
4.1.14 Approvals of Governmental Bodies......................................................22
4.2 Agreements of Purchaser Pending the Asset Possession Date and the Closing......................22
4.2.1 Actions of Purchaser..................................................................22
4.2.2 Operation of Assets...................................................................22
4.2.3 Maintenance of Physical Assets........................................................23
4.2.4 Employees and Business Relations......................................................23
4.2.5 Maintenance of Insurance..............................................................23
4.2.6 Maintenance of Authorizations.........................................................23
4.2.7 Compliance with Laws..................................................................23
4.2.8 Updated Schedules.....................................................................23
4.2.9 Cooperative Efforts...................................................................23
4.2.11 Press Releases........................................................................23
4.2.12 Approvals of Governmental Bodies......................................................24
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5. Conditions Precedent to Asset Possession Date.................................................................24
5.1 Conditions Precedent to Asset Possession Date..................................................24
5.1.1 Material Adverse Changes..............................................................24
5.1.2 Phase I...............................................................................24
5.1.3 No Threatened or Pending Litigation...................................................24
5.1.4 Governmental Authorizations...........................................................24
6. Conditions Precedent To Closing..............................................................................24
6.1 Conditions Precedent to Purchaser's Obligations................................................24
6.1.1 Representations and Warranties True as of the Closing Date............................24
6.1.2 Compliance with this Agreement........................................................25
6.1.3 Closing Certificate...................................................................25
6.1.4 No Threatened or Pending Litigation...................................................25
6.1.5 Consents, Approvals and Notices.......................................................25
6.1.6 Seller's Deliveries...................................................................25
6.1.7 Opinion of Counsel to Seller..........................................................26
6.2 Conditions Precedent to the Obligations of Seller..............................................26
6.2.1 Representations and Warranties True as of the Closing Date............................26
6.2.2 Compliance with this Agreement........................................................26
6.2.3 No Threatened or Pending Litigation...................................................26
7. Indemnification..............................................................................................26
7.1 General Indemnification Obligation of Seller...................................................26
7.2 General Indemnification Obligation of Purchaser................................................28
7.3 Defense of Claims..............................................................................28
7.4 Set-Off........................................................................................29
7.5 Compliance with Bulk Sales Laws................................................................29
7.6 Other Rights and Remedies Not Affected.........................................................29
8. Post-Asset Possession Date and Post-Closing Matters..........................................................29
8.1 Employee Benefits..............................................................................29
8.2 Employees......................................................................................30
8.3 Maintenance of Books and Records...............................................................30
8.4 Payments Received..............................................................................30
8.5 Use of Name....................................................................................30
8.6 UCC Matters....................................................................................31
8.7 Further Assurances.............................................................................31
9. Miscellaneous................................................................................................31
9.1 Termination....................................................................................31
9.1.1 Causes before Asset Possession Date...................................................31
9.1.2 Causes before Closing Date............................................................31
9.1.3 Effect of Termination.................................................................32
9.2 Brokers' and Finders' Fees.....................................................................32
9.2.1 For Seller............................................................................32
9.2.2 For Purchaser.........................................................................32
9.3 Sales, Transfer and Documentary Taxes..........................................................32
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9.4 Expenses.......................................................................................32
9.5 Contents of Agreement; Parties in Interest; Etc................................................32
9.6 Assignment and Binding Effect..................................................................33
9.7 Waiver.........................................................................................33
9.8 Notices........................................................................................33
9.9 Governing Law..................................................................................34
9.10 No Benefit to Others...........................................................................34
9.11 Headings, Gender and "Person.".................................................................34
9.12 Schedules and Exhibits.........................................................................34
9.13 Severability...................................................................................34
9.14 Jurisdiction...................................................................................34
9.15 Counterparts...................................................................................34
9.16 Continuation of Business.......................................................................35
9.17 Mediation......................................................................................35
</TABLE>
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ASSET PURCHASE AGREEMENT
AMONG
LAKER EXPRESS, INC.,
ITS SOLE SHAREHOLDER,
DENNIS PRESSLER
AND
LANDAIR TRANSPORT, INC.
This (this "Agreement"), dated December 10, 1998, is made and entered
into by and among LAKER EXPRESS, INC., an Indiana corporation ("Laker"); DENNIS
PRESSLER, the sole shareholder of Laker ("Pressler") (Laker and Pressler are
referred to herein collectively, and when the context so requires, individually
as "Seller"); and LANDAIR TRANSPORT, INC., a Tennessee corporation
("Purchaser").
RECITALS:
WHEREAS, Seller is engaged in business as a motor carrier (the
"Business") and desires to sell to Purchaser certain of Seller's assets; and
WHEREAS, Purchaser, together with its subsidiaries and operating
affiliates (collectively "Purchaser"), is engaged in business as a motor carrier
and transportation logistics provider (the "Purchaser's Business") and desires
to purchase certain assets of Seller's Business; and
WHEREAS, Pressler is the sole owner, of record and beneficially, of all
of the issued and outstanding capital stock of Laker and will benefit from a
sale of the Assets to Purchaser.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter expressed, and subject to the satisfaction or waiver of
the conditions hereof, the parties agree as follows:
1. PURCHASE AND SALE
1.1 AGREEMENT TO SELL. At the Closing (as defined herein) and except as
otherwise specifically provided in Section 1.3.2 hereof, and in reliance on the
representations, warranties and covenants of Purchaser contained herein, Seller
shall sell, convey, assign, transfer and deliver to Purchaser or its nominee,
upon and subject to the terms and conditions of this Agreement, all right, title
and interest of Seller in and to the Assets (as defined below), free and clear
of all mortgages, liens, pledges, security interests, charges, claims,
liabilities, restrictions and encumbrances of any nature whatsoever, except for
liens or mortgages expressly agreed to and assumed by Purchaser.
1.2 AGREEMENT TO PURCHASE. Upon and subject to the terms and conditions
of this Agreement and in reliance on the representations, warranties and
covenants of Seller contained herein, Purchaser shall,
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at Closing, purchase the Assets from Seller in exchange for the Purchase Price
(defined in Section 1.4.1 hereof).
1.3 DESCRIPTION OF ASSETS; EXCLUDED ASSETS. The following described
assets (the "Assets") shall be transferred to Purchaser hereunder:
1.3.1 Assets to Be Acquired.
(a) all machinery, equipment, tools, vehicles, rolling stock,
goods and other tangible personal property owned by Seller that are
utilized in the Business as currently conducted, including, but not
limited to, those items which are listed on Seller's October 31, 1998
Balance Sheet attached hereto as Exhibit A (the "October 31 Balance
Sheet") under the captions "Revenue Equipment," "Shop and Garage
Equipment" and "Miscellaneous Equipment," and including without
limitation the tangible personal property set forth on Schedule
1.3.1(a) attached hereto (which items shall be collectively referred to
as the "Equipment");
(b) all parts, fuel, tires, oil and other like items
comprising the inventories of Seller, as well as all office supplies,
including, but not limited to, replacements therefor, as such are used
in the regular course of the Business, with inventories to be
maintained at levels consistent with past operations (the "Inventory");
(c) all leasehold improvements and other improvements to real
property interests, all fixtures thereon, and all rights, privileges
and easements appurtenant thereto that are associated with or used in
the operation of the Business (the "Real Property Improvements");
(d) all Seller's rights under any trademark, servicemark,
trade name or copyright, whether registered or unregistered, and any
applications therefor, including the name "Laker Express," and any
other trade names or trademarks, all telephone numbers and telecopier
numbers, as well as all other intangible assets;
(e) the option, for ten days from the date Purchaser receives
a written list from Seller, to take assignment of, to the extent
assignable, all Seller's rights under any written or oral contract,
agreement, warranty, maintenance agreement, lease, conditional or
installment sales agreements, plan, instrument, advertising, listing,
registration, license, operating authority, certificate of occupancy,
permit or approval of any nature, or other document, commitment,
arrangement, undertaking, practice or authorization;
(f) all furniture and office equipment, including without
limitation computer equipment, computer software (including
documentation and related object and source codes) of Seller, and the
option to take assignment of all license agreements relating to
computer equipment and computer software including, but not limited to,
those items listed on Schedule 1.3.1(f) hereto;
(g) all methods, formulations, databases, trade secrets,
know-how and other intellectual property used in the Business;
(h) all rights under express or implied warranties relating to
the Assets;
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(i) all of Seller's driver, customer and supplier lists,
updated, as appropriate, at the Closing;
(j) to the extent legally transferable, all governmental or
quasi-governmental licenses, consents and permits, including without
limitation all plates, permits and operating authorities relating to
Rolling Stock;
(k) to the extent legally transferable, all prepaid expenses,
for periods subsequent to the Asset Possession Date, of Seller included
on the October 31 Balance Sheet under the captions "Prepaid Taxes and
Licenses" and "Prepaid Rents;" and
(l) all claims, counterclaims and set-offs against third
parties relating to or arising out of the Assets and the Assumed
Contracts (as defined herein) and which arise (or are continuing, in
which event said claims, counterclaims and set-offs shall be prorated)
after December 12, 1998 (the "Asset Possession Date").
1.3.2 Excluded Assets. Notwithstanding the foregoing, the Assets shall
not include any of the following (collectively, the "Excluded Assets"):
(a) cash or cash equivalents (including marketable securities
and short term investments);
(b) all accounts receivable for services or goods provided by
Seller prior to the Asset Possession Date and accounts receivable from
Seller's employees, refunds from prepaid insurance and note
receivables;
(c) the rights which accrue or will accrue to Seller under
this Agreement;
(d) the corporate minute books and stock books having to do
solely with the corporate organization of Seller;
(e) all rights and funds in connection with Seller's benefit
plans;
(f) deposits and certificates of deposit;
(g) prepaid insurance;
(h) the 1999 Chevrolet Suburban service vehicle;
(i) all insurance proceeds received under or which might be
available under Seller's insurance coverage for body damage, property
damage, general liability or other coverage;
(j) the right to any refund of Taxes (as hereinafter defined)
for periods ending on or prior to the Asset Possession Date, to the
extent such refunds or the prospects thereof are not reflected as an
asset on the October 31 Balance Sheet;
(k) Seller's financial records; and
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(l) those assets described on Schedule 1.3.2 hereto.
1.4 PURCHASE PRICE, PAYMENT, ALLOCATION, AND LIABILITIES.
1.4.1 Purchase Price. Subject to any adjustments under Sections 1.4.3,
1.4.4 and 1.4.5 hereof, the aggregate consideration to be paid for the Assets
shall be $14,884,000 (such number, as adjusted pursuant to the terms hereof,
shall be referred to as the "Purchase Price"). The Purchase Price shall be
allocated among the Assets in the manner set forth on Schedule 1.4.1. After the
Closing, the parties hereto shall make consistent use of such allocation for all
purposes relating to Taxes and in any and all filings, declarations and reports
with the Internal Revenue Service, including all Tax Returns (as hereinafter
defined).
1.4.2 Payments. Assuming the conditions to Closing are satisfied or
duly waived, on the Closing Date, Purchaser shall deliver the Purchase Price as
follows:
(a) pay via wire transfer an amount of $14,484,000 less any
deductions pursuant to Sections 1.4.3, 1.4.4 and 1.4.5 included in the
Preliminary Adjustments as defined in Section 1.4.6 hereof;
(b) pay to third parties at the instruction of Seller amounts
established pursuant to Section 1.4.3. to satisfy liens enabling the
transfer of clear title to the Assets (except for liens related to
Assumed Liabilities, as hereinafter defined); and
(c) a promissory note in the original principal amount of
$400,000 in the form attached hereto as Exhibit B (the "Note").
The balance of the Purchase Price, if any, shall be paid based on the
difference between the Final Adjustments (as hereinafter defined) and the
Preliminary Adjustments as provided in Section 1.4.6.
1.4.3 Delivery of Title. Seller agrees to deliver the titles to all
Assets, including the tractors, trailers and other revenue equipment utilized in
the Business as currently conducted (the "Rolling Stock"), at Closing, and such
Assets will be free and clear of all liens or other claims as of the Closing
Date. Purchaser understands that certain of the Rolling Stock is presently
subject to security interests in favor of third parties. To the extent Seller is
unable to obtain release of such security interests prior to Closing, Seller
shall provide confirmation of the amount of any indebtedness secured by such
liens and instructions for pay off of such amounts from any such secured party
claiming an interest in the Assets. To the extent Seller is not able to provide
either satisfactory evidence of clear title or confirmation of the pay-off
amount required to retire all liens and establish such clear title (unless such
liens relate to Assumed Liabilities), Purchaser shall not be required to deliver
the Purchase Price attributable to such Assets on the Agreed Values Schedule
attached hereto as Schedule 1.4.3 (the "Agreed Values Schedule") until it
receives confirmation of clear title, and Purchaser shall retain possession of
such Assets until such time. If such clear title is not delivered within 90 days
after Closing, possession shall revert back to Seller.
1.4.4 Purchase Price Adjustments. The Purchase Price shall be adjusted
as set forth below:
(a) Rolling Stock Adjustments.
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(i) Missing Rolling Stock. If any tractor or trailer
comprising the Rolling Stock is Missing (as hereinafter
defined) as of the date of Closing, the Purchase Price shall
be reduced by an amount equal to the aggregate value set forth
on the Agreed Values Schedule for the type of tractor or
trailer that is Missing. As used herein, a tractor or trailer
shall be deemed "Missing" if it has not been located prior to
Closing by Purchaser (or, with respect to trailers, there is a
lack of evidence satisfactory to Purchaser in dispatch records
or otherwise of such trailer's current use), and, with respect
to tractors, if it has not also been inspected by
representatives of Purchaser (including inspections by drivers
if authorized) prior to Closing. Purchaser shall provide
Seller, on a weekly basis, with an inventory, updated as
appropriate, indicating that Rolling Stock which Purchaser has
located and inspected and that Rolling Stock which is Missing
or Destroyed (as hereinafter defined).
(ii) Destroyed Rolling Stock. If any tractor or
trailer comprising the Rolling Stock is deemed to be Destroyed
as of the date of Closing, the Purchase Price shall be reduced
by an amount equal to the value set forth on the Agreed Values
Schedule for the type of tractor or trailer that is Destroyed.
As used herein, the term "Destroyed" shall mean any Rolling
Stock which has sustained damage, the repair of which is
estimated to cost in excess of 25% of the value of such
Rolling Stock (as such value is established on the Agreed
Values Schedule).
(iii) Deduction for Repairs and Excessive Wear.
Purchaser is acquiring the Rolling Stock with the expectation
that it will be in average condition for Rolling Stock of its
age and type, and that it will have been maintained and
serviced in a manner consistent with the requirements of the
various manufacturers and the United States Department of
Transportation ("DOT") standards. Each item of Rolling Stock
must not be damaged, require repair or extraordinary
maintenance and must be in sound and roadworthy operating
condition at the Asset Possession Date. Each item of Rolling
Stock: (1) must contain no physical damage, including but not
limited to broken glass, and interior and exterior sheet metal
damage which, in the aggregate, exceeds $750; (2) the tires
must contain at least 50% of the original tread on the steer
axle and at least 50% of the original first-time recap or
retread on the drive or trailer axles; and (3) there must be
remaining at least 50% of the brake lining for each such item
of Rolling Stock (collectively the "Applicable Standard"). To
the extent that any item of Rolling Stock does not meet the
Applicable Standard, the Rolling Stock Value shall be reduced
(the "Damage Deduction") on a per item basis, based upon the
actual or estimated cost (which shall be commercially
reasonable) to bring each item of Rolling Stock up to the
Applicable Standard, but not to a new condition or any
condition substantially higher than the Applicable Standard.
All Rolling Stock shall be subject to inspection by Purchaser.
(iv) Location of Missing Rolling Stock. If after the
Closing representatives of Purchaser or Seller locate tractors
or trailers comprising the Rolling Stock that were categorized
as Missing at the Closing and for which an Adjustment to the
Purchase Price was made pursuant to Section 1.4.4 hereof,
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Purchaser shall pay Seller the value of such Missing Rolling
Stock pursuant to the amount set forth on the Agreed Values
Schedule within ten days of the location of the Missing
Rolling Stock. All Rolling Stock which has not been located
within 90 days after Closing shall be presumed to be
permanently Missing, and title to such assets along with title
to Destroyed Rolling Stock shall not transfer to Purchaser but
shall be retained by Seller.
(b) Disposition of Assets. In the event that Seller has sold
or otherwise disposed of any of the Equipment or the Inventory shown on
the October 31 Balance Sheet since October 31, 1998, or if any such
Equipment or the Inventory has been destroyed, by fire, damage or
otherwise since October 31, 1998, which Equipment or Inventory is not
replaced prior to the Asset Possession Date, the Purchase Price shall
be reduced by the replacement value of such Equipment and Inventory so
disposed of or destroyed and not replaced.
(c) Loss of Drivers. The Purchase Price shall be adjusted for
the variance between the number of drivers (including employees and
owner-operators) below or above 175 (the "Minimum Driver Count") as set
forth herein. The total number of drivers (including employees and
owner-operators) shall be determined as of December 18, 1998 and
compared to the Minimum Driver Count. For each driver below the Minimum
Driver Count, the Purchase Price shall be adjusted downward by $5,000.
For each driver above the Minimum Driver Count, the Purchase Price
shall be adjusted upward by $5,000. For purposes of calculating the
number of drivers as of December 18, 1998, Seller shall be entitled to
include (i) any driver employed by Seller on the date hereof who is
employed by Purchaser on December 18, 1998; (ii) any prospective
employee listed on Schedule 1.4.4(c) hereto who is hired by Purchaser
by December 18, 1998; and (iii) any owner-operator under contract with
Seller on the date of this Agreement who accepts employment as a driver
with or contracts as an owner-operator with Purchaser by December 18,
1998.
1.4.5 No Assumption of Liabilities. Except with respect to the
liabilities Purchaser agrees to assume in writing prior to Closing (the "Assumed
Liabilities"), Purchaser shall not assume or be responsible for any Liability
(as hereinafter defined) of Seller, whether accrued before or after the Closing
Date. For purposes of this Agreement, the term "Liability" or "Liabilities"
shall include, without limitation, any direct or indirect indebtedness,
guarantee, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown, asserted or
unasserted, choate or inchoate, liquidated or unliquidated, secured or
unsecured, matured or unmatured, absolute or contingent, whether arising under
contract, tort or by statute. All Assumed Liabilities shall be set forth on
Schedule 1.4.5 attached hereto prior to Closing. Without limiting the breadth
and generality of the foregoing, except for the Assumed Liabilities, Purchaser
shall not assume or incur any Liability in respect to any of the following:
(a) Liabilities to any of Seller's creditors for deficiencies
following the sale, return or other disposition of any Assets,
including, but not limited to, the Rolling Stock, which are subject to
their respective security interests or leases;
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(b) Any product liability, cargo liability, vehicle accident,
premises liability, or similar claim for injury to person or property,
regardless of when made or asserted, which arises out of or is based
upon any express or implied representation, warranty, agreement or
guarantee made by Seller, or alleged to have been made by Seller, or
which is imposed or asserted to be imposed by operation of law, and any
claim seeking recovery for consequential damage, lost revenue or
income;
(c) Any liability arising from or incurred in connection with
any violation or noncompliance with any or all laws, regulations or
orders relating to Hazardous Substances (as hereinafter defined). As
used in this Section, the term "Hazardous Substances" means any
hazardous or toxic substances, pollutants, contaminants, materials or
wastes, including but not limited to those substances, pollutants,
contaminants, materials and wastes listed in the DOT Table (49 CFR
172.101) or by the Environmental Protection Agency as hazardous
substances pursuant to 40 CFR Part 302, or such substances, materials
and wastes which are regulated under any federal environmental law or
any applicable local or state environmental law, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), as supplemented and amended, or the
Resource Conservation and Recovery Act, as amended ("RCRA"), 42 U.S.C.
ss. 6901, et seq.; toxic substances as defined under the Toxic
Substance Control Act, 15 U.S.C. ss. 2601, et seq.; or any of the
following: hydrocarbons, petroleum and petroleum products, asbestos,
polychlorinated biphenyls, formaldehyde, radioactive substances,
flammables and explosives;
(d) Any foreign, federal, state or local Taxes: (i) payable
with respect to the business, assets, properties or operations of
Seller or any member of any affiliated group of which either is a
member; or (ii) incident to or arising as a consequence of the
negotiation or consummation by Seller or any member of any affiliated
group of which either is a member of this Agreement and the
transactions contemplated hereby, provided that the foregoing shall not
apply to Taxes payable by Purchaser;
(e) Any Liability arising prior to or as a result of the
transactions contemplated by this Agreement to any employees, agents or
independent contractors of Seller, whether or not employed by Purchaser
after the Asset Possession Date, or under any benefit arrangement with
respect thereto; and
(f) Any Liability of Seller arising or incurred in connection
with the negotiation, preparation and execution of this Agreement and
the transactions contemplated hereby including fees and expenses of
counsel, accountants, trustees and other experts.
1.4.6 Procedures for Adjustments to Purchase Price. The parties agree
that they shall make a preliminary assessment of the Adjustments pursuant to
Sections 1.4.3, 1.4.4 and 1.4.5 as of a date which is two business days prior to
the Closing Date based on the most current information then available as to:
(a) Missing Rolling Stock and Destroyed Rolling Stock;
(b) an assessment of any Damage Deduction to the Rolling
Stock;
(c) any dispositions or destruction of Assets as contemplated
in Section 1.4.4(b);
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(d) the adjustment contemplated in Section 1.4.4(c) for
drivers below or above the Minimum Driver Count;
(e) the pay-off amount required to retire all liens and to
establish clear title (except for liens related to the Assumed
Liabilities) pursuant to Section 1.4.3;
(f) the amounts attributable to Assets as to which clear title
cannot be delivered pursuant to Section 1.4.3; and
(g) the amount of Assumed Liabilities under Section 1.4.5.
(collectively, the "Preliminary Adjustments").
The Purchase Price shall be reduced or increased, as appropriate, by
the aggregate amount of the Preliminary Adjustments, if any. Within 30 days
after the Closing, Purchaser shall present to Seller a statement showing the
proposed final amount of the Adjustments, which statement Seller shall have 30
days to review. If Seller should desire to dispute any of such proposed final
adjustments, it shall notify Purchaser of any disputed items, containing
reasonable detail of the nature of the dispute within said 30-day period. The
parties shall attempt in good faith to reconcile such dispute in the 45 days
after the expiration of said 30-day period. If the parties are unable to agree
upon the resolution of such dispute in said period, the parties agree to
endeavor to settle the dispute in an amicable manner by mediation under the
Commercial Mediation Rules of the American Arbitration Association. If mediation
is not successful within 30 days after referral to mediation, the matter shall
be submitted to arbitration in Lexington, Kentucky in accordance with the rules
and procedures of the American Arbitration Association, and any disputed amounts
of the proposed Final Adjustments shall thereafter be determined by the
arbitrator in such arbitration (the "Arbitrator"). The engagement of and the
determination by the Arbitrator shall be completed within 60 days after such
assignment is given to the Arbitrator and shall be binding on and shall be
nonappealable by Seller and Purchaser. The fees and expenses payable to the
Arbitrator in connection with such determination will be borne 50% by Seller and
50% by Purchaser, unless (i) the determination of the Arbitrator with respect to
the disputed amounts results in a payment by Seller in an amount which exceeds
by more than $10,000 the amount Seller shall have claimed it owes hereunder; in
which case all of the fees and expenses payable to the Arbitrator shall be paid
by Seller, or (ii) the determination of the Arbitrator with respect to the
disputed amounts results in a payment by Purchaser in an amount which exceeds by
more than $10,000 the amount Purchaser shall have claimed it owed hereunder, in
which case all of the fees and expenses payable to the Arbitrator shall be paid
by Purchaser. The final adjustments as agreed upon by the parties or as
determined by arbitration are herein referred to as the "Final Adjustments."
Within 10 days of the determination of the Final Adjustments, the Final
Adjustments shall be compared to the Preliminary Adjustments, and if the
deductions represented by the Final Adjustments are less than those represented
by the Preliminary Adjustments, Purchaser shall pay Seller such difference, and
if the deductions represented by the Final Adjustments are more than those
represented by the Preliminary Adjustments, Seller shall pay Purchaser such
difference, in each case in immediately available funds. Notwithstanding the
foregoing, any payment pursuant to this Section 1.4.6 shall be net of any
payments for located Missing Rolling Stock which have been made subsequent to
Closing pursuant to Section l.4.4(a)(iv).
1.5 INDIANAPOLIS TERMINAL. As of the Asset Possession Date, Purchaser
agrees to lease Seller's terminal located at 4808 West 96th Street,
Indianapolis, Indiana (the "Indianapolis Terminal") for a period of not less
than six months (unless the transactions contemplated hereby are terminated
pursuant to Section
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9.1 hereof, in which case said lease shall expire contemporaneously with such
termination). Purchaser's obligation to lease the Indianapolis Terminal is
conditioned upon the following:
(a) Purchaser's receipt of a Report of Preliminary
Environmental Site Assessment of the Indianapolis Terminal containing
results satisfactory to Purchaser (the "Phase I"); and
(b) execution of a lease in the form attached hereto as
Exhibit C (the "Realty Lease").
1.6 LEASE OF ROLLING STOCK. As of the Asset Possession Date, Purchaser
shall lease the Rolling Stock pursuant to a lease in the form attached hereto as
Exhibit D (the "Rolling Stock Lease").
1.7 CUSTOMER CONTACTS. Seller agrees that beginning on December 11,
1998, Purchaser shall be entitled to contact customers of Seller with the
intention of transitioning their business to Purchaser. Seller agrees to
cooperate with Purchaser in making such initial contacts, and in moving the
accounts to Purchaser.
1.8 TRANSFER OF POSSESSION OF ASSETS. In order to effect an orderly
sale of the Assets, Seller and Purchaser have agreed that, subject to the
satisfaction of the conditions set forth in Section 5 hereof, effective at 12:01
a.m., Indianapolis time, on the Asset Possession Date, Purchaser shall (a) lease
the Rolling Stock pursuant to Section 1.7; (b) employ such of Seller's employees
as it elects to employ; (c) lease the Indianapolis Terminal pursuant to the
Realty Lease; and (d) be entitled to use the inventory and spare parts to the
extent necessary to operate the Assets.
1.8.1 In Transit Assets. Seller and Purchaser recognize that certain
Rolling Stock will have been dispatched by Seller and will be "in transit" at
the time of the Asset Possession Date. If the Rolling Stock has been dispatched
to pick up a load from a shipper and such load has been loaded onto the truck on
or before 11:59 p.m. on December 11, 1998, then such load shall be considered a
"Pre-Asset Possession Load." Any shipment which is loaded after 11:59 p.m. on
December 11, 1998 shall be considered a "Post-Asset Possession Load." All
revenues derived from Pre-Asset Possession Loads shall be for the benefit of,
and shall belong to, Seller, and all revenues derived from Post-Asset Possession
Loads shall be for the benefit of, and shall belong to, Purchaser.
(a) Obligations with Respect to Pre-Asset Possession Loads and
Post-Asset Possession Loads. Seller shall bear the risk of loss with
respect to Rolling Stock that is used to deliver any Pre-Asset
Possession Load until such load has been delivered and the Rolling
Stock is available for dispatch by Purchaser. For purposes of this
Section 1.9.1, the phrase "available for dispatch by Purchaser" shall
mean that time when the Rolling Stock has delivered its load and is
available to Purchaser for dispatch to another location; provided that
for any Pre-Asset Possession Load that is delivered to a location
outside of Seller's Normal Service Area (as defined in Schedule
1.8.1(a)), "available for dispatch by Purchaser" shall mean the earlier
of that time when the Rolling Stock is (i) returned to the Indianapolis
Terminal; (ii) parked at a driver's residence, if such tractor is
typically parked at a driver's residence; or (iii) at the pick-up
location for the first assigned load following the Asset Possession
Date. Purchaser shall bear the risk of loss with respect to Rolling
Stock which is used to deliver any Post-Asset Possession Load. Seller
shall maintain full insurance coverage (i.e., physical damage, property
damage and liability insurance) identical to its present coverage
covering all Rolling Stock delivering Pre-Asset Possession Loads. All
drivers delivering Pre-Asset Possession Loads shall continue to be
employees of Seller until such loads have been delivered and any such
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driver is available for dispatch by Purchaser (assuming that Purchaser
has offered that driver employment). Seller agrees to indemnify, defend
and hold Purchaser harmless from any type of claim or liability which
may arise or be asserted against Purchaser for injury, death or
property damage arising from the delivery of any Pre-Asset Possession
Load (including any transit required to make the Rolling Stock
available for dispatch by Purchaser). Purchaser agrees to indemnify,
defend and hold Seller harmless from any type of claim or liability
which may arise or be asserted against Seller for injury, death or
property damage arising from the delivery of any Post-Asset Possession
Load.
(b) Expenses for Pre-Asset Possession Loads and Post-Asset
Possession Loads. All costs and expenses incurred in connection with
delivering Pre-Asset Possession Loads (including any transit required
to make the Rolling Stock available for dispatch by Purchaser) shall be
the sole obligation of Seller, including, but not limited to, fuel,
salaries and per diem payments to drivers. Purchaser shall bear all
such costs and expenses incurred in connection with delivering
Post-Asset Possession Loads.
1.8.2 Certain Costs and Expenses. Purchaser and Seller understand and
agree that during the period from the Asset Possession Date through the time
when Seller is able to complete and wind down its business, there may be
instances where certain costs and expenses will need to be allocated. The
parties agree to work cooperatively to make such allocations in a manner
consistent with the provisions of this Agreement.
1.8.3 Use of Office Space, Equipment and Systems.
(a) Pre-Closing. Seller agrees that from the date of this
Agreement until the Closing, Purchaser shall be entitled to use the
office equipment and systems of Seller as required in connection with
Purchaser's commencement of operations at the Indianapolis Terminal.
The parties agree that Purchaser's use of the facilities shall be at
its own cost and expense and, accordingly, Purchaser shall reimburse
Seller for utilities and the cost of any employees of Seller providing
services to Purchaser.
(b) Post-Closing. Purchaser agrees to allow Seller to continue
to use the office equipment and systems and software in connection with
the winding down of its business through March 31, 1999. During such
period, Seller shall be entitled to maintain reasonable office space
for up to four employees. Subsequent to March 31, 1999, Purchaser and
Seller agree to negotiate any continued joint use of facilities and
equipment.
(c) Proration of Certain Expenses. Utility charges, real
estate and personal property taxes, and other similar expenses in
respect of the Assets and the Business shall be adjusted ratably as of
the Asset Possession Date. The net amount payable either to the
Purchaser by the Seller or to the Seller by the Purchaser as a result
of such adjustments shall be determined and adjusted on a monthly
basis.
(d) Certain Direct Costs. During the period of joint use of
any office equipment, each party shall be responsible for direct costs
associated with operation of the office equipment. By way of example,
to the extent Seller requires continued use of software programs
included in the Assets,
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Seller shall be responsible for any license, maintenance or other fees
and expenses associated with such continued usage.
2. CLOSING
The closing (the "Closing") of the sale and purchase of the Assets
shall take place at the offices of Scopelitis, Garvin, Light & Hanson, 10 West
Market Street, Suite 1500, Indianapolis, Indiana 46260 on January 6, 1999, or at
such location and at such time as the parties may otherwise agree, provided the
conditions set forth in Section 6 have been satisfied or waived by the party
whose obligations are subject to such condition or on such other date as may be
mutually agreed upon in writing by Purchaser and Seller. The date of the Closing
is sometimes herein referred to as the "Closing Date."
3. REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER. Laker and Pressler,
jointly and severally, represent and warrant to Purchaser as follows:
3.1.1 Corporate Existence and Organization. Laker is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Indiana, and Laker is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the conduct of the Business by it
requires it to be so qualified, as evidenced by certificates of good standing
issued by each such jurisdiction, except for those jurisdictions where the
failure to be so qualified will not have a material adverse effect on Laker.
There are no agreements affecting Laker's corporate governance other than the
Articles of Incorporation and Bylaws.
3.1.2 Corporate Power; Authorization; Enforceable Obligations. Seller
has the corporate power, authority and legal right to execute, deliver and
perform this Agreement. This Agreement and the underlying transactions
contemplated hereby, and the execution, delivery and performance of this
Agreement by Seller have been duly authorized by all necessary corporate and
shareholder action. This Agreement has been, and the other agreements, documents
and instruments required to be delivered by Seller in accordance with the
provisions hereof (the "Seller's Documents") will be, duly executed and
delivered on behalf of Seller by duly authorized officers of Seller; and this
Agreement constitutes, and the Seller's Documents when executed and delivered
will constitute, the legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms. Pressler has valid
power, authority and legal right to execute, deliver and perform the Seller's
Documents, which are the legal, valid and binding obligations of Pressler,
enforceable against Pressler in accordance with their respective terms.
3.1.3 Safety Rating. Seller has now, and since the commencement of its
operations, has maintained a "Satisfactory" safety rating as promulgated by the
DOT and is not aware of any issues, deficiencies or violations which would
change such rating. Seller is not aware of any notice of any intended, pending
or proposed audit of its operations by the DOT or any other governmental entity
having jurisdiction over the operations of Seller.
3.1.4 Validity of Contemplated Transactions. The execution, delivery
and performance of this Agreement by Seller does not and will not violate,
conflict with or result in the breach of any material term, condition or
provision of, or require the consent of any other person under, (a) any existing
law, ordinance or governmental rule or regulation to which Seller is subject,
(b) any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or authority which is
applicable
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to Seller, (c) the charter documents of Laker or any securities issued by Laker,
or (d) any mortgage, indenture, agreement, contract, commitment, lease, plan,
Authorizations (defined in Section 3.1.14), or other instrument, document or
understanding, oral or written, to which Seller is a party, by which Seller may
have rights or by which any of the Assets may be bound or affected, or give any
party with rights thereunder the right to terminate, modify, accelerate or
otherwise change the existing rights or obligations of Seller thereunder. No
Authorization, approval or consent of, and no registration or filing with, any
governmental or regulatory official, body or authority is required in connection
with the execution, delivery or performance of this Agreement by Seller.
3.1.5 Capitalization, Ownership of Shares and Third Party Options.
(a) Pressler is the lawful record and beneficial owner of all
of the issued and outstanding capital stock of Laker. All of such
capital stock is owned free and clear of all liens, encumbrances and
restrictions of every kind except for restrictions on transfer under
federal and state securities laws.
(b) There are no outstanding options, warrants, rights
(including conversion or preemptive rights) or agreements for the
purchase or acquisition from Seller of any shares of its capital stock.
(c) Laker has no subsidiaries and is not a general partner in
any partnership.
(d) Except as set forth on Schedule 3.1.5(d), there are no
existing agreements, options, commitments or rights with, of or to any
person to acquire any of Seller's assets, properties or rights included
in the Assets or any interest therein. Seller is not subject to any
restrictive covenants or covenants not to compete that would interfere
with the operation of the Business on a national scale.
3.1.6 Financial Statements. Seller has delivered to Purchaser true and
complete copies of (a) the audited balance sheets of Seller as at its fiscal
year end for each of the years December 31, 1995, 1996, and 1997 and the related
audited statements of income, cash flow and changes in shareholders equity for
the fiscal years then ended, certified by Seller's auditors (the "Audited
Statements") and; (b) the unaudited balance sheet of Seller as of October 31,
1998 and related statements of income and cash flow for the periods then ended
(the "Interim Statements" and, together with the Audited Statements, the
"Financial Statements"), all of which have been prepared in accordance with
GAAP, except as indicated in the notes thereto, consistently applied throughout
the periods involved. The Financial Statements, including the related notes,
fairly present the financial position, assets and liabilities (whether accrued,
absolute, contingent or otherwise) of Seller at the dates indicated, and such
statements of income, cash flow and changes in shareholders equity fairly
present the results of operations, cash flow and changes in shareholders equity
of Seller for the periods indicated. The Interim Statements contain all
adjustments, which are solely of a normal recurring nature, necessary to present
fairly the financial position for the periods then ended, subject to normal
year-end adjustments.
3.1.7 Accounts Receivable. The accounts receivable of Seller shown in
the Financial Statements (the "Accounts Receivable") do not include any amounts
attributable to services yet to be performed. All of the Accounts Receivable are
actual and bona fide receivables representing obligations for the total dollar
amount thereof shown on the books of the Seller which resulted from the regular
course of the Seller's
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business. The reserve for collection losses on the Interim Statements has been
determined in accordance with GAAP consistent with past practice.
3.1.8 Inventory. All inventory of Seller used in the conduct of the
Business, reflected on the Financial Statements or acquired since the date
thereof, was acquired and has been maintained in the ordinary course of the
Business; is of good and merchantable quality, normal wear and tear excepted; in
Seller's judgment consists substantially of a quality, quantity and condition
usable in the ordinary course of the Business; is valued at reasonable amounts
based on the ordinary course of business of Seller; and is not subject to any
material write-down or write-off.
3.1.9 Tax and Other Returns and Reports. Except as listed on Schedule
3.1.9, to the best of Seller's knowledge, all federal, state, local and foreign
tax returns, reports, statements and other similar filings required to be filed
by Seller (the "Tax Returns") with respect to any federal, state, local or
foreign taxes, assessments, interest, penalties, deficiencies, fees and other
governmental charges or impositions, (including, without limitation, all income
tax, unemployment compensation, social security, payroll, sales and use, excise,
privilege, property, ad valorem, franchise, license, school, fuel and any other
tax or similar governmental charge or imposition under laws of the United States
or any state or municipality or political subdivision thereof or any foreign
country or political subdivision thereof) (the "Taxes") have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, and all such Tax Returns reflect in all material
respects the liabilities of Seller for Taxes for the periods, property or events
covered thereby. All Taxes, including without limitation those which are called
for by the Tax Returns or are heretofore or hereafter claimed to be due by any
taxing authority from Seller, have been accrued as shown on the financial
statements or paid, and no Taxes are currently delinquent, except those being
disputed in good faith by Seller as identified on Schedule 3.1.9. In all
material respects, and to Seller's best knowledge, the accruals for Taxes
contained in the Financial Statements are adequate to cover the tax liabilities
of Seller with respect to the Business as of that date and include adequate
provision for all deferred taxes, and nothing has occurred subsequent to that
date to make any of such accruals inadequate. Seller has not received any notice
of assessment or proposed assessment in connection with any Tax Returns, and
except as listed on Schedule 3.1.9, there are no pending tax examinations or
audits of or tax claims asserted against Seller or any of its assets or
properties of which Seller is aware. Seller has not extended or waived the
application of any statute of limitations of any jurisdiction regarding the
assessment or collection of any Taxes. There are no tax liens (other than any
lien for current taxes not yet due and payable) on any of the assets or
properties of Seller. Seller has no knowledge of any basis for any additional
material assessment of any Taxes. To its best knowledge, Seller has made all
deposits required by law to be made with respect to employees' withholding and
other employment taxes, including without limitation the portion of such
deposits relating to taxes imposed upon Seller.
3.1.10 Books of Account. The books, records and accounts of Seller
maintained with respect to the Business accurately and fairly reflect, in
reasonable detail, the Assets and Liabilities of Seller in all material
respects. Seller has not engaged in any transaction with respect to the
Business, maintained any bank account for the Business or used any of the funds
of Seller in the conduct of the Business except for transactions, bank accounts
and funds which have been and are reflected in the normally maintained books and
records of the business.
3.1.11 Existing Condition. Since October 31, 1998, Seller has not:
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(a) incurred any material Liabilities, other than Liabilities
incurred in the ordinary course of business, consistent with past
practice, failed to pay or discharge when due any Liabilities of which
the failure to pay or discharge has caused or will cause any material
damage or risk of material loss to it or any of its assets or
properties;
(b) except as disclosed in Schedule 3.1.11(b), sold,
encumbered, assigned or transferred any material assets or properties
which would have been included in the Assets if the Closing had been
held on the date of the October 31 Balance Sheet or on any date since
then, except for the sale of Assets, use or consumption of inventory in
the ordinary course of business consistent with past practice;
(c) created, incurred, assumed or guaranteed any indebtedness
for money borrowed, or mortgaged, pledged or subjected any of the
Assets to any mortgage, lien, pledge, security interest, conditional
sales contract or other encumbrance of any nature whatsoever, except
for any Liens related to the Assumed Liabilities ("Permitted Liens");
(d) except as disclosed in Schedule 3.1.11(d), suffered any
damage, destruction or loss, whether or not covered by insurance, (i)
materially and adversely affecting its business, operations, assets,
properties or prospects or (ii) of any item or items carried on its
books of account individually or in the aggregate at more than $5,000,
or suffered any repeated, recurring or prolonged shortage, cessation or
interruption of supplies or utility or other services required to
conduct its business and operations;
(e) suffered any material adverse change in its business,
operations, assets, properties, prospects or condition (financial or
otherwise);
(f) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or
condition of any similar character which has had or might have a
material adverse effect on its business, operations, assets, properties
or prospects;
(g) made commitments or agreements for capital expenditures or
capital additions or betterments exceeding in the aggregate $10,000,
except such as may be involved in ordinary repair, maintenance or
replacement of its assets;
(h) increased the salaries or other compensation of, or made
any advance (excluding advances for ordinary and necessary business
expenses) or loan to, any of its employees or made any increase in, or
any addition to, other benefits to which any of its employees may be
entitled;
(i) changed any of the accounting principles followed by it or
the methods of applying such principles; or
(j) entered into any material transaction other than in the
ordinary course of business consistent with past practice.
3.1.12 Title to Properties. Seller has good, valid and marketable title
to all of its properties and assets, real, personal and mixed, which would be
included in the Assets if the Closing took place on the date hereof, which it
purports to own, including without limitation all Assets to be acquired under
this Agreement
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and as reflected in the October 31 Balance Sheet (except for inventory sold,
used or consumed since the date thereof in the ordinary course of business
consistent with past practice). Except for Permitted Liens, the Assets are free
from all liens, claims, restrictions, equitable interests, pledges, options,
security interests, rights of way, rights of first refusal and encumbrances,
including liens, if any, for ad valorem personal property taxes and federal
taxes.
3.1.13 Condition of Tangible Assets; Availability of Assets. All
equipment, machinery, vehicles and other material items of tangible property and
assets which would be included in the Assets if the Closing took place on the
date hereof (except for Rolling Stock which is deemed to be Destroyed or
Missing) are in Seller's possession and control, are in good operating condition
and repair, subject to normal wear and maintenance, are usable in the regular
and ordinary course of Seller and Purchaser's business and materially conform to
all applicable laws, ordinances, codes, rules, regulations, authorizations,
warranties and maintenance schedules relating to their construction,
manufacture, modification, use and operation. The Rolling Stock is in an average
condition for Rolling Stock of its age and type and has been maintained and
serviced in a manner consistent with manufacturers' requirements and DOT
standards. No person other than Seller or the owner-operators with whom Seller
has valid contracts owns any equipment or other assets or properties, tangible
or intangible, used in or necessary to the operation of the Business, except for
leased property. The Assets and the Excluded Assets constitute all the assets,
tangible or intangible, necessary for the operation of the Business in Seller's
judgment.
3.1.14 Compliance with Law; Authorizations. To its best knowledge,
Seller has complied with each, and is not in material violation of any, law,
ordinance, or governmental or regulatory rule or regulation, whether federal,
state, local or foreign, to which Seller's business, operations, assets or
properties is subject (the "Regulations"). To the best of its knowledge, Seller
owns, holds, possesses or lawfully uses in the operation of its business all
operating authorities, franchises, licenses, permits, easements, rights,
applications, filings, registrations and other authorizations (the
"Authorizations") which are materially necessary for it to conduct its business
as now or previously conducted or for the ownership and use of the assets owned
or used by Seller in the conduct of the business of Seller, in material
compliance with all Regulations. Schedule 3.1.14 listing such Authorizations
shall be delivered to Purchaser on or before December 31, 1998. To Seller's best
knowledge, Seller is not in material default, nor has it received any notice of
any claim of default, with respect to any such Authorization.
3.1.15 Insurance. The Assets and operations of Seller are insured under
various policies of general liability and other forms of insurance, all of which
is described in Schedule 3.1.15 and which will disclose for each policy the
risks insured against, coverage limits, deductible amounts, all outstanding
claims thereunder, and whether the terms of such policy provide for
retrospective premium adjustments. All such policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both, would constitute a default thereunder. All
premiums to date have been paid in full through the periods provided.
3.1.16 Contracts and Commitments.
(a) Purchaser shall not assume any of Seller's obligations,
except contracts and agreements which are listed in Schedule 3.1.16
attached hereto (the "Assumed Contracts"), under any written or oral
agreements, contracts, commitments, instruments, options or
undertakings.
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(b) To the best of Seller's knowledge, as of the Closing Date,
each of the Assumed Contracts is valid and enforceable in accordance
with its terms. As of the Closing Date, Seller will be and to Seller's
knowledge all other parties thereto will be, in compliance with the
material provisions thereof; Seller will not be, and to Seller's
knowledge, no other party thereto will be, in default in the
performance, observance or fulfillment of any material obligation,
covenant or condition contained therein. Except as set forth on
Schedule 3.1.16, no such Agreement requires the consent of any party to
its assignment in connection with the transactions contemplated hereby.
(c) Each Assumed Contract as delivered is the full, correct
and complete copy thereof.
(d) Schedule 3.1.16 accurately discloses with respect to each
Assumed Contract, the customer name; the form from which such contract
has been derived; whether or not the contract amount is fixed or may be
varied based on services performed; if the contract amount is fixed,
the contract amount, or, if the contract amount is not fixed, a good
faith, reasonable estimate of the contract amount and the estimated
contract amount most recently communicated to the customer; a good
faith, reasonable estimate of the work completed and total costs
incurred to the date hereof thereunder; the total billings as of the
date hereof under such contract; the estimated completion dates
therefor; and whether such contract requires the furnishing of goods or
services by persons other than the employees of Seller.
3.1.17 Additional Information. Attached as Schedule 3.1.17 is an
accurate list and summary descriptions of the following:
(a) all inventory, equipment, furniture and fixtures of Seller
included in the Assets as of the date of the October 31 Balance Sheet,
specifying such items as are owned and such as are leased and, with
respect to the leased property as to which Seller is a lessee,
specifying the identity of the lessor, the rental rate and the
unexpired term of the lease; and
(b) the names and titles of and current annual base salary or
hourly rates for all employees of Seller engaged in the conduct of the
Business, together with a statement of the full amount and nature of
any other remuneration, whether in cash or kind, paid to each such
person during the past or current fiscal year or payable to each such
person in the future and the bonuses accrued for the vacation and
severance benefits to which each such person is entitled.
3.1.18 Labor Matters. Seller is not a party to any collective
bargaining agreement, no such agreement determines the terms and conditions of
employment of any employee of Seller, no collective bargaining agent has been
certified as a representative of any of the employees of Seller to Seller's
knowledge, and no representation campaign or election is now in progress with
respect to any of the employees of Seller. If Purchaser reasonably determines
that it is required to send a notice under 29 U.S.C. ss.ss. 2101-2109 (the "WARN
Act") or state law notice to any of Seller's employees prior to Closing, Seller
will provide to Purchaser any information necessary or helpful in the sending of
such notice, will cooperate with Purchaser in providing such notice, and will
assist Purchaser in coordinating responses to inquiries and requests by such
employees. To the best of its knowledge, Seller is in material compliance with
all applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours. Any workers' compensation claims
filed against Seller in the past two years are fully reserved against on the
October 31 Balance Sheet and are listed on Schedule 3.1.18. There is no labor
strike, dispute, slow-down or work stoppage actually pending or, to the
knowledge of Seller, threatened with respect
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to Seller's employees. Since the date of the Interim Statements, Seller has not
made or agreed to any increase in the amount, rate, terms or method of
calculation of compensation to any existing or former employee of Seller, except
as listed in Schedule 3.1.18.
3.1.19 Employee Benefit Plan and Arrangements. Purchaser shall have no
liability for any employee benefit plans of Seller, whether formal or informal,
whether or not set forth in writing, and whether covering one person or more
than one person, sponsored or maintained by the Seller. For the purposes hereof,
the term "employee benefit plan" includes all plans, funds, programs, policies,
arrangements, practices, customs and understandings providing benefits of
economic value to any employee, former employee, or present or former
beneficiary, dependent or assignee of any such employee or former employee other
than regular salary, wages or commissions paid substantially concurrently with
the performance of the services for which paid. Without limitation, the term
"employee benefit plan" includes all employee welfare benefit plans within the
meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and all employee pension benefit plans within the meaning
of section 3(2) of ERISA. Set forth on Schedule 3.1.19 is a complete list of all
employee benefit plans maintained by Seller. Except as set forth on Schedule
3.1.19, Seller has not incurred or reasonably expects to incur prior to the
Closing, any liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA that is likely to become, after the
Closing, an obligation of Purchaser. Except as disclosed on Schedule 3.1.19,
Seller is aware of no condition that is likely to constitute grounds for
termination by the PBGC of any employee benefit plan subject to Title IV of
ERISA that is maintained by Seller. To Seller's knowledge, except as set forth
on Schedule 3.1.19, no "reportable event," within the meaning of Section
4043(c)(5), (6) or (10) of ERISA, has occurred in connection with any employee
benefit plan subject to Title IV of ERISA. None of Seller's employee benefit
plans is a "multi-employer plan" as defined in Section 3(37) or Section
4001(a)(3) of ERISA.
3.1.20 Intellectual Property Matters. Set forth on Schedule 3.1.20 is a
complete list of any patent, trademark, trade name, service mark, copyright,
software, or trade secret utilized by Seller in the conduct of the Business (the
"Intellectual Property"), all of which are owned by the Seller free and clear of
any liens, claims, charges or encumbrances except for Permitted Liens. To
Seller's best knowledge, the Seller does not materially infringe upon or
unlawfully or wrongfully use any patent, trademark, trade name, service mark,
copyright or trade secret owned or claimed by another. The Seller is not in
material default under, and has not received any notice of any claim of
infringement or any other claim or proceeding relating to the Intellectual
Property. No present or former employee of the Seller and no other person owns
or has any proprietary, financial or other interest, direct or indirect, in
whole or in part, in any Intellectual Property, or in any application therefor,
or in any trade secret, which the Seller owns, possesses or uses in its
operations as now or heretofore conducted.
3.1.21 Software.
(a) Performance. The computer software of Seller included in
the Intellectual Property (the "Software") represents all of the
software used by Seller to conduct the Business of Seller. Schedule
3.1.21 contains a complete list of all Software, including the trade
name of such Software, its function(s) and any maintenance or license
agreement concerning or related to such Software. The Software performs
substantially in accordance with the documentation and other written
material used in connection with the Software and is in
machine-readable form. Seller is in
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possession of and will deliver at Closing complete and correct copies
of all user and technical documentation related to the Software which
are currently in its possession.
(b) Delivery of All Copies. All copies of the Software
embodied in physical form are being delivered to Purchaser at or prior
to the Closing, with the exception of copies of Software retained by
Seller for use in winding down its business. Seller represents that its
use of the Software during such wind-down period will not violate or
infringe the rights of any third party, and will not violate any
contract or license with respect to the Software.
3.1.22 Environmental Matters.
(a) To Seller's best knowledge, Seller has obtained all
material permits, licenses and other authorizations which are required
in connection with the conduct of the Business (including all of its
leased real estate, the "Real Property") or any other assets owned or
leased by Seller under applicable Regulations relating to pollution or
protection of the environment, including Regulations relating to
emissions, storage, discharges, existence, releases or threatened
releases of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes into the environment (including
without limitation ambient air, surfacewater, groundwater, or land), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes ("Hazardous Material").
(b) To Seller's best knowledge, Seller is in compliance in all
material respects in the conduct of the Business (including the Real
Property and all assets owned or leased by Seller) with all terms and
conditions of the required permits, licenses and authorizations, and is
also in compliance in all material respects with all other applicable
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in those
laws or contained in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder.
(c) Seller is not aware of, nor has Seller received notice of,
any material past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere
with or prevent compliance or continued compliance with those laws or
any regulations, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved
thereunder, or which may give rise to any common law or legal
liability, or otherwise form the basis of any claim, action, demand,
suit, proceeding, hearing, study or investigation, based on or related
to the manufacture, existence, processing, distribution, use,
treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment of any
Hazardous Material.
(d) Seller is not aware of any civil, criminal or
administrative action, suit, demand, claim, hearing, notice or demand
letter, notice of violation, investigation or proceeding pending or
threatened against Seller in connection with the conduct of the
Business (including the Real Property and all assets owned or leased by
the Seller) relating in any way to those laws or any applicable
regulation, code, plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved thereunder, or
which requires any investigation or response activities.
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3.1.23 Real Property.
(a) Leased Real Property. Seller's Indianapolis Terminal is
the only real estate operated by Seller in connection with the conduct
of its business as presently conducted, and Seller has not operated or
owned any other real estate for the period beginning January 1, 1993
through the present. The Indianapolis Terminal is leased to Seller from
Pressler pursuant to a valid and binding lease. The Indianapolis
Terminal is owned by Pressler.
(b) Pollution and Hazardous Substances. To Seller's best
knowledge, Seller has not used, discharged, released, disposed of or
allowed to exist on, under or about any of its assets, including the
Indianapolis Terminal, any radioactive materials, asbestos, organic
compounds known as polychlorinated biphenyls, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including
without limitation any substances defined as or included within the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," or "toxic substances" under any and all Regulations, except
for goods and materials transported as cargo or used in the ordinary
course of the Business (inclusive of petroleum products) and in
compliance with all Regulations. To the best of its knowledge, Seller
has kept and maintained its assets, including the Indianapolis
Terminal, and the waters or any waste on, under or discharged from its
assets, including the Indianapolis Terminal, in material compliance
with, and has not caused or permitted its assets, including the
Indianapolis Terminal, to be in material violation of any regulations
now or previously in effect related to environmental conditions, air,
water and land pollution or the storage or disposition of hazardous or
toxic materials on, under or about its assets, including the
Indianapolis Terminal.
3.1.24 Availability of Documents. Seller has made available to
Purchaser or will make available to Purchaser prior to Closing copies of all
documents, including without limitation all agreements, contracts, commitments,
insurance policies, leases, plans, instruments, undertakings, authorizations,
permits, licenses, patents, trademarks, trade names, service marks, copyrights
and applications therefor reasonably required in the operation of the Business
and requested by Purchaser in its due diligence.
3.1.25 Restrictions. Except for this Agreement and as disclosed herein,
Seller is not a party to any indenture, agreement, contract, commitment, lease,
plan, license, permit, authorization or other instrument, document or
understanding, oral or written, or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or award which
materially adversely affects or materially restricts or, so far as Seller can
now reasonably foresee, may in the future materially adversely affect or
materially restrict, the consummation of the transactions contemplated hereby.
3.1.26 Conditions Affecting Seller. There is no fact, development or
threatened development with respect to the markets, products, services, clients,
customers, facilities, computer software, data bases, personnel, vendors,
suppliers, operations, Assets or prospects of the Business which are known to
Seller which would materially adversely affect the business, operations or
prospects of Seller considered as a whole, other than such conditions as may
affect the economy generally. Apart from attrition commonly associated with
transactions of this type, Seller is not aware of any loss of any employee
(excluding drivers), agent or customer or other advantageous arrangement that
will result because of the consummation of the transactions contemplated hereby.
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3.1.27 Completeness of Disclosure. No representation or warranty by
Seller in this Agreement nor any certificate, schedule, statement, document or
instrument furnished or to be furnished to Purchaser pursuant hereto, or in
connection with the negotiation, execution or performance of this Agreement,
contains or will contain any untrue statement of a material fact, or omits or
will omit to state a material fact required to be stated herein or therein, or
necessary to make any statement herein or therein not misleading.
3.1.28 Customers. Schedule 3.1.28 contains a complete list of the names
of each customer of Seller that purchased services from Seller (the "Seller
Services") with an aggregate value of $100,000 or more during the six month
period ending October 31, 1998. As of the date hereof to the actual knowledge of
the executive officers of Seller, Seller has not received any notice from any
such customer that it has (i) ceased or is planning to cease using the Seller
Services or (ii) within the past 90 days, substantially reduced, or will
substantially reduce, the amount of the Seller Services to be purchased in the
future.
3.1.29 Drivers. Seller warrants that as of December 7, 1998, it had 210
drivers employed and contracted with 13 owner-operators.
3.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to Seller as follows:
3.2.1 Corporate Existence. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Tennessee,
with the corporate power to own its properties and to carry on its business as
now being conducted.
3.2.2 Corporate Power and Authorization. Purchaser has the corporate
power, authority and legal right to execute, deliver and perform this Agreement.
The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate action. This Agreement has been duly
executed and delivered by duly authorized officers of Purchaser and constitutes
the legal, valid and binding obligation of Purchaser enforceable against
Purchaser in accordance with its terms.
3.2.3 Validity of Contemplated Transactions. The execution, delivery
and performance of this Agreement by Purchaser does not and will not violate,
conflict with or result in the breach of any term, condition or provision of, or
require the consent of any other person under, (a) any existing law, ordinance
or governmental rule or regulation to which Purchaser is subject, (b) any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which is applicable to
Purchaser, (c) the charter of Purchaser or any securities issued by Purchaser,
or (d) any mortgage, indenture, agreement, contract, commitment, lease, plan,
authorization or other instrument, document or understanding, oral or written,
to which Purchaser is a party or by which Purchaser may have rights or give any
party with rights thereunder the right to terminate, modify, accelerate or
otherwise change the existing rights or obligations of Purchaser thereunder. No
authorization, approval or consent of, and no registration or filing with, any
governmental or regulatory official, body or authority is required in connection
with the execution, delivery or performance of this Agreement by Purchaser.
Purchaser represents to Seller that it has obtained the approval of its board of
directors as well as the approval of the board of directors of Purchaser's
parent corporation, subject to the fulfillment of the terms and conditions of
this Agreement.
3.2.4 Financial Ability. Purchaser has the financial ability to perform
its obligations under this Agreement and to pay the Purchase Price to Seller in
the manner set forth in this Agreement.
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3.2.5 Safety Rating. Purchaser has now, and since the commencement of
its operations, maintained a "Satisfactory" safety rating as promulgated by the
DOT and is not aware of any issues, deficiencies or violations which would
change such rating. Purchaser is not aware of any notice of any intended,
pending or proposed audit of its operations by the DOT or any other governmental
entity having jurisdiction over the operations of Purchaser.
3.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the parties in this Agreement or in any certificate,
schedule, statement, document or instrument furnished hereunder or in connection
with the negotiation, execution and performance of this Agreement shall survive
the Closing. Notwithstanding any investigation, due diligence or audit conducted
before or after the Closing Date or the decision of any party to complete the
Closing, each party shall be entitled to rely upon the representations and
warranties set forth herein and therein.
4. AGREEMENTS PENDING THE ASSET POSSESSION DATE AND THE CLOSING
4.1 AGREEMENTS OF SELLER PENDING THE ASSET POSSESSION DATE AND THE
CLOSING. Seller covenants and agrees that, pending the Asset Possession Date and
the Closing, as applicable, and except as otherwise agreed to in writing by
Purchaser:
4.1.1 Conduct of Business. Prior to the Asset Possession Date, the
Business shall be conducted in the ordinary course consistent with past
practice. Prior to the Closing, Seller shall not intentionally engage in any
activity or other business competitive with or detrimental to the Business.
Seller shall use its best efforts to conduct the Business and its affairs in
such a manner that on the Asset Possession Date and the Closing Date the
representations and warranties of Seller contained in this Agreement shall be
true, as though such representations and warranties were made on and as of such
date. Seller agrees not to accelerate collection efforts or adopt other
techniques to accelerate collection of Accounts Receivable. Seller shall not
provide any confidential information concerning the Business or its properties
or assets to any third party, other than in the ordinary course of business.
Prior to Closing, Seller covenants to work diligently with the management of
Purchaser to make available to Purchaser its existing business, customers,
drivers and vendors.
4.1.2 Maintenance of Physical Assets. Until the Asset Possession Date,
Seller shall continue to maintain and service the physical assets used in the
conduct of the Business in the same manner as has been its consistent past
practice.
4.1.3 Employees and Business Relations. Seller shall use its best
efforts to keep available the services of the present employees and agents of
the Business and to maintain the relations and goodwill with the suppliers,
customers, distributors and any others having business relations with the
Business.
4.1.4 Maintenance of Insurance. Prior to the Asset Possession Date,
Seller shall notify Purchaser of any changes in the terms of the insurance
coverages, policies and binders relating to the Business.
4.1.5 Maintenance of Authorizations. Seller shall use its best efforts
to maintain in full force and effect all Authorizations currently in effect and
used in the conduct of the Business up to the Asset Possession Date.
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4.1.6 Compliance with Laws. Seller shall use its best efforts to comply
with all applicable laws, ordinances, rules, regulations and orders applicable
to the Business (or Seller's operations, assets or properties in respect
thereof) the noncompliance with which might materially affect the Business or
the Assets.
4.1.7 Updated Schedules. Seller shall promptly disclose to Purchaser
any information contained in its representations and warranties and Schedules
delivered pursuant hereto which, because of an event occurring after the date
hereof, is incomplete or is no longer correct as of all times after the date
hereof until the Closing Date; provided, however, that none of such disclosures
shall be deemed to modify, amend or supplement the representations and
warranties of Seller contained herein for the purposes of Sections 6 and 7
hereof, unless Purchaser shall have consented thereto in writing.
4.1.8 Information Regarding Assets. As promptly as practicable after
the date of this Agreement, and in any event prior to Closing, Seller shall
provide Purchaser a schedule, which shall be attached hereto as Schedule 4.1.8,
of the aggregate cost or original value and the net book value of all inventory,
equipment, furniture and fixtures included in the Assets (to the extent records
are not reasonably available, Seller will estimate such cost or original value).
4.1.9 Cooperative Efforts. Seller shall cooperate with Purchaser and
execute all necessary instruments and documents reasonably requested by
Purchaser to effect the Asset Possession and the Closing. Seller shall use its
best efforts to cause all of the conditions to the obligations of Purchaser and
Seller under this Agreement to be satisfied on or prior to the Asset Possession
Date and the Closing Date, as the case may be.
4.1.10 Sale of Assets. Seller shall not, directly or indirectly, sell
or encumber all or any part of the Assets, other than as contemplated by or
pursuant to this Agreement.
4.1.11 Access. Seller shall give to Purchaser's officers, employees,
counsel, accountants and other representatives free and full access to and the
right to inspect, during normal business hours, all of the premises, properties,
assets, records, contracts and other documents relating to the Assets and the
Rolling Stock, and shall permit them to consult with the officers, employees,
accountants, counsel and agents of Seller for the purpose of making such
investigation of the Assets and the Rolling Stock as Purchaser shall desire to
make. Seller shall furnish to Purchaser all such documents and copies of
documents and records and information with respect to the affairs of the
Business and copies of any working papers relating thereto as Purchaser shall
from time to time reasonably request and shall permit Purchaser and its agents
to make such physical inventories and inspections of the Assets, the Rolling
Stock and the Business as Purchaser may request from time to time.
4.1.12 Press Releases. Except as required by applicable law, neither
Seller nor Purchaser shall give notice to third parties or otherwise make any
public statement or releases concerning this Agreement or the transactions
contemplated hereby except for such written information as shall have been
approved in writing as to form and content by Purchaser, which approval shall
not be unreasonably withheld.
4.1.13 WARN Notice. Seller will comply with all applicable notice
requirements under the WARN Act and all applicable state law counterparts and
will cooperate with Purchaser in doing so.
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4.1.14 Approvals of Governmental Bodies. As promptly as practicable
after the date of this Agreement, Seller will make all filings required by any
federal, state, local, municipal, foreign, international, multinational or other
administrative order, constitution, law, ordinance, principle of common law,
regulation, statute, or treaty (the "Legal Requirements") to be made by Seller
in order to consummate the transactions contemplated by this Agreement
(including all filings under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 or any successor law, and regulations and rules issued pursuant to that Act
or any successor law (the "HSR Act"), if any). Between the date of this
Agreement and the Closing Date, Seller will (a) reasonably cooperate with
Purchaser with respect to all filings that Purchaser reasonably elects to make
or is required by Legal Requirements to make in connection with the transactions
contemplated by this Agreement, and (b) reasonably cooperate with Purchaser in
obtaining all consents required to be obtained in connection with the
transactions contemplated by this Agreement (including taking all actions
requested by Purchaser to cause early termination of any applicable waiting
period under the HSR Act).
4.2 AGREEMENTS OF PURCHASER PENDING THE ASSET POSSESSION DATE AND THE
CLOSING. Purchaser covenants and agrees that, pending the Asset Possession Date
and the Closing and except as otherwise agreed to in writing by Seller:
4.2.1 Actions of Purchaser. Purchaser will not take any action which
would result in a breach of any of its representations and warranties hereunder.
Furthermore, Purchaser shall cooperate with Seller and use its best efforts to
cause all of the conditions to the obligations of Purchaser and Seller under
this Agreement to be satisfied on or prior to the Asset Possession Date and the
Closing Date.
4.2.2 Operation of Assets. After the Asset Possession Date, the Assets
shall be operated by Purchaser in the ordinary course as it operates its fleet.
Prior to the Closing, Purchaser shall not intentionally engage in any activity
detrimental to the operation of Assets. Purchaser shall use its best efforts to
operate the Assets and conduct its affairs in such a manner that on the Closing
Date the representations and warranties of Purchaser contained in this Agreement
shall be true, as though such representations and warranties were made on and as
of such date. Purchaser agrees to assume its responsibilities under the Rolling
Stock Lease. Purchaser shall not provide any confidential information concerning
Assets to any third party, other than as shall be required in the ordinary
course of business.
4.2.3 Maintenance of Physical Assets. After the Asset Possession Date,
Purchaser shall maintain and service the physical Assets consistent with
Purchaser's maintenance practices for its owned rolling stock.
4.2.4 Employees and Business Relations. After the Asset Possession
Date, Purchaser shall use its best efforts to keep available the services of the
employees and agents of Seller hired by Purchaser, normal attrition excepted,
and to maintain the relations and goodwill with such of those suppliers,
customers, distributors and any others previously having business relations with
Seller as Purchaser elects to employ or enter into business relationships.
4.2.5 Maintenance of Insurance. Purchaser agrees to procure and
maintain comprehensive public liability insurance, collision insurance, workers'
compensation coverage and cargo liability insurance through Closing pursuant to
the terms of the Rolling Stock Lease. After the Asset Possession Date, Purchaser
shall notify Seller of any changes in the terms of the insurance coverages,
policies and binders relating to the operation of the Assets.
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4.2.6 Maintenance of Authorizations. After the Asset Possession Date,
Purchaser shall use its best efforts to maintain in full force and effect all
Authorizations currently in effect and used in the conduct of the operation of
the Assets.
4.2.7 Compliance with Laws. After the Asset Possession Date, Purchaser
shall materially comply with all applicable laws, ordinances, rules, regulations
and orders applicable to the operation of the Assets, the noncompliance with
which might materially negatively affect the Assets.
4.2.8 Updated Schedules. Purchaser shall promptly disclose to Seller
any information contained in its representations and warranties and Schedules
delivered pursuant hereto which, because of an event occurring after the date
hereof, is incomplete or is no longer correct as of all times after the date
hereof until the Closing Date; provided, however, that none of such disclosures
shall be deemed to modify, amend or supplement the representations and
warranties of Purchaser contained herein, unless Seller shall have consented
thereto in writing.
4.2.9 Cooperative Efforts. Purchaser shall cooperate with Seller and
execute all necessary instruments and documents reasonably requested by Seller
to effect the Asset Possession and the Closing. Purchaser shall use its best
efforts to cause all of the conditions to the obligations of Purchaser and
Seller under this Agreement to be satisfied on or prior to the Asset Possession
Date and the Closing Date, as the case may be.
4.2.10 Sale of Assets. Purchaser shall not, directly or indirectly,
sell or encumber all or any part of the Assets prior to the Closing.
4.2.11 Press Releases. Except as required by applicable law, Purchaser
shall not give notice to third parties or otherwise make any public statement or
releases concerning this Agreement or the transactions contemplated hereby
except for such written information as shall have been approved in writing as to
form and content by Seller, which approval shall not be unreasonably withheld.
4.2.12 Approvals of Governmental Bodies. As promptly as practicable
after the date of this Agreement, Purchaser will make all filings required by
Legal Requirements to be made by it to consummate the transactions contemplated
by this Agreement (including all filings under the HSR Act, if any). Between the
date of this Agreement and the Closing Date, Purchaser will cooperate with
Seller with respect to all filings that Seller is required by Legal Requirements
to make in connection with the transactions contemplated by this Agreement;
provided that this Agreement will not require Purchaser to dispose of or make
any change in any portion of its business or to incur any other burden to obtain
any governmental authorization.
5. CONDITIONS PRECEDENT TO ASSET POSSESSION DATE
5.1 CONDITIONS PRECEDENT TO ASSET POSSESSION DATE. The obligation of
Purchaser to accept the possession of the Rolling Stock and to lease the
Indianapolis Terminal pursuant to Section 1.9 hereof are, subject to
fulfillment, satisfaction, or waiver at Purchaser's discretion prior to the
Asset Possession Date of each of the following conditions precedent:
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5.1.1 Material Adverse Changes. The business, operations, assets,
properties or prospects of the Business shall not have been and shall not be
threatened to be materially adversely affected in any way as a result of any
event or occurrence.
5.1.2 Phase I. Purchaser shall have received the Phase I on the
Indianapolis Terminal as contemplated by Section 1.6(a) hereof.
5.1.3 No Threatened or Pending Litigation. On the Asset Possession
Date, no suit, action or other proceeding, or injunction or final judgment
relating thereto, shall be threatened or be pending before any court or
governmental or regulatory official, body or authority in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated hereby, and
Seller shall be aware of no investigation that might result in any such suit,
action or proceeding.
5.1.4 Governmental Authorizations. Purchaser shall have obtained all
necessary governmental and quasi-governmental permits, licenses, authorizations,
plates and similar matters to allow it to possess and operate the Rolling Stock
under the Rolling Stock Lease.
6. CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All obligations of
Purchaser under this Agreement are, at Purchaser's discretion, subject to the
fulfillment or satisfaction, on or prior to the Closing, of each of the
following conditions precedent:
6.1.1 Representations and Warranties True as of the Closing Date. The
representations and warranties of Seller contained in Sections 3.1.1, 3.1.2,
3.1.4, 3.1.5, 3.1.6, and 3.1.12 of this Agreement or in any schedule,
certificate or document delivered by Seller to Purchaser pursuant to the
provisions hereof shall be true on the date hereof and shall be true on the
Closing Date with the same effect as though such representations and warranties
were made as of such date, except for such representations as are rendered
untrue by acts or omissions of Purchaser after the Asset Possession Date in
connection with the possession or operation of the Rolling Stock or the lease of
the Indianapolis Terminal.
6.1.2 Compliance with this Agreement. Seller shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing, including without
limitation the agreement by Seller pursuant to Section 4.1.14 hereto regarding
approvals of governmental bodies to be obtained in connection with the
transactions contemplated by this Agreement.
6.1.3 Closing Certificate. Purchaser shall have received a certificate
from Seller dated the Closing Date, certifying in such detail as Purchaser may
reasonably request that the conditions specified in Sections 6.1.1 and 6.1.2
hereof have been fulfilled and certifying that Seller has obtained all consents
and approvals required with respect to the transaction contemplated herein.
6.1.4 No Threatened or Pending Litigation. On the Closing Date, no
suit, action or other proceeding, or injunction or final judgment relating
thereto, shall be threatened or be pending before any court or governmental or
regulatory official, body or authority in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this Agreement
or the consummation of the transactions
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contemplated hereby, and Seller shall be aware of no investigation that could
reasonably result in any such suit, action or proceeding.
6.1.5 Consents, Approvals and Notices. To the extent required by
applicable law:
(a) The holders of any indebtedness of Seller, the lessors or
lessees of any real or personal property or assets leased by Seller,
the parties (other than Purchaser) to any contract, commitment or
agreement to which Seller is a party or subject, any governmental or
regulatory official, body or authority or any other person which owns
or has authority to grant any Authorization and any governmental,
judicial or regulatory official, body or authority having jurisdiction
over Seller or Purchaser to the extent that their consent or approval
is required or necessary under the pertinent debt, lease, contract,
commitment, agreement, other document or instrument, Authorization or
under applicable orders, laws, rules or regulations, for the
consummation of the transactions contemplated hereby in the manner
herein provided, shall have granted such consent or approval.
(b) If any consent or approval shall not be obtained or if any
attempted assignment would be ineffective or would impair Purchaser's
rights under the Asset in question so that Purchaser would not in
effect acquire the benefit of all such rights, and Purchaser elects to
close this transaction without such consent, approval or assignment,
Purchaser shall have the discretion to require that Seller, to the
maximum extent permitted by law, cooperate with Purchaser and act after
the Closing as Purchaser's agent in order to obtain for it the benefits
of such Asset, provided that all costs incurred by Seller thereby shall
be borne by Purchaser, or as otherwise agreed between the parties.
6.1.6 Seller's Deliveries. The Seller shall have delivered to the
Purchaser at or prior to the Closing the following, all of which shall be in a
form reasonably satisfactory to the Purchaser and its counsel:
(a) Such bills of sale, deeds and assignments with covenants
of warranty, assignments, endorsements and other good and sufficient
instruments and documents of conveyance and transfer, in form
reasonably satisfactory to Purchaser and its counsel, as shall be
necessary and effective to transfer and assign to, and vest in,
Purchaser (i) good and valid title in and to the Assets free and clear
of all liens and encumbrances as provided herein except for Permitted
Liens, (ii) good and valid leasehold interests in and to the Assets
leased by Seller as lessee, and (iii) Seller's rights under all
agreements, warranties, contracts, commitments, leases, plans,
quotations, proposals, instruments and other documents included in the
Assets.
(b) Agreements, contracts, commitments, leases, plans, bids,
quotations, proposals, instruments, computer programs and software,
data bases whether in the form of computer tapes or otherwise, related
object and source codes, manuals and guidebooks, price books and price
lists, customer and subscriber lists, supplier lists, sales records,
files, correspondences, rulings issued by governmental entities, and
other documents, books, records, papers, files, office supplies and
data belonging to Seller which are part of the Assets; and
simultaneously with such delivery, all such steps will be taken as may
be reasonably required to put Purchaser in actual possession and
operating control of the Assets.
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(c) Evidence satisfactory to Purchaser that, as of the Closing
Date, all tax liabilities pertaining to the Assets which might
otherwise inure to the detriment of Purchaser (including, but not
limited to, federal highway use tax, excise taxes, sales, use and
transaction privilege taxes) have been paid or are otherwise accrued
through the Closing.
(d) The Realty Lease, duly executed by Purchaser and Seller.
6.1.7 Opinion of Counsel to Seller. Purchaser shall have received an
opinion of counsel for Seller dated the Closing Date, in the form attached
hereto as Exhibit E.
6.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER. All obligations
of Seller under this Agreement are subject to the fulfillment or satisfaction,
on or prior to or at the Closing, of each of the following conditions precedent:
6.2.1 Representations and Warranties True as of the Closing Date. The
representations and warranties of Purchaser contained in this Agreement or in
any list, certificate or document delivered by Purchaser to Seller pursuant to
the provisions hereof shall be true on the Closing Date with the same effect as
though such representations and warranties were made as of such date.
6.2.2 Compliance with this Agreement. Purchaser shall have performed
and complied with all agreements and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
6.2.3 No Threatened or Pending Litigation. On the Closing Date, no
suit, action, or other proceeding, or injunction or final judgment relating
thereto, shall be threatened or be pending before any court or governmental or
regulatory official, body or authority in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this Agreement
or the consummation of the transactions contemplated hereby, and no
investigation that might result in any such suit, action or proceeding shall be
pending or threatened.
7. INDEMNIFICATION
7.1 GENERAL INDEMNIFICATION OBLIGATION OF SELLER. From and after the
Closing, Laker and Pressler shall, jointly and severally, reimburse, indemnify
and hold harmless Purchaser and its successors and assigns (a "Purchaser Party")
against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses (including, without limitation, reasonable legal
fees and expenses) incurred or suffered by any Purchaser Party that
result from, relate to or arise out of:
(i) any and all actions, suits, claims, or legal,
administrative arbitration, governmental or other proceedings
or investigations (collectively, "Actions") against any
Purchaser Party that: (1) relate to Seller or the Business, in
which the principal act or omission giving rise thereto
occurred prior to the Closing Date, except for such actions
that arise due to any act or omission of Purchaser after the
Asset Possession Date; or
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(2) result from or arise out of any action or inaction of
Seller or any director, officer, employee, agent,
representative or subcontractor of Seller;
(ii) any Action for the payment of Taxes, including
interest and penalties in connection therewith, owed by Seller
before or after the Closing Date;
(iii) any Action for violation of any Regulations
relating to the environment, or any Liability relating to the
ownership, operation or condition at any time on or prior to
the Asset Possession Date of the Indianapolis Facility or any
other properties and assets included in the Assets or in which
Seller has or had an interest; or any Liability relating to
Hazardous Materials or other contaminants that were present at
the Indianapolis Facility or such other properties and assets
at any time on or prior to the Asset Possession Date; or any
Liability relating to any Hazardous Materials or other
contaminants, wherever located, that were, or were allegedly,
generated, transported, stored, treated, released or otherwise
handled by Seller or by any other person for whose conduct
Seller is or may be held responsible at any time on or prior
to the Asset Possession Date; or any bodily injury, personal
injury, property damage or other damage of or to any person,
including any employee or former employee of Seller or any
other person for whose conduct they are or may be held
responsible, arising from or allegedly arising from any
Hazardous Materials used or present at the Indianapolis
Facility or the operation of the Assets prior to the Asset
Possession Date;
(iv) any misrepresentations, breach of warranty or
nonfulfillment of any agreement or covenant on the part of
Purchaser under this Agreement, or from any misrepresentation
in or omission from any certificate, schedule, statement,
document or instrument furnished to Seller pursuant hereto or
in connection with the negotiation, execution or performance
of this Agreement except those arising by way of Purchaser's
operation of the Assets subsequent to the Asset Possession
Date; and
(v) any Actions against any Purchaser Party relating
to Seller's winding down the Business, including the
collection of Accounts Receivable, the termination of
employees or otherwise; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs
and other expenses (including, without limitation, reasonable legal
fees and expenses) incident to any of the foregoing or to the
enforcement of this Section 7.1.
7.2 GENERAL INDEMNIFICATION OBLIGATION OF PURCHASER. From and after the
Asset Possession Date, Purchaser shall reimburse, indemnify and hold harmless
Seller and its successors and assigns (a "Seller Party") against and in respect
of:
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(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses (including, without limitation, reasonable legal
fees and expenses) incurred or suffered by any Seller Party that result
from, relate to or arise out of:
(i) any and all Actions, against any Seller Party
that: (1) relate to Purchaser or the Business, in which the
principal event giving rise thereto occurred on or after the
Asset Possession Date; or (2) result from or arise out of any
action or inaction of Purchaser or any director, officer,
employee, agent, representative or subcontractor of Purchaser;
or
(ii) any Action for the payment of Taxes, including
interest and penalties in connection therewith, owed by
Purchaser before or after the Closing Date;
(iii) any Action for violation of any Regulations
relating to the environment, or any Liability relating to the
ownership, operation or condition at any time after the Asset
Possession Date of the Indianapolis Facility or any other
properties and assets included in the Assets or in which
Purchaser has or had an interest; or any Liability relating to
Hazardous Materials or other contaminants that may be placed
or transported to at the Indianapolis Facility or such other
properties and assets at any time after the Asset Possession
Date; or any Liability relating to any Hazardous Materials or
other contaminants, wherever located, that may be generated,
transported, stored, treated, released or otherwise handled by
Purchaser or by any other person for whose conduct Purchaser
is or may be held responsible at any time after the Asset
Possession Date; or any bodily injury, personal injury,
property damage or other damage of or to any person, including
any employee or former employee of Purchaser or any other
person for whose conduct they are or may be held responsible,
arising from or allegedly arising from any Hazardous Materials
used at the Indianapolis Facility or the operation of the
Assets after the Asset Possession Date;
(iv) any misrepresentations, breach of warranty or
nonfulfillment of any agreement or covenant on the part of
Seller under this Agreement, or from any misrepresentation in
or omission from any certificate, schedule, statement,
document or instrument furnished to Purchaser pursuant hereto
or in connection with the negotiation, execution or
performance of this Agreement; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs
and other expenses (including, without limitation, reasonable legal
fees and expenses) incident to any of the foregoing or to the
enforcement of this Section 7.2.
7.3 DEFENSE OF CLAIMS. If Purchaser or Seller seeks indemnity (the
"Indemnitee") pursuant to this Section 7, it shall give notice to all
indemnifying parties (the "Indemnitor"), briefly describing the claim
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and providing a good faith estimate of the amount of the claim if it is
successful. Within ten days of the date notice is given, the Indemnitor shall
notify Indemnitee in writing that the Indemnitor acknowledges its liability for
defense and indemnity; the Indemnitor denies all liability for indemnity or
defense; or the Indemnitor denies liability for indemnity but is willing to
provide a defense to the Indemnitee. Defense of the claim shall be provided by
counsel selected by the Indemnitee, in the exercise of reasonable discretion,
unless the Indemnitor acknowledges full liability for indemnity and defense and
provides to the Indemnitee reasonable evidence that the Indemnitor has the
financial wherewithal to pay for both indemnity and defense. If the Indemnitor
acknowledges its liability for defense and indemnity and provides reasonable
evidence that the Indemnitor has the financial wherewithal to pay for both
indemnity and defense, any such claim shall not be settled without the consent
of the Indemnitor, which shall not be unreasonably withheld.
7.4 SET-OFF. Until such time that the Purchase Price is paid in full,
the Indemnitee shall be entitled to increase or reduce the Purchase Price, as
the case may be (reducing or increasing the cash portion first), for the amount
of any claim (third party or otherwise) for which Indemnitee is responsible in
the event that such claim is not paid in full by Indemnitor within ten days
after the later of (a) the date the amount thereof is submitted to the
Indemnitor by Indemnitee, or (b) if the claim is disputed in good faith, the
date the Indemnitor shall have exhausted all avenues of appeal. After payment of
the cash portion of the Purchase Price to Seller, the Indemnitee shall have the
right of set-off against any amounts owed by it to the other party under this
Agreement or any exhibit, instrument, document or agreement contemplated
hereunder. Without limiting the generality of the foregoing, after payment of
the cash portion of the Purchase Price in full, when a claim is made in which
Seller is or is alleged to be the Indemnitor, Purchaser shall be entitled to
hold back the estimate (made in good faith by Purchaser) of the amount required
to satisfy the claim from payments of principal and interest due under the Note
(a "Holdback"). If it is determined by a court of competent jurisdiction in a
final adjudication that Purchaser is not responsible for the claim (or if the
underlying basis of the claim is invalid and it is dismissed or abandoned), the
amount of the Holdback, plus accrued interest thereon, shall be paid to Seller.
If it is determined by a court of competent jurisdiction in a final adjudication
that Purchaser is responsible for the claim and that it is subject to
indemnification pursuant to the terms of Section 7.1 hereof, Purchaser shall
have the right to set-off (a "Set-Off") the amount of such claim, and interest
accrued threon, against any amounts owed by it to Seller pursuant to the Note.
7.5 COMPLIANCE WITH BULK SALES LAWS. Purchaser and Seller acknowledge
that Seller's principal business is not the sale of inventory from stock, and
hereby waive compliance by Purchaser and Seller with the bulk sales law and any
other similar laws in any applicable jurisdiction in respect of the transactions
contemplated by this Agreement.
7.6 OTHER RIGHTS AND REMEDIES NOT AFFECTED. The indemnification rights
of the Indemnitee under this Section 7 are independent of and in addition to
such rights and remedies as the parties may have at law or in equity or
otherwise for any misrepresentation, breach of warranty or failure to fulfill
any agreement or covenant hereunder on the part of any party hereto, including
without limitation the right to seek specific performance, rescission or
restitution, none of which rights or remedies shall be affected or diminished
hereby.
8. POST-ASSET POSSESSION DATE AND POST-CLOSING MATTERS
8.1 EMPLOYEE BENEFITS. The amounts payable on account of all benefit
arrangements (other than as specified in the following subsections) shall be
determined with reference to the date of the event by reason of which such
amounts become payable, without regard to conditions subsequent, and Purchaser
shall
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not be liable for any claim for insurance, reimbursement or other benefits
payable by reason of any event which occurs prior to the Asset Possession Date.
All employees of Seller who may be employed by Purchaser on or after the Asset
Possession Date shall be new employees of Purchaser and any prior employment by
Seller of such employees shall not affect entitlement to, or the amount of,
salary or other cash compensation, current or deferred, which Purchaser may make
available to its employees. Seller shall take adequate steps after the Asset
Possession Date to terminate its 401(k) plan and apply to the IRS for a
determination letter in connection therewith.
8.2 EMPLOYEES. As of the Asset Possession Date, Purchaser may offer
employment to, and Seller shall use its best efforts to assist Purchaser in
employing as new employees of Purchaser, those employees that Purchaser desires
to employ after the Asset Possession Date.
8.3 MAINTENANCE OF BOOKS AND RECORDS. Seller shall preserve all records
possessed or to be possessed by such party relating to any of the Assets,
Liabilities or of the Business until the earlier of (i) the tenth anniversary of
the Closing Date or (ii) 90 days after notice to Purchaser that Seller intends
to destroy the records, in which case Purchaser shall have 30 days to elect to
receive the records and Seller will deliver the records as requested by
Purchaser. After the Closing Date, where there is a legitimate purpose, Seller
shall provide the Purchaser with access, upon prior reasonable written request
specifying the need therefor, during regular business hours, to (i) the officers
and employees of Seller and (ii) the books of account and records of Seller, and
the Purchaser and its representatives shall have the right to make copies of
such books and records; provided, however, that the foregoing right of access
shall not be exercisable in such a manner as to interfere unreasonably with the
normal operations and business of Seller; and further, provided, that, as to so
much of such information as constitutes trade secrets or confidential business
information of Seller (and not part of the Assets), the Purchaser and its
officers, directors and representatives will use due care to not disclose such
information except (i) as required by law, (ii) with the prior written consent
of Seller, which consent shall not be unreasonably withheld, or (iii) where such
information becomes available to the public generally, or becomes generally
known to competitors of Seller, through sources other than Purchaser, its
affiliates or its officers, directors or representatives. Such records may
nevertheless be destroyed by Seller if such party sends to the Purchaser written
notice of its intent to destroy records, specifying with particularity the
contents of the records to be destroyed. Such records may then be destroyed
after the 30th day after such notice is given unless Purchaser objects to the
destruction in which case the party seeking to destroy the records shall deliver
such records to Purchaser.
8.4 PAYMENTS RECEIVED. Seller and Purchaser each agree that after the
Asset Possession Date they will hold and will promptly transfer and deliver to
the other, from time to time as and when received by them, any cash, checks with
appropriate endorsements (using their best efforts not to convert such checks
into cash), or other property that they may receive on or after the Asset
Possession Date which properly belongs to the other party, including without
limitation any insurance proceeds, and will account to the other for all such
receipts. From and after the Asset Possession Date, Purchaser shall have the
right and authority to endorse, without recourse, the name of Seller on any
check or any other evidences of indebtedness received by Purchaser on account of
the Assets transferred to Purchaser hereunder.
8.5 USE OF NAME. From and after the Closing Date, Seller will sign such
consents and take such other action as Purchaser shall reasonably request in
order to permit Purchaser to use the name "Laker Express" and variants thereof.
From and after the Closing Date, Seller will change the name of Laker and will
not use directly or indirectly, the name "Laker Express" or any names similar
thereto or variants thereof.
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8.6 UCC MATTERS. From and after the Closing Date, Seller will promptly
refer all inquiries with respect to ownership of the Assets to Purchaser. In
addition, Seller will execute such documents and financing statements as
Purchaser may reasonably request from time to time to evidence transfer of the
Assets to Purchaser, including any necessary assignments of financing
statements.
8.7 FURTHER ASSURANCES. Seller from time to time after the Closing, at
Purchaser's reasonable request, will execute, acknowledge and deliver to
Purchaser such other instruments and will take such other actions and execute
and deliver such other documents, certifications and further assurances as
Purchaser may reasonably require to vest more effectively in Purchaser, or to
put Purchaser more fully in possession of, any of the Assets. Each of the
parties hereto will cooperate with the other and execute and deliver to the
other parties hereto such other instruments and documents and take such other
actions as may be reasonably requested from time to time by any other party
hereto as necessary to carry out, evidence and confirm the intended purposes of
this Agreement.
9. MISCELLANEOUS
9.1 TERMINATION.
9.1.1 Causes before Asset Possession Date. Anything herein or elsewhere
to the contrary notwithstanding, this Agreement may be terminated by written
notice of termination at any time on or before the Asset Possession Date as
follows:
(a) by mutual consent of Seller and Purchaser; or
(b) by Purchaser (i) if the possession of the Rolling Stock
and the other matters contemplated by Section 1.9 do not occur at 12:01
a.m. on December 12, 1998 or (ii) if all of the conditions precedent in
Section 5.1 hereof have not been met.
9.1.2 Causes before Closing Date. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated by written notice of
termination at any time on or before the Closing Date only as follows:
(a) by mutual consent of Seller and Purchaser; or
(b) by Purchaser (i) if any representations of Seller
contained in Sections 3.1.1, 3.1.2, 3.1.4, 3.1.5, 3.1.6 or 3.1.12 were
incorrect in any material respect when made or at any time thereafter,
including as of Closing, except if such representations and warranties
are rendered untrue by Purchaser after the Asset Possession Date in
connection with operation of the transferred Assets; (ii) upon written
notice to Seller given at any time after January 6, 1999 (or such later
date as shall have been specified in a writing authorized on behalf of
Seller and Purchaser), if all of the conditions precedent set forth in
Section 6.1 hereof have not been met; or (iii) if Seller breaches any
material covenant or agreement which it makes under this Agreement or
any other document contemplated by this Agreement.
(c) by Seller (i) upon written notice to Purchaser given at
any time after January 6, 1999 (or such later date as shall have been
specified in a writing authorized on behalf of Seller and Purchaser),
if all of the conditions precedent set forth in Section 6.2 hereof have
not been met; or (ii)
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if Purchaser breaches any material covenant or agreement which it makes
under this Agreement or any other document contemplated by this
Agreement.
9.1.3 Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of this Section 9.1, this
Agreement (except for Sections 9.2 and 9.4 which shall continue) shall become
void and have no effect, without any liability on the part of any of the parties
or their directors or officers or stockholders in respect of this Agreement,
unless the termination was the result of the representations and warranties of a
party being materially incorrect when made or the material breach by such party
of a covenant hereunder in which event the party whose representations and
warranties were incorrect or who breached such covenant shall be liable to the
other party for all costs and expenses of the other party in connection with the
preparation, negotiation, execution and performance of this Agreement.
9.2 BROKERS' AND FINDERS' FEES.
9.2.1 For Seller. Seller represents and warrants to Purchaser that all
negotiations relative to this Agreement have been carried on by it directly
without the intervention of any person who may be entitled to any brokerage or
finder's fee or other commission in respect of this Agreement or the
consummation of the transactions contemplated hereby, and Seller agrees to
indemnify and hold harmless Purchaser against any and all claims, losses,
liabilities and expenses which may be asserted against or incurred by it as a
result of Seller's dealings, arrangements or agreements with any such person.
9.2.2 For Purchaser. Purchaser represents and warrants to Seller that,
except for Jones, Taylor & Co. (with which firm it has a separate fee
agreement), all negotiations relative to this Agreement have been carried on by
it directly without the intervention of any person who may be entitled to any
brokerage or finder's fee or other commission in respect of this Agreement or
the consummation of the transactions contemplated hereby, and Purchaser agrees
to indemnify and hold harmless Seller against any and all claims, losses,
liabilities and expenses which may be asserted against or incurred by it as a
result of Purchaser's dealings, arrangements or agreements with any such person.
9.3 SALES, TRANSFER AND DOCUMENTARY TAXES. Seller shall pay all
federal, state and local sales, documentary and other transfer taxes, if any,
due as a result of the transaction contemplated hereby. Seller shall indemnify,
reimburse and hold harmless Purchaser in respect of the liability for payment of
or failure to pay any such taxes or the filing of or failure to file any reports
required in connection therewith. Notwithstanding the foregoing, Purchaser shall
pay all fees to title the Rolling Stock.
9.4 EXPENSES. Except as otherwise provided in this Agreement and
hereunder, each party hereto shall pay its own expenses incidental to the
preparation of this Agreement, the carrying out of the provisions of this
Agreement and the consummation of the transactions contemplated hereby.
9.5 CONTENTS OF AGREEMENT; PARTIES IN INTEREST; ETC. This Agreement
sets forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby. It shall not be amended or modified except by
written instrument duly executed by each of the parties hereto. Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement.
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9.6 ASSIGNMENT AND BINDING EFFECT. This Agreement may not be assigned
prior to the Closing by any party hereto without the prior written consent of
the other parties, except that prior to Closing, Purchaser may assign and
delegate any or all of its rights and obligations hereunder to one or more of
its subsidiaries, or other entity affiliated by common ownership with Purchaser
or one of its subsidiaries. Subject to the foregoing, all of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the successors and assigns of Seller and Purchaser. Prior
to execution by all parties, this Agreement shall not be binding upon or
enforceable by or against any party, by estoppel or otherwise. In consideration
of Seller's agreement to permit Purchaser to assign its obligations hereunder,
Purchaser agrees that, in the event of a breach of the obligations of its
assignee hereunder, Purchaser shall remain liable for any such breach.
9.7 WAIVER. Any condition, term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a written
instrument duly executed by such party. Any such written waiver shall not imply
a waiver as to any other term, condition, circumstance or occasion nor estop any
party from enforcing any term, condition, right or remedy not expressly so
waived. Failure of a party to insist upon adherence to any term or condition of
this Agreement on any occasion shall not be considered a waiver or deprive that
party of the right thereafter to insist upon adherence to that term or condition
or any other term or condition of this Agreement.
9.8 NOTICES. Any notice or communication under this Agreement shall be
in writing and delivered (by hand, telecopier, telegraph, telex or courier) or
deposited in the United States mail (first class, registered or certified),
postage fully prepaid and addressed as stated below.
IF TO SELLER: Laker Express, Inc.
4808 West 96th Street
Indianapolis, Indiana 46268
and
Dennis Pressler
806 Pebble Brook Place
Nobelsville, Indiana 46060
With Copy to: Andrew K. Light
Scopelitis, Gavin, Light & Hanson
10 West Market, Suite 1500
Indianapolis, Indiana 46260-2969
IF TO PURCHASER: Landair Transport, Inc.
P.O. Box 1058
Greeneville, Tennessee 37744-1058
Attn: Richard H. Roberts, Esquire
With Copy to: Leigh Walton, Esquire
Bass, Berry & Sims PLC
2700 First American Center
Nashville, Tennessee 37238
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Notice by United States mail shall be deemed given on the third day after its
deposit. Notice by telecopier, telegraph or telex shall be deemed given on the
day sent. Notice by hand delivery or courier shall be deemed given on the first
business day when such delivery is first attempted. Either party may from time
to time specify as its address for purposes of this Agreement any other address
upon the giving of 10 days' notice thereof to the other party in the manner
required by this paragraph. This paragraph shall not prevent the giving of
written notice in any other manner, but such notice shall be deemed effective
only when and as of its actual receipt at the proper address and by the proper
addressee.
9.9 GOVERNING LAW. This Agreement shall be governed by and interpreted
and enforced in accordance with the laws of the State of Tennessee.
9.10 NO BENEFIT TO OTHERS. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Section 7 hereof, the other parties certified
to indemnity or defense, and their heirs, executors, administrators, legal
representatives, successors and assigns, and they shall not be construed as
conferring any rights on any other persons.
9.11 HEADINGS, GENDER AND "PERSON." All section headings contained in
this Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine, or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated organization or any other entity.
9.12 SCHEDULES AND EXHIBITS. All Schedules and Exhibits referred to
herein are intended to be and hereby are specifically made a part of this
Agreement.
9.13 SEVERABILITY. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. If, however, any condition precedent described in
Section 5.1 or Section 6.1 hereof is invalid or unenforceable, Purchaser shall
nevertheless have the option of terminating this Agreement under Section 9.1
hereof.
9.14 JURISDICTION. Seller and Purchaser consent to the jurisdiction and
venue of the federal courts located in Wilmington, Delaware with respect to any
legal action, in tort or contract, arising directly or indirectly from this
Agreement or the relationship created hereby. This provision shall not bar
enforcement of a provisional, extraordinary, In rem or post-judgment remedy in
any court whose original jurisdiction is essential or exclusive as to that
remedy, despite the above consent to jurisdiction.
9.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
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9.16 CONTINUATION OF BUSINESS. Seller covenants and agrees to continue
to recruit drivers and use its best efforts to maintain its present number of
drivers. Upon announcement of the sale pursuant to this Agreement, Seller agrees
to work with Purchaser to retain drivers and to encourage any qualified driver
to accept employment with Purchaser.
9.17 MEDIATION. If a dispute arises relative to the interpretation of
or a breach of the provisions of this Agreement, or with respect to the
indemnification obligations of the parties hereto, and if said dispute cannot be
settled through direct discussion, Seller and Purchaser agree to endeavor to
settle the dispute in an amicable manner by mediation under the Commercial
Mediation Rules of the American Arbitration Association before resorting to
litigation. Each party shall pay its own expenses in mediation and one-half of
the expenses of the mediator. Notwithstanding the foregoing, the dispute
resolution mechanisms set forth in Section 1.4.6 shall govern disputes relating
to the adjustments provided for under Section 1.4.3, 1.4.4 and 1.4.5 hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written.
LANDAIR TRANSPORT, INC.
By: /s/ Eddie R. Brown
-----------------------------------
Its: President
-----------------------------------
/s/ Dennis Pressler
----------------------------------------
DENNIS PRESSLER
LAKER EXPRESS, INC.
By: /s/ Dennis Pressler
-----------------------------------
Its: President
-----------------------------------
The undersigned, Donna M. Pressler, wife of Dennis Pressler, joins in
this Agreement (i) to confirm that she is aware of the transactions contemplated
by this Agreement and is familiar with the terms and conditions of this
Agreement; (ii) to confirm that she has and will claim no interest in the Assets
of Laker or the Laker Common Stock, all of which is owned by her husband, Dennis
Pressler, or any other capital stock of Seller, or any option to acquire any
interest in any capital stock of Seller or the proceeds of the sale of the
Assets of Laker; and (iii) that she will make no claim against Purchaser
regarding any matter related to Seller, its affairs or the Business.
----------------------------------------
DONNA M. PRESSLER
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LIST OF EXHIBITS
Exhibit A October 31, 1998 Balance Sheet
Exhibit B Promissory Note
Exhibit C Realty Lease
Exhibit D Rolling Stock Lease
Exhibit E Form of Opinion of Counsel to Seller
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LIST OF SCHEDULES
Schedule 1.3.1 (a) Machinery, equipment, tools, vehicles,
furniture, furnishings, leasehold improvements,
goods, and other tangible personal property owned by
Seller
Schedule 1.3.1 (f) Computer software
Schedule 1.3.2 Excluded Assets
Schedule 1.4.1 Allocation of Purchase Price
Schedule 1.4.3 Agreed Values
Schedule 1.4.4(c) Prospective Employees
Schedule 1.4.5 Assumed Liabilities
Schedule 1.8.1(a) Normal Service Area
Schedule 3.1.5(d) Third Party Options
Schedule 3.1.9 Taxes
Schedule 3.1.11(b) Disposition of Assets
Schedule 3.1.11(d) Damage of Assets
Schedule 3.1.14 Authorizations
Schedule 3.1.15 Insurance
Schedule 3.1.16 Assumed Contracts
Schedule 3.1.17 Additional Information
Schedule 3.1.18 Labor Matters
Schedule 3.1.19 Employee Benefit Plans
Schedule 3.1.20 Intellectual Property
Schedule 3.1.21 Software
Schedule 3.1.28 Customers
Schedule 4.1.8 Values of inventory, equipment, furniture and fixtures
<PAGE> 1
Exhibit 99.1
CONTACT: Ed Brown (423) 636-7205
Richard Roberts (423) 636-7012
FOR IMMEDIATE RELEASE
LANDAIR TRANSPORT, INC. ACQUIRES ASSETS OF LAKER EXPRESS, INC.
GREENEVILLE, TN (December 11, 1998) - Landair Corporation
(Nasdaq/NM:LAND) announced that Laker Express, Inc. ("Laker") and Landair's
subsidiary, Landair Transport, Inc., have signed a definitive Asset Purchase
Agreement under the terms of which Landair has agreed to acquire certain of the
operating assets of Laker. Laker is a truckload dry van carrier based in
Indianapolis, Indiana and operates predominantly in the Midwest in the short to
medium haul market.
Under the terms of the Purchase Agreement, Landair will acquire 225
tractors, 560 trailers and certain other assets used in connection with the
Laker operations. Effective December 12, 1998, Landair will begin to integrate
the assets into its existing operations.
As a part of the acquisition, Dennis Pressler, the sole shareholder of
Laker, has agreed to work with Landair and has entered into a two year
consulting agreement.
"With the addition of these Indianapolis-based drivers, Indianapolis
will now be our largest driver domicile," stated Eddie Brown, President of
Landair. "We are excited about the opportunity that the Laker acquisition
represents for Landair," he added.
This press release and statements made by Landair in reports to its
shareholders and public filings, as well as oral public statements by Landair
representatives, may contain certain forward-looking information that is subject
to certain risks and uncertainties that could cause actual results to differ
materially from those projected. Without limitation, these risks and
uncertainties include, but are not limited to, economic recessions or downturns
in business cycles, competition, rapid fluctuations in fuel prices or
availability, fluctuation in the frequency and severity of accidents, increases
in interest rates and the availability of qualified drivers.
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