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EXHIBIT 10.23
DATED 25 AUGUST 2000
CONTINENTAL CONTAINER LINE, INC.
CONTINENTAL CARGO LOGISTICS INC.
CONTINENTAL CARGO LOGISTICS INC.
UNION-TRANSPORT CORPORATION
LAI KWOK FAI
NG CHUN KA
CHENG KWAN KOK DAVID
ALBERT PATRICK CATALDO
LEWIS BILLY BARNHILL
FRANCIS RAYMOND BELLO
CHAN KA MING
CHAN KWAN HANG
CHAU HAK CHEONG
CHENG KWAN LUNG
NG SAI KUEN
ASSET PURCHASE AGREEMENT
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CONTENTS
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Number Clause Headings Page
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1. Definitions and Interpretation..................................................................... 2
2. Sale of Assets..................................................................................... 11
3. Payment of Purchase Price.......................................................................... 11
4. Conditions......................................................................................... 11
5. Pre-ClosingObligations............................................................................. 12
6. Closing............................................................................................ 14
7. Assignment of Leased Properties.................................................................... 15
8. Apportionments..................................................................................... 15
9. Responsibility for Liabilities..................................................................... 16
10. Third Party Consents............................................................................... 18
11. Employees.......................................................................................... 18
12. "Fidelity Simple-IRA Plan"......................................................................... 20
13. Warranties......................................................................................... 20
14. Restriction of Covenantors......................................................................... 24
15. Independent Accountants............................................................................ 25
16. Further Obligations and Intentions................................................................. 26
17. Restriction on Announcements....................................................................... 27
18. Costs.............................................................................................. 27
19. General............................................................................................ 28
20. Notices............................................................................................ 29
21. Governing Law and Submission to Jurisdiction....................................................... 32
Schedules
Schedule 1 Warranties...................................................................................... 33
Schedule 2 Excluded Assets................................................................................. 54
Schedule 3 The Leased Properties........................................................................... 55
Schedule 4 Intellectual Property........................................................................... 63
Schedule 5 Leasing Agreements.............................................................................. 66
Schedule 6 Machinery and Equipment......................................................................... 67
Schedule 7 Transferring Employees.......................................................................... 68
Schedule 8 Purchased Contracts............................................................................. 69
Schedule 9 Letter to Employees............................................................................. 71
Schedule 10 Retirement Scheme.............................................................................. 73
Schedule 11 Insurances..................................................................................... 74
Schedule 12 Guarantees..................................................................................... 75
Schedule 13 Employment Agreement........................................................................... 76
Execution...................................................................................................
Annexures
Annexure 1 CO Container (US) Accounts...................................................................... 87
Annexure 2 CO Cargo (CA) Accounts.......................................................................... 88
Annexure 3 CO Cargo (NY) Accounts.......................................................................... 89
Annexure 4 Customer List................................................................................... 90
</TABLE>
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DATE: 25 August 2000
PARTIES:
(1) CONTINENTAL CONTAINER LINE, INC., a company incorporated in the State
of New York in the USA whose head office is at 182-16 147th Avenue,
Jamaica, NY 11413, New York, United States of America("CO CONTAINER
(US)").
(2) CONTINENTAL CARGO LOGISTICS INC., a company incorporated in the State
of New York in the USA whose head office is at 182-16 147th Avenue,
Jamaica, NY 11413, New York, United States of America ("CO CARGO
(NY)").
(3) CONTINENTAL CARGO LOGISTICS INC., a company incorporated in the State
of California in the USA whose head office is at 11120 S. Hindry
Avenue, Unit A, Los Angeles, CA 90045, United States of America ("CO
CARGO (CA)"; CO Container (US), CO Cargo (NY) and CO Cargo (CA) are
collectively referred to herein as the "VENDORS" and singly as the
"VENDOR").
(4) UNION-TRANSPORT CORPORATION, a company incorporated in the State of New
York in the USA whose head office is at 19443 Laurel Park Road, Suite
107, Rancho Dominguez, CA 90220, United States of America (the
"PURCHASER").
(5) LAI KWOK FAI of Flat J1, Block J, 1st Floor, Beverly Hill, 6 Broadwood
Road, Hong Kong ("LAI").
(6) NG CHUN KA of 11120 S. Hindry Avenue, Unit A, Los Angeles, CA 90045,
United States of America ("JOE NG"; the Vendors, Lai and Joe Ng are
collectively referred to herein as the "WARRANTORS" and singly as the
"WARRANTOR").
(7) CHENG KWAN KOK DAVID of 16C, Block C, The Crescent, 11 Homantin Hill
Road, Kowloon, Hong Kong ("DAVID CHENG").
(8) ALBERT PATRICK CATALDO of 80 Everett Avenue, Suite 301, Chelsea, MA
02150, United States of America ("CATALDO").
(9) LEWIS BILLY BARNHILL of 8505 Freeport Parkway, Suite 170, Irving, Texas
75063, United States of America ("BARNHILL").
(10) FRANCIS RAYMOND BELLO of 182-16 147th Avenue, Jamaica, NY 11413, United
States of America ("BELLO").
(11) CHAN KA MING of 6th and 7th Floors, Leahander Centre, 28 Wang Wo Tsai
Street, Tsuen Wan, New Territories, Hong Kong ("ALEX CHAN").
(12) CHAN KWAN HANG of 6th and 7th Floors, Leahander Centre, 28 Wang Wo Tsai
Street, Tsuen Wan, New Territories, Hong Kong ("TOBBY CHAN").
(13) CHAU HAK CHEONG of 6th and 7th Floors, Leahander Centre, 28 Wang Wo
Tsai Street, Tsuen Wan, New Territories, Hong Kong ("CHAU").
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(14) CHENG KWAN LUNG of 6th and 7th Floors, Leahander Centre, 28 Wang Wo
Tsai Street, Tsuen Wan, New Territories, Hong Kong ("JEFFREY CHENG").
(15) NG SAI KUEN of 182-16 147th Avenue, Jamaica, NY 11413, United States of
America ("SAI NG"; Lai, Joe Ng, David Cheng, Cataldo, Barnhill, Bello,
Alex Chan, Tobby Chan, Chau, Jeffrey Cheng and Sai Ng are collectively
referred to herein as the "KEY EMPLOYEES" and singly as the "KEY
EMPLOYEE"; the Vendors and the Key Employees are collectively referred
to herein as the "COVENANTORS" and singly as the "Covenantor").
RECITALS:
(A) The Vendors carry on the business of customs brokerage, freight
forwarding, warehousing and distribution and other related services.
The Vendors wish to sell and the Purchaser wishes to purchase the
business, and the assets used in it, as a going concern on the terms
and conditions set out in this Agreement.
(B) The Purchaser requires the Warrantors who have requested the Purchaser
to enter into this Agreement, to give such covenants and undertakings
as are set out herein as a condition of the Purchaser's entry into this
Agreement.
(C) The HK Vendors (as hereinafter defined), the HK Purchaser (as
hereinafter defined) and the Key Employees have executed
contemporaneously with this Agreement an agreement (the "HK AGREEMENT")
for the sale and purchase of the business (and the assets used in it)
carried on by the HK Vendors on the terms and conditions set out
therein.
TERMS AGREED:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement where the context so admits the following
words and expressions shall have the following meanings:
"ACCOUNTING DATE" 31 December 1999;
"ACCOUNTS" the CO Container (US) Accounts, the
CO Cargo (NY) Accounts and the CO
Cargo (CA) Accounts;
"ACCOUNTS RECEIVABLE" all book debts, trade and other
debts, notes receivable and other
rights to payment arising from the
operation of the Business before the
Closing Date (including the right to
receive payment for services
rendered before the Closing Date but
not invoiced before such date) and
including the benefit of all
guarantees and security in respect
thereof;
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"AFFILIATE" in relation to a company, any person
(legal or natural) who directly or
indirectly controls, or is
controlled by, or is under common
control with, such company;
"ASSETS" the Goodwill, the benefit of the
Insurances, Intellectual Property,
Machinery and Equipment, Leased
Properties, the benefit of the
Purchased Contracts, Sales
Documentation, Books and Records
(other than minute books relating to
directors' and shareholders'
meetings and statutory books), the
Customer List and all other rights
and assets used in the Business
immediately prior to Closing, but
not including the Excluded Assets;
"BOOKS AND RECORDS" originals and copies in
whatever form and upon whatever
media they may be recorded of all
registers, books, reports,
correspondence, files, records,
accounts, documents and other
material relating to or used in
connection with the Business, the
Assets, the Transferring Employees
and the customers on the Customer
List;
"BUSINESS" the business of customs brokerage,
freight forwarding, warehousing and
distribution and other related
services as carried on by the
Vendors immediately prior to Closing
including that carried on at the
Leased Properties under the names
"Continental Container Line, Inc."
and "Continental Cargo Logistics
Inc." and, where the context
permits, shall include the Assets;
"BUSINESS DAY" a day (other than a Saturday or
a Sunday) on which banks are
generally open for business in New
York City in the USA;
"CASH FLOAT" the cash balance including all
cash-in-hand and at bank, held by
the Vendors immediately prior to
Closing for the purposes of the
Business;
"CLOSING" closing of the sale and purchase of
the Business pursuant to Clause 6;
"CLOSING DATE" 1 September 2000 (or such other date
as the Parties may agree in
writing);
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"CO AIR (CHINA)" Continental Air Express (China) Co.
Ltd., a company incorporated in the
British Virgin Islands;
"CO AIR (HK)" Continental Air Express (HK)
Limited, a company incorporated in
Hong Kong;
"CO CARGO (CA) ACCOUNTS" the unaudited balance sheet as
at the Accounting Date, and the
unaudited statement of income
and retained earnings and
schedule of general and
administrative expenses for the
period ended on such date of CO
Cargo (CA), a copy of which is
annexed hereto as Annexure 2 and
initialled for the purposes of
identification by the Vendors
and the Purchaser;
"CO CARGO (NY) ACCOUNTS" the unaudited balance sheet as at
the Accounting Date, and the
unaudited statement of income and
retained earnings and statement of
cashflows for the period ended on
such date of CO Cargo (NY) and
schedule of general and
administrative expenses and schedule
of operating income for the period
ended on such date of CO Cargo (NY)
New York office, Boston office,
Chicago office and Dallas office, a
copy of which is annexed hereto as
Annexure 3 and initialled for the
purposes of identification by the
Vendors and the Purchaser;
"CO CONTAINER (HK)" Continental Container Lines Limited,
a company incorporated in Hong Kong;
"CO CONTAINER (US) ACCOUNTS" the unaudited balance sheet as at
the Accounting Date of CO Container
(US) New York office, Dallas office
and Chicago office, the unaudited
statement of cashflows for the
period ended on such date of CO
Container (US) Dallas office and the
unaudited profit and loss account
for the period ended on such date of
CO Container (US) New York office,
Dallas office, Chicago office, Los
Angeles office and San Francisco
office, a copy of which is annexed
hereto as Annexure 1 and initialled
for the purposes of identification
by the Vendors and the Purchaser;]
"COMPANY" a company or body corporate wherever
incorporated;
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<S> <C>
"CONDITIONS" the conditions specified in Clause
4.1;
"CUSTOMER LIST" the list of customers of the
Vendors set out in Annexure 4, as
supplemented by written notice to
the Purchaser by the Vendors up to
and including the Closing Date by
the addition of persons with whom
the Vendors have transacted business
between the date hereof and the
Closing Date;
"DISCLOSURE LETTER" the letter of today's date from the
Vendors to the Purchaser in the
approved terms;
"EMPLOYEE WELFARE any "employee welfare benefit
BENEFIT PLAN" plan" within the meaning of
Section 3(1) of the
Employment Retirement Income
Security Act of 1974 (as
amended) ("ERISA") of which
any of the Vendors is the
plan sponsor and which
provides benefits to
employees of any of the
Vendors, together with the
related trust agreement or
insurance contract providing
the funding medium for
benefits thereunder and any
related contracts;
"EMPLOYMENT AGREEMENT" the employment agreement
substantially in the form set out in
Schedule 13;
"ENCUMBRANCES" all pledges, charges, liens,
mortgages, security interests,
pre-emption rights, options and any
other encumbrances or third party
rights or claims of any kind (other
than repairmens' and similar liens
arising or incurred in the ordinary
course of the Business and securing
obligations not material in amount
and provisions constituting
reservation and retention of title
clauses entered into in the ordinary
course of the Business in favour of
suppliers of goods purchased in the
ordinary course of the Business);
"EXCLUDED ASSETS" those assets used in or relating to
the Business which are excluded from
the sale and purchase and which are
identified in Schedule 2;
"FIDELITY SIMPLE-IRA PLAN" means that IRA plan for the
employees of the Vendors which have
signed adoption agreements to adopt
the Fidelity Simple-IRA Plan;
</TABLE>
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"GOODWILL" the goodwill of the Vendors in
connection with the Business
including the exclusive right for
the Purchaser to represent itself as
carrying on the Business in
succession to the Vendors;
"HK BUSINESS" the business of customs
brokerage, freight forwarding,
warehousing and distribution and
other related services as carried on
by the HK Vendors immediately prior
to Closing (as defined in the HK
Agreement) including that carried on
under the names "Continental Air
Express (HK) Limited" and
"Continental Container Lines
Limited";
"HK PURCHASER" Union-Transport (HK) Limited (to be
renamed as UTi (HK) Limited), a
company incorporated in Hong Kong
with registered number 319402;
"HK VENDORS" CO Air (HK) and CO Container (HK);
"HONG KONG" the Hong Kong Special
Administrative Region of the PRC;
"INSURANCES" the policies of assurance and
insurance, particulars of which are
set out in Schedule 11;
"INTELLECTUAL PROPERTY" the following rights arising or used
in connection with the Business
(including but not limited to those
listed in Schedule 4):
</TABLE>
(i) all patents, registered
designs, design rights,
trade marks, service
marks, copyrights,
Internet domain names of
any level, rights in
circuit layouts,
topography rights, trade
and business names,
including the benefit of
all registrations of and
applications to register
and rights to apply for
registration of any of the
aforesaid items, and all
rights in the nature of
any of the aforesaid
items, anywhere in the
world;
(ii) rights in the nature of
unfair competition rights
and rights to sue for
passing off;
(iii) all trade secret,
confidentiality and other
proprietary rights,
including all rights to
know-how and other
technical information;
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(iv) the benefit of all
licences and permissions
granted to or enjoyed by
the Vendors in respect of
any of the foregoing;
"KEY US EMPLOYEES" Barnhill, Bello and Cataldo;
"LEASED PROPERTIES" the properties occupied by the
Vendors, for the purposes of the
Business, which are described in
Schedule 3 Part 1 (each such
property, a "LEASED PROPERTY");
"LEASES" collectively the leases or other
agreements (including any options
for extension or renewal relating
thereto) pursuant to which certain
of the Vendors holds or occupies the
Leased Properties, details of which
are set out in Schedule 3 (each, a
"LEASE");
"LEASING AGREEMENTS" the leasing and hire purchase
agreements listed in Schedule 5;
"LOGISTICS MANAGEMENT" The Logistics Management Group
Limited, a company incorporated in
the British Virgin Islands;
"MACHINERY AND the movable plant, machinery,
EQUIPMENT" vehicles, office and warehouse
equipment, computer hardware and
software, furniture and furnishings,
together with all spare parts,
accessories and consumable supplies
therefor owned or used by the
Vendors in the Business immediately
prior to Closing (excluding the
Excluded Assets and any items which
are not owned by the Vendors but for
which the Vendors have a right of
user pursuant to a Purchased
Contract) including without
limitation those items which are
described in Schedule 6;
"MONTH" calendar month;
"PARTIES" the named parties to this Agreement
and their respective successors,
personal representatives and
permitted assigns;
"PATENTS" the patents, petty patents and
registered designs and applications
therefor listed in Schedule 4 Part
1;
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"PRC" the People's Republic of China but
excluding, for the purposes of this
Agreement, Hong Kong, Macau and
Taiwan;
"PURCHASE PRICE" the total price to be paid by
the Purchaser under Clause 3.1 of
this Agreement;
"PURCHASED CONTRACTS" (i) the Leasing Agreements; (ii)
all contracts for the supply of
services by the Vendors in
connection with the Business which
are in existence at the date hereof
and which are not fully performed
prior to commencement of business on
the Closing Date (a list of those
contracts which are in writing is
set out in Schedule 8 Part 1); (iii)
all the written purchase orders or
contracts for the purchase by the
Vendors of supplies in connection
with the Business which are in
existence at the date hereof in
respect of which delivery has not
been made on or before the
commencement of business on the
Closing Date (a list of which is set
out in Schedule 8 Part 2); (iv) all
licences granted by the Vendors in
relation to the Intellectual
Property which are in existence at
the date hereof (a list of which is
set out in Schedule 8 Part 3); (v)
all agreements with airlines,
shipping lines, transportation
companies and warehouses in
connection with the Business which
are in existence at the date hereof
and have not been fully performed (a
list of which is set out in Schedule
8 Part 4); and (vii) other than the
Leases, all other contracts entered
into in the course of carrying on
the Business to which any of the
Vendors is a party and which have
not been fully performed prior to
commencement of business on the
Closing Date which relate to the
Business and which (a) if entered
into prior to the date hereof are
listed in Schedule 8 Part 5 or (b)
if entered into after the date
hereof are approved by the Purchaser
under Clause 5.1;
"RELATED COMPANY" in relation to the Vendors,
a company in which one or more
directors or substantial
shareholders of any of the Vendors
and/or its holding company either
have a beneficial interest or are in
a position to exercise significant
influence therein;
"SALES DOCUMENTATION" all sales publications, advertising
and promotional materials, printed
terms and
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conditions of sale, business
forms, instructional material and
other technical and sales materials
which relate to the Business,
together with any plates, blocks,
negatives, computer discs or tapes
and similar items relating to them;
"TAX" all forms of taxation, estate
duties, deductions, withholdings,
duties, imposts, levies, fees,
charges, social security
contributions and rates imposed,
levied, collected, withheld or
assessed by any local, municipal,
regional, urban, governmental,
state, federal or other body in the
United States or elsewhere and any
interest, additional taxation,
penalty, surcharge or fine in
connection therewith;
"THIRD PARTY RIGHTS" the rights given or granted to the
Vendors by third parties for the use
by the Vendors of the trade marks,
service marks, trade names, patents,
designs and copyright as listed in
Part 4 of Schedule 4 and know-how
and confidential information owned
by such third parties and any other
rights given to the Vendors under
any agreements including but not
limited to, licence, distribution,
marketing or sales agreements, for
use in or relating to the Business
and which rights are assignable from
the Vendors to the Purchaser;
"TRADE MARKS" the registered trade marks
and trade mark applications listed
in Schedule 4 Part 2;
"TRANSFERRING EMPLOYEES" all of the employees of the Vendors
who shall be offered "at will"
employment by the Vendors, a list of
whom appears in Schedule 7;
"US DISCLOSURE the bundle of documents annexed to
BUNDLE" the Disclosure Letter marked "US
Disclosure Bundle" and initialled
for purposes of identification by
the Purchaser and the Vendors;
"USA" United States of America;
"UTi GROUP" UTi Worldwide and its subsidiaries;
"UTi WORLDWIDE" UTi Worldwide Inc., a company
incorporated in the British Virgin
Islands;
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"WARRANTIES" the representations, warranties and
undertakings contained or referred
to in Clause 13 and Schedule 1; and
"US$" United States dollars, the lawful
currency of the USA.
1.2 References in this Agreement to Clauses, Schedules and
Annexures are to clauses in and schedules and annexures to
this Agreement (unless the context otherwise requires). The
Recitals, Schedules and Annexures to this Agreement shall be
deemed to form part of this Agreement.
1.3 Headings are inserted for convenience only and shall not
affect the construction of this Agreement.
1.4 The expressions "CO Container (US)", "CO Cargo (NY)", "CO
Cargo (CA)", "the Vendors", "the Purchaser", "Lai", "Joe Ng",
"David Cheng", "Cataldo", "Barnhill", "Bello", "Alex Chan",
"Tobby Chan", "Chau", "Jeffrey Cheng", "Sai Ng", "the Key
Employees", "the Covenantors" and "the Warrantors" shall,
where the context permits, include their respective
successors, personal representatives and permitted assigns.
1.5 References to "persons" shall include bodies corporate,
unincorporated associations and partnerships (whether or not
having separate legal personality).
1.6 References to writing shall include any methods of producing
or reproducing words in a legible and non-transitory form.
1.7 The masculine gender shall include the feminine and neuter and
the singular number shall include the plural and vice versa.
1.8 All warranties, representations, indemnities, covenants,
agreements and obligations given or entered into by more than
one person are given or entered into jointly and severally.
1.9 A document expressed to be "in the approved terms" means a
document the terms of which have been approved by or on behalf
of the Vendors and the Purchaser and a copy of which has been
signed for the purposes of identification by or on behalf of
those Parties.
1.10 In construing this Agreement:
1.10.1 the rule known as the ejusdem generis rule shall not
apply and, accordingly, general words introduced by
the word "other" shall not be given a restrictive
meaning by reason of the fact that they are preceded
by words indicating a particular class of acts,
matters or things; and
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1.10.2 general words shall not be given a restrictive
meaning by reason of the fact that they are followed
by particular examples intended to be embraced by the
general words.
2. SALE OF ASSETS
2.1 Subject to the terms of this Agreement, each of the Vendors
shall sell as beneficial owner, and the Purchaser shall
purchase, the Business carried on by each of the Vendors
respectively as a going concern and all of the Assets relating
to the Business carried on by each of the Vendors respectively
free from all Encumbrances. The sale and purchase shall take
effect from the Closing Date subject to Closing.
2.2 Nothing in this Agreement shall operate to transfer from the
Vendors, nor to impose any obligation or liability on the
Purchaser in respect of, any of the Excluded Assets nor any
other assets or liabilities of the Vendors except as
specifically provided in this Agreement.
3. PAYMENT OF PURCHASE PRICE
3.1 The Purchase Price shall be US *** which shall be paid by
the Purchaser to the Vendors on 31 October 2000 by the
delivery to each of the Vendors a banker's draft payable to
the Vendors in the proportion of *** to CO Container (US), ***
to CO Cargo (NY) and *** to CO Cargo (CA) (or to such other
person and in such other proportion as the Vendors in writing
may direct) for the Purchase Price.
3.2 Any amounts owing by any of the Vendors to the Purchaser may
be set-off by the Purchaser against any amount payable by the
Purchaser to the Vendors hereunder, provided that amounts
exceeding US$65,000 owing by any of the Vendors to the
Purchaser other than pursuant to Clause 9.1.1 shall have been
verified and acknowledged in writing by the relevant Vendor.
4. CONDITIONS
4.1 The sale and purchase of the Assets is conditional upon:
4.1.1 completion of the sale and purchase of the HK
Business (and the assets used in it) becoming
unconditional in accordance with the terms and
conditions set out in the HK Agreement;
4.1.2 each of the Vendors having complied fully with the
obligations set out in Clause 5; and
4.1.3 delivery by the Vendors to the Purchaser of the
Employment Agreements for each of the Key US
Employees (providing for remuneration for each of
them substantially on the same terms as set
* Information omitted and filed separately with the Commission for
confidential treatment.
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out against each of them respectively in Schedule 7) duly
executed by the Key US Employees.
4.2 The Purchaser may waive all or any of the Conditions at any
time by notice in writing to the Vendors.
4.3 The Vendors shall use their best endeavours to procure the
fulfilment of the Conditions on or before the Closing Date.
4.4 In the event that any of the Conditions shall not have been
fulfilled (or waived pursuant to Clause 4.2 by the Purchaser)
on the Closing Date, then the Purchaser shall not be bound to
proceed with the purchase of the Assets and, save for the
provisions of Clauses 1, 4, 17, 18.1, 19.1, 19.2, 19.4, 19.6,
19.7, 19.9, 20 and 21 of this Agreement and save in respect of
any antecedent breach of this Agreement, all rights and
liabilities of the Parties hereunder shall cease and no Party
shall have any claim against any other Parties.
5. PRE-CLOSING OBLIGATIONS
5.1 Between the date hereof and the Closing Date, the Vendors
shall carry on the Business in the usual and ordinary course
consistent with prior practice so as to maintain the same as a
going concern (using its best endeavours to preserve its
assets, customer and supplier relations, employee relations,
business and organisation) and shall ensure that without the
prior written consent of the Purchaser:
5.1.1 there will be no change, other than changes in the
ordinary day-to-day course of business, in the assets
or liabilities of the Business;
5.1.2 there will be no expenditure of a capital nature
exceeding US$65,000 in value;
5.1.3 there will be no acquisition or sale or other
disposition of, or creation of any Encumbrance over,
any asset used or for use in the Business other than
in the ordinary course of the Business;
5.1.4 no contracts exceeding 1 month in duration, or which
could have a value or liability arising for the
Vendors thereunder which could exceed US$130,000 will
be entered into, varied or terminated;
5.1.5 there will be no variation of, or agreement to
terminate, any of the Purchased Contracts;
5.1.6 there will be no grant or entry into of any licence,
franchise or other agreement or arrangement
concerning any part of the Intellectual Property;
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5.1.7 no change will be made to the terms of employment of
any of the Transferring Employees, no Transferring
Employee will be dismissed and no one will be hired
for employment in the Business;
5.1.8 there shall be no variation of terms of any of the
Leases or grant of any lease or third party right in
respect of any of the Leased Properties and there
shall be no defaults under the Leases by any of the
Vendors;
5.1.9 no change will be made in the practices of ordering
supplies, shipping goods, invoicing customers and
collecting debts to those adopted in relation to the
Business prior to the commencement of the
negotiations which lead to the execution of this
Agreement;
5.1.10 no changes in management policy of a significant
nature will be instituted; and
5.1.11 no agreement, conditional or otherwise, to do any of
the foregoing shall be made.
5.2 As from the date of this Agreement, the Vendors will ensure
that the Purchaser and any person authorised by it shall be
given such access to the Leased Properties and to any other
premises from which the Business is carried on, managed or
administered and to all the Books and Records as the Purchaser
may reasonably request and be permitted to take copies of any
such Books and Records. Each of the Vendors will procure that
its directors and employees provide the Purchaser promptly
during this period all such information and explanations
requested by the Purchaser, and any person authorised by it,
in relation to the Business or the Assets.
5.3 The Purchaser hereby undertakes and warrants that it will not
prior to Closing, save as required by law or by the rules of
any supervisory or regulatory body or securities exchange to
which it is subject, divulge any confidential information
relating to the Business obtained by it pursuant to this
Agreement to any person other than its own officers, employees
or professional advisers, provided that the Purchaser and UTi
Worldwide may, without obtaining the prior consent of the
other Parties, disclose the contents hereof or the matters
contemplated herein to any person (including, but not limited
to, the underwriters of UTi Worldwide's shares or their
counsel) in respect of or in connection with the proposed
registration and listing of the ordinary shares of UTi
Worldwide on a stock exchange in the USA.
5.4 The Vendors shall procure that the Purchaser's interest is
noted on all Insurances with effect from the Closing Date, and
in the event of any loss or damage arising which is covered by
such Insurance will take all steps within its power at the
request and direction of the Purchaser to recover from the
insurers and, subject to Closing, account to the Purchaser for
any payment received.
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6. CLOSING
6.1 Subject to the provisions of Clause 4, Closing shall take
place on the Closing Date at the offices of Baker & McKenzie,
Hong Kong at 14th Floor, Hutchison House, 10 Harcourt Road,
Hong Kong when all (but not some only) of the following events
shall occur:
6.1.1 the Vendors shall:
6.1.1.1 deliver the fully executed Bill of Sale to
the Purchaser, substantially in the form of
Exhibit A attached hereto, to give the
Purchaser good and marketable title and to
vest in the Purchaser all of the Vendors'
rights, title and interests in and to the
Business and the Assets, free and clear of
any third party claims in accordance with
the provisions of this Agreement;
6.1.1.2 place the Purchaser in possession of all the
Books and Records (other than minute books
relating to directors' and shareholders'
meetings and statutory books);
6.1.1.3 deliver to the Purchaser a written
confirmation that the Warrantors are not
aware of any matter or thing which is a
breach of or inconsistent with any of the
Warranties;
6.1.1.4 deliver to the Purchaser certified copies of
resolutions of the shareholders and
directors of each of the Vendors, each such
resolution unanimously approving the sale of
the Assets in accordance with the terms of
this Agreement and authorising the
appropriate officers to execute and deliver
this Agreement and to perform the Vendors'
obligations hereunder;
6.1.1.4A A deliver to the Purchaser Certificates of
the Officers of the Vendors, executed in
each case by the Chief Executive Officer,
substantially in the form of Exhibit B
attached hereto;
6.1.1.5 subject to Clause 16.4, deliver to the
Purchaser duly executed assignments or
transfer documents (as the case may be) in
the approved terms in respect of the
assignment or transfer of the licences and
permits granted to or enjoyed by the Vendors
in respect of the Business to the Purchaser;
and
6.1.1.6 deliver to the Purchaser a release and
waiver by each of Logistics Management and
CO Air (China) in favour of the Purchaser in
respect of all past, present and future
commissions, fees, expenses and other
payments whatsoever arising from the
carrying on of the Business, in
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form and substance reasonably satisfactory to the
Purchaser; and
6.1.2 the Purchaser shall deliver to the Vendors a
certified resolution of the Board of Directors of the
Purchaser approving the purchase of the Business on
the terms of this Agreement and authorising the
appropriate officers to execute and deliver this
Agreement and perform all of the Purchaser's
obligations hereunder.
6.2 Without prejudice to any other remedies available to the
Purchaser:
6.2.1 if in any respect the provisions of Clause 6.1 are
not complied with by any of the Vendors on the
Closing Date, the Purchaser may proceed to Closing so
far as practicable (without prejudice to its rights
under this Agreement); or
6.2.2 if the provisions of Clause 6.1.1.4 is not complied
with by any of the Vendors on the Closing Date, the
Purchaser may rescind this Agreement.
7. ASSIGNMENT OF LEASED PROPERTIES
Each Vendor who is a party to a Lease shall use its best efforts,
beginning immediately after Closing, to obtain from the landlord
thereunder (and from such other party(ies) whose consent is required)
written consent to the assignment of the relevant Lease to the
Purchaser, in each case in accordance with and subject to the
conditions of assignment contained in Part 3 of Schedule 3 hereto.
8. APPORTIONMENTS
8.1 The following items of expenditure and income shall be
apportioned such that the cost of items of expenditure
accrued, or referable to periods, prior to the Closing Date
shall be borne by the Vendors and thereafter by the Purchaser
and the benefit of items of income accrued, or referable to
periods, prior to the Closing Date shall belong to the Vendors
and thereafter to the Purchaser:
8.1.1 all rents, rates, gas, water, electricity and
telephone charges and other outgoings relating to or
payable in respect of the Leased Properties;
8.1.2 all rents, royalties and other periodical payments
receivable in respect of the Business;
8.1.3 all vehicle licence fees payable in respect of any
motor vehicles included in the Machinery and
Equipment;
8.1.4 all salaries, wages, accrued holiday pay entitlement,
and other emoluments and all statutory contributions,
salaries tax and employer's contributions to the
Fidelity Simple-IRA Plan relating to the employment
of the Transferring Employees in the Business;
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8.1.5 all pre-payments made, and all deposits received, by
the Vendors under the Purchased Contracts; and
8.1.6 all rents, royalties, licence fees and other
periodical payments in respect of the Business.
8.2 The Vendors and the Purchaser shall use all reasonable
endeavours to draw up and agree a statement of the
apportionments referred to in Clause 8.1, and the balance
owing by either the Vendors or the Purchaser to one another,
as soon as practicable after the Closing Date. If such
statement has not been prepared and agreed within 30 days
after the Closing Date, either the Vendors or the Purchaser
may refer the matter for resolution in accordance with the
procedure in Clause 15. Payment of the balance agreed, or
determined under Clause 15 to be due, shall be made within 14
days after agreement or determination (as the case may be)
together with interest on the amount due from and including
the Closing Date down to but not including the date of payment
at the rate of 2% above the prime rate as published in The
Wall Street Journal on the last business day of the applicable
quarter, compounded on the last days of March, June, September
and December in each year.
9. RESPONSIBILITY FOR LIABILITIES
9.1 Without prejudice to the Warranties, the Vendors shall be
responsible for, and shall keep the Purchaser fully and
effectively indemnified against:
9.1.1 all debts, obligations and liabilities arising from
the carrying on of the Business prior to the Closing
Date including, for the avoidance of doubt, all
liabilities arising (whether before or after the
Closing Date) in respect of warranties given to
purchasers of services from the Vendors;
9.1.2 all claims by and liabilities to third parties in
respect of any negligent act or omission or breach of
obligation of the Vendors prior to the Closing Date;
9.1.3 all liabilities or obligations to banks or other
non-trade creditors, and all Tax liabilities of the
Vendors;
9.1.4 all obligations and liabilities accrued or falling to
be performed under, or arising out of the manner of
performance of, the Purchased Contracts up to (but
excluding) the Closing Date;
9.1.5 all commissions, fees, expenses, debts, obligations
and liabilities owed to Logistics Management and CO
Air (China) arising from the carrying on of the
Business (whether before or after the Closing Date).
The Vendors represent and warrant that no
commissions, fees, expenses or any other payments
whatsoever arising from the carrying on of the
Business shall be payable to Logistics Management or
CO Air (China) on or after the Closing Date; and
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9.1.6 all claims, liabilities and obligations arising from
or in connection with the carrying on of the Business
prior to the Closing Date in breach of, or otherwise
than in compliance with, any applicable law,
regulation or order.
9.2 With effect from the Closing Date the Purchaser shall:
9.2.1 observe and perform or procure to be observed and
performed all the obligations of the Vendors under
the Purchased Contracts and Leases, except insofar as
such obligations should have been performed before
the Closing Date, and, with respect to the Leases,
only to the extent that the Purchaser has the legal
right and obligation, respectively, to demand and
obtain the benefits thereof, and to perform the
obligations thereunder;
9.2.2 assume responsibility for payment for all goods
delivered to, or services received by, the Purchaser
under the Purchased Contracts and Leases on or after
the Closing Date whether the invoices for such goods
or services are received before or after the Closing
Date; and
9.2.3 keep the Vendors fully and effectively indemnified
against any liability howsoever arising from the
failure of the Purchaser to perform its obligations
under Clauses 9.2.1 and 9.2.2.
9.3 Each of the Vendors agrees with the Purchaser that it will, in
accordance with its normal practice, pay, satisfy or discharge
all debts, liabilities and obligations relating in any way to
the Business which are not expressly assumed by the Purchaser
hereunder. If the Purchaser becomes aware that any of the
Vendors has failed to discharge any such liabilities and
believes that this failure may damage the goodwill of the
Business as carried on by the Purchaser after Closing, it may
give notice of that fact to the relevant Vendor. If the
relevant Vendor does not provide reasonable evidence that the
liability in question is disputed, the Purchaser may satisfy
such liability on the relevant Vendor's behalf and shall be
entitled to immediate reimbursement from the relevant Vendor
of the amount paid by the Purchaser, together with interest
thereon at the rate of 2% above the prime rate as published in
The Wall Street Journal on the last business day of the
applicable quarter, compounded on the last days of March,
June, September and December in each year from and including
the date of payment to but not including the date of
reimbursement Provided that the said entitlement of the
Purchaser to reimbursement shall not arise unless and until
the said notice has been duly served on the relevant Vendor
with reasonable evidence in support of the Purchaser's claim
therein.
9.4 With effect from the Closing Date all complaints received by
the Vendors or the Purchaser from customers of the Business in
relation to services rendered prior to the Closing Date shall
be dealt with as follows:
9.4.1 all such complaints shall be referred in the first
instance to the Purchaser who will endeavour to
resolve them in accordance with the
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procedures and practices previously employed by the
Vendors in the Business;
9.4.2 if any complaint cannot be resolved by the Purchaser,
it shall be referred to the Vendors who shall be
responsible at its own expense for resolving the
same;
9.4.3 each Party will provide any information or assistance
reasonably requested by another Party in dealing with
complaints under this Clause 9.4;
9.4.4 the Vendors will reimburse to the Purchaser on demand
all reasonable expenses and costs incurred in dealing
with complaints under this Clause 9.4 including,
without limitation, the full cost of its employees'
time involved;
9.4.5 the Purchaser will not make any admission of
liability in relation to any complaint without the
relevant Vendor's prior consent (which shall not be
unreasonably withheld or delayed) but shall otherwise
be free to deal with complaints in a manner
consistent with prior practice so as to maintain and
preserve the goodwill of the Business.
10. THIRD PARTY CONSENTS
If any consent or approval of any person who is not a party to this
Agreement is required for the transfer to the Purchaser of the benefit
of any of the Purchased Contracts or any of the Leases and any such
consent or approval has not been received at or prior to Closing:
10.1 this Agreement shall not constitute an assignment or attempted
assignment of any such Purchased Contract or Leases, as
applicable, whose terms would be broken by an assignment or
attempted assignment;
10.2 the assignment of each such Purchased Contract or Lease, as
applicable, shall be conditional upon such consent which the
Vendors shall use their best endeavours to obtain as soon as
practicable; and
10.3 until such time as such consent or approval is received to the
satisfaction of the Purchaser, the Vendors shall be deemed to
be holding the benefit thereof in trust for the Purchaser.
11. EMPLOYEES
11.1 The Purchaser agrees that the Transferring Employees shall be
offered "at will" employment with the Purchaser commencing as
of the Closing Date with salaries commensurate to the salaries
paid by the relevant Vendor prior to the Closing.
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11.2 Purchaser agrees to send to each of the Transferring Employees
an offer letter substantially in the form set out in Schedule
9 hereto. At the request of Purchaser, Vendors agree to
prepare a letter to each of the Transferring Employees urging
them to accept Purchaser's offer of employment, which letter
shall be subject to Purchaser's prior review and approval. The
letter sent by Vendors shall not contain any terms which are
inconsistent with Purchaser's offer letter.
11.3 The Vendors shall use all reasonable endeavours to persuade
the Transferring Employees to accept employment with the
Purchaser on such terms as aforesaid.
11.4 The Vendors shall fully indemnify and keep indemnified the
Purchaser against any claim for wrongful dismissal or
unreasonable dismissal, wrongful termination or otherwise that
may hereafter be made against the Purchaser by any person who
was at any time an employee of the Vendors in connection with
the Business. Without limiting any of the Vendor's agreements
and covenants herein, the Vendors shall remain responsible for
all costs, expenses and liabilities related to its employees,
including, without limitation, any severance benefits payable
to such employees, accrued but unused vacation and sick pay,
and all health care continuation coverage requirements under
the law commonly known as COBRA with respect to the Vendors'
employees as to qualifying events that occur prior to or upon
the Closing, and any liability under any employee benefit plan
of the Vendors.
11.5 Except with the prior consent in writing of the Purchaser, the
Vendors shall not terminate the employment or make any
variation in the terms of employment of any of the
Transferring Employees (whether immediate, conditional or
prospective) at any time after the signing hereof and before
the Closing Date. Effective as of the Closing, the Vendors
shall take all lawful steps necessary to terminate all
employees of the Vendors. As of the Closing, the Vendors will
pay, or make adequate provision to pay, all wages,
commissions, severance pay, vacation pay, sick pay, holiday
pay and any amounts due its employees pursuant to any employee
benefit plan through the Closing. The Vendors represent and
warrant that they are unaware that any employee has indicated
that they do not intend to accept Purchaser's offer of
employment.
11.6 In addition to Clause 11.4, the Vendors hereby agree and
undertake to indemnify the Purchaser at all times from and
against all actions, proceedings, costs, claims, damages,
demands, expenses and liabilities:
11.6.1 arising out of or in any way connected with the
Transferring Employees during the period when they
were in the relevant Vendor's employ on or before the
Closing Date, including without prejudice to the
generality of the foregoing:
11.6.1.1 any breach by the relevant Vendor of any
obligation under or in connection with terms
of employment;
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11.6.1.2 any breach by the relevant Vendor of any
other obligation or any duty (whether
statutory or otherwise) owed by the relevant
Vendor to any of the Transferring Employees;
and
11.6.2 arising out of or in relation to any claims brought
by the Transferring Employees (or any of them) under
any relevant statute, rule, regulation or any other
law conferring protection against discrimination,
harassment, victimisation or vilification by reason
of age, gender, race, religion, family circumstances
or disability, insofar as such claims relate in whole
or in part to the period when the Transferring
Employees were in the employ of the relevant Vendor
(or any predecessor of the relevant Vendor).
12. "FIDELITY SIMPLE-IRA PLAN"
12.1 Each of the Vendors hereby jointly and severally represents and
warrants to the Purchaser that the "Fidelity Simple-IRA Plan" cannot
and shall not be transferred to the Vendors and, therefore, does not
constitute part of the Assets. None of the Assets which are to be
acquired by the Vendors hereunder shall be subject to any liens under
the Fidelity Simple-IRA Plan or any other employee benefit plan of the
Vendors. The Vendors have performed all obligations required to be
performed by the Vendors under the Fidelity Simple-IRA Plan and the
Vendors are not in violation of, and have no knowledge of, any existing
default or violation by any other party to the Fidelity Simple-IRA Plan
or any other employee benefit plan of any nature of the Vendors.
12.2 Each of the Vendors further jointly and severally represents, warrants
and undertakes to and with the Purchaser that:
(a) it shall cease to make employer's contribution to the
"Fidelity Simple-IRA Plan" as of Closing; and
(b) it shall procure termination of the "Fidelity Simple-IRA Plan"
forthwith after Closing and that it shall forthwith after the
"Fidelity Simple-IRA Plan" has been terminated deliver to the
Purchaser such evidence as may be required by the Purchaser in
respect thereof.
13. WARRANTIES
13.1 The Warrantors jointly and severally represent, warrant and
undertake to and with the Purchaser that each of the
Warranties is now and will at Closing be true and accurate.
13.2 The Warranties are given subject to matters fully, fairly and
specifically disclosed in the Disclosure Letter but no other
information relating to the Business of which the Purchaser
has knowledge (actual or constructive) and no investigation by
or on behalf of the Purchaser shall prejudice any claim made
by the Purchaser under the Warranties or operate to reduce any
amount recoverable and liability in respect thereof shall not
be confined to breaches discovered before Closing. No letter,
document or other communication shall
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be deemed to constitute a disclosure for the purposes of this
Agreement unless the same is accepted as such by the Purchaser
and is expressly referred to in the Disclosure Letter.
13.3 The Warrantors acknowledge that the Purchaser has entered into
this Agreement in reliance upon the Warranties and has been
induced by them to enter into this Agreement.
13.4 Without restricting the rights of the Purchaser or otherwise
affecting the ability of the Purchaser to claim damages on any
other basis available to it, the Warrantors hereby jointly and
severally undertake to indemnify the Purchaser at all times
from and against all and any diminution in the value of the
Business or the Assets and all and any losses, damages,
interest, costs or expenses whatsoever suffered or incurred by
the Purchaser as a result of any breach of any of the
Warranties including any costs (including legal costs on a
solicitor and own client basis), expenses or other liabilities
which the Purchaser may incur either before or after the
commencement of any action in connection with (i) any legal
proceedings in which the Purchaser claims that any of the
Warranties has been broken or is untrue or misleading and in
which judgment is given for the Purchaser or (ii) the
enforcement of any settlement of, or judgment in respect of
such claim.
13.5 Each of the Warranties shall be separate and independent and,
save as expressly provided to the contrary, shall not be
limited by reference to or inference from any other Warranty
or any other term of this Agreement nor by anything in the
Disclosure Letter which is not expressly referenced to the
Warranty concerned.
13.6 Where any statement in the Warranties or any confirmation or
certificate given by the Vendors or the Warrantors under or
pursuant to this Agreement is qualified by the expression "so
far as the Warrantors are aware", "so far as the Vendors are
aware", "to the best of the Warrantors' knowledge and belief"
or "to the best of the Vendors' knowledge and belief" or any
similar expression, that statement shall be deemed to include
an additional statement that it has been made after due and
careful enquiry.
13.7 The Warrantors hereby agree with the Purchaser to waive any
rights which they may have in respect of any misrepresentation
or inaccuracy in, or omission from, any information or advice
supplied or given by any of the Transferring Employees in
connection with the giving of the Warranties and the
preparation of the Disclosure Letter.
13.8 The Warrantors shall not, and shall procure that (save only as
may be necessary to give effect to this Agreement) none of
their respective Affiliates shall, do, allow or procure any
act or omission before Closing which will cause the Warrantors
to be in breach of any of the Warranties when given at
Closing.
13.9 The Warrantors hereby agree to disclose promptly to the
Purchaser in writing immediately upon becoming aware of the
same, any matter, event or
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circumstance (including any omission to act) which may arise
or become known to it after the date of this Agreement and
before Closing which:
13.9.1 constitutes a breach of or is inconsistent with any
of the Warranties or will constitute a breach of any
of the Warranties when given at Closing; or
13.9.2 has, or is likely to have, an adverse effect on the
financial position or prospects of the Business.
13.10 The Vendors shall give to the Purchaser and its solicitors and
accountants both before and after Closing all such information
and documentation relating to the Business and the Assets as
the Purchaser shall reasonably require to enable it to satisfy
itself as to the accuracy and due observance of the
Warranties.
13.11 The liability of the Warrantors under the Warranties:
13.11.1 shall save in relation to paragraphs 1.7, 2.1 to 2.10
and 7.6 of Schedule 1 (the "ENDURING WARRANTIES")
cease after 2 years except in respect of matters
which have been the subject of a written claim made
before such date by the Purchaser to the Vendors;
13.11.2 shall in relation to the Enduring Warranties cease
after 3 years except in respect of matters which have
been the subject of a written claim made before such
date by the Purchaser to the Vendors;
13.11.3 shall be limited to a maximum amount equal to the
aggregate amount of the Purchase Price,
unless in any case the relevant claim or claims has arisen by
reason of fraud, wilful concealment, dishonesty or deliberate
non-disclosure on the part of any of the Warrantors or any
Affiliate of the Vendors or in any case where the relevant
claim(s) is/are material and such claim(s) has/have arisen by
reason of fraud, wilful concealment, dishonesty or deliberate
non-disclosure on the part of any of their respective agents,
officers or employees, in which event there shall be no limit
under this Agreement on the amount recoverable by the
Purchaser from the Warrantors in respect of such claim or
claims or the time within which such claim or claims may be
brought.
13.12 The provisions of this Clause 13.12 shall operate to limit the
liability of the Warrantors in respect of any claim under or
in connection with the Warranties and references to "claim" or
"claims" shall be construed accordingly. The Purchaser and the
Warrantors agree as follows:
13.12.1 in the event that the Purchaser is entitled
to recover any sum (whether by payment,
discount, credit, set-off or otherwise) from
any third party in respect of any matter for
which a claim has been made against the
Warrantors pursuant to this Clause
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13 and in respect of which it has received
payment from the Warrantors, the Purchaser
shall as soon as reasonably practicable
account to the Warrantors in respect of any
amount so recovered from such third party
(after deduction of all reasonable costs and
expenses of the recovery);
13.12.2 in the event that a claim against the
Warrantors arises as a result of or in
connection with a liability to or a dispute
with any third party, the Purchaser shall
notify the Warrantors in writing of any such
third party claim and take such action as
the Warrantors may reasonably require to
avoid, resist, contest or compromise any
such claim, provided that:
13.12.2.1 the Purchaser is indemnified to
its reasonable satisfaction by the
Warrantors against any reasonable
cost and expenses and any
liabilities, penalties and fines
which may be incurred by the
Purchaser in taking such action;
and
13.12.2.2 the Purchaser shall not, in any
event, be required to take any
steps which would affect the
future conduct of the Business,
the business of the Purchaser or
any member of the UTi Group or
affect the rights or reputations
of any of them;
13.12.3 any claim made by the Purchaser for breach
of Warranty shall be reduced by the amount
of any payment made by the Warrantors in
respect of the same facts or circumstances
pursuant to the other provisions of this
Agreement;
13.12.4 nothing in this Agreement shall limit or
restrict the Purchaser's general obligation
at law to take reasonable steps to mitigate
any loss or damage which it may incur in
consequence of any matter giving rise to a
potential claim under this Agreement;
13.12.5 the Vendors shall be under no liability in
respect of a breach of any of the Warranties
unless the Vendors shall have received
written notice thereof from the Purchaser;
and
13.12.6 the Vendors shall be under no liability in
respect of any breach of the Warranties if
such liability would not have arisen but for
something voluntarily done or omitted to be
done (other than required by law or pursuant
to a legally binding commitment created on
or before Closing) by the Purchaser after
the Closing Date and otherwise than in the
ordinary course of business.
13.13 The Warranties together with any provisions of this Agreement
which shall not have been fully performed at Closing shall
remain in force notwithstanding Closing.
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13.14 If any sum payable by the Warrantors under this Clause 13
shall be subject to Tax (whether by way of deduction or
withholding or direct assessment of the person entitled
thereto) such payment shall be increased by such an amount as
shall ensure that after deduction, withholding or payment of
such Tax the recipient shall have received a net amount equal
to the payment otherwise required hereby to be made.
14. RESTRICTION OF COVENANTORS
14.1 Each of the Covenantors undertakes with the Purchaser that,
except with the consent in writing of the Purchaser, it shall
not and shall procure that each Affiliate of the Covenantors
shall not, either on its own account or in conjunction with or
on behalf of any person, firm or company:
14.1.1 for the period of 5 years after Closing, within any
country in which the Business has been carried on
during the year preceding the date hereof carry on or
be engaged, concerned or interested, directly or
indirectly, whether as a shareholder, director,
employee, partner, agent or otherwise in carrying on
any trade, business or undertaking which is in
competition with the Business (other than as a holder
of not more than 5% of the issued shares or
debentures of any company listed on a stock
exchange);
14.1.2 for the period of 5 years after Closing canvass,
solicit or entice away from the Purchaser or any
Affiliate of the Purchaser the custom of any person,
firm, company or organisation who shall at any time
within the year preceding the Closing Date have been
a customer, client, identified prospective customer
or client, representative, agent, or correspondent of
the Business or in the habit of dealing with the
Business or enter into any contract for sale and
purchase or accept business from any such person,
firm, company or organisation in competition with the
Business as carried on after Closing by the Purchaser
or any of its Affiliates;
14.1.3 for the period of 5 years after Closing employ,
solicit, entice away from the Purchaser any of the
Transferring Employees whether or not such person
would commit a breach of contract by reason of
leaving such employment;
14.1.4 save only for the purposes of preparing its accounts,
financial statements and Tax returns, at any time
hereafter make use of or disclose or divulge to any
person (other than to officers or employees of the
Purchaser whose province it is to know the same) any
information (other than any information properly
available to the public or disclosed or divulged
pursuant to an order of a court of competent
jurisdiction) relating to the Business, the identity
of its customers and suppliers, its products,
finance, contractual arrangements, business or
methods of business and shall use its best endeavours
to prevent the publication or disclosure of any such
information;
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14.1.5 at any time hereafter in relation to any trade,
business or company (other than any trade or business
carried on by the Purchaser or other members of the
UTi Group) use a name or trade mark including the
word or symbol "Continental" or any word or symbol
confusingly similar thereto in such a way as to be
capable of or likely to be confused with the name or
any trade mark of the Business;
14.1.6 attempt, counsel, procure or otherwise assist any
person to do any of the acts referred to in Clauses
14.1.1 to 14.1.5.
14.2 The Warrantors agree that, as of the Closing Date, the
Warrantors will immediately take any and all actions
reasonably necessary to change the Vendors' names to names not
including the words "Continental," "Continental Cargo,"
"Continental Container" or any variation or derivative thereof
or any name confusingly similar thereto, and to sign, seal,
deliver, file, acknowledge and record such instruments as are
necessary to accomplish said name changes.
14.3 Each of the Covenantors acknowledges that:
14.3.1 the undertakings given in Clause 14.1 are material to
the Purchaser's decision to enter into this
Agreement; and
14.3.2 the restrictions contained in Clause 14.1 are:
14.3.2.1 fair and reasonable with regard to subject
matter, area and duration; and
14.3.2.2 reasonably required by the Purchaser to
protect the Business and the Assets.
14.4 While the restrictions contained in Clause 14.1 are considered
by the Parties to be reasonable in all the circumstances, it
is recognised that restrictions of the nature in question may
fail for technical reasons and accordingly it is hereby agreed
and declared that if any of such restrictions shall be
adjudged to be void as going beyond what is reasonable in all
the circumstances for the protection of the interests of the
Purchaser but would be valid if part of the wording thereof
were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby reduced in scope the
said restriction shall apply with such modifications as may be
necessary to make it valid and effective.
15. INDEPENDENT ACCOUNTANTS
If any difference of opinion arises between the Vendors and the
Purchaser or their respective accountants, in relation to any provision
of this Agreement in respect of which either the Vendors or the
Purchaser is expressed to have the right to refer such matter for
determination pursuant to this Clause 15, subject to any time period
referred to in the relevant provision during which either the Vendors
or the Purchaser must seek to resolve the dispute before referring it
for determination pursuant to this
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Clause 15 having expired, either the Vendors or the Purchaser may refer
the matter to an independent firm of accountants for resolution as
follows:
15.1 the independent firm shall be jointly agreed by the Vendors
and the Purchaser or, if no agreement is reached within 10
days after either the Vendors or the Purchaser notifies the
other that it wishes to appoint a firm under this Clause 15, a
New York partner at a "Big Five" independent public accounting
firm not associated with any of the Vendors or the Purchaser
who is jointly agreed by the Vendors and the Purchaser;
15.2 the independent firm or the New York partner (as the case may
be) shall be requested to resolve the matter in dispute
applying the terms of this Agreement;
15.3 the determination of the independent firm or the New York
partner (as the case may be) shall be final and binding on the
Vendors and the Purchaser in the absence of manifest error;
15.4 the costs of the independent firm or the New York partner (as
the case may be) shall be shared by the Vendors on the one
part and the Purchaser on the other part equally.
16. FURTHER OBLIGATIONS AND INTENTIONS
16.1 If at any time within 38 months after Closing there is a
change in the ownership or control, direct or indirect, of
shares carrying more than 50% of the voting rights attaching
to the issued share capital of the Purchaser (except within
the group of companies of which the Purchaser is a member at
the date hereof), the Purchaser undertakes to procure that the
acquirer of such ownership or control guarantees to the
Vendors the due and punctual performance by the Purchaser of
its obligations hereunder.
16.2 In the event that any of the Key US Employees is given
diminished responsibilities during the period of 36 months
after Closing, his base salary and benefits will not be
reduced during this period.
16.3 In the event that any of the Key US Employees is required to
relocate, then his reasonable relocation costs will be paid
and compensation will be made in his remuneration package for
tax differentials.
16.4 Each of the Vendors undertakes that it will use its best
endeavours to obtain all necessary approvals in respect of the
transfer or assignment to the Purchaser of all licences and
permits granted to or enjoyed by the relevant Vendor in
respect of the Business and to transfer or assign (as the case
may be) all such licences and permits to the Purchaser at
Closing (if no approval is required in respect of such
transfer or assignment) or, where such approval is required,
within 30 days after attainment of the same Provided That the
Purchaser shall reimburse the Vendors for all reasonable costs
and expenses incurred by the Vendors in connection with such
approval, transfer and assignment.
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16.5 Within 120 days after the Closing Date (or such longer time as
shall be agreed between the Vendors and the Purchaser):
16.5.1 the Vendors shall:
16.5.1.1 deliver to the Purchaser duly
executed assignments in the approved
terms of the Trade Marks, Patents,
other Intellectual Property and the
Purchased Contracts;
16.5.1.2 complete the assignment to the
Purchaser of the Leases in respect
of the Leased Properties in
accordance with and subject to the
terms and conditions contained or
referred to in Schedule 3 Part 3;
and
16.5.2 the Purchaser shall:
16.5.2.1 subject to receipt of the documents
referred to in Clause 16.5.1.1 from
the Vendors, deliver to the Vendors
as soon as reasonably practicable
thereafter duly executed
counterparts of such documents; and
16.5.2.2 subject to receipt of the documents
referred to in Clause 16.5.1.2 from
the Vendors, deliver to the Vendors
as soon as reasonably practicable
thereafter the documents required to
be delivered by it on completion of
the assignment of the Leases in
respect of the Leased Properties in
accordance with the terms contained
or referred to in Schedule 3 Part 3.
16.6 The Purchaser shall use reasonable commercial endeavours to
procure the release of the guarantees and indemnities given to
carriers in respect of the Business within 120 days after the
Closing Date, the particulars of which are set out in Schedule
12.
17. RESTRICTION ON ANNOUNCEMENTS
Each of the Parties undertakes that prior to Closing it will not (save
as required by law or by any securities exchange or any supervisory or
regulatory body to whose rules any party to this Agreement is subject)
make any announcement in connection with this Agreement unless the
other Parties shall have given their respective consents to such
announcement (which consents may not be unreasonably withheld or
delayed and may be given either generally or in a specific case or
cases and may be subject to conditions).
18. COSTS
18.1 Save as otherwise provided herein, each Party shall pay its
own costs of and incidental to this Agreement and the sale and
purchase hereby agreed to be made.
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18.2 All stamp duty, registration fees, notarisation fees, consent
fees, approval charges and other fees, charges and costs
properly payable by the Vendors to any government authorities
and third parties in connection with or incidental to the
transfer, assignment, novation and other rights of the Vendors
to the Purchaser so as to give effect and place control of the
Business in the hands of the Purchaser shall, subject to the
prior approval of the Purchaser before any such payment is
made by the Vendors, be borne and paid wholly by the
Purchaser. For the avoidance of doubt, the said fees, charges
and costs shall not include capital gain taxes, profits taxes
and other forms of taxation levied on the Vendors, which taxes
shall be borne and paid solely by the Vendors themselves.
19. GENERAL
19.1 This Agreement shall be binding upon and enure for the benefit
of the estates, personal representatives, successors and
permitted assigns of the Parties.
19.2 This Agreement (together with any documents referred to herein
or executed contemporaneously by the Parties in connection
herewith) constitutes the whole agreement between the Parties
and supersedes any previous agreements or arrangements between
them or between the Vendors and the Purchaser relating to the
subject matter hereof and the proposal letter dated 13 April
2000 from the Union Transport Group to the Continental Group;
it is expressly declared that no variations hereof shall be
effective unless made in writing signed by duly authorised
representatives of the Parties.
19.3 All of the provisions of this Agreement shall remain in full
force and effect notwithstanding Closing (except insofar as
they set out obligations which have been fully performed at
Closing).
19.4 Any right of rescission conferred upon the Purchaser hereby
shall be in addition to and without prejudice to all other
rights and remedies available to it (and, without prejudice to
the generality of the foregoing, shall not extinguish any
right to damages to which the Purchaser may be entitled in
respect of any breach of this Agreement) and no exercise or
failure to exercise such a right of rescission shall
constitute a waiver by the Purchaser of any such other right
or remedy.
19.5 Upon and after Closing the Vendors shall do and execute and
deliver or procure to be done and executed and delivered all
such further acts, deeds, documents, instruments of
conveyance, assignment and transfer and things, if applicable,
to give effect to the terms of this Agreement, to place
control of the Business in the hands of the Purchaser and as
the Purchaser may request in order effectively to convey,
transfer, vest and record title to each of the Assets in the
Purchaser and pending the doing of such acts, deeds, documents
and things the Vendors shall as from Closing hold the legal
estate in each of the Assets in trust for the Purchaser to the
extent that it shall not have transferred to the Purchaser.
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19.6 No failure of the Purchaser to exercise, and no delay or
forbearance in exercising, any right or remedy in respect of
any provision of this Agreement shall operate as a waiver of
such right or remedy.
19.7 If any provision or part of a provision of this Agreement
shall be, or be found by any authority or court of competent
jurisdiction to be, invalid or unenforceable, such invalidity
or unenforceability shall not affect the other provisions or
parts of such provisions of this Agreement, all of which shall
remain in full force and effect.
19.8 The Vendors shall after Closing give all such assistance and
provide access for the Purchaser to all such information,
documents, accounting books and other records of the Business
as the Purchaser may reasonably require for the purpose of
enabling the Purchaser to respond to enquiries of or make
returns to any Tax authority and to negotiate any liability to
Tax.
19.9 This Agreement may be executed in one or more counterparts,
and by the Parties on separate counterparts, but shall not be
effective until each Party has executed at least one
counterpart and each such counterpart shall constitute an
original of this Agreement but all the counterparts shall
together constitute one and the same instrument.
20. NOTICES
Any notice required to be given by any Party to any other shall be
deemed validly served by hand delivery or by prepaid registered letter
sent through the post (airmail if to an overseas address) or by
facsimile transmission to its address or facsimile number given below
or such other address or facsimile number as may from time to time be
notified for this purpose and any notice served by hand shall be deemed
to have been served on delivery, any notice served by facsimile
transmission shall be deemed to have been served when sent and any
notice served by prepaid registered letter shall be deemed to have been
served 48 hours (72 hours in the case of a letter sent by airmail to an
address in another country) after the time at which it was posted and
in proving service it shall be sufficient (in the case of service by
hand and prepaid registered letter) to prove that the notice was
properly addressed and delivered or posted, as the case may be, and in
the case of service by facsimile transmission to prove that the
transmission was confirmed as sent error-free by the originating
machine.
To CO Container (US) and CO Cargo (NY) :
Continental Container Line, Inc./Continental
Cargo Logistics Inc. (the one incorporated in
the State of New York in the USA)
182-16 147th Avenue
Jamaica
NY 11413
New York
United States of America
Fax no. : (718) 917 8238
Attention : June Feng
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To CO Cargo (CA): Continental Cargo Logistics Inc. (the one
incorporated in the State of California in
the USA)
11120 S. Hindry Avenue
Unit A
Los Angeles
CA 90045
United States of America
Fax no. : (310) 641 0459
Attention : Vivian Chen
To the Purchaser : Union-Transport Corporation
120 Eastern Avenue
Chelsea
Massachusetts 02150
United States of America
Fax no. : (1 617) 887 2772
Attention : Steve Savarese
To Lai : Lai Kwok Fai
6th and 7th Floors, Leahander Centre
28 Wang Wo Tsai Street
Tsuen Wan
New Territories
Hong Kong
Fax no. : (852) 2238 6603
To Joe Ng : Ng Chun Ka
11120 S. Hindry Avenue, Unit A
Los Angeles
CA 90045
United States of America
To David Cheng : Cheng Kwan Kok David
6th and 7th Floors, Leahander Centre
28 Wang Wo Tsai Street
Tsuen Wan
New Territories
Hong Kong
Fax no. : (852) 2238 6603
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To Cataldo : Albert Patrick Cataldo
80 Everett Avenue, Suite 301
Chelsea
MA02150
United States of America
To Barnhill : Lewis Billy Barnhill
8505 Freeport Parkway, Suite 170
Irving
Texas 75063
United States of America
To Bello : Francis Raymond Bello
182-16 147th Avenue
Jamaica
NY 11413
United States of America
To Alex Chan : Chan Ka Ming
6th and 7th Floors, Leahander Centre
28 Wang Wo Tsai Street
Tsuen Wan
New Territories
Hong Kong
Fax no. : (852) 2338 6603
To Tobby Chan : Chan Kwan Hang
6th and 7th Floors, Leahander Centre
28 Wang Wo Tsai Street
Tsuen Wan
New Territories
Hong Kong
Fax no. : (852) 2338 6603
To Chau : Chau Hak Cheong
6th and 7th Floors, Leahander Centre
28 Wang Wo Tsai Street
Tsuen Wan
New Territories
Hong Kong
Fax no. : (852) 2338 6603
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To Jeffrey Cheng : Cheng Kwan Lung
6th and 7th Floors, Leahander Centre
28 Wang Wo Tsai Street
Tsuen Wan
New Territories
Hong Kong
Fax no. : (852) 2338 6603
To Sai Ng : Ng Sai Kuen
182-16 147th Avenue
Jamaica
NY 11413
United States of America
21. GOVERNING LAW AND SUBMISSION TO JURISDICTION
21.1 This Agreement shall be governed by and construed in
accordance with the laws of New York and the Parties hereby
irrevocably submit to the exclusive jurisdiction of the courts
of New York for the purpose of enforcing any claim arising
hereunder.
21.2 Each of CO Cargo (CA), Lai, Joe Ng, David Cheng, Cataldo,
Barnhill, Alex Chan, Tobby Chan, Chau and Jeffrey Cheng (the
"APPOINTORS") hereby irrevocably appoints Ms. June Feng of
182-16 147th Avenue, Jamaica, NY 11413, New York, USA, as its
agent to receive and acknowledge on its behalf service of any
writ, summons, order, judgment, complaint or other notice of
legal process based on or arising under this Agreement or any
of the transactions contemplated hereunder in the United
States Federal District Court or the State Court in the State
of New York, County of New York, USA. The Appointors further,
by execution and delivery of this Agreement, irrevocably
designate and appoint Ms. June Feng in the County, City and
State of New York, United States of America, as the authorised
agent for the Appointors upon whom process may be served in
any such suit or proceeding, it being understood that the
designation and appointment of Ms. June Feng as such
authorised agent shall become effective immediately without
any further action on the part of the Appointors. The
Appointors further agree that, to the extent permitted by law,
service of process upon Ms. June Feng shall be deemed in every
respect effective service of process upon the Appointers in
any suit or proceeding. The Appointors further agree to take
any and all action, including the execution and filing of all
such instruments and documents, as may be necessary to
continue such designation and the appointment in full force
and effect for five years from the Closing.
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SCHEDULE 1
WARRANTIES
1. THE ACCOUNTS
1.1 The Accounts have been prepared in accordance with the
requirements of all relevant laws and generally accepted
statements of standard accounting practice and are complete
and accurate in all respects and show a true and fair view of
the state of affairs of the Vendors (the "RELEVANT ENTITY")
and of its results and profits for the financial period ending
on the Accounting Date and depreciation of the fixed assets of
the Relevant Entity has been made at a rate sufficient to
write down the value of such assets to nil not later than the
end of their useful working lives;
1.2 The Accounts disclose and make full provision or reserve for
all actual liabilities of the Relevant Entity.
1.3 The Accounts disclose and make full provision or reserve for
or note all contingent, unquantified or disputed liabilities
and capital or burdensome commitments of the Relevant Entity.
1.4 The bases and policies of accounting of the Relevant Entity
(including depreciation and valuation of stock and work in
progress) adopted for the purpose of preparing the Accounts
are the same as those adopted for the purpose of preparing the
audited accounts of the Relevant Entity for each of the last 3
preceding accounting periods.
1.5 The profits and losses of the Relevant Entity shown by the
Accounts and for the last 3 preceding accounting periods have
not in any material respect been affected by any unusual or
non-recurring or exceptional item or by any other matter which
has rendered such profits or losses unusually high or low.
1.6 The Business has no liabilities, obligations or contingencies
of any kind, whether absolute, contingent, unaccrued, asserted
or unasserted, or otherwise, except liabilities, obligations
or contingencies that were in existence on the Accounting Date
and are fully accrued or reserved in the Accounts, or that
have been incurred after such date in the ordinary course of
the Business.
1.7 The Accounts contain full provision for all Tax in relation to
the Business including deferred or provisional taxation liable
to be assessed on the Relevant Entity for the accounting
period ended on the Accounting Date or for any subsequent
period (on the basis of the rates of Tax and taxation statutes
in force at the Accounting Date) in respect of any
transaction, event or omission occurring or any income or
profits or gains earned, accrued or received by the Relevant
Entity on or prior to the Accounting Date or for which the
Relevant Entity is accountable up to such date and all
contingent liabilities for Tax have been provided for or
disclosed in the Accounts.
2. TAXATION MATTERS
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2.1 Since the Accounting Date no further liability or contingent
liability for Tax in relation to the Business has arisen
otherwise than as a result of commercial activities in the
ordinary course of its business.
2.2 All returns of the Vendors made for Tax purposes were when
made and remain correct and on a proper basis and all other
information supplied to the Internal Revenue Service or other
fiscal authority for such purpose was when supplied and
remains correct and on a proper basis and such returns include
all returns and information which the Vendors ought to have
made or given.
2.3 Each Vendor is not a party to any action or proceeding for the
assessment or collection Tax and, to the best of the
Warrantors' knowledge and belief, no such action or proceeding
is likely. Each Vendor is not involved in any dispute with any
Tax authority concerning any matter likely to affect the
conduct of the Business after Closing or any of the Assets and
no such dispute is likely. Each Vendor has disclosed to the
Purchaser all correspondence between each of them and any
governmental agency regarding Tax.
2.4 Each Vendor has paid all Tax in relation to the Business for
which it is liable to account to the Internal Revenue Service
or other fiscal authority on the due date for payment thereof
and is under no liability to pay any penalty or interest in
connection therewith.
2.5 Each Vendor has made all deductions and withholdings in
respect, or on account, of any Tax from any payments made by
it which it is obliged or entitled to make and has accounted
in full to the appropriate authority for all amounts so
deducted or withheld.
2.6 All remuneration, compensation payments, payments on
retirement or removal from an office or employment and other
sums paid or payable to employees or officers or former
employees or officers of the Vendors in connection with the
Business and all interest, annuities, royalties, rent and
other annual payments paid or payable by the Vendors in
connection with the Business (whether before or after the date
hereof) pursuant to any obligation in existence at the date
hereof are and will (on the basis of the Tax legislation in
force at the date hereof) be deductible for profits tax
purposes either in computing the profits of the Vendors or as
a charge on the income of the Vendors.
2.7 Each Vendor has complied with its reporting obligations to the
Internal Revenue Service or other fiscal authority, in respect
of any benefits provided to any of the Transferring Employees.
2.8 To the best of the Warrantors' knowledge and belief, all
returns and information made or given by each Vendor to any
relevant authorities in connection with the import or export
of any products in relation to the Business are correct and
each Vendor has complied with all legislation relating to the
import and export of products and to all customs and excise
matters.
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2.9 To the best of the Warrantors' knowledge and belief, all
duties payable upon the importation of goods, and all customs
and excise duties payable in respect of the Assets have been
paid in full, and none of the Assets is liable to confiscation
or forfeiture.
2.10 No Assets are subject to any filed lien for any Taxes by any
taxing authority.
3. CORPORATE AND JOINT VENTURE MATTERS
3.1 Each Vendor has been duly incorporated, organised or
established and is validly existing under the laws of the
jurisdiction of its place of incorporation and no order has
been made or petition presented or resolution passed for the
dissolution of the Vendors and no distress, execution or other
process has been levied on any of its assets. Each Vendor is
qualified as a foreign corporation in every jurisdiction where
the failure to so qualify would have a material adverse effect
on its respective business, condition (financial or
otherwise), operations, or results of operations. Each Vendor
is solvent and able to pay its debts as they become due in the
ordinary course of business. Each Vendor has the corporate
authority to own, lease and operate the Assets and to carry on
its business as currently being conducted. No receiver,
trustee, committee or other party has been appointed by any
court to manage or dispose of the Business and Assets, and no
power to make or require any such appointment has arisen. In
addition, after Closing, the Warrantors further represent and
warrant that they will pay all creditors and accounts
receivable as recorded in the books and records of the
Vendors. No creditor of any of the Vendors will have any
lawful basis for a post-Closing claim against the Business or
Assets.
3.2 No Vendor has any place of business or branch or permanent
establishment relating to the Business outside its
jurisdiction of incorporation.
3.3 Accurate and complete copies of the Articles or Certificate of
Incorporation and By-laws of each Vendor have been provided to
the Purchaser. Each Vendor has complied with its Articles or
Certificate of Incorporation and By-laws in all material
respects and none of the activities, agreements, commitments
or rights of the Vendors relating to the Business nor this
Agreement is ultra vires or unauthorised.
3.4 Each Vendor has all the requisite corporate power to execute,
deliver and perform, and has taken all necessary corporate or
other action to authorise the execution, delivery and
performance of, this Agreement. This Agreement constitutes a
legal, valid and binding obligation of the Vendors enforceable
in accordance with its terms.
3.5 All Books and Records of Vendors:
(a) are true and accurate; and
(b) do not contain or reflect any material discrepancies.
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3.6 All of the shareholders of CO Container (US) are natural
persons (other than CO Container (HK)).
3.7 All of the shareholders of each of CO Cargo (CA) and CO Cargo
(NY) are natural persons (other than CO Air (HK)).
4. THE ASSETS
4.1 The Vendors have good and marketable title to all their
respective Assets free from any Encumbrances, other third
party rights, hire or hire purchase agreements, credit sale
agreements, agreements for payment on deferred terms or bills
of sale and any rights of any person to call for any of the
same. All of the Assets are in the possession or under the
control of the Vendors. The Assets comprise all of the assets
necessary to carry on the Business as carried on by the
Vendors.
4.2 All of the items of Machinery and Equipment are in good repair
having regard to their age.
4.3 The Machinery and Equipment comprise all the movable plant,
machinery, vehicles, office and warehouse equipment, computer
hardware and software, furniture and furnishings used in the
carrying on of the Business.
5. THE PURCHASED CONTRACTS
5.1 The Purchased Contracts do not include:
5.1.1 any contract for the purchase or use by the
Vendors of materials, supplies or equipment which
is in excess of the requirements of the Business
for its normal operating purposes or at prices
higher than current market prices or requires
expenditure in excess of US$65,000;
5.1.2 any contract for supply of services by the
Vendors which contains warranties or conditions
in favour of the purchaser substantially broader
in scope than warranties and conditions implied
by law or as specified in the Vendors' standard
conditions of sale or supply (a copy of which has
been provided to the Purchaser) or incorporates
unreasonable discounts, commissions or prices
calculated otherwise than in accordance with the
Vendor's standard pricing structure;
5.1.3 any unusual or onerous contract nor any contract
which cannot be terminated without penalty or
compensation on less than 12 months' notice;
5.1.4 any contract restricting any of the Vendors'
freedom of action in relation to the normal
activities of the Business;
5.1.5 any contract not made in the ordinary course of
the Business;
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5.1.6 any agency, distribution, marketing, purchasing,
franchising or licensing agreement.
5.2 Each of the Purchased Contracts is in full force and effect
and constitutes a legal, valid, binding and enforceable
obligation of every party thereto, and none of the terms of
the Purchased Contracts or compliance with any of them has
been waived.
5.3 With respect to each of the Purchased Contracts:
5.3.1 the relevant Vendor has duly performed and
complied in all material respects with each of
its obligations thereunder;
5.3.2 there has been no delay, negligence or other
default on the part of the relevant Vendor and no
event has occurred which, with the giving of
notice or passage of time, may constitute a
default thereunder;
5.3.3 the relevant Vendor is under no obligation which
cannot readily be fulfilled, performed or
discharged by it from the resources and Assets of
the Business on time and without undue or unusual
expenditure or effort;
5.3.4 the relevant Vendor has within the Business the
technical and other capabilities and the human
and material resources to enable it to fulfil,
perform and discharge all its outstanding
obligations in the ordinary course of the
Business;
5.3.5 there are no grounds for rescission, avoidance,
repudiation or termination and the relevant
Vendor has not received any notice of
termination; and
5.3.6 none of the other parties thereto is in default
thereunder.
5.4 None of the Purchased Contracts is one in which any of the
Affiliates of the Vendors or any shareholder or director of
the Vendors or of any of its Affiliates is in any way
interested.
5.5 None of the Purchased Contracts nor any of the arrangements or
practices of the Business is void, illegal, unenforceable,
registrable or notifiable under or in contravention of any
laws or regulations.
5.6 Other than the Purchased Contracts, there are no contracts,
agreements or arrangements relating to the Business which is
likely to be material to a purchaser of the Business and the
Assets.
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6. SERVICES
6.1 The Vendors have not provided any services in the course of
the Business which, to the best of the knowledge of the
Warrantors, have been provided in a negligent manner or in any
other manner which would entitle the recipient of such
services to claim damages against the Vendors.
6.2 There has been no claim in respect of personal injury or
damage to property arising from use of any services supplied
in the course of the Business during the period of 6 years
prior to the Closing Date.
7. GENERAL COMMERCIAL MATTERS
7.1 The Vendors have provided to the Purchaser a list of all
outstanding guarantees, performance bonds, letters of credit
or similar instruments given by the Vendors or any of its
Affiliates or any other person in respect of the Business, and
all agreements under which any finance has been provided to
the Vendors in relation to the Business.
7.2 To the best of the Warrantors' knowledge and belief, so far as
the Warrantors are aware, following a change in the ownership
of the Business and the Assets, the customers of or suppliers
to the Business will remain customers or suppliers of the
Purchaser to the same extent and upon terms no less favourable
than the terms of their dealings with the Vendors prior to the
date of this Agreement. Within the period of 90 days preceding
the date of this Agreement the Warrantors have not received
any notice or indication (either in writing or orally) from
any customer or supplier of the Business that it intends to
change in any respect the nature of its relationship
(including, without limitation, the terms of its dealings)
with the Business.
7.3 Neither the Vendors, their predecessors in title, nor any
person for whose acts or defaults the Vendors may be
vicariously liable, has committed any criminal offence or any
tort or any breach of legislation, regulation or other
requirement having force of law, relating to the Business.
7.4 The Vendors have obtained all authorisations, licences and
consents necessary for the carrying on of the Business. All
such authorisations, licences and consents are valid and
subsisting.
7.5 As at the date of signing of this Agreement the Vendors do not
carry on the Business under any name other than its own.
7.6 To the best of the Warrantors' knowledge and belief, the
Vendors are not the subject of any official investigation or
inquiry and is not aware of any facts which are likely to give
rise to any such investigation or inquiry.
7.7 None of the shareholders or directors of the Vendors, the
Vendors nor any Affiliate of the Vendors is either alone or
with any other person or persons engaged in any business or
concerned or interested in any way whatsoever in any business
of a similar nature to or competitive with the Business.
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7.8 There are no obligations, agreements, arrangements or
concerted practices relating to or affecting the Business to
which any of the Vendors is a party or by which any of the
Vendors is bound and there are no practices in which any of
the Vendors is engaged which relate to or affect the Business
which are void, illegal, unenforceable, registrable or
notifiable under or which contravene any antitrust or similar
legislation anywhere in the USA (all such laws being referred
to as "the antitrust rules" in this paragraph). The Warrantors
have received no complaint or threat to complain under or
referring to the antitrust rules from any person and has not
received any request for information, investigation or
objections or been the addressee of or party to any decision,
judgment, undertaking or settlement relating to the antitrust
rules or to any proceedings in which the antitrust rules were
pleaded or relied upon which in any case related to or
affected the Business.
7.9 The books and records of the Business accurately present and
reflect all transactions entered into in relation to the
Business, and have been properly maintained, in accordance
with generally accepted accounting principles (GAAP)
consistently applied and applicable legislation in the USA.
Such books and records are up to date and complete.
7.10 The Vendors have been and are in material compliance with all
applicable laws relating to privacy.
8. INTELLECTUAL PROPERTY
8.1 Save in respect of those Third Party Rights pursuant to
agreements described in Part 3 of Schedule 8, the relevant
Vendor is and has been at all times since its creation the
sole legal and beneficial owner, free from all Encumbrances,
capable of transferring the same as beneficial owner and,
where registered, the sole registered proprietor of all the
Intellectual Property.
8.2 The material particulars as to registration (and applications
therefor) of the Intellectual Property, including priority and
renewal dates, are set forth in Schedule 4. Each of those
registrations is valid.
8.3 The Intellectual Property, and the validity or subsistence of
the relevant Vendor's right, title and interest therein, is
not the subject of any current pending or threatened
challenge, claim or proceeding, including for opposition,
cancellation, revocation or rectification, and has not during
the period of 6 years prior to Closing been the subject of any
such challenge, claim or proceeding, and there are no facts or
matters which might give rise to any such challenge, claim or
proceeding.
8.4 All registration and/or renewal fees regarding the
Intellectual Property due on or before Closing have been paid
in full.
8.5 The relevant Vendor has not entered into any agreement,
arrangement or understanding (whether legally enforceable or
not) for the licensing or otherwise permitting the use or
exploitation of the Intellectual Property or
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which prevents, restricts or otherwise inhibits its freedom to
use and exploit the Intellectual Property.
8.6 None of the Intellectual Property is currently being
infringed, misused or used without authorisation by any third
party or has been so infringed, misused or used without
authorisation during the 6 year period preceding Closing and
no third party has threatened any such infringement, misuse or
unauthorised use and the Warrantors are aware of no
allegations of the same.
8.7 The Vendors are not engaged in any activities involving the
Business which infringe or otherwise involve the misuse or
unauthorised use of any patents, petty patents, know-how,
trade secrets, technical processes, lists of customers or
suppliers and other confidential information, registered
designs, copyrights, performer's rights, rights in Internet
domain names of any level, plant variety rights, design
rights, rights in circuit layouts, topography rights, trade
marks, business names, rights in the nature of any of the
aforesaid or rights in the nature of unfair competition rights
belonging to any third party or which give any third party the
right to sue for passing off. None of the Intellectual
Property has been wrongfully or unlawfully acquired by the
Vendors. Complete and accurate copies of all documentation by
which the Vendors acquired from any third party ownership of
any of the Intellectual Property have been disclosed to the
Purchaser, and no claim under any warranty contained in such
documentation has been made or intimated nor are there any
grounds on which any such claim could be made.
8.8 The relevant Vendor has taken all steps open to it to preserve
the Intellectual Property including, but not limited to taking
all reasonable steps to preserve the confidentiality of all
know-how, confidential information and trade secrets used in
the Business, including ensuring that all such know-how,
information and secrets are fully documented and held in a
secure location in the possession or control of the relevant
Vendor, are only disclosed to such employees and other persons
to whom disclosure is necessary in the normal conduct of the
Business and who are aware of, and accept in writing an
obligation to maintain, the confidentiality thereof.
9. CLOSING SYSTEMS AND SOFTWARE
9.1 In this paragraph 9, the expression "THE SOFTWARE" means all
of the computer programs identified and briefly described in
Schedule 4 Part 4.
9.2 The Software includes all computer programs and software used
or supplied in or in connection with the Business during the
period of 6 years prior to Closing (whether owned by the
Vendors or licensed or sub-licensed to the Vendors by a third
party pursuant to a licence agreement from the third party).
9.3 The relevant Vendor has absolute title and right to and
copyright in each item of the Software described in Section A
of Schedule 4 Part 4 including source code and object code,
user and other manuals, tapes, indices, descriptive memoranda,
original listings, development working papers, calculations
and all other relevant documents, media and confidential
information free of all
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Encumbrances and adverse claims and no property rights of the
relevant Vendor in such Software have been sold, assigned,
licensed or disposed of to any party other than by the
granting of non-exclusive licences to customers of the
Business in the ordinary course of the Business.
9.4 All source codes, tapes, indices, descriptive memoranda,
original listings, development working papers, calculations
and any other documents or media necessary conclusively to
prove authorship and ownership of copyright in the Software
described in Section A of Schedule 4 Part 4 are in the
possession custody or control of the Vendors. The Vendors are
not a party to any contract requiring the Vendors to place in
escrow, or otherwise to permit any third party to use or have
access to, the source code to any of the Software described in
Section A of Schedule 4 Part 4.
9.5 The relevant Vendor is entitled to assign to the Purchaser and
to use and, where indicated, to grant sub-licences to third
parties to use the Software described in Section B of Schedule
4 Part 4 pursuant to licences and/or consents granted to the
relevant Vendor by the owner or licensee of such Software,
true and complete copies of such licences having been
disclosed to the Purchaser and being in full force and effect.
All royalties and other payments have been paid when due and
there has been no act or default by the relevant Vendor or,
where appropriate, its sub-licensees or any other person which
may in any way result in such licences being terminated or the
relevant Vendor being unable to obtain any benefit under such
licences.
9.6 The relevant Vendor has not at any time had any dispute with
any person relating to proprietary or other rights in or to
the Software. All licences relating to the Software granted by
the relevant Vendor are in full force and effect and the
relevant Vendor is not aware of any breach of any terms of any
such licences. The relevant Vendor has on the termination of
any licence granted by it either recovered or secured the
destruction of all copies of the Software in the possession
custody or control of the licensee or other contracting party
at the date of such termination.
9.7 The Software is fit in all respects for its intended purpose,
of satisfactory quality, performs in all respects in
accordance with its specifications and user or other manuals
or documentation and does not contain any defect or feature
which does or may adversely affect its performance or the
performance of any other software, hardware or system. The
relevant Vendor has not at any time had any dispute with any
person relating to the functionality, quality or fitness for
purpose of the Software or relating to its compliance with its
specifications or with any warranties given by the relevant
Vendor or any other person relating to it.
9.8 (a) All computer software, hardware and equipment owned
or used by the Vendors in relation to the Business or
used or operated by third parties on behalf of the
Vendors in relation to the Business, which performs
or is or may be required to perform functions
involving dates or the computation of dates or
containing date related data, has the programming,
design and performance capabilities to ensure that:
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(i) it will not suffer or cause a Malfunction;
and
(ii) it will not be adversely affected by, nor
require changes in inputting or operating
practices nor produce invalid or incorrect
output or results, nor cause any abnormal
ending scenario or suffer any diminution in
functionality or performance as a result of
the date change at the end of the twentieth
century or the input, processing, storage or
use of dates up to and including 31 December
2001.
(b) All date related data stored electronically by or on
behalf of the Vendors in relation to the Business is
in such a form that its input, processing, storage or
use by or on behalf of the Vendors in relation to the
Business will not, directly or indirectly, cause a
Malfunction in any software, hardware or equipment.
(c) For the purposes of this Warranty, a "MALFUNCTION"
means failure:
(i) accurately to recognise dates falling
before, upon and after the year 2000;
(ii) accurately to record, store, retrieve and
process data input and date information;
(iii) to function in a manner which does not
create any ambiguity as to century; and
(iv) accurately to manage and manipulate single
century and multi-century formulae,
including leap year calculations.
9.9 The Vendors have security procedures in place to prevent the
unauthorised access, amendment or damage to, or use of, the
Vendors' data or data of third parties held on the Vendors'
computer systems or Software by any third party, and no such
unauthorised access, amendment, damage or use has taken place
during the 6 years preceding Closing.
9.10 The Vendors have access to the source code of Software
licensed or sub-licensed to it in terms of source code deposit
agreements between the owner(s) of the copyright in such
Software and reputable deposit agents, true and complete
copies of which agreements have been disclosed to the
Purchaser.
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10. THE LEASED PROPERTIES
10.1 In this paragraph 10 unless the context otherwise requires:
10.1.1 "LAWS" includes any law, statute, ordinance,
rule, regulation, code, license, permit, order,
decree or similar edit of a governmental
authority, from time to time in effect relating
to or regulating the ownership, transfer,
development, construction, use, or occupancy of a
Leased Property;
10.1.2 "FINANCIAL ENCUMBRANCES" include any debenture,
mortgage, charge, pledge, lien, encumbrance,
assignment of rent or any security interest or
other security arrangement of any kind granted or
agreed to be granted over or in respect of the
Leased Properties;
10.1.3 "LIABILITIES" include all liabilities (whether or
not contingent) incurred or to be incurred by
each of the Vendors, all damage or loss suffered
by it, all claims, demands, actions and
proceedings made or brought against it and all
costs and disbursements incurred by it and
Liability shall be construed accordingly;
10.1.4 "OBLIGATIONS" include covenants, conditions,
agreements, stipulations, restrictions,
contractual requirements or other obligations
(whether positive or negative) of a similar
nature;
10.1.5 "OCCUPANCY DOCUMENTS" include any lease,
sub-lease, tenancy agreement, sub-tenancy
agreement, licence or other document granted or
agreed to be granted by any of the Vendors or its
predecessors in title giving any person a right
to use, possess or occupy the Leased Properties;
10.1.6 "OCCUPANCY RIGHTS" include any right to use,
possess or occupy any of the Leased Properties,
granted by any of the Vendors or its predecessors
in title or otherwise acquired or in the course
of being acquired;
10.1.7 "RIGHTS" include any easement, licence,
quasi-easement, privilege, contractual right or
other rights of a similar nature;
10.1.8 "UTILITY" includes provision for sewage disposal,
water, electricity, gas, television,
telecommunications and information and
"UTILITIES" shall be construed accordingly;
10.1.9 Any reference to the Leased Properties be deemed
to include reference to each of them and each and
every part of them.
10.2.0 The Leased Properties comprise all the land,
buildings and premises currently owned, occupied
or used by the Vendors in relation to the
Business or in respect of which the Vendors have
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any estate, interest, right or title and the
descriptions of the Leased Properties set out in
Schedule 3 are correct and not misleading.
10.2.1 The Vendors have exclusive and unfettered
possession and occupation of the Leased
Properties and there are no Occupancy Rights or
Financial Encumbrances in favour of third parties
affecting them except those disclosed in Schedule
3.
10.2.2 All Obligations to which the Leased Properties
are subject and all obligations under the
Financial Encumbrances (if any) have been timely
and properly observed and performed and there are
no circumstances which could give rise to the
restriction or termination of the continued
possession, occupation, use or enjoyment of the
Leased Properties or to the exercise of any
powers under any Financial Encumbrances or to any
Liabilities whatever.
10.2.3 The Vendors are not in default under the Leases,
and there are no events or circumstances which,
with the passage of time, would constitute a
default thereunder.
10.2.4 The Leased Properties have the benefit of all
Rights required to comply with fire regulations
and to maintain adequately the Leased Properties,
and all other Rights, Utilities and facilities
reasonably required for the continued full and
free use and enjoyment of the Leased Properties
for the duration of the Vendors' interest in the
relevant Leased Property and such Rights are held
on terms which do not entitle any person to
terminate, curtail or charge for the Rights.
10.2.5 There are no outstanding claims, disputes,
complaints, notices, orders or proceedings
relating to or affecting the Leased Properties or
which have given or might give rise to any
Liabilities.
10.2.6 All laws, statutes and subsidiary legislation
relating to the use of the Leased Properties, the
employment of persons or the use or storage of
machinery, materials, consumables or chattels in
the Leased Properties have been complied with and
all consents, licences or permits required
thereunder have been obtained and any conditions
or restrictions imposed by such consents,
licences or permits have been observed and
performed.
10.2.7 The present use of the Leased Properties does not
conflict with and is properly permitted under any
and all Laws and is not a temporary or personal
use or a use subject to restrictions or
conditions giving rise to expenditure or
affecting the Vendors' use or enjoyment of the
Leased Properties and all necessary or required
permits have been obtained and are currently
complied with.
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10.2.8 No demolition, development or construction work
has been carried out in relation to the Leased
Properties which would require any consent under
any Laws or without such consent having been
properly obtained and any conditions or
restrictions imposed upon the giving of such
consent have been observed and performed.
10.2.9 There are no unauthorised structures on or
unauthorised alterations to any of the Leased
Properties. All of the structures on the Leased
Properties are in good operating condition and
repair and adequate and suitable for the purposes
for which they are currently proposed to be used.
Such structures are free from any latent or
patent design, construction, physical or
mechanical defects.
10.2.10 No application by the Vendors under any Laws or
relevant in relation to demolition, development
or construction work or for change of use at the
Leased Properties has been submitted or a
decision in relation thereto appealed, which
application or appeal (as appropriate) is still
pending and no such application has been
submitted and refused.
10.2.11 There are no circumstances or matters which would
prevent any development, change of use,
demolition or construction work at any of the
Leased Properties for which consent under any
Laws has been obtained.
10.2.12 There has been no flooding, subsidence or heave
affecting the Leased Properties, there are no
structural or material defects in or affecting
the Leased Properties and the Leased Properties
are in good and substantial repair and condition
and will not require substantial expenditure in
the foreseeable future.
10.2.13 The Vendors have not entered into any agreements
with any Utility authority or company for the
supply to or discharge from the Leased Properties
of any Utility or for mains or other equipment
laying and has not deposited any money with any
such authority or company as security therefor.
10.2.14 The Occupancy Documents, if any, are on terms
negotiated at arm's length and the rent or fees
payable under the Occupancy Documents were the
best that could reasonably be obtained in the
open market (at the time of the grant of the
relevant Occupancy Document or the last rent or
fee review under the relevant Occupancy Document
(as the case may be)) and the rent and fees are
as disclosed to the Purchaser in writing.
10.2.15 All rent, fees and other payments due under the
Occupancy Documents, if any, or in respect of any
Occupancy Rights have been promptly paid on the
due date and no such rent, fees or other payments
have been commuted, waived or paid more than
monthly in advance.
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10.2.16 Where any Occupancy Documents contain provisions
for rent or fee review or rights of renewal, such
review or renewal shall be at the best rent or
fee that could reasonably be obtained in the open
market assuming willing parties but otherwise on
the same terms as the relevant Occupancy Document
(other than the option for renewal where
appropriate) and the terms of the Occupancy
Documents relating to the assessment of the new
rent or fee shall have the effect of realising
the highest yield for the Leased Properties
reasonably obtainable and there are no building
alterations or improvements which are to be
disregarded for rent or fee review purposes.
10.2.17 The Vendors are not engaged in any rent or fee
review negotiations, process, proceedings or
determination under any legislation or Leases or
Occupancy Documents (if any) and there is no
outstanding rent or fee review under any Leases
or the Occupancy Documents (if any).
10.2.18 The parking spaces, including handicapped spaces,
at the Leased Properties are all the parking
spaces required by any Laws.
10.2.19 All Occupancy Documents (if any) are listed on
Schedule 3, and copies of all of the Occupancy
Documents, if any, have been supplied to the
Purchaser and are true and complete, and written
details of the material terms of any subsisting
oral Occupancy Rights or Occupancy Rights
subsisting by reason of conduct are set forth on
Schedule 3 and are true and complete and the
terms of such Occupancy Rights do not contain any
unusual provisions, and no collateral assurances,
undertakings, concessions or agreements for
surrender have been made by any party to any
Occupancy Documents or Occupancy Rights.
10.2.20 Any consents required for the grant of any
Occupancy Documents or Occupancy Rights have been
obtained.
10.2.21 [Intentionally Omitted]
10.2.22 The Vendors will not create, grant or agree to
grant any Occupancy Rights in respect of the
Leased Properties before Closing except with the
prior written consent of the Purchaser.
10.2.23 Copies of all Financial Encumbrances have been
supplied to the Purchaser and are true and
complete.
10.2.24 Policies of insurance relating to any Liabilities
of the Vendors to third parties deriving in any
way from the Leased Properties or their use have
been effected by the Vendors, are current and
valid, cover the reasonably foreseeable Liability
of the Vendors and are not subject to any special
or unusual terms or restrictions or to the
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payment of any premium in excess of the normal
rate for policies of the same kind.
10.3.1 The relevant Vendor possesses the right to occupy
the Leased Properties pursuant to the terms of
the relevant Leases.
10.3.2 The Leases for each of the Leased Properties are
in full force and effect and have not been
modified, cancelled or amended. No such Lease is
subject to any claim, defense, setoff or
counterclaim for the benefit of the landlord
thereunder and each Vendor is in full compliance
with all of its obligations under each Lease.
10.3.3 All necessary consents for the grant of the
Leases were obtained before such grant and the
landlords named in the Leases were the registered
legal owners of the Leased Properties at the time
of the grant of the relevant Lease.
10.3.4 The Leases contain no unusual or onerous
provisions.
10.3.5 The Leased Properties are not subject to any
expenses other than general and water rates,
rent, management charges of a non-capital nature
and Utility charges and the relevant Vendor is
not responsible for payment of Government rent.
10.3.6 The Leases are not subject to any options or
rights of preemption or first refusal in favour
of any third parties.
10.3.7 Where the relevant Vendor is responsible for
maintaining insurance of the Leased Properties,
the policy conforms in all respects with the
requirements of the relevant Lease.
10.3.8 Policies of insurance relating to the interior of
the Leased Premises and their fixtures, fittings
and contents have been effected by the relevant
Vendor, are current and valid, cover the full
reinstatement value thereof and are not subject
to any special or unusual terms or restrictions
or to the payment of any premium in excess of the
normal rate for policies of the same kind.
10.3.9 The relevant Vendor knows of no reason why the
existing leases of the Leased Properties will not
be or are likely not to be renewed on their
expiry on similar terms to those in the existing
Leases (save as regards reasonable commercial
increases in rent).
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11. LITIGATION
Neither the Vendors nor any person for whose acts or defaults the
Vendors may be vicariously liable is engaged whether as plaintiff or
defendant or otherwise in any civil, criminal or arbitration
proceedings or any proceedings before any tribunal in relation to the
Business (save for debt collection by the Vendors in the ordinary
course of the Business for amounts which are not material) and there
are no proceedings threatened or pending against the Vendors in
relation to the Business including proceedings in respect whereof any
of the Vendors is liable to indemnify any party concerned therein and
there are no facts which are likely to give rise to any such litigation
or proceedings. There is no unfulfilled or unsatisfied judgment or
court order outstanding against the Vendors or the Assets in relation
to the Business or the Assets.
12. EMPLOYEES
12.1 There has been no past and there is no existing or threatened
or pending disputes involving any of the Vendors and any of
their respective employees, including without limitation, the
Transferring Employees. There are no agreements or
arrangements (whether oral or in writing or existing by reason
of custom and practice) between any of the Vendors and any
trade union or other employees' representatives concerning or
affecting any of the Transferring Employees and there are no
trade unions or other employees' representatives whom any of
the Vendors recognises to any extent, in relation to the
Transferring Employees, for collective bargaining purposes.
There are no collective bargaining arrangements, and no
contracts or agreements with any labour unions relating to,
involving or affecting the employees of the Vendors or to
which any Vendor is a party or by which any Vendor is bound.
No Vendor has any obligation to bargain with any labour
organisation with respect to any persons. There are no pending
unfair labour practice charges against any Vendor, nor any
demands for recognition, nor any other request or demand from
a labour organisation for representative status with respect
to any employee employed by the Vendors. The Vendors are in
compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and
conditions of employment and wages and hours.
12.2 No circumstances have arisen under which any of the Vendors is
likely to be required to pay damages for wrongful termination
or breach of contract, to make any contractual or statutory
leave, severance or long service payment or make or pay any
compensation in respect of any dismissal, to make any other
payment under any employment related regulation or law or to
reinstate or re-engage any former employee who was previously
employed in the Business. So far as the Warrantors are aware,
there are no pending or threatened claims of any type against
it by any existing or former employees who are or were
employed in the Business. No circumstances have arisen under
which any of the Vendors is likely to be required to pay
damages or compensation, or suffer any penalty or be required
to take corrective action or be subject to any form of
discipline under any laws conferring protection against
discrimination, harassment, victimisation or vilification by
reason of
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age, gender, race, religion, family circumstances or
disability. So far as the Warrantors are aware, there are no
current, pending or threatened claims of any type against it
by any existing or former employees. Each of the Vendors has
never breached and is not in breach of any industrial award or
determination applicable to the Transferring Employees.
12.3 There are no existing employment or other agreements between
any of the Vendors and any of the Transferring Employees which
cannot be lawfully terminated by 3 calendar months' notice or
less without giving rise to any claim for damages or
compensation other than a statutory redundancy or severance or
long service payment. Each Vendor has complied with all its
obligations under all laws, regulations, and other
requirements (including without limitation codes, orders and
awards) in connection with the Transferring Employees.
12.4 Schedule 7 contains full and accurate particulars of the
following in relation to all of the Transferring Employees:
(i) name, date of birth and commencement of employment;
(ii) details of all remuneration payable (including any
bonus or commission entitlements) and any other
benefits provided or which the relevant Vendor is
bound to provide (whether now or in the future) to
all such persons; and
(iii) details of any other material terms and conditions of
employment of such persons,
all of which information is true and complete.
12.5 There are no persons working in the Business other than those
listed in Schedule 7.
12.6 Other than the "Fidelity Simple-IRA Plan" there are no
Employee Welfare Benefit Plans, retirement benefits, IRAs,
pension, provident, share option, share incentive, insurance,
401(k), disability or similar plans, arrangements or
obligations of the Vendors or any company of which any of the
Vendors is an Affiliate for any Transferring Employees or any
of their spouses or dependants. The Vendors have no obligation
(whether legally binding or established by custom) to pay any
pension, allowance or gratuity or make any other payment on
termination of service, death or retirement or to make any
payment for the purpose of providing any similar benefits to
or in respect of any Transferring Employee or any spouse or
dependant of any such person and is not a party to any scheme
or arrangement having as its purpose or one of its purposes
the making of such payments or the provision of such benefits.
The Vendors have not announced any proposals to establish any
such plans, arrangements or obligations.
12.7 The "Fidelity Simple-IRA Plan" complies with and has at all
times complied with all laws, rules and regulations made
thereunder. All contributions to the
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"Fidelity Simple-IRA Plan" have been made in accordance with
the rules governing the "Fidelity Simple-IRA Plan", any
applicable requirements of ERISA and all other requirements.
The Vendors and the administrator of the "Fidelity Simple-IRA
Plan" have duly complied with their respective obligations
under the plan and the rules thereof and under all relevant
laws and requirements. All amounts due under the plan have
been paid.
12.8 Complete and accurate copies of the rules and all booklets and
announcements describing the benefits (or any proposed changes
to the benefits) of the "Fidelity Simple-IRA Plan" and any
other employment benefit plan of Vendor and all other
documents, records and materials relating to the establishment
and operation of all such plans (including all annual returns,
reports, statements and certificates) have been supplied to
the Purchaser prior to the date hereof.
12.9 The Vendors have fulfilled all of their obligations under the
"Fidelity Simple-IRA Plan" (including any obligation to pay
contributions thereto).
12.10 To the best of the Warrantors' knowledge and belief, neither
the Vendors nor the trustees or other administrator of any
Employee Welfare Benefit Plan is engaged in any litigation or
arbitration proceedings in respect of any Employee Welfare
Benefit Plan or any benefit provided thereunder in relation to
the Transferring Employees or any former employees of the
Vendors and no such litigation or arbitration proceedings are
pending or have been threatened.
12.11 No Employee Welfare Benefit Plan in which any of the
Transferring Employees participate or have participated has
been or is in the process of being (or is proposed to be)
wound up (in whole or in part) or closed to new entrants (in
whole or in part), except as contemplated by this Agreement.
13. MATTERS SINCE THE ACCOUNTING DATE
Since the Accounting Date:
13.1 there has been no interruption or alteration in the nature,
scope or manner of the Business, which has been carried on
lawfully and in the ordinary and usual course so as to
maintain it as a going concern;
13.2 there has been no material adverse change in the customer
relations of the Business or in the financial condition,
prospects, assets or liabilities of the Business as compared
with the position disclosed by the Accounts and no damage,
destruction or loss (whether or not covered by insurance)
affecting the Business or the Assets;
13.3 no substantial customer or supplier being a customer or
supplier accounting for contribution to gross profits of more
than US$65,000 of the Business for the accounting period
ending on the Accounting Date has:
13.3.1 indicated that it is likely to cease trading with or
supply to the Business;
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13.3.2 indicated that it is likely to reduce substantially
its trading with or supplies to the Business; or
13.3.3 indicated that it is likely to change substantially
the terms upon which it is prepared to trade with or
supply the Business (other than normal price and
minor changes);
13.4 the Vendors have continued to pay its creditors in the
ordinary course of the Business. No unusual trade discounts or
other special terms have been incorporated into any contract
entered into by the Vendors;
13.5 each Vendor has not acquired, sold, transferred or otherwise
disposed of any assets of the Business of whatsoever nature or
cancelled, waived, released or discounted in whole or in part
any rights, debts or claims of or connected with the Business,
except in each case in the ordinary course of the Business in
a manner consistent with prior practice;
13.6 each Vendor has not hired or dismissed any employee employed
in the Business earning an annual rate of remuneration,
including fringe benefits, in excess of US$65,000;
13.7 no sum or benefit has been paid, applied or voted to any of
the Transferring Employees by way of remuneration, bonus,
incentive or otherwise in excess of the amounts payable to
them by the relevant Vendor at the Accounting Date so as to
increase their total remuneration and no new service
agreements have been made or entered into by the relevant
Vendor with any of the Transferring Employees since the
Accounting Date and the relevant Vendor is not under any
contractual or other obligation to, and the relevant Vendor
will not, change the terms of service of any Transferring
Employee prior to Closing;
13.8 the relevant Vendor has not acquired or disposed of or granted
any right or created any Encumbrance over any of the Leased
Properties or any land or buildings or any estate or interest
therein or parted with possession of the whole or any part
thereof or agreed to do any of the same;
13.9 each Vendor has not made any purchase or sale or introduced
any method of management or operation in respect of the
Business or the Assets except in the ordinary course of the
Business in a manner consistent with prior practice; and
13.10 each Vendor has not incurred or become subject to any
liability or obligation (absolute, contingent or otherwise) in
relation to the Business except current liabilities and
obligations incurred under contracts entered into in the
ordinary course of the Business and consistent with past
practice.
14. ACCURACY OF INFORMATION PROVIDED
14.1 All information contained in the Recitals and Schedules to
this Agreement is true and accurate in all respects and not
misleading in any respect.
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14.2 All written information regarding the Vendors and the Business
provided by the Vendors or any of its professional advisers to
the Purchaser or any of its professional advisers during the
negotiations prior to this Agreement is and was when given
true and accurate in all respects and not misleading in any
respect.
14.3 There is no material fact or matter concerning the Vendors and
the Business which has not been disclosed to the Purchaser
which would reasonably be expected to influence the decision
of the Purchaser to proceed with the purchase of the Business
on the terms of this Agreement.
14.4 All forecasts and projections relating to the Business given
to the Purchaser or its advisers by or on behalf of the
Vendors have been prepared with all due care and prudence and
on a reasonable basis on the assumption that the Business will
be conducted by Purchaser in the same manner as the Vendors.
There are no material facts or circumstances known, or which
ought to be known, to the Warrantors which would lead a
prudent person to revise those forecasts or projections.
15. GENERAL
The execution, delivery and performance of this Agreement will not
result in the breach, cancellation and/or termination of any of the
terms or conditions of or constitute a default under any of the
Purchased Contracts or any agreement by which the Assets may be bound
or affected or give rise to a right of any other party to terminate or
cancel any of the Purchased Contracts or any such agreement or violate
any legislation, regulation or other requirement having force of law or
any order, writ, injunction or decree of any court, administrative
agency or governmental body affecting the Business or the Assets or
give rise to the revocation, withdrawal or amendment of any Approval.
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SCHEDULES 2 THROUGH 13 OMITTED.
<PAGE> 56
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IN WITNESS WHEREOF the Parties have executed this Agreement on the date
appearing at the head hereof.
SIGNED by )
for and on behalf of )
CONTINENTAL )
CONTAINER LINE, INC. )
in the presence of: )
SIGNED by )
for and on behalf of )
CONTINENTAL )
CARGO LOGISTICS )
INC. (INCORPORATED IN THE )
STATE OF NEW YORK IN THE USA) )
in the presence of: )
SIGNED by )
for and on behalf of )
CONTINENTAL )
CARGO LOGISTICS )
INC. (INCORPORATED IN THE )
STATE OF CALIFORNIA IN THE USA) )
in the presence of: )
SIGNED by )
for and on behalf of )
UNION-TRANSPORT )
CORPORATION )
in the presence of: )
SIGNED by )
LAI KWOK FAI )
in the presence of: )
<PAGE> 57
REDACTED
SIGNED by )
NG CHUN KA )
in the presence of: )
SIGNED by )
CHENG KWAN KOK DAVID )
in the presence of: )
SIGNED by )
ALBERT PATRICK CATALDO )
in the presence of: )
SIGNED by )
LEWIS BILLY BARNHILL )
in the presence of: )
SIGNED by )
FRANCIS RAYMOND BELLO )
in the presence of: )
SIGNED by )
CHAN KA MING )
in the presence of: )
SIGNED by )
CHAN KWAN HANG )
in the presence of: )
<PAGE> 58
REDACTED
SIGNED by )
CHAU HAK CHEONG )
in the presence of: )
SIGNED by )
CHENG KWAN LUNG )
in the presence of: )
SIGNED by )
NG SAI KUEN )
in the presence of: )
