Exhibit 2.8
Execution Copy
ASSET PURCHASE AGREEMENT
by and among
STONEPATH HOLDINGS (HONG KONG) LIMITED
a Hong Kong company
and
G LINK EXPRESS (CAMBODIA) PTE. LTD.
a Cambodian company
and
THE SHAREHOLDERS OF G LINK EXPRESS (CAMBODIA) PTE. LTD.
August 8, 2003
TABLE OF CONTENTS
Page
ARTICLE 1 CERTAIN DEFINITIONS; TERMINATION OF SHARE PURCHASE AGREEMENT.................................1
ARTICLE 2 TRANSFER OF ASSETS...........................................................................2
2.1 Purchased Assets................................................................................2
2.2 Excluded Assets.................................................................................2
ARTICLE 3 PURCHASE PRICE...............................................................................3
3.1 Purchase Price for Purchased Assets.............................................................3
3.2 Payment of Base Amount..........................................................................3
3.3 Deferred delivery of Option Shares..............................................................5
3.4 [Intentionally Deleted].........................................................................5
3.5 Net Tangible Assets Payment.....................................................................5
3.6 Option to Purchase Option Shares................................................................5
3.7 Objections; Dispute Resolution..................................................................7
3.8 Taxes...........................................................................................8
3.9 Prorations......................................................................................8
ARTICLE 4 ASSUMPTION OF LIABILITIES....................................................................8
4.1 Assumed Liabilities.............................................................................8
4.2 Excluded Liabilities............................................................................8
ARTICLE 5 CLOSING......................................................................................9
5.1 Closing.........................................................................................9
5.2 Deliveries by Seller............................................................................9
5.3 Deliveries by Buyer............................................................................10
5.4 Contemporaneous Effectiveness..................................................................10
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF SELLER AND the SHAREHOLDERs...............................11
6.1 Organization, Good Standing and Power..........................................................11
6.2 Authorization of Agreement and Enforceability..................................................11
6.3 No Violation; Consents.........................................................................12
6.4 Capitalization.................................................................................12
6.5 Taxes..........................................................................................12
6.6 Financial Statements...........................................................................13
6.7 Absence of Undisclosed and Contingent Liabilities..............................................14
6.8 Absence of Certain Changes or Events...........................................................14
6.9 Guarantees.....................................................................................14
6.10 Customers......................................................................................14
6.11 Real Property..................................................................................15
6.12 Tangible Personal Property.....................................................................15
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6.13 Condition of Buildings and Tangible Personal Property..........................................15
6.14 Material Contracts.............................................................................15
6.15 Title to Purchased Assets; Absence of Encumbrances; Sufficiency................................17
6.16 Intellectual Property Matters..................................................................18
6.17 Licenses and Permits...........................................................................18
6.18 Compliance with Laws...........................................................................18
6.19 Absence of Certain Business Practices..........................................................19
6.20 Legal Proceedings..............................................................................19
6.21 Labor and Employment Matters...................................................................19
6.22 Effect of Transaction..........................................................................20
6.23 No Finder......................................................................................20
6.24 No Fraudulent Conveyance.......................................................................20
6.25 Insurance......................................................................................21
6.26 Accounts Receivable............................................................................21
6.27 Certain Securities Law Representations.........................................................21
6.28 Relationship With Related Persons..............................................................23
6.29 Completeness and Accuracy......................................................................23
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF BUYER.....................................................23
7.1 Organization, Good Standing, Power.............................................................24
7.2 Authorization of Agreement and Enforceability..................................................24
7.3 No Violations; Consents........................................................................24
7.4 No Finder......................................................................................24
ARTICLE 8 COVENANTS...................................................................................24
8.1 Access and Cooperation.........................................................................24
8.2 Continuance of Businesses......................................................................25
8.3 Affirmative Covenants..........................................................................26
8.4 Notification of Certain Matters................................................................26
8.5 Name Following Closing.........................................................................27
8.6 Satisfaction of Conditions; Cooperation........................................................27
8.7 Further Assurances.............................................................................27
8.8 Confidentiality................................................................................27
8.9 Non-Competition Agreement......................................................................27
8.10 Seller's Post-Closing Operation and Interim Operating Agreement................................28
8.11 Payment of Liabilities.........................................................................28
8.12 Third Party Consents...........................................................................28
8.13 Non Solicitation of Other Offers...............................................................28
8.14 Prohibition on Trading in Stonepath Group Stock................................................29
8.15 Agreement Not To Compete.......................................................................29
8.16 Reasonableness of Covenants....................................................................30
8.17 Injunctive Relief..............................................................................30
8.18 Blue Pencil Doctrine...........................................................................30
8.19 Treatment of Seller's Employees................................................................30
8.20 Continuation of Insurance Coverage.............................................................31
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8.21 Restriction on Resale of Stonepath Shares......................................................31
8.22 Collection of Accounts Receivable..............................................................31
8.23 Post-Closing Covenants.........................................................................32
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER................................................32
9.1 Conditions to Closing..........................................................................32
(a) Accuracy of Representations and Warranties...............................................32
(b) No Adverse Change........................................................................32
(c) Performance of Agreement.................................................................32
(d) Injunction...............................................................................32
(e) Actions and Proceedings..................................................................33
(f) Consents.................................................................................33
(g) Approval of Acquisition..................................................................33
(h) Availability of Employees................................................................33
(i) Deliveries by the Seller and Shareholders................................................33
(j) Due Diligence Review.....................................................................33
(k) Concurrent Acquisitions..................................................................33
(l) Agency and Servicing Agreement...........................................................33
ARTICLE 10 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER...........................................33
10.1 Conditions to Closing..........................................................................33
(a) Accuracy of Representations and Warranties...............................................34
(b) Performance of Agreement.................................................................34
(c) Injunction...............................................................................34
(d) Actions or Proceedings...................................................................34
(e) Consents.................................................................................34
ARTICLE 11 SURVIVAL; INDEMNIFICATION...................................................................34
11.1 Survival.......................................................................................34
11.2 Indemnification by Seller and the Shareholders.................................................34
11.3 Indemnification by Buyer.......................................................................35
11.4 Third Party Claims.............................................................................35
11.5 Effect of Certain Matters......................................................................35
11.6 Other Remedies.................................................................................36
ARTICLE 12 TERMINATION.................................................................................36
12.1 Termination....................................................................................36
12.2 Effect of Termination..........................................................................36
ARTICLE 13 GENERAL.....................................................................................37
13.1 Expenses.......................................................................................37
13.2 Publicity......................................................................................37
13.3 Waivers........................................................................................38
13.4 Binding Effect; Benefits.......................................................................38
13.5 Bulk Transfers Laws............................................................................38
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13.6 Notices........................................................................................38
13.7 Entire Agreement...............................................................................39
13.8 Counterparts...................................................................................39
13.9 Headings.......................................................................................39
13.10 Construction...................................................................................39
13.11 Governing Law..................................................................................39
13.12 Arbitration....................................................................................39
13.13 Cooperation....................................................................................40
13.14 Severability...................................................................................40
13.15 English Language Controlling...................................................................40
13.16 Shareholders' Agent............................................................................40
EXHIBIT A Definitions
EXHIBIT B Employment Agreement
EXHIBIT C Interim Operating Agreement
iv
ASSET PURCHASE AGREEMENT
------------------------
ASSET PURCHASE AGREEMENT dated as of the 8 day of August, 2003 by and
among STONEPATH HOLDINGS (HONG KONG) LIMITED, a Hong Kong corporation (the
"Buyer" or "Holdings"), G LINK EXPRESS (CAMBODIA) PTE. LTD., a single member
private limited company organized and existing under the laws of the Kingdom of
Cambodia (the "Seller"), and the Shareholders of Seller identified on the
signature pages of this Agreement (the "Shareholders").
RECITALS
--------
WHEREAS, Seller is in the business of providing customs brokerage,
freight forwarding, warehousing, distribution, and other related services (the
"Business"); and
WHEREAS, Buyer desires to acquire from Seller, and Seller desires to
transfer to Buyer, all of the assets of Seller used, necessary for use, held for
use or intended to be used in connection with the Business, upon the terms and
conditions of this Agreement.
WHEREAS, the Parties have entered into that certain Share Purchase
Agreement dated March 7, 2003 (the "Share Purchase Agreement").
WHEREAS, the Parties have agreed to enter into this Agreement in lieu
of the Share Purchase Agreement and wish to terminate the Share Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained herein, and in reliance thereon, Buyer
and Seller, intending to be legally bound, hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS; TERMINATION OF SHARE PURCHASE AGREEMENT
1.1 As used herein, the terms set forth in Exhibit A shall have the
meanings set forth therein.
1.2 The Share Purchase Agreement is hereby terminated with respect to
each signatory hereto with immediate effect and each signatory hereto is hereby
released and discharged, retrospectively and prospectively, from all obligations
whatsoever pursuant to the Share Purchase Agreement.
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ARTICLE 2
TRANSFER OF ASSETS
2.1 Purchased Assets. Upon the terms and subject to the conditions of
this Agreement, at the Closing, Seller shall sell and convey to Buyer, and Buyer
shall purchase and accept from Seller, all of Seller's right, title and interest
in, to, and under all of the business, properties, assets, goodwill and rights
of Seller of whatever kind and nature, real or personal, tangible or intangible,
that are owned, leased or licensed by Seller on the Closing Date, other than the
Excluded Assets (hereinafter collectively referred to as the "Purchased
Assets"), including, without limitation, the following:
(a) the Assumed Leases;
(b) the Equipment and the Leased Equipment;
(c) the Furnishings and Supplies;
(d) the Intellectual Property;
(e) the Contracts;
(f) the Business Records;
(g) the Permits to the extent that they are assignable to the
Buyer;
(h) the Leased Premises;
(i) the Accounts Receivable;
(j) all cash (including any and all cash held in trust for all
other G Link companies and their Affiliates), marketable securities, rights to
any funds set aside for employee benefits and other cash equivalents;
(k) all claims or rights against Third Persons arising out of, or
relating to, the Business; and
(l) the Goodwill.
Buyer shall acquire the Purchased Assets free and clear of all
liabilities, obligations and commitments, other than the Assumed Liabilities,
and free and clear of all Encumbrances.
2.2 Excluded Assets. Notwithstanding the provisions of Section 2.1, it
is expressly acknowledged and agreed that the Purchased Assets shall not
include, and that the Seller shall not sell or convey to the Buyer, and the
Buyer shall not purchase or accept from the Seller, the following assets (the
"Excluded Assets"):
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(a) The minute books and membership records of the Seller; and
(b) The financial records of the Seller;
(c) All rights of Seller under this Agreement; and
(d) All amounts due and owing from Related Persons of the Seller
as set forth in the Interim Financial Statements.
ARTICLE 3
PURCHASE PRICE
3.1 Purchase Price for Purchased Assets. The purchase price for the
Purchased Assets (the "Purchase Price") shall be the total of (a) an amount of
up to Three Million Two Hundred Twenty-One Thousand Seven Hundred and
Eighty-Five ($3,221,785) (the "Base Amount"), (b) the Option Shares issuable
pursuant to Section 8.23, and (c) the amount payable, if any, with respect to
the Net Tangible Assets under Section 3.5, all to be paid, calculated, and
subject to adjustment pursuant to the further provisions of this Article 3.
3.2 Payment of Base Amount. Buyer shall pay the Base Amount to Seller
in the following manner:
(a) Buyer shall pay to Seller at the Closing $1,610,893,
(representing (50%) of the Base Amount) in immediately available funds in United
States Dollars (the "Closing Date Cash Payment");
(b) Buyer shall deliver to Seller at the Closing certificates for
shares of the Common Stock of Stonepath Group, Inc. (the "Stonepath Shares"),
with appropriate restrictive legends, having a value of $322,179, (representing
twenty percent (10%) of the Base Amount), with the number of such Stonepath
Shares to be issued to be based upon the average closing price of the Stonepath
Shares on the Principal Exchange for the five Trading Days immediately preceding
the third Trading Day preceding the Closing Date; and
(c) Subject to the further provisions of this Section 3.2(c), the
balance of the Base Amount (the "Base Earn-Out Amount"), shall be paid by Buyer
to Seller in installments (each a "Base Earn-Out Payment") covering the
four-year earn-out period immediately following the Closing (the "Earn-Out
Period").
(i) The Base Earn-Out Payments will be based on the Net Income
Before Taxes of the Business, calculated in accordance with Section 3.2(c)(ii)
below, during each of the calendar years (or prorated portion) that fall within
the Earn-Out Period. With the recognition that the Base Earn-Out Payments will
be based upon two periods of less than a full calendar year (i.e., those periods
that fall between the Closing Date and December 31, 2003, and between January 1,
2007 and the fourth anniversary of the Closing Date, each a "Partial Earn-Out
3
Period"), the Base Earn-Out Payment and the corresponding "Targeted Amount" (as
defined below) of Net Income Before Taxes of the Business shall, for each
Partial Earn-Out Period, be prorated on a daily basis by multiplying each of the
Targeted Amount and Base-Earn Out Payment, as applicable, by the percentage
obtained by dividing the number of days within such Partial Earn-Out Period by
365 days. The Base Earn-Out Payments shall be due as follows (each an "Earn-Out
Payment Date"):
Closing Date through December 31, 2003 April 1, 2004
January 1, 2004 through December 31, 2004 April 1, 2005
January 1, 2005 through December 31, 2005 April 1, 2006
January 1, 2006 through December 31, 2006 April 1, 2007
January 1, 2007 through fourth anniversary 90 days after the
of the Closing Date fourth anniversary
of the Closing Date
(ii) Payment of each Base Earn-Out Payment shall be contingent
upon, and the Seller shall not be entitled to the full amount of the Base
Earn-Out Payment unless, Buyer achieves Net Income Before Taxes of the Business
for the full calendar year preceding the Earn-Out Payment Date of no less than
Nine Hundred Twenty Thousand Five Hundred and Ten ($920,510) (the "Targeted
Amount"), as prorated for any Partial Earn-Out Period. To the extent Buyer's Net
Income Before Taxes of the Business for the full calendar year preceding the
Earn-Out Payment Date is less than the Targeted Amount, as prorated for the
Partial Earn-Out Periods (such shortfall, the "Shortfall Amount"); the Base
Earn-Out Payment shall be reduced on a dollar-for-dollar basis by the amount
obtained by multiplying the Shortfall Amount by Holdings' Ownership Percentage.
In the event that a Shortfall Amount occurs with respect to any year within the
Earn-Out Period, and if during any subsequent year in the Earn-Out Period
Buyer's Net Income Before Taxes of the Business exceeds the Targeted Amount (as
prorated for each Partial Earn-Out Period) (such excess, the "Excess Amount"),
that amount obtained by multiplying the Excess Amount by Holdings' Ownership
Percentage shall first be applied to reduce the Shortfall Amount in the earliest
order in which any Shortfall Amounts were incurred; provided that such portion
of the Excess Amount may only be applied in any year until consumed.
(iii) On each Earn-Out Payment Date, Buyer shall prepare and
deliver to Seller, along with the Earn-Out Payment, a certificate (the "Annual
Earn-Out Certificate") signed by a senior executive of Buyer setting forth the
amount and method of calculating Net Income Before Taxes of the Business for the
prior calendar year (or portion thereof), the calculation of the Earn-Out
Payment then due, if any, and the recovery of the Shortfall Amount, if any.
(iv) All Base Earn-Out Payments shall be made in immediately
available cash funds expressed in U.S. Dollars, provided that the Base Earn-Out
Payment covering the period from the Closing Date through December 31, 2003
shall be paid in Stonepath Shares, with the number of shares being determined
based upon the average closing price of the Stonepath Shares on the Principal
Exchange for the five (5) Trading Days immediately preceding the third Trading
Day preceding the Earn-Out Payment Date for that year.
4
3.3 Deferred delivery of Option Shares. Seller hereby agree and
acknowledge that the Option Shares will not be issued and delivered to Seller at
Closing and will be issued and delivered to the Company Secretary in accordance
with Section 8.23 below.
3.4 [Deleted Intentionally]
3.5 Net Tangible Assets Payment. Within 60 days after the Closing Date,
Buyer shall prepare and deliver to Seller a statement (the "Net Tangible Assets
Statement"), certified by an officer of Buyer, setting forth the Net Tangible
Assets of the Seller as of the Effective Time and a certificate of Buyer that
the Net Tangible Assets Statement has been prepared in accordance with GAAP on a
basis consistent with that used in the preparation of the Audited Financial
Statements. If the dollar amount of the Net Tangible Assets reflected in the Net
Tangible Assets Statement as finally determined hereunder exceeds One Hundred
Thousand Dollars ($100,000) (the "Base Net Tangible Assets"), then Buyer shall
pay to Seller, as an adjustment to the Purchase Price, the amount of the
difference in Stonepath Shares, with the number of shares being determined based
upon the lower of: (i) the average closing price of the Stonepath Shares on the
Principal Exchange for the five (5) Trading Days immediately preceding the third
(3rd ) third Trading Day preceding the Closing Date; or (ii) the average closing
price of the Stonepath Shares on the Principal Exchange for the five (5) Trading
Days immediately following the date on which the Net Tangible Assets Statement
became final in accordance with Section 3.7. If the dollar amount of the Net
Tangible Assets reflected in the Net Tangible Assets Statement is less than Base
Net Tangible Assets, then Buyer shall be entitled to apply the amount of the
difference, as an adjustment of the Purchase Price, to reduce, on a
dollar-for-dollar basis, any Base Earn-Out Payment or Base Earn-Out Payments
otherwise due to Seller under this Agreement. In the event Buyer has not fully
applied such amount of the difference to the reduction of the Base Earn-Out
Payment or Base Earn-Out Payments on or before the last Earn-Out Payment Date,
Seller shall on such last Earn-Out Payment Date pay to Buyer in immediately
available funds the amount not so applied by Buyer. Any payment to be made under
this Section 3.5 shall be made within five Business Days after final
determination of the amount of the Net Tangible Assets as of the Effective Time
and, if in cash, by wire transfer to an account previously specified by Buyer.
3.6 Option to Purchase Option Shares.
(a) On or before the fifth anniversary of the Closing Date,
Holdings shall have the right, but not the obligation, to purchase from Seller
and to require Seller to sell to Holdings (such right, the "Option"), from time
to time, all or any portion of the Option Shares by delivering a written notice
(the "Option Notice") to the Seller setting forth the number of Option Shares to
be purchased.
(b) The purchase price for the Option Shares (the "Option Shares
Purchase Price") shall be an amount equal to the product of: (1) Six Hundred
Percent (600%) of the Net Income Before Taxes of the Business for the calendar
year immediately preceding the date the Option Notice is given by Buyer, less
all Indebtedness of Buyer on the date the Option Notice is given; and (2) the
percentage of outstanding share capital of the Company represented by the Option
Shares covered by the Option Notice (the "Minority Share Percentage").
5
(c) The Option Shares Purchase Price with respect to any exercise,
once determined, shall be payable to the Seller as follows:
(i) If the Option Shares Closing (as defined in Section 3.6(f)
below) occurs on or before April 1, 2004, one-quarter (1/4) of such Option
Shares Purchase Price shall be paid on each of April 1, 2004, April 1, 2005,
April 1, 2006 and April 1, 2007;
(ii) If the Option Shares Closing occurs after April 1, 2004
but on or before April 1, 2005, one-third (1/3) of such Option Shares Purchase
Price shall be paid on each of April 1, 2005, April 1, 2006 and April 1, 2007;
(iii) If the Option Shares Closing occurs after
April 1, 2005 but on or before April 1, 2006, one-half (1/2) of such Option
Shares Purchase Price shall be paid each of April 1, 2006 and April 1, 2007;
(iv) If the Option Shares Closing occurs after April 1, 2006
but on or before April 1, 2007, all of such Option Shares Purchase Price shall
be paid on April 1, 2007; and
(v) If the Option Shares Closing occurs after April 1, 2007,
all of such Option Shares Purchase Price shall be paid at the Option Shares
Closing.
(d) Upon delivery of an Option Notice, Buyer shall also prepare and
deliver to Seller a certificate setting forth the amount and method of
calculating the Option Shares Purchase Price (the "Option Shares Purchase Price
Certificate").
(e) The Option Shares Purchase Price shall be paid in immediately
available cash funds expressed in U.S. Dollars, or upon agreement between the
Parties, in Stonepath Shares or a combination thereof. Any portion of the Option
Shares Purchase Price paid in Stonepath Shares shall be valued on each of the
due dates of the Options Shares Purchase Price at the average closing price of
such stock on the Principal Exchange for the five (5) Trading Days immediately
preceding the third Trading Day preceding the respective due dates that payments
for the Option Shares are required to be made.
(f) In the event that Holdings delivers the Option Notice, a
closing of the purchase and sale of the Option Shares (the "Option Shares
Closing") shall be held within fifteen (15) days after the date the Seller has
received the Option Notice. At Option Shares Closing, Buyer shall deliver to
Seller the Option Shares Purchase Price in such form as determined pursuant to
subsection (e) of this Section 3.6 and Seller shall deliver to Buyer the
following:
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(i) Certificates representing the Option Shares covered by the
Option Notice, duly endorsed by Seller or accompanied by duly executed
instruments of transfer;
(ii) A certificate signed by Seller to the effect that in the
event that any portion of the Option Shares Purchase Price is being paid in
shares of Stonepath's common stock, that (1) Seller understands that the sale of
such shares to Seller has not been registered under the Securities Act or the
securities laws of any other jurisdiction and that such shares may not be resold
without such registration or an exemption therefrom, (2) Seller shall not resell
such shares in the absence of such registration or an exemption therefrom, and
(3) Seller is acquiring such shares for investment purposes only and not with
the view to the distribution thereof.
3.7 Objections; Dispute Resolution.
(a) If Seller concludes that any matter reported in the Net
Tangible Assets Statement, an Annual Earn-Out Certificate, or an Option Shares
Purchase Price Certificate is not accurate, Seller shall, within thirty (30)
days after its receipt of such certificate (the "Response Period"), deliver to
Buyer a written statement (the "Objection Notice"): (i) setting forth in
reasonable detail the nature of the objections to each of any discrepancies
believed to exist, and (ii) requesting all additional information required by
the Seller to perform calculations relating to matters contained in such
certificate. If no Objection Notice is given within the Response Period, then
the calculations set forth in the Net Tangible Assets Statement, Annual Earn-Out
Certificate, or Option Shares Purchase Price Certificate, shall be controlling
for all purposes of this Agreement.
(b) If an Objection Notice is timely given within the Response
Period, Buyer shall provide Seller all requested information included in the
Objection Notice within fifteen (15) days; thereafter, the Buyer and the Seller
shall use good faith efforts to jointly resolve any properly noticed objections
and discrepancies within thirty (30) days of the receipt by Buyer of an
Objection Notice, which resolution, if achieved, shall be fully and completely
binding upon all Parties to this Agreement and not subject to further review,
appeal, or dispute.
(c) If Buyer and Seller are unable to resolve the objections and
discrepancies to their mutual satisfaction within such thirty (30) day period,
then the matter shall be submitted to an accounting firm of international
reputation mutually acceptable to Buyer and the Seller (the "Independent
Accountants"). In submitting a dispute to the Independent Accountants, each
Party shall concurrently furnish, at its own expense, to the Independent
Accountants and the other Party such documents and information as the
Independent Accountants may request. Each Party may also furnish to the
Independent Accountants such other information and documents as it deems
relevant, with copies of such submission and all such documents and information
being concurrently given to the other Party. Neither Party shall have or conduct
any communication, either written or oral, with the Independent Accountants
without the other Party either being present or receiving a concurrent copy of
any written communication. The Independent Accountants may conduct a conference
concerning the objections and disagreements between Buyer and Seller, at which
conference each Party shall have the right to (i) present its documents,
materials and other evidence (previously provided to the Independent Accountants
and the other Party), and (ii) have present its or their advisors, accountants
7
and/or counsel. The Independent Accountants shall promptly (but not to exceed
seventy-five (75) days from the date of engagement of the Independent
Accountants) render a decision, acting as an expert and not an arbitrator, on
the issues presented, and such decision shall be final and binding on all of the
Parties to this Agreement. In the event the Independent Accountants require a
payment to be made by Buyer to Seller, such payment shall be due and payable
within thirty (30) days from the date the decision is rendered ("Independent
Accountant Required Payment"). Each of the Parties shall agree to indemnify and
hold harmless the Independent Accountants, and to execute whatever documents or
agreements are necessary to effectuate the foregoing.
(d) Seller and Buyer shall each pay 50% of all costs, fees and
expenses to engage the Independent Accountants.
(e) In connection with its review of all the matters arising under
the Net Tangible Assets Statement, any Annual Earn-Out Certificate, or any
Option Shares Purchase Price Certificate, Buyer shall afford Seller and its
representatives complete access to the books, records, personnel and facilities
of or pertaining to Buyer.
3.8 Taxes. Seller and Shareholders shall, jointly and severally, bear
and be responsible for the payment of all Taxes (excluding Taxes based on or
measured by income), if any, that are imposed by any government or political
subdivision thereof and that are payable or arise as a result of: (i) the
revenue or income of Seller prior to the Closing Date; (ii) operations of Seller
prior to the Closing Date: or (ii) the transfer of any of the Purchased Assets,
notwithstanding the Party upon which such Taxes are actually imposed.
3.9 Prorations. At the Closing, fuel, tax, municipal assessments, rents
(other than rents related to the facility lease) and storage fees, and other
like matters associated with the Purchased Assets shall be prorated between
Buyer and Seller as of the Closing Date.
ARTICLE 4
ASSUMPTION OF LIABILITIES
4.1 Assumed Liabilities. Seller shall transfer the Purchased Assets to
Buyer free and clear of all Encumbrances and Buyer shall not, by virtue of its
purchase of the Purchased Assets or otherwise, assume or become responsible for
any Liabilities of Seller or any other Person, except for, and only for, the
following (the "Assumed Liabilities"):
(a) Liabilities of Seller under the Assumed Leases identified in
Schedule 2.1(a) and the Contracts identified in Schedule 2.1(e), but only to the
extent such Assumed Leases and Contracts are transferred to Buyer and only to
the extent such Liabilities relate to the period from and after the Closing; and
(b) The Accounts Payable of Seller, but only to the extent: (i)
included in Net Tangible Assets; and (ii) due and owing to non-Related Persons.
In no event shall Buyer assume any amounts due and owing to Related Persons
including, without limitation, such amounts set forth in the Interim Financial
Statements).
8
4.2 Excluded Liabilities. Notwithstanding any other provision of this
Agreement or any Ancillary Agreement, and regardless of any disclosure to Buyer,
Buyer shall not, except as expressly set forth in Section 4.1, assume any
liability, obligation or commitment of Seller, whether express or implied,
liquidated, absolute, accrued, contingent or otherwise, or known or unknown.
ARTICLE 5
CLOSING
5.1 Closing. The closing of the purchase and sale of the Purchased
Assets (the "Closing") shall take place at 10:00 a.m., local time, at the
offices of G Link Express Pte Ltd., at 000 Xxx Xxxxxx Xxxx, #00-00, Xxxxxxxxx
Xxxxx, Xxxxxxxxx 000000, within five (5) Business Days after the conditions set
forth in Articles 9 and 10 have been satisfied or waived or on such other place
and time or on such other date as may be mutually agreed upon by Buyer and
Seller. The date upon which the Closing shall occur shall be referred to in this
Agreement as the "Closing Date." The conveyance of the Purchased Assets and the
assumption of the Assumed Liabilities shall be effective as of 7:00 a.m., local
time, on the Closing Date (the "Effective Time").
5.2 Deliveries by Seller. At the Closing, Seller shall execute and
deliver the following:
(a) A general assignment and assumption in form and substance
satisfactory to Buyer, transferring to Buyer all of Seller's right, title, and
interest in the Purchased Assets (including an assignment of all trademarks,
trade names, service marks and Intellectual Property);
(b) The Business Records;
(c) The Permits to the extent that they are assignable to the
Buyer;
(d) An employment agreement between the Buyer and each Shareholder
in the form of Exhibit B hereto (the "Employment Agreements") duly executed by
each Shareholder;
(e) A certificate of the Seller and each Shareholder to the effect
that: (i) all representations and warranties made by the Seller and the
Shareholders under this Agreement are true and correct as of the Closing Date,
as though originally given to Buyer on the Closing Date; (ii) the Seller and the
Shareholders have performed all obligations to be performed by them under this
Agreement prior the Closing Date; and (iii) the conditions precedent identified
in Article 9 have been satisfied;
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(f) A certificate signed by the Seller to the effect that (A) such
Seller understands that the sale of Stonepath Shares to such Seller has not been
registered under the Securities Act or the securities laws of any other
jurisdiction and that such shares may not be resold without such registration or
an exemption therefrom, (B) such Seller shall not resell such shares in the
absence of such registration or an exemption therefrom, and (C) such Seller is
acquiring such shares for investment purposes only and not with the view to the
distribution thereof;
(g) Copies of all resolutions adopted by the Seller and the
Shareholders authorizing the transactions contemplated by this Agreement;
(h) All cash, marketable securities, and other cash equivalents, or
such forms which shall provide Buyer with the right to have all accounts in
which such cash, marketable securities, or other cash equivalents are held
transferred to Buyer;
(i) save as otherwise provided in the Interim Operating Agreement,
evidence satisfactory to Buyer that Seller has changed its name to a name which
bears no resemblance to "G Link Express";
(j) All consents required for the transfer and assignment of the
Purchased Assets to Buyer; if any;
(k) Such additional instruments of conveyance and transfer as Buyer
may reasonably request in order to more effectively vest in Buyer the Purchased
Assets;
(l) Confirmation by Seller as to the absence of any Indebtedness as
of the Closing Date; and
(m) An interim operating agreement between Seller and Holdings in
the form of Exhibit C hereto (the "Interim Operating Agreement").
5.3 Deliveries by Buyer. At the Closing, Buyer shall execute and/or
deliver the following:
(a) The Closing Date Cash Payment via wire transfer in accordance
with instructions provided by the Seller no less than three Business Days prior
to the Closing Date;
(b) The Stonepath Shares to be delivered at the Closing pursuant to
Section 3.2(b);
(c) The Employment Agreements duly executed by the Buyer;
(d) A certificate of the Buyer to the effect that: (i) all
representations and warranties made by the Buyer under this Agreement are true
and correct as of the Closing Date, as though originally given to Seller on the
Closing Date; (ii) the Buyer has performed all obligations to be performed by it
under this Agreement prior the Closing Date; and (iii) the conditions precedent
identified in Article 10 have been satisfied;
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(e) Copies of all resolutions adopted by the board of directors of
the Buyer and of Stonepath Group authorizing the transactions contemplated by
this Agreement; and
(f) The Interim Operating Agreement duly executed by Buyer.
5.4 Contemporaneous Effectiveness. All acts and deliveries required by
this Article 5, regardless of chronological sequence, will be deemed to occur
contemporaneously and simultaneously on the occurrence of the last act or
delivery, and none of such acts or deliveries will be effective until the last
of the same has occurred.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF SELLER AND THE SHAREHOLDERS
To induce Buyer to enter into this Agreement, Seller and the
Shareholders, jointly and severally, hereby make the following representations
and warranties to Buyer. The disclosure schedules (the "Schedules") attached
hereto are numbered to correspond to the various sections of this Article 6
setting forth certain exceptions to the corresponding representations and
warranties contained in this Article 6 and certain other information required by
this Agreement. Any claim or liability arising in connection with the provisions
of this Article 6 against the Seller or any Shareholder shall be limited in
accordance with the terms of Article 11 hereof.
6.1 Organization, Good Standing and Power.
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of formation, has all requisite
power and authority to conduct its business, and has all requisite power and
authority to own, lease, and operate the Purchased Assets and to execute and
deliver this Agreement and the Ancillary Agreements, to consummate the
transactions contemplated hereby and to perform all of the obligations to be
performed by it pursuant to this Agreement. Seller is duly qualified or licensed
to do business and in good standing as a foreign corporation in each of the
jurisdictions in which the nature of its business or the character of the
properties and assets which it owns or leases makes such qualification or
licensing necessary, except where the failure to be so qualified, licensed, or
in good standing would not have a material adverse effect on the Business or the
Purchased Assets. Each jurisdiction in which Seller is qualified or licensed to
do business is set forth in Schedule 6.1. Seller has not, during the six (6)
year period immediately preceding the date hereof, changed its name, been the
surviving entity of a merger, consolidation or other reorganization, or acquired
all or substantially all of the assets of any person or entity. Schedule 6.1
sets forth all assumed names under which the Seller or such predecessors have
conducted business; and
(b) The copies of the Seller's statute and other corporate records
and governing instruments attached hereto as Schedule 6.1 are true, correct and
complete and each includes all amendments to the date hereof. The Seller's
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minute books, as made available to Buyer, contain a true, complete and correct
record of all corporate action taken on or prior to the date hereof at the
meetings of its shareholders and directors and committees thereof. The share
register of the Seller, as made available to Buyer for inspection, are true,
correct and complete, and accurately reflect, at the date hereof, the ownership
of the outstanding registered capital of the Seller.
6.2 Authorization of Agreement and Enforceability. The Shareholders and
Seller have the full capacity, power and authority to enter into this Agreement
and the Ancillary Agreements and to consummate the transactions contemplated
hereby and thereby and to comply with the terms, conditions and provisions
hereof and hereof. This Agreement and the Ancillary Agreements have been duly
authorized, executed and delivered by the Shareholders and Seller and are legal,
valid and binding obligations of the Shareholders and Seller, enforceable
against each of them in accordance with their terms. No notices to, declaration,
filing or registration with, approvals or consents of, or assignments by, any
Persons (including Governmental Authorities) are necessary to be made or
obtained by the Shareholders or Seller in connection with the execution,
delivery or performance by the Shareholders or Seller of this Agreement or the
Ancillary Agreements provided the Permits are not transferred from the Seller.
This Agreement constitutes, and the Ancillary Agreements when executed will
constitute, legal, valid and binding obligations of Seller and the Shareholders,
enforceable against them in accordance with their terms.
6.3 No Violation; Consents. Seller is not in default under or in
violation of any provision of (a) its articles of incorporation or bylaws, or
(b) any material provision of any agreement, understanding, arrangement,
indenture, contract, lease, sublease, license, sublicense, franchise, loan
agreement, note, restriction, obligation or liability to which it is a party or
by which it is bound or to which it or its assets are subject (individually, an
"Instrument" and collectively, the "Instruments"). Except as set forth on
Schedule 6.3, neither the execution and delivery of this Agreement or the
Ancillary Agreements by the Shareholders or Seller, nor the consummation of the
transactions contemplated hereby or thereby, nor compliance with the terms
hereof or thereof, will (i) conflict with or result in a breach of any of the
terms, conditions or provisions of the certificate of formation or operating
agreement of Seller, nor (ii) violate, conflict with or result in a breach of or
default under any material provision of the terms, conditions or provisions of
any Instrument, nor (iii) accelerate or give to others any interests or rights,
including rights of acceleration, termination, modification or cancellation,
under any Instrument, nor (iv) result in the creation of any Encumbrance on the
Purchased Assets, nor (v) conflict with, violate or result in a breach of or
constitute a default under, any Applicable Law to which Seller or the
Shareholders or any of its or their assets or properties is subject, nor (vi)
require the Shareholders or Seller to give notice to, or obtain an
authorization, approval, order, license, franchise, declaration or consent of,
or make a filing with, any Governmental Authority or any other Person with
respect to Permits, licenses, authorizations, etc. that are otherwise to be
transferred from the Seller.
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6.4 Capitalization. The authorized and contributed registered capital
of the Seller is 20,000,000 Xxxxx, all of which are held of record by Xxxxxx Law
Teck Wah and beneficially by the Shareholders. There are no authorized or
outstanding options, warrants, convertible securities, subscription rights,
puts, calls, unsatisfied pre-emptive rights or other rights of any nature to
purchase or otherwise receive, or to require the Seller to purchase, redeem or
acquire, any registered capital or other securities of the Seller and there is
no outstanding security of any kind convertible into such registered capital.
6.5 Taxes.
Except as set forth on Schedule 6.5 attached hereto:
(a) Seller (i) has timely and properly filed or caused to be filed
all Tax Returns which it is or has been required to file on or prior to the date
hereof, by any jurisdiction to which it is or has been subject, all such tax
returns being true and correct and complete in all respects, (ii) has timely
paid or caused to be paid in full all Taxes which are or have become due and
payable to all taxing authorities with respect to such returns and periods,
(iii) has made or caused to be made all withholdings of Taxes required to be
made by it, and such withholdings have either been paid to the appropriate
governmental agency or set aside in appropriate accounts for such purpose, and
(iv) has otherwise satisfied, in all material respects, all applicable laws and
agreements with respect to the filing of Tax Returns and the payment of Taxes.
(b) There are no unassessed Tax deficiencies proposed or threatened
against Seller, nor are there any agreements, waivers, or other arrangements
providing for extension of time with respect to the assessment or collection of
any Tax against Seller or any actions, suits, proceedings, investigations or
claims now pending against the Seller with respect to any Tax, or any matter
under discussion with any governmental authority relating to any Taxes.
(c) Schedule 6.5 identifies all audits of Seller's Tax Returns, if
any, including a reasonably detailed description of the nature and outcome of
each audit.
(d) Seller has withheld and paid all taxes required to have been
withheld and paid in connection with any amounts paid or owing to any employee,
member, or any other third party for which withholding obligations are imposed.
6.6 Financial Statements.
(a) Schedule 6.6 hereto contains true and correct and complete
copies of the audited financial statements of Seller for its two most recently
completed fiscal years ended December 31, 2001, and December 31, 2002 (the
"Annual Financial Statements") and unaudited financial statements of Seller for
the three (3) month period ending March 31, 2003 (the "Interim Financial
Statements" and collectively with the Annual Financial Statements, the
"Financial Statements"). The Financial Statements have been prepared in
conformity with GAAP applied on a consistent basis (other than the lack of
footnote disclosures), and present fairly the financial position and results of
operations and cash flows of Seller at the dates and for the periods covered by
such Financial Statements. All liabilities and obligations of Seller outstanding
as of the dates of the Financial Statements required to be reflected as
liabilities in accordance with GAAP have been included in the Financial
Statements. There have been no material changes in the financial condition,
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assets, liabilities, or results of operations of Seller from March 31, 2003 to
the date hereof, except changes in the Ordinary Course of Business, none of
which, either singly or in the aggregate, has been materially adverse. Since
March 31, 2003, Seller has conducted its business in a normal and customary
manner. The books and records of the Seller from which the Financial Statements
were prepared properly and accurately record the transactions and activities
which they purport to record. As of the Closing Date, Seller shall have no
Indebtedness.
(b) Seller has not engaged in any transaction, maintained any bank
account, or used any corporate funds except for the transactions, bank accounts
or funds which have been and are reflected in Seller's books and records.
(c) Seller maintains accurate books and records reflecting its
assets and liabilities and maintains proper and adequate internal accounting
controls which provide assurance that (i) transactions are executed with
management's authorization, (ii) transactions are recorded as necessary to
permit preparation of Seller's financial statements and to maintain
accountability for Seller's assets, (iii) access to Seller's assets is permitted
only in accordance with management's authorization, (iv) the reporting of
Seller's assets is compared with existing assets at regular intervals, and (vi)
accounts, notes and other receivables and inventory are recorded accurately, and
proper and adequate procedures are implemented to effect the collection thereof
on a current and timely basis.
6.7 Absence of Undisclosed and Contingent Liabilities.
(a) Seller has no material Liabilities except (i) Liabilities which
are reflected and properly reserved against in the Financial Statements, (ii)
Liabilities incurred in the Ordinary Course of Business since March 31, 2003,
and (iii) Liabilities arising under the Contracts set forth in the Schedules or
which are not required to be disclosed on such Schedules and which have arisen
in the Ordinary Course of Business.
(b) None of the Liabilities described in this Section 6.7 relates
to any breach of contract, breach of warranty, tort, infringement or violation
of law, or arose out of any action, order, writ, injunction, judgment, or decree
outstanding or claim, suit, litigation, proceeding, investigation or dispute
attributable to any material Liabilities.
(c) The reserves for Liabilities set forth on the balance sheets
included in the Financial Statements are reasonable.
6.8 Absence of Certain Changes or Events. Since December 31, 2002,
Seller has not:
(a) Suffered the occurrence of a Material Adverse Change; or
(b) Entered into any transaction or made any commitments (for
capital expenditures or otherwise) other than in the Ordinary Course of
Business.
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6.9 Guarantees.
Except as set forth on Schedule 6.9, the Seller has not guaranteed,
become surety or contingent obligor for or assumed any obligation, debt or
dividend of any Person; and no assets of the Seller are or have been pledged,
hypothecated, delivered for safekeeping, subjected to a security interest or
otherwise provided in any way as security for payment or performance of any
obligation of a Person other than the Seller.
6.10 Customers. Customers. Set forth on Schedule 6.10 is a list of the
10 largest customers of the Company based on the percentage of revenue
represented by those customers for 2002 and through the Closing Date. No
material customer of the Company (i.e., one that accounts for more than 5% of
the business of the Company) has since the date of this Agreement canceled,
terminated or threatened to cancel or otherwise terminate, his, her, or its
relationship with the Company, except that the mix of the Company's customers
changes from time to time in the ordinary course of business.
6.11 Real Property.
(a) Leased Real Property. The Company is the lessee of properties
under the real estate leases described on Schedule 6.11 hereto. True, correct
and complete copies of said leases and any amendments, extensions and renewals
thereof have heretofore been delivered by the Seller to Buyer. Said leases are
valid and binding and in full force and effect, gives to the Buyer the right to
occupy and use the premises without disturbance, and are not in default as to
the payment of rent or otherwise. The consummation of the transactions
contemplated by this Agreement will not constitute an event of default under any
of said leases and the continuation, validity and effectiveness of such leases
will not be adversely affected by the transactions contemplated by this
Agreement
(b) Owned Real Property. The Seller does not own any real property
or any interest therein.
6.12 Tangible Personal Property. Seller owns or has the right to use
all personal property presently utilized in its Business, (the "Tangible
Personal Property"). Except as set forth on Schedule 6.12 hereto and except for
property disposed of in the Ordinary Course of Business of Seller, Seller has
all right, title and interest in, and good title to, the Tangible Personal
Property free and clear of any Encumbrance of any kind or nature whatsoever, and
all of such Tangible Personal Property is to be included in the Purchased
Assets.. Except as set forth on Schedule 6.12, with respect to each item of
Tangible Personal Property, (i) there are no leases, subleases, licenses,
options, rights, or concessions or other agreements, written or oral, granting
to any party or parties the right of use of any portion of such item of Tangible
Personal Property, (ii) there are no outstanding options or rights of first
refusal in favor of any other party to purchase any such item of Tangible
Personal Property or portion thereof or interest therein, and (iii) there are no
parties other than Seller which are in possession of or are using such Tangible
Personal Property. True, complete and correct copies of all leases and licenses
relating to the Tangible Personal Property have heretofore been delivered by
Seller to Buyer.
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6.13 Condition of Buildings and Tangible Personal Property. All of the
premises occupied and the items of Tangible Personal Property are in good
working order (ordinary wear and tear excepted), are free from any material
defect to which Seller or either Shareholder have actual knowledge, and have
been maintained in all material respects in accordance with the past practice of
the Business and generally accepted industry practice, and no repairs,
replacements or regularly scheduled maintenance relating to any such item has
been deferred. All leased personal property of the Business is in all material
respects in the condition required of such property by the terms of the lease
applicable thereto.
6.14 Material Contracts.
(a) Schedule 6.14 contains a true, correct, and complete list of
all of the material contracts of Seller which shall consist of all agreements,
leases, licenses, contracts, obligations, promises, commitments, arrangements,
understandings, or undertakings, (whether oral or written or express or implied)
to which Seller is a party, under which the Seller may become subject to any
obligation or liability, or by which the Seller or any of its assets may become
bound (collectively, the "Material Contracts") that satisfy any of the
following:
(i) each arrangement, agreement, contract or understanding
that involves performance of services or delivery of goods or materials by
Seller in an amount or for a value in excess of $20,000;
(ii) each arrangement, agreement, contract or understanding
that was not entered into in the Ordinary Course of Business;
(iii) each lease, rental or occupancy agreement, license,
installment and conditional sale agreement, and other arrangement, agreement,
contract or understanding affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or personal property (except
personal property leases and installment and conditional sales agreements having
a value per item or aggregate payments of less than $20,000 and with terms of
less than one year);
(iv) each licensing agreement or other arrangement, agreement,
contract or understanding with respect to patents, trademarks, copyrights, or
other intellectual property (regardless of whether Seller is the licensee or
licensor thereunder), including agreements with current or former employees,
consultants, or contractors regarding the appropriation or the nondisclosure of
any intellectual property assets of Seller;
(v) each collective bargaining agreement or other arrangement,
agreement, contract or understanding with any labor union or other employee
representative of a group of employees;
(vi) each joint venture, partnership, and other arrangement,
agreement, contract or understanding (however named) involving a sharing of
profits, losses, costs, or liabilities by Seller with any other Person;
16
(vii) each arrangement, agreement, contract or understanding
containing covenants that in any way purport to restrict the business activity
of Seller;
(viii) each arrangement, agreement, contract or understanding
providing for payments to or by any Person based on sales, purchases, or
profits, other than direct payments for goods;
(ix) each power of attorney that is currently effective and
outstanding;
(x) each arrangement, agreement, contract or understanding for
capital expenditures in excess of $20,000;
(xi) each written warranty, guaranty, and or other similar
undertaking with respect to contractual performance extended by Seller other
than in the Ordinary Course of Business;
(xii) each confidentiality and non-disclosure agreement
(whether Seller is the beneficiary or the obligated party thereunder);
(xiii) each employment contract, consulting contract, or
severance agreement, including contracts (A) to employ or terminate officers or
other personnel and other contracts with present or former officers or directors
of Seller or (B) that will result in the payment by, or the creation of, any
material Liability of Seller, the Shareholders, or Buyer to pay any severance,
termination, "golden parachute," or other similar payments to any present or
former personnel following termination of employment or otherwise as a result of
the consummation of the transactions contemplated by this Agreement;
(xiv) each arrangement, agreement, contract or understanding
with a Related Person;
(xv) any other arrangement, agreement, contract or
understanding under which the consequences of a default or termination would
reasonably be expected to have a Material Adverse Effect on the Business or
Seller; and
(xvi) each amendment, supplement, and modification (whether
oral or written) in respect of any of the foregoing.
(b) True, correct and complete copies of each Material Contract
listed in Schedule 6.14 have been made available to Buyer. Except as otherwise
set forth on Schedule 6.14; (i) all of the Material Contracts are valid, binding
and enforceable against the respective parties thereto in accordance with their
respective terms; (ii) neither Seller nor any other party is in default or in
arrears under the terms of any material provision of a Material Contract, and no
condition exists or event has occurred to which the Seller or either Shareholder
has actual knowledge which, with the giving of notice or lapse of time or both,
would constitute a default thereunder; (iii) Seller has fulfilled, or taken
action to fulfill when due, all of its material obligations under each of the
Material Contracts; neither Seller nor the Shareholders have any reason to
17
believe that the products or services called for by any executory Material
Contract cannot be supplied in accordance with the terms of such Material
Contract, and there is no reason to believe that any unfinished Material
Contract will, upon performance by Seller, result in a material loss by Seller;
and (v) to the best of Seller's and the Shareholders' knowledge, Seller has not
committed any act, and there has been no omission, which may result in, and
there has been no occurrence which may give rise to, material Liability for
breach of warranty (whether or not covered by insurance) on the part of Seller
with respect to services rendered or products sold by Seller.
6.15 Title to Purchased Assets; Absence of Encumbrances; Sufficiency.
Seller owns and will transfer to Buyer at the Closing good, marketable and
indefeasible title to all of the Purchased Assets, free and clear of all
Encumbrances. The Purchased Assets are all of the assets (other than the
Excluded Assets) that are used, necessary for use, held for use or intended to
be used in the operation or conduct of the Business as currently conducted or as
currently proposed to be conducted.
6.16 Intellectual Property Matters. The corporate name of Seller and
the trade names and service marks listed in Schedule 6.16 are the only names and
service marks which are used by the Seller in the operation of the Business.
Schedule 6.16 includes an identification of all Intellectual Property used in
the Business. Except as noted on Schedule 6.16, Seller owns, or has enforceable
rights to use all Intellectual Property presently in use by it and necessary for
the operation of the Business as now being conducted or as proposed to be
conducted; there are no outstanding licenses or consents granting third parties
the right to use the Intellectual Property of Seller; Seller has received no
notice of any adversely held patent, invention, trademark, copyright, service
xxxx or trade name, or trade secret of any Person, or any claims of any other
Person relating to any of the Intellectual Property; there is no presently known
threatened infringement of any such Intellectual Property; the manufacture, sale
or use of any products or services now or heretofore provided by Seller did not
and to the best of Seller's knowledge, does not infringe (nor has any claim been
made that any such action infringes) the intellectual property rights of others.
6.17 Licenses and Permits.
(a) The Seller has secured all Permits necessary for the conduct of
the Business, except for those Permits, the absence of which, either alone or in
the aggregate, would not have a Material Adverse Effect upon the Business or the
Seller. With respect to each Permit, (a) such Permit is in full force and
effect, (b) the Seller (or other designated permittee or licensee thereunder) is
in compliance with the terms, provisions and conditions thereof, (c) there are
no outstanding violations, notices of noncompliance therewith, judgments,
consent decrees, orders or judicial or administrative action(s) or
proceedings(s) affecting such Permit, and (d) no condition exists and no event
has occurred which (whether with or without notice, lapse of time or the
occurrence of any other event) would permit the suspension or revocation of such
Permit other than by expiration of the term set forth therein.
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(b) All Permits included in the Purchased Assets are validly held
by Seller and Seller has complied in all material respects with all terms and
conditions thereof. During the past five years, Seller has not received notice
of any Proceedings relating to the revocation or modification of any such
Permit. None of such Permits will be subject to suspension, modification,
revocation or non-renewal as a result of the execution and delivery of this
Agreement or the Ancillary Agreements or the consummation of the transactions
contemplated hereby or thereby.
6.18 Compliance with Laws.
(a) Seller is in compliance with all Applicable Laws, including
those relating to occupational health and safety or the environment, the
noncompliance of which would result in a Material Adverse Change to the
Business. Seller has not received any communication during the past five years
from a Governmental Authority that alleges that the Seller is not in compliance
with any Applicable Laws. Seller has not received any written notice that any
investigation or review by any Governmental Authority with respect to any
Purchased Asset or the Business is pending or that any such investigation or
review is contemplated. The current use by Seller of the plants, offices and
other facilities located on Leased Premises does not violate any local zoning or
similar land use or government regulations which would result in a Material
Adverse Change to the Business.
(b) Seller has at all times conducted, and is presently conducting,
the Business so as to comply with all laws, ordinances and regulations
applicable to the ownership or use of the Purchased Assets.
(c) Neither Seller nor any director, officer, agent, employee or
other Person associated with or acting on behalf of the Seller has violated any
provision of the Foreign Corrupt Practices Act of 1977 or any other laws
regarding corrupt practices where such activities would have an adverse effect
on the Purchased Assets or the Business.
6.19 Absence of Certain Business Practices. Except for customer or
prospective customer entertainment occurring in the Ordinary Course of Business,
neither Seller nor to the best of Seller's knowledge, any Person authorized to
act on its behalf, has within the past six (6) years given or agreed to give any
gift or similar benefit to any customer, supplier, governmental employee or
other Person who is or may be in a position to help or hinder Seller or the
Business (or assist Seller in connection with any actual or proposed
transaction) which (i) would subject Seller to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if not given in
the past, would have had a material adverse effect on Seller or the Business, or
(iii) if not continued in the future, would adversely affect the financial
condition, Business or operations of the Buyer or its Affiliates, or (iv) might
subject Seller to suit or penalty in any Proceeding.
6.20 Legal Proceedings. Except as set forth on Schedule 6.20, there are
no actions, suits or proceedings at law or in equity, or arbitration
proceedings, or claims, demands or investigations, pending or to the best of
Seller's knowledge, threatened (i) against or involving the Seller or any of its
officers, directors or employees (in their capacity as such), (ii) which seeks
19
to enjoin or obtain damages in respect of the transactions contemplated by this
Agreement, or (iii) which would prevent the Seller from consummating the
transactions contemplated by this Agreement. There are no proceedings pending or
to the best of Seller's knowledge, threatened against or involving the Seller by
or before any Governmental Authority (including but not limited to any
Governmental Authority concerned with control of foreign exchange, energy,
environmental protection or pollution control, franchising or other distribution
arrangements, antitrust or trade regulation, civil rights, labor or
discrimination, wages and hours, safety or health, zoning or land use). The
Seller is not in violation of any Injunction of any Governmental Authority.
6.21 Labor and Employment Matters.
(a) Schedule 6.21 contains a complete list of all employment
arrangements, all work rules, all pension, retirement, profit sharing and bonus
plans or promises, and all deferred compensation, health, welfare, all severance
management, and other similar plans or promises for the benefit of any employees
of the Company ("Employee Benefit Plans"). The Company at present is not, and
during the five (5) year period preceding the Closing Date will not have been, a
party to any collective bargaining agreement. True, correct and complete copies
of each Employee Benefit Plan have heretofore been delivered by the Company to
Purchaser.
(b) A list of all employees of the Company is set forth on Schedule
6.21. The current salaries, job descriptions, and locations of such employees
are also set forth in Schedule 6.21.
(c) The Company is not obligated to and does not (directly or
indirectly) provide death benefits or health care coverage to any former
employees or retirees.
(d) The Company has complied with all Applicable Laws respecting
employment practices, terms and conditions of employment, wages and hours, equal
employment opportunity, and the payment of social security or insurance and
similar taxes. The Company is not engaged in any unfair labor practice.
(e) The Company has not entered into any severance or similar
arrangement in respect of any present or former employee that will result in an
obligation (absolute or contingent) of the Company to make any payment to any
present or former employee following termination of employment or upon
consummation of the transactions contemplated by this Agreement.
(f) Seller is not a party to, or bound by, any labor agreement or
collective bargaining agreement or other similar arrangement with any labor
organization, group, union or association.
(g) No collective bargaining agreement is being negotiated by
Seller. There is no pending or to the best of Seller's knowledge, threatened
labor dispute, strike, work stoppage, lock-out or other labor action against or
affecting Seller. Seller has not committed any unfair labor practice. There is
no pending or to the best of Seller's knowledge, threatened charge or complaint
against Seller by or before the National Labor Relations Board, the Equal
Employment Opportunity Commission or any comparable agency of any other State of
the United States.
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6.22 Effect of Transaction. No creditor, employee, client, customer or
other Person having a material business relationship with Seller has informed
Seller that such Person intends to change such relationship because of the
purchase and sale of the Purchased Assets or the consummation of any other
transaction contemplated hereby.
6.23 No Finder. Seller has not taken any action that would give to any
Person a right to a finder's fee or any type of brokerage commission in relation
to, or in connection with, the transactions contemplated by this Agreement other
than Albion International Services, Inc. and Seller shall be responsible for any
such fee or commission payable to Albion International Services, Inc.
6.24 No Fraudulent Conveyance. Seller is entering into this Agreement
and the transactions contemplated hereby without the intent to hinder, delay, or
defraud any creditor of Seller. This Agreement provides for the receipt by
Seller of reasonable value for the Purchased Assets. Seller is, after giving
effect to the transactions contemplated hereby, solvent, able to pay its debts
as they become due, has capital sufficient to carry on its business, now owns
property having a value both at fair valuation and at present fair saleable
value greater than the amount required to pay its debts, and will not be
rendered insolvent by the execution and delivery of this Agreement or by
completion of the transactions contemplated hereby.
6.25 Insurance. The Seller has for a period of at least three (3) years
maintained insurance coverage covering the operations of its Business and the
errors or omissions of its personnel with policy limits sufficient to cover any
claims that have arisen or could arise in the future. There is no claim by the
Seller pending under any of such policies as to which coverage has been
questioned or denied.
6.26 Accounts Receivable. All the Accounts Receivable (a) represent
actual indebtedness incurred by the applicable account debtors and (b) have
arisen from bona fide transactions in the ordinary course of the Businesses. All
the Accounts Receivable are good and collectible at the aggregate recorded
amounts thereof, net of any applicable reserves for doubtful accounts reflected
on the Net Tangible Assets Statement. Since March 31, 2003, there have not been
any write-offs as uncollectible of any receivables, except for write-offs in the
Ordinary Course of the Business and consistent with past practice.
6.27 Certain Securities Law Representations. Seller hereby
acknowledges, represents and warrants to Buyer that:
(a) Seller understands that Stonepath Shares to be issued to Seller
hereunder have not been and will not be registered under the Securities Act, and
may not be offered or sold except in accordance with all applicable federal and
state securities laws of the United States of America.
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(b) Without in any way limiting the representations set forth
herein, Seller further agrees not to make any disposition of all or any portion
of the Stonepath Shares unless and until:
(i) the restrictions imposed by Section 8.21 hereof have
expired;
(ii) (A) Seller shall have notified Buyer of the proposed
disposition and shall have furnished both Buyer with a detailed statement of the
circumstances surrounding the proposed disposition and (B) if reasonably
requested by Buyer, Seller shall have furnished Buyer with an opinion of
counsel, reasonably satisfactory to Buyer, that such disposition will not
require registration under the Securities Act; and
(iii) Buyer shall be satisfied that such proposed disposition
complies in all respects with Rule 144 or Rule 145 under the Securities Act or
any successor rule providing a safe harbor for such disposition without
registration.
(c) Seller is not a citizen or resident of the United States of
America, is not a U.S. Person (as that term is defined in Regulation S of the
United States Securities and Exchange Commission) and is not acquiring the
securities for the account or benefit of any U.S. Person.
(d) Seller is acquiring the Stonepath Shares for investment for his
account, not as a nominee or agent, and not with a view to the distribution of
any part thereof; Seller has no present intention of selling, granting any
participation in or otherwise distributing any of the Stonepath Shares in a
manner contrary to Section 8.21 hereof, the Securities Act, or any applicable
state securities or Blue Sky law, nor does Seller have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
a participation to such Person or to any third person with respect to any of the
Stonepath Shares.
(e) Seller understands that the certificate evidencing the
Stonepath Shares will bear the following or a comparable legend:
The securities evidenced by this certificate have not been
registered under the U.S. Securities Act of 1933, as amended (the
"Act"), or applicable U.S. state securities laws, and no interest
therein may be sold, distributed, assigned, offered, pledged or
otherwise transferred unless and until (i) the restrictions imposed
by that certain Asset Purchase Agreement dated August 8, 2003, by
and between, among others, the holder of the securities and this
corporation, (ii) this corporation receives an opinion of legal
counsel for the holder of the securities reasonably satisfactory to
this corporation stating that such transaction is exempt from
registration, or (iii) this corporation otherwise satisfies itself
that such transaction is exempt from registration.
(f) Seller acknowledges that Stonepath will refuse to register any
transfer of the Stonepath Shares if such transfer is not made in accordance with
the legend set forth above.
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(g) Seller has reviewed such quarterly, annual and periodic reports
of Stonepath Group, Inc. as have been filed with the United States Securities
and Exchange Commission and that he has such knowledge and experience in
financial and business matters that he is capable of utilizing the information
set forth therein, concerning Stonepath Group, Inc. to evaluate the risk of
investing in the Stonepath Shares. Seller has been afforded adequate opportunity
to review and is familiar with said reports and has based his decision to invest
in the Stonepath Shares solely on the information contained therein and the
information contained within this Agreement, and has not been furnished with any
other literature, prospectus or other information except as included in said
reports or this Agreement.
(h) Seller has been given adequate opportunity to ask questions
about Stonepath Group, Inc. and is satisfied that any information about
Stonepath Group, Inc. and the Stonepath Shares have been answered to its
satisfaction.
(i) Seller is able to bear the economic risks of an investment in
the Stonepath Shares; its overall commitment to his investments which are not
readily marketable is not disproportionate to its net worth.
(j) Seller understands that no Governmental Authority has approved
or disapproved the Stonepath Shares, passed upon or endorsed the merits of the
transfer of such shares set forth within this Agreement or made any finding or
determination as to the fairness of such shares for investment.
6.28 Relationship With Related Persons. The Shareholders, directors,
officers, and employees of Seller, and their Related Persons do not have any
interest in any of the properties or assets of or used by Seller and do not own,
of record or as a beneficial owner, an equity interest or any other financial or
profit interest in any Person that (i) has had business dealings or a material
financial interest in any transaction with Seller, or (ii) has engaged or is
engaged in competition with Seller with respect to any line of products or
services of Seller in any market presently served by the Seller (a "Competing
Business") (except for the ownership of less than three percent (3%) of the
outstanding capital stock of any Competing Business that is publicly traded on
any recognized exchange or in the over-the-counter market). Except as set forth
on Schedule 6.28, no Shareholder, and no director, officer, or employee of the
Seller and none of their Related Persons is a party to any contract with, or has
any claim against, Seller or the Purchased Assets. All money owed by seller to
its shareholders, directors or officers, or their Related Persons, (other than
for salary) are for bona fide debts and are set forth in Schedule 6.28.
6.29 Completeness and Accuracy. All information set forth on any
Schedule hereto provided by Seller is true, correct, and complete. No
representation or warranty of Seller contained in this Agreement contains or
will contain any untrue statement of a material fact, or omits or will omit to
state any material fact necessary to make the statements made therein not
misleading. All contracts, Permits, and other documents and instruments
furnished or made available to Buyer by Seller are or will be true, complete,
and accurate copies of the originals and include all amendments, supplements,
waivers, and modifications thereto. There is no fact, development or threatened
development (excluding general economic factors affecting the Business in
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general) that Seller has not disclosed to Buyer in writing that materially
adversely affects or, so far as Seller can foresee, may materially adversely
affect, the Business or the Purchased Assets. Any disclosure made herein or
pursuant to a Schedule attached hereto by the Seller or a Shareholder shall be
considered a disclosure for purposes of all representations and warranties made
hereunder by the Seller and the Shareholders even if such disclosure does not
cross-reference a particular provision of this Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF BUYER
To induce Seller to enter into this Agreement, Buyer hereby makes, as
of the date hereof and as of the Closing Date, the following representations and
warranties to Seller. The disclosure Schedules attached hereto are numbered to
correspond to the various sections of this Article 7 setting forth certain
exceptions to the corresponding representations and warranties contained in this
Article 7 and certain other information required by this Agreement.
7.1 Organization, Good Standing, Power. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own the Purchased Assets and to execute and deliver this Agreement,
to consummate the transactions contemplated hereby and to perform all the
obligations to be performed by it pursuant to this Agreement.
7.2 Authorization of Agreement and Enforceability. Buyer has taken all
necessary corporate action to authorize the execution and delivery of this
Agreement and the Ancillary Agreements, the performance by it of all terms and
conditions hereof and thereof to be performed by it and the consummation of the
transactions contemplated hereby and thereby. This Agreement constitutes, and
the Ancillary Agreements will constitute, legal, valid and binding obligations
of Buyer, enforceable against it in accordance with their terms.
7.3 No Violations; Consents. The execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions contemplated
hereby will not (with or without the giving of notice or the lapse of time, or
both) (i) violate any provision of the certificate of incorporation or bylaws of
Buyer, (ii) violate or require any consent, authorization or approval of, or
exemption by, or filing under any provision of any law, statute, rule or
regulation to which Buyer is subject, (iii) violate any judgment, order, writ or
decree of any court applicable to Buyer, (iv) conflict with, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval under
any contract, agreement or instrument to which Buyer is a party or any of its
assets is bound or (v) result in the creation or imposition of any Encumbrance
upon its assets, other than upon the Purchase Assets. In particular, the Buyer
represents that it has all Permits necessary to allow the Business to be
operated on and after the Closing Date without the necessity of transferring or
assigning any Permits from the Seller to the Buyer.
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7.4 No Finder. Buyer has not taken any action which would give to any
Person a right to a finder's fee or any type of brokerage commission in relation
to, or in connection with, the transactions contemplated by this Agreement.
ARTICLE 8
COVENANTS
8.1 Access and Cooperation. During the period from the date hereof
through the Closing, Seller will afford to the officers and authorized
representatives of Buyer, during reasonable business hours, access to all of its
sites, properties, books and records as they pertain to the Purchased Assets and
will furnish the Buyer with such additional information relating to the
Purchased Assets as the Buyer may from time to time reasonably request. Seller
will cooperate with the Buyer, and its representatives, engineers, auditors and
counsel in the preparation of any documents or other material which may be
required in connection with any documents or materials required by any
governmental agency. Buyer and Seller will cooperate to minimize any disruption
to the Business resulting from the obligations and rights provided herein.
8.2 Continuance of Business. Except as otherwise expressly permitted by
the terms of this Agreement and the Interim Operating Agreement, from the date
of this Agreement to the Closing Date, Seller shall conduct its Business in the
usual, regular or ordinary course in substantially the same manner as previously
conducted (including, without limitation, with respect to advertising,
promotions, capital expenditures and inventory and working capital levels) and
use all reasonable efforts to keep intact the Business, keep available the
services of its current employees and preserve its relationships with customers,
suppliers, licensers, licensees, distributors and others with whom the Seller
has dealings to the end that the Business shall be unimpaired at the Closing.
Prior to the Closing Date, Seller shall not take any action that would, or that
could reasonably be expected to, result in any of the conditions set forth in
Article 9 not being satisfied. In addition (and without limiting the generality
of the foregoing), except as otherwise expressly permitted or required by the
terms of this Agreement, Seller shall not do any of the following in connection
with the Business without the prior written consent of Buyer:
The Seller shall not and shall not, at any time prior to Closing or
for the duration of the Interim Operating Agreement, propose to:
(a) declare, set aside or pay any dividend, on, or make other
distributions in respect of, any of its share capital;
(b) split, combine or reclassify any of its share capital or issue,
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for its shares; redeem, repurchase or otherwise acquire
any shares; or otherwise change its capitalization; provided, however, that the
Company may distribute to its shareholders the non-current assets identified as
"Other Assets" on the Company's balance sheet as of December 31, 2002, as
included in the Financial Statements.
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(c) adopt or amend any Plan (or any plan that would be a Plan if
adopted) or enter into, adopt, extend (beyond the Closing Date), renew or amend
any collective bargaining agreement or other Contract with any labor
organization, union or association, except in each case as required by Law;
(d) grant to any executive officer or employee any increase in
compensation or benefits that exceeds 20% of their current salary,
(e) incur or assume any liabilities, obligations or indebtedness
for borrowed money or guarantee any such liabilities, obligations or
indebtedness, other than in the Ordinary Course of Business; provided, however,
that in no event shall Seller incur or assume any long-term indebtedness for
borrowed money;
(f) permit or allow any Purchased Asset to become subjected to any
Encumbrance of any nature whatsoever;
(g) cancel any material indebtedness owing to the Seller
(individually or in the aggregate) or waive any claims or rights of substantial
value;
(h) sell, transfer or lease any of its assets;
(i) make any change in any method of accounting or accounting
practice or policy;
(j) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof or otherwise acquire any assets;
(k) make or incur any capital expenditure that, individually, is in
excess of $25,000 or make or incur any such expenditures which, in the
aggregate, are in excess of $100,000;
(l) sell, lease, license or otherwise dispose of any of its assets,
except (A) inventory sold in the ordinary course of business and consistent with
past practice and (B) any Excluded Asset;
(m) enter into any lease of real property, except any renewals of
existing leases in the Ordinary Course of Business, with respect to which Buyer
shall have the right to participate;
(n) modify, amend, terminate or permit the lapse of any lease of,
or reciprocal easement agreement, operating agreement or other material
agreement relating to, real property or
(o) authorize any of, or commit or agree to take, whether in
writing or otherwise, to do any of, the foregoing actions.
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8.3 Affirmative Covenants. Until the Closing and for the duration of
the Interim Operating Agreement, Seller shall:
(a) maintain the Purchased Assets in the ordinary course of
business in good operating order and condition, reasonable wear and tear
excepted; and
(b) upon any damage, destruction or loss to any Purchased Asset,
apply any and all insurance proceeds received with respect thereto to the prompt
repair, replacement and restoration thereof to the condition of such Purchased
Asset before such event or, if required, to such other (better) condition as may
be required by Law.
8.4 Notification of Certain Matters. Seller and the Shareholders shall
give prompt notice to Buyer, and Buyer shall give prompt notice to Seller, of
(a) the occurrence or non-occurrence of any event, the occurrence or
non-occurrence of which would cause any of its or their representations or
warranties in this Agreement to be untrue or inaccurate in any material respect,
and (b) any failure to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it or them under this Agreement.
The delivery of any notice pursuant to this Section shall not limit or otherwise
affect the remedies available to the Party receiving such notice under this
Agreement.
8.5 Name Following Closing.
(a) Save as provided in the Interim Operating Agreement, on or
before the Closing, Seller shall change its name to a corporate name that bears
no resemblance to its current name or to the name of Buyer or any Affiliates of
Buyer.
(b) Save as provided in the Interim Operating Agreement, after the
Closing, Seller shall not, and shall cause its Affiliates to not, maintain any
business, trade under, or make use of any name, trade name or trademark that
bears a resemblance, or suggests a connection to: (i) any trademark or service
xxxx included in the Purchased Assets, including, without limitation, the name
"G Link Express"; or (ii) any trade name of Buyer or any Affiliates of Buyer.
8.6 Satisfaction of Conditions; Cooperation. The Shareholders and
Seller shall use all commercially reasonable efforts to cause the conditions set
forth in Article 9 to be satisfied. Buyer and Stonepath shall use all
commercially reasonable efforts to cause the conditions set forth in Article 10
to be satisfied. Each Party to this Agreement agrees to cooperate fully with the
other Parties and their counsel, accountants and other representatives and to
use all commercially reasonable efforts to do, or cause to be done, all things
necessary, proper or advisable under Applicable Laws, or to remove any
injunctions or other impediments or delays, legal or otherwise, as soon as
reasonably practicable, to facilitate Closing of the transactions contemplated
by this Agreement, and will refrain from a course of action inconsistent with
this Agreement.
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8.7 Further Assurances. From and after the Closing Date, Seller shall,
at the request of Buyer, (i) execute, acknowledge and deliver to Buyer, without
further consideration, all such further assignments, conveyances, endorsements,
deeds, special powers of attorney, consents and other documents, as Buyer may
reasonably request to transfer to and vest in Buyer, and protect its rights,
title and interest in, all the Purchased Assets and otherwise to consummate the
transactions contemplated by this Agreement, and (ii) allow Buyer access to
facilities in which the Purchased Assets were or are located to verify that the
transfer of the Purchased Assets is taking place or has taken place as set forth
in this Agreement.
8.8 Confidentiality. On and after the Closing Date, Seller will not,
except as may be required by law, rule, regulation, or court order, reveal,
divulge or make known to any Person (other than Buyer and its agents and
Affiliates) any information relating to the Business or the Purchased Assets, or
use any such information for any purpose other than complying with Seller's
obligations under this Agreement.
8.9 Non-Competition Agreement. In consideration for the benefits to be
received by the Shareholders as a result of the transactions contemplated by
this Agreement, as well as in conjunction with the services to be rendered by
the Shareholders to the Buyer after the Closing, the Buyer and the Shareholders
shall enter into the Employment Agreements, which contain certain covenants by
the Shareholders prohibiting competition with the Buyer at certain times
8.10 Seller's Post-Closing Operation and Interim Operating Agreement.
Seller shall not after the Closing, (a) make any distribution to its
Shareholders which would render it insolvent or which would leave it with assets
which are unreasonably small in relation to any business it is engaged in or the
Liabilities it has retained, (b) engage in a business or transaction for which
its assets are unreasonably small in relation to such business or transaction,
or (c) incur debts beyond its ability to pay as they become due. The Parties
hereto consent to the Seller making distributions to the Shareholders necessary
to pay their state and federal tax obligations incurred in connection with the
transaction contemplated by this Agreement, to the extent such distributions are
not inconsistent with any of the terms above. From and after the Closing Date,
Seller shall operate the Business on behalf of Buyer in strict compliance with
the Interim Operating Agreement or otherwise as directed by Buyer.
8.11 Payment of Liabilities. Seller shall after the Closing pay and
discharge, promptly and when due, all of its obligations and liabilities, other
than the Assumed Liabilities, which, if unpaid, would create a liability on the
part of Buyer or a lien on any of the Purchased Assets or render void or
voidable the transfer of any of the assets to Buyer, and, to the extent
necessary, shall apply the proceeds of the sale of the Assets to Buyer to such
payment and discharge. At Buyer's request, Seller shall provide to Buyer
evidence of such payment and discharge, in form and substance satisfactory to
Buyer.
8.12 Third Party Consents. Nothing in this Agreement nor the
consummation of the transactions contemplated hereby shall be construed as an
attempt or agreement to assign any Purchased Asset, including any Contract,
Assumed Lease, Permit, certificate, approval, authorization or other right,
which by its terms or by Applicable Law is nonassignable without the consent of
a Third Party or a Governmental Authority or is cancelable by a Third Party or a
Governmental Authority in the event of an assignment ("Nonassignable Assets")
unless and until such consents shall be given. Seller agrees to use all
28
commercially reasonable efforts, with the cooperation of Buyer, where
appropriate, to obtain such consents prior to Closing. To the extent permitted
by Applicable Law, in the event consents to the assignment thereof cannot be
obtained, such Nonassignable Assets shall be held, as and from the Closing Date,
by Seller in trust for Buyer and the covenants and obligations thereunder shall
be performed by Buyer in Seller's name and all benefits and obligations existing
thereunder shall be for Buyer's account. Seller shall take at Seller's expense
(not to exceed $5,000) such action in its name or otherwise as Buyer may
reasonably request so as to provide Buyer with the benefits of the Nonassignable
Assets and to effect collection of money or other consideration to become due
and payable under the Nonassignable Assets, and Seller shall promptly pay over
to Buyer all money or other consideration received by them with respect to all
Nonassignable Assets.
8.13 Non Solicitation of Other Offers. During the term of this
Agreement, and for a period of ninety (90) days following the termination of
this Agreement, the Shareholders and Seller will not, and will not permit their
respective representatives, investment bankers, agents and affiliates to,
directly or indirectly, (i) solicit or encourage submission of or any inquiries,
proposals or offers by, (ii) participate in any negotiations with, (iii) afford
any access to the properties, books or records of the Seller to, (iv) accept or
approve, or (v) otherwise assist, facilitate or encourage, or enter into any
contracts, agreements, arrangements or understandings with, any person or group
(other than the Buyer and its affiliates, agents and representatives), in
connection with any "Acquisition Proposal" (as hereafter defined). In addition,
the Shareholders and Seller will not, and will not permit their respective
representatives, investment bankers, agents and affiliates to, directly or
indirectly, make or authorize any statement, recommendation or solicitation in
support of any Acquisition Proposal made by any Person or group (other than the
Buyer). In addition, the Shareholders and Seller will immediately cease any and
all existing activities, discussions or negotiations with any parties with
respect to any of the foregoing. The Shareholders will promptly notify Buyer if
any offer is made, any discussions or negotiations are sought to be initiated,
any inquiry, proposal or contact is made or any information is requested with
respect to any Acquisition Proposal. For the purposes hereof, the term
"Acquisition Proposal" shall mean any proposal relating to the possible
acquisition of the Seller, whether by way of merger, purchase of capital stock
of the Seller representing fifty percent (50%) or more of the voting power or
equity of the Seller, or the purchase of all or substantially all of the assets
of the Seller.
8.14 Prohibition on Trading in Stonepath Group Stock. The Shareholders
and Seller acknowledge that the United States securities laws prohibit any
person who has received material non-public information concerning the matters
which are the subject matter of this Agreement from purchasing or selling the
securities of Stonepath Group, or from communicating such information to any
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell securities of Stonepath Group. Accordingly,
the Shareholders agree that they will not purchase or sell any securities of
Stonepath Group, or communicate such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell securities of Stonepath Group, until no earlier than 72
hours following the filing of a Current Report on Form 8-K with the Securities
and Exchange Commission announcing the Closing pursuant to this Agreement.
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8.15 Agreement Not To Compete.
(a) Except for the scope of business as conducted as of the date of
this Agreement by the entities set forth in Schedule 8.15 attached hereto, each
Seller and each Shareholder hereby undertakes, jointly and severally, during,
and for one (1) year after the end of, the Earn-Out Period, not to, and to
procure that his or its Affiliates do not, in the Republic of Singapore or the
Kingdom of Cambodia, either alone or in concert with others (i) provide,
directly or indirectly, any product, or render, directly or indirectly, any
services (whether as a representative, agent, independent contractor, consultant
or advisor or any other similar relationship or capacity) to, any Person which
provides products and/or services that are identical or similar to, or which
otherwise competes with, any product and/or services offered from time to time
by Buyer or any of its Affiliates, or which carries on a business identical or
similar to, or which otherwise competes with, any business carried on by Buyer
or its Affiliates from time to time (a "Company Competitor"); (ii) engage in any
activity that would result in the promotion of a Company Competitor's business
or its provision of goods or services in the Republic of Singapore or the
Kingdom of Cambodia, or (iii) become interested, directly or indirectly, in any
Company Competitor (including without limitation any interest as a proprietor,
franchisee, partner, joint venturer, shareholder, principal, member, investor,
trustee or any other similar relationship or capacity).
(b) Independent of any obligation that Seller or any of the
Shareholders may have under this Section 10, Seller and each Shareholder hereby
jointly and severally agrees that during, and for one (1) year after the end of,
the Earn-Out Period, not to, and to procure that his or its Affiliates do not,
in the Republic of Singapore, the Kingdom of Cambodia or the Republic of
Indonesia, either alone or in concert with others (i) solicit, induce or
influence, or seek to or assist or refer others to or hold or facilitate
discussions to, solicit, induce or influence, any Person which is engaged by
Buyer or its affiliates, as an employee, agent, independent contractor,
consultant or otherwise, to leave the employ of or engagement by Buyer or any of
its Affiliates, or any successor or assign thereof; (ii) solicit, induce or
influence, or seek to solicit, induce or influence, any customer, supplier or
client of Buyer or any of its Affiliates, to cease being a customer, supplier or
client of Buyer or any of their Affiliates, or otherwise change its relationship
or volume or nature of business with Buyer or such Affiliate; (iii) recruit,
hire or engage, or seek to assist or refer others to or hold or facilitate
discussions to, recruit, hire or engage any Person who is or has been an
employee or consultant or agent of Buyer or any of its Affiliates.
8.16 Reasonableness of Covenants. The Seller and the Shareholders
acknowledge and agree that the geographic scope and period of duration of the
restrictive covenants contained in Section 8.15 of this Agreement (and similar
provisions in the Employment Agreements) are both fair and reasonable and that
the interests sought to be protected by the Buyer are legitimate business
interests entitled to be protected. The Seller and the Shareholders further
acknowledge and agree that the Buyer would not have purchased the Seller unless
the Seller and Shareholders agreed to the covenants contained in such Section
and in such Employment Agreements.
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8.17 Injunctive Relief. The Seller and the Shareholders agree that the
remedy of damages at law for the breach by any of them of any of the covenants
contained in this Agreement, including those in Section 8.15 (and similar
provisions, if applicable, in the Employment Agreements), is an inadequate
remedy. In recognition of the irreparable harm that a violation by the
Shareholders or the Seller of such covenants would cause the Buyer, the Seller
and the Shareholders agree that in addition to any other remedies or relief
afforded by law, an injunction against an actual or threatened violation or
violations may be issued against it and/or them and every other Person concerned
thereby, it being the understanding of the parties that both damages and
injunction shall be proper modes of relief and are not to be considered
alternative remedies.
8.18 Blue Pencil Doctrine. In the event that any restrictive covenant
contained in this Article (or similar provisions in the Employment Agreements)
shall be found by a court of competent jurisdiction to be unreasonable by reason
of its extending for too great a period of time or over too great a geographic
area or by reason of its being too extensive in any other respect, then such
restrictive covenant shall be deemed modified to the minimum extent necessary to
make it reasonable and enforceable under the circumstances.
8.19 Treatment of Seller's Employees.
(a) Pursuant to the Interim Operating Agreement, Seller shall
continue to employ all of its employees on and after the Closing Date until the
termination of the Interim Operating Agreement whereupon Seller shall terminate
the employment of all of its employees. Seller shall be solely responsible for
any liabilities or obligations arising out of or in connection with such
termination which pertain to periods of employment on or before the Closing
Date, including severance payments and post-employment benefits due to such
terminated employees and any fees, charges, fines or other expenses payable to
any Governmental Authority with respect thereto. Seller shall enforce, for the
benefit of Buyer, any confidentiality, noncompetition and non-solicitation
covenants to which such terminated employees are parties or are otherwise bound.
Effective as of the date of termination of the Interim Operating Agreement,
Buyer shall offer to employ all of the employees of Seller that were employed by
Seller immediately prior to such date to work with the Business unless otherwise
directed in writing by the Seller.
(b) Seller shall fully indemnify and keep indemnified Buyer against
any claim for wrongful dismissal or redundancy or otherwise that may hereafter
be made against Buyer by any person who was at any time an employee of Seller in
connection with the Business, other than those employees who accept employment
with Buyer, including any claims arising out of their terms of employment or
under applicable employment laws and against any other claims arising from the
termination of their employments; provided that Seller shall indemnify and keep
indemnified Buyer against any such claims brought by any employees who accept
employment with Buyer to the extent that such claims relate to or are referable
to a period or periods of employment before the Closing Date other than any
claim made by an employee for wrongful dismissal or redundancy where such
employee accepts employment with the Buyer. Without limiting the foregoing, all
liabilities and claims arising from the previous employment of an employee with
Seller shall be the exclusive and sole responsibility of Seller.
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8.20 Continuation of Insurance Coverage. For a period of at least one
year following the Closing Date, Seller will maintain in full force and effect
all applicable insurance coverages covering the operations of the Business.
8.21 Restriction on Resale of Stonepath Shares. All Stonepath Shares
delivered under this Agreement shall be subject to restriction upon resale,
transfer, assignment or pledge or other disposition for a period of one (1) year
from the date of delivery under this Agreement.
8.22 Collection of Accounts Receivable. After the Closing, Seller shall
use its best efforts to assist Buyer in the collection of accounts receivable
that arose prior to the Closing Date. To the extent that funds representing the
payment of accounts receivable are received by Seller after the Closing Date,
Seller shall account for and promptly forward such funds to Buyer. Seller shall
indemnify and hold Buyer harmless against any loss, damage or diminution in
value of such funds once received by Seller and prior to delivery to Buyer.
8.23 Post-Closing Covenants. As soon as practicable after the due
incorporation of Newco:
(a) Holdings shall transfer and assign to Newco the Purchased
Assets acquired by Holdings at Closing and Newco shall assume the Assumed
Liabilities assumed by Holdings at Closing;
(b) the Interim Operating Agreement shall be terminated by the
parties thereto and Seller shall cease to carry on the Business (on behalf of
Holdings) and Newco shall be entitled to carry on the Business in succession to
Seller and/or Holdings;
(c) Holdings shall procure Newco to issue and deliver, or procure
the issue and delivery, to the Company Secretary certificates for shares which
represent thirty percent (30%) of the entire registered share capital of Newco,
after giving effect to such issuance (the "Option Shares");
(d) at the request of Holdings, Seller shall dispatch a letter to
the suppliers and customers of the Business in the approved terms to notify them
of Newco's acquisition of the Business; and
(e) Seller shall deliver to Holdings evidence satisfactory to
Holdings that Seller has changed its name to a name which bears no resemblance
to "G Link Express".
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ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
9.1 Conditions to Closing. The obligations of Buyer to be performed at
the Closing are subject to the fulfillment at or prior to the Closing of each of
the following conditions:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Seller and the Shareholders contained in this Agreement shall
be true in all material respects on and as of the Closing Date.
(b) No Adverse Change. Since December 31, 2002, there shall have
been no Material Adverse Change with respect to the Seller or the Business.
(c) Performance of Agreement. Seller and the Shareholders shall
have performed in all material respects all obligations and agreements and
complied in all material respects with all covenants and conditions contained in
this Agreement to be performed or complied with by them at or prior to Closing.
(d) Injunction. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction directing that the transactions provided
for herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry or other legal or administrative proceeding by
any governmental body or other Person shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated hereby
or which if successfully asserted might otherwise have a material adverse effect
on the Purchased Assets or impose any additional material financial obligation
on, or require the surrender of any material right, by Buyer.
(e) Actions and Proceedings. All corporate actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental thereto and all other related legal matters shall
be reasonably satisfactory to counsel for Buyer, and such counsel shall have
been furnished with such certified copies of such corporate actions and
proceedings and such other instruments and documents as it shall have reasonably
requested.
(f) Consents. Any third-party and governmental consents, approvals
or authorizations necessary for the conveyance of the Purchased Assets or the
operation of the Business by Buyer or the valid consummation of the transactions
contemplated hereby shall have been obtained and the Stonepath Shares to be
issued at the Closing shall have been approved for listing by the American Stock
Exchange.
(g) Approval of Acquisition. This transactions contemplated by this
Agreement shall have been approved by LaSalle Business Credit, Inc., Buyer's
principal lender, and by the Board of Directors of Buyer and Stonepath Group.
33
(h) Availability of Employees. The employees of Seller identified
by Buyer as material to the post-Closing operation of the Business have accepted
offers of employment from Buyer.
(i) Deliveries by the Seller and Shareholders. The Seller and the
Shareholders shall have executed and delivered to Buyer at Closing the documents
identified in Section 5.2 hereof.
(j) Due Diligence Review. Buyer shall have concluded to its sole
discretion, a satisfactory review of the Purchased Assets, personnel of Seller,
prospects of the Business and financial condition of the Seller.
(k) Concurrent Acquisition. Buyer's Affiliates shall have completed
the acquisition of the assets of G Link Express Pte Ltd., a Singapore Company.
(l) Agency and Servicing Agreement. The Company shall have entered
into an Agency and Servicing Agreement, in a form to be agreed upon by and on
such terms and conditions satisfactory to the Parties, with certain Affiliates
of the Seller and the Shareholders operating businesses similar to the Seller's
Business in Indonesia, Malaysia, Thailand, Myanmar and Vietnam.
ARTICLE 10
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
10.1 Conditions to Closing. The obligations of Seller to be performed
at the Closing are subject to the fulfillment at or prior to the Closing of each
of the following conditions:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Buyer and the Stonepath Group contained in this Agreement
shall be true in all material respects on and as of the Closing Date.
(b) Performance of Agreement. Buyer and the Stonepath Group shall
have performed in all material respects all obligations and agreements and
complied in all material respects with all covenants and conditions contained in
this Agreement to be performed or complied with by it at or prior to Closing.
(c) Injunction. On the Closing Date, there shall be no injunction,
writ, preliminary restraining order or any order of any nature in effect issued
by a court of competent jurisdiction directing that the transactions provided
for herein, or any of them, not be consummated as herein provided and no suit,
action, investigation, inquiry or other legal or administrative proceeding by
any governmental body or other Person shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated hereby
or which if successfully asserted might impose any additional material financial
obligation on, or require the surrender of any material right, by Seller.
34
(d) Actions or Proceedings. All corporate actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental thereto and all other related legal matters shall
be reasonably satisfactory to counsel for Seller, and such counsel shall have
been furnished with such certified copies of such corporate actions and
proceedings and such other instruments and documents as it shall have reasonably
requested.
(e) Consents. Any third-party and governmental consents, approvals
or authorizations necessary for the conveyance of the Purchased Assets or the
valid consummation of the transactions contemplated hereby shall have been
obtained.
ARTICLE 11
SURVIVAL; INDEMNIFICATION
11.1 Survival. The representations, warranties, and covenants of the
Parties contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the Closing.
11.2 Indemnification by Seller and the Shareholders. .Seller and the
Shareholders shall, jointly and severally, defend and hold harmless Buyer and
its Affiliates and each of their officers, directors, employees, stockholders,
members, partners and agents, and the successors to the foregoing (and their
respective Affiliates' officers, directors, employees, stockholders, members,
partners, and agents) (each a "Buyer Indemnified Party") from and against any
and all liabilities, damages, and losses, including, without limitation,
diminution in the value of the Purchased Assets, lost profits and other
consequential damages, punitive damages, and all costs and expenses, including,
without limitation, reasonable attorneys' and consultants' fees and expenses
("Damages") incurred or suffered as a result of or arising out of (i) the
inaccuracy of any representation or warranty made by Seller or the Shareholders
in this Agreement or in any certificate or other writing delivered by Seller or
any Shareholder pursuant hereto or in connection herewith, (ii) the breach of
any covenant or agreement made or to be performed by Seller or any Shareholder
pursuant to this Agreement, (iii) any attempt (whether or not successful) by any
Person to cause or require any Buyer Indemnified Party to pay or perform, any
liability or obligation of, or any claim against, Seller of any kind other than
the Assumed Liabilities, or (iv) any claim relating to the transactions
contemplated by this Agreement asserted against a Buyer Indemnified Party by a
party to a contract or relationship with Seller (other than a transferred
Contract) prior to the Closing.
11.3 Indemnification by Buyer. Buyer shall indemnify, defend, and hold
harmless Seller and its Affiliates and each of their officers, directors,
employees, stockholders, members, partners and agents, and the Shareholders, and
the successors to the foregoing (and their respective Affiliates' officers,
directors, employees, stockholders, members, partners, and agents) (each a
"Seller Indemnified Party") against Damages incurred or suffered as a result of
or arising out of (i) the inaccuracy of any representation or warranty made by
Buyer in this Agreement or in any certificate or other writing delivered by
Buyer pursuant hereto or in connection herewith, or (ii) the breach of any
covenant or agreement made or to be performed by Buyer pursuant to this
Agreement.
35
11.4 Third Party Claims. Promptly after an indemnified party has
received notice of or has knowledge of any claim by a person not a party to this
Agreement ("Third Person") or the commencement of any action or proceeding by a
Third Person, such indemnified party shall, as a condition precedent to a claim
with respect thereto being made against an indemnifying party, give the
indemnifying party written notice of such claim or the commencement of such
action or proceeding; provided, however, that the failure to give such notice
will not relieve such indemnifying party from liability under this Article with
respect to such claim, action or proceeding, except to the extent that the
indemnifying party has been actually prejudiced as a result of such failure. The
indemnifying party (at its own expense) shall have the right and shall be given
the opportunity to associate with the indemnified party in the defense of such
claim, suit or proceedings, provided that counsel for the indemnified party
shall act as lead counsel in all matters pertaining to the defense or settlement
of such claims, suit or proceedings. The indemnified party shall not, except at
its own cost and provided that such action shall not adversely affect the
indemnifying party, make any settlement with respect to any such claim, suit or
proceeding without the prior consent of the indemnifying party, which consent
shall not be unreasonably withheld or delayed. It is understood and agreed that
in situations where failure of the indemnifying party to settle a claim
expeditiously could have an adverse effect on the indemnified party, the failure
of the indemnifying party to act upon the indemnified party's request for
consent to such settlement within five (5) Business Days of the indemnifying
party's receipt of notice thereof from the indemnified party shall be deemed to
constitute consent by the indemnifying party of such settlement for purposes of
this Section 11.4.
11.5 Effect of Certain Matters. The right to indemnification, payment
of damages or other remedy based on any representations, warranties, covenants
and obligations contained in this Agreement will not be affected by and will
survive any investigation conducted with respect to, or any knowledge acquired
(or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or obligation. The waiver of any condition based on the
accuracy of any representation or warranty, or on the performance of or
compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representation, warranty, covenant or obligation.
11.6 Other Remedies. The indemnification rights of any indemnified
party under this Article 11 are independent of and in addition to such rights
and remedies as such indemnified party may have at law, in equity or otherwise
for any misrepresentation, breach of warranty or failure to fulfill any covenant
or agreement under or in connection with this Agreement on the part of any
Party, none of which rights or remedies shall be affected or diminished hereby.
Buyer shall have the right to set off against any payment due under this
Agreement any amount payable by Seller or a Shareholder to Buyer under this
Agreement.
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ARTICLE 12
TERMINATION
12.1 Termination. This Agreement may be terminated at any time prior to
Closing as follows:
(a) at the election of Buyer, if there is a material breach of any
of the representations and warranties of Seller contained in Article 6 and such
breach cannot be, or has not been, cured within the earlier of (i) ten (10) days
of its occurrence or (ii) the Closing Date;
(b) at the election of Seller, if there is a material breach of any
of the representations and warranties of Buyer contained in Article 7 and such
breach cannot be, or has not been, cured within the earlier of (i) ten (10) days
of its occurrence or (ii) the Closing Date;
(c) by Seller or Buyer if the Closing has not taken place on or
before August 31, 2003; provided that no Party then in breach of any obligations
hereunder shall have the right to terminate; and
(d) by mutual consent of the Parties;
provided, however, that the party seeking termination pursuant to clause (a),
(b) or (c) is not then in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
12.2 Effect of Termination. If this Agreement is terminated and the
transactions contemplated hereby are abandoned as described in Section 12.1,
this Agreement shall become null and void and of no further force and effect,
except for the provisions of (i) Section 13.1 relating to certain expenses,
(iii) Section 12.1 and this Section 12.2 and (iv) Section 13.2 relating to
publicity. Nothing in this Section 12.2 shall be deemed to release any party
from any liability for any breach by such party of the terms and provisions of
this Agreement or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreements.
ARTICLE 13
GENERAL
13.1 Expenses. Except as otherwise provided in this Agreement, and
whether or not the transactions herein contemplated shall be consummated, Buyer
and Seller shall pay their own fees, expenses and disbursements, including the
fees and expenses of their respective counsel, accountants and other experts, in
connection with the subject matter of this Agreement and all other costs and
expenses incurred in performing and complying with all conditions to be
performed under this Agreement.
37
13.2 Publicity.
(a) Neither the Shareholders nor the Buyer, Stonepath or any
Affiliate, shall disclose to the public or to any third party the existence of
this Agreement or the transactions contemplated hereby or any other material
nonpublic information (as construed pursuant to Regulation FD under the
Securities Act) concerning or relating to any Party hereto, other than with the
express prior written consent of the Party regarding whom such disclosure would
be made; provided, however, that disclosure may be made (a) to the minimum
extent as may be required by Applicable Law or court order, or (b) to enforce
the rights of such disclosing Party under this Agreement; provided further,
however, that notwithstanding anything to the contrary contained in this
Agreement, any Party hereto may disclose this Agreement to any of its directors,
officers, employees, shareholders, affiliates, agents and representative who
need to know such information for the sole purpose of evaluating, or performing
its obligations or exercising its rights under this Agreement.
(b) Notwithstanding anything contained in this Section to the
contrary,
(i) In the event a Party is required by court order or
subpoena to disclose material nonpublic information of another Party, prior to
such disclosure, the disclosing Party shall: (i) promptly notify the
non-disclosing Party and, if having received a court order or subpoena, deliver
a copy of the same to the non-disclosing Party; (ii) cooperate with the
non-disclosing Party at the expense of the non-disclosing Party in obtaining a
protective or similar order with respect to such information; and (iii) provide
only such of the Confidential Information of the non-disclosing Party as the
disclosing Party is advised by its counsel is necessary to strictly comply with
such court order or subpoena; and
(ii) Except as reasonably necessary to comply with applicable
securities laws, each Party (and each employee, representative, or other agent
of such party) may (A) consult any tax advisor regarding the United States
federal income tax treatment or tax structure of the transaction, and (B)
disclose to any and all Persons, without limitation of any kind, the United
States federal income tax treatment and tax structure of the transaction and all
material of any kind (including opinions or other tax analyses) that are
provided to either Party. For the purposes of this subsection (ii), the term
"tax structure" is limited to the facts relevant to the United States federal
income tax treatment of the transaction.
(c) Stonepath Group shall have the right to make such public
disclosures of this Agreement and the transactions contemplated hereby as it
determines in good faith are required under applicable federal securities laws
or the rules of the Principal Exchange.
(d) The Parties anticipate issuing a mutually acceptable joint
press release announcing the consummation of the transactions provided for
herein.
13.3 Waivers. The waiver by either Party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
13.4 Binding Effect; Benefits. This Agreement shall inure to the
benefit of, and be binding upon, the Parties hereto and their respective
successors and permitted assigns. Except for the express provisions of Article
11, nothing in this Agreement, express or implied, is intended to confer on any
Person other than the Parties hereto, or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
38
13.5 Bulk Transfers Laws. Buyer hereby waives compliance by Seller with
the provisions of any and all laws relating to bulk transfers in connection with
the sale of the Purchased Assets. Seller covenants and agrees to indemnify and
save harmless Buyer from and against any and all losses, liability, cost and
expense (including reasonable attorneys fees) arising out of noncompliance with
such bulk transfers laws.
13.6 Notices. All notices, requests, demands, elections and other
communications which either Party to this Agreement may desire or be required to
give hereunder shall be in writing and shall be deemed to have been duly given
if delivered personally, by a reputable courier service which requires a
signature upon delivery, by mailing the same by registered or certified first
class mail, postage prepaid, return receipt requested, or by telecopying with
receipt confirmation (followed by a first class mailing of the same) to the
Party to whom the same is so given or made. Such notice, request, demand,
waiver, election or other communication will be deemed to have been given as of
the date so delivered or electronically transmitted or seven days after mailing
thereof.
If to Seller: G Link Express (Cambodia) Pte. Ltd.
Xx.0, Xxxxxx 000, Xxxxxxx Xxxxx Xxxxxx,
Khan 0 Xxxxxx, Xxxxx Xxxx,
Xxxxxxx of Cambodia
If to the Shareholder: c/o Xx. Xxxxxx Law Teck Wah,
as agent for the Shareholders
00 Xxxxxxxx Xxxxx, Xxxxxxxxx 000000
If to Buyer
Or Holdings, to: Stonepath Holdings (Hong Kong) Limited
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
with a copy to: Xxxxxxx Xxx
Xxxxxxx Coie
25 Floor, Three Exchange Place 0 Xxxxxxxxx
Xxxxx, Xxxxxxx
Xxxx Xxxx
(tel) 000 0000 0000
(fax) 000 0000 0000
or to such other address as such Party shall have specified by notice to the
other Party hereto.
39
13.7 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) constitutes the entire agreement and understanding between the
Parties hereto as to the matters set forth herein and supersede and revokes all
prior agreements and understandings, oral and written, between the Parties
hereto or otherwise with respect to the subject matter hereof. No change,
amendment, termination or attempted waiver of any of the provisions hereof shall
be binding upon any Party unless set forth in an instrument in writing signed by
the Party to be bound or their respective successors in interest.
13.8 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument, and may be delivered
by facsimile transmission.
13.9 Headings. The article, section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement.
13.10 Construction. Within this Agreement, the singular shall include
the plural and the plural shall include the singular, and any gender shall
include all other genders, all as the meaning and the context of this Agreement
shall require.
13.11 Governing Law. The validity and interpretation of this Agreement
shall be construed in accordance with, and governed by the laws of the Republic
of Singapore, without regard to conflicts-of-law principles that could otherwise
require the application of any other law.
13.12 Arbitration. If a dispute arises as to the interpretation of this
Agreement, including any question regarding its existence, validity or
termination, it shall be decided finally in an arbitration proceeding in
accordance with the Arbitration Rules of the Singapore International Arbitration
Centre then in effect at the time of the dispute which rules are deemed to be
incorporated by reference to this clause.. The arbitration shall take place in
the Republic of Singapore. The decision of the arbitrators shall be conclusively
binding upon the Parties and final, and such decision shall be enforceable as a
judgment in any court of competent jurisdiction. The parties shall share equally
the costs of the arbitration.
13.13 Cooperation. The Parties hereto shall cooperate fully at their
own expense, except as otherwise provided in this Agreement, with each other and
their respective counsel and accountants in connection with all steps to be
taken as part of their obligations under this Agreement.
13.14 Severability. If any term, covenant, condition or provision of
this Agreement or the application thereof to any circumstance shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected thereby and each remaining
term, covenant, condition and provision of this Agreement shall be valid and
shall be enforceable to the fullest extent permitted by law. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as is enforceable.
40
13.15 English Language Controlling. This Agreement is written in the
English language and such language shall be controlling for all purposes of this
Agreement. Any translation of this Agreement into another language shall be for
convenience of the Parties only and shall have no effect on the interpretation
of this Agreement.
13.16 Shareholders' Agent.
(a) The Shareholders, pursuant to this Agreement, hereby appoint
Xxxxxx Law Teck Wah as the Shareholders' Agent, who shall be the Shareholders'
representative and attorney-in-fact for each Shareholder. The Shareholders'
Agent shall have the authority to act for and on behalf of each of the
Shareholders, including without limitation, to amend this Agreement, to give and
receive notices and communications, waivers and consents under this Agreement,
to act on behalf of the Shareholders with respect to any matters arising under
this Agreement, to authorize delivery to the Buyer and/or Holdings of cash and
other property, to object to such deliveries, to agree to, negotiate, enter into
settlements and compromises of, and commence, prosecute, participate in, settle,
dismiss or otherwise terminate, as applicable, lawsuits and claims, mediation
and arbitration proceedings, and to comply with orders of courts and awards on
behalf of courts, mediators and arbitrators with respect to such suits, claims
or proceedings, and to take all actions necessary or appropriate in the judgment
of the Shareholders' Agent for the accomplishment of the foregoing. In addition
to and in furtherance of the foregoing, the Shareholders' Agent shall have the
right to (i) employ accountants, attorneys and other professionals on behalf of
the Shareholders, and (ii) incur and pay all costs and expenses related to (A)
the performance of its duties and obligations as the Shareholders' Agent
hereunder, and (B) the interests of the Shareholders under this Agreement. The
Shareholders' Agent shall for all purposes be deemed the sole authorized agent
of the Shareholders until such time as the agency is terminated with notice to
the Buyer. Such agency may be changed by the Shareholders from time to time upon
not less than thirty (30) days prior written notice to the Buyer; provided,
however, that the Shareholders' Agent may not be removed unless all of the
Shareholders agree to such removal and to the identity of the substituted
Shareholders' Agent. Any vacancy in the position of the Shareholders' Agent may
be filled by approval by those Shareholders who hold or held a majority of the
Shares prior to the Closing. No bond shall be required of the Shareholders'
Agent, and the Shareholders' Agent shall not receive compensation for its
services. Notices or communications to or from the Shareholders' Agent shall
constitute notice to or from each of the Shareholders during the term of the
Agreement.
(b) The Shareholders' Agent shall not incur any liability with
respect to any action taken or suffered by him or omitted hereunder as
Shareholders' Agent while acting in good faith and in the exercise of reasonable
judgment. The Shareholders' Agent may, in all questions arising hereunder, rely
on the advice of counsel and other professionals and for anything done, omitted
or suffered in good faith by the Shareholders' Agent based on such advice and
the Shareholders' Agent shall not be liable to anyone. The Shareholders' Agent
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement, and no covenants or obligations shall be implied under
this Agreement against the Shareholders' Agent; provided, however, that the
foregoing shall not act as a limitation on the powers of the Shareholders' Agent
determined by him to be reasonably necessary to carry out the purposes of his
41
obligations. The Shareholders shall jointly and severally, indemnify the
Shareholders' Agent and hold him harmless against any loss, liability or expense
incurred without gross negligence or bad faith on the part of the Shareholders'
Agent and arising out of or in connection with the acceptance or administration
of his duties under this Agreement. Specifically, each Shareholder hereby agrees
to reimburse the Shareholders' Agent for his reasonable and documented costs or
expenses (including attorneys' fees) in pursuing a dispute under this Agreement.
A decision, act, consent or instruction of the Shareholders' Agent
shall constitute a decision, act, consent or instruction from all of the
Shareholders and shall be final, binding and conclusive upon each of the
Shareholders. The Buyer and Holdings may rely upon any such decision, act,
consent or instruction of the Shareholders' Agent as being the decision, act,
consent or instruction of every such Shareholder. The Buyer is hereby relieved
from any liability to any person for any acts done by it in accordance with such
decision, act, consent or instruction of the Shareholders' Agent. In furtherance
of the foregoing, any reference to a power of the Shareholders under this
Agreement, to be exercised or otherwise taken, shall be a power vested in the
Shareholders' Agent.
[SIGNATURE PAGE FOLLOWS]
42
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the date first written above.
STONEPATH HOLDINGS (HONG KONG)
LIMITED
By:______________________________
Name:
Title:___________________________
G LINK EXPRESS (CAMBODIA) PTE. LTD.
By:______________________________
Name:
Title:___________________________
43
SHAREHOLDERS:
_________________________________
XXXXXX LAW TECK WAH
_________________________________
XXXXX XXX KHENG HE
_________________________________
XXXXXX XXX XXX XXXX
_________________________________
XXXXXXX SOON CHIN TEE
G LINK EXPRESS PTE. LTD.
By:______________________________
Name:
Title:___________________________
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
44
EXHIBIT A
---------
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the following
meanings:
"Accounts Payable" means all accounts payable of Seller as of the
Closing Date as would appear as accounts payable on a balance sheet of the
Seller as of the Closing Date prepared in accordance with GAAP.
"Accounts Receivable" means all accounts receivable, including all
trade and miscellaneous receivable, of Seller as of the Closing Date as would
appear as accounts receivable on a balance sheet of Seller as of the Closing
Date prepared in accordance with GAAP.
"Acquisition Proposal" has the meaning given to such term in Section
8.13.
"Affiliate" means, with respect to any Person, any other Person who,
directly or indirectly, controls or is controlled by, or is under common control
with, such Person. For the purposes of the foregoing, (1) the ownership,
directly or indirectly, of more than fifty percent (50%) of the voting stock or
other equity interest of such Person or (2) the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities, by
contract or otherwise, shall be deemed to constitute control.
"Agreement" means this Asset Purchase Agreement.
"Ancillary Agreements" means the Employment Agreements and the Interim
Operating Agreement.
"Annual Earn-Out Certificate" has the meaning given to such term in
Section 3.2(c)(iii).
"Annual Financial Statements" has the meaning given to such term in
Section 6.6(a).
"Applicable Law" or "Applicable Laws" means any and all laws,
ordinances, constitutions, regulations, statutes, treaties, rules, codes,
licenses, certificates, franchises, permits, requirements and Injunctions
adopted, enacted, implemented, promulgated, issued, entered or deemed applicable
by or under the authority of any Governmental Authority having jurisdiction over
a specified Person or any of such Person's properties or assets.
"Assumed Leases" means the Leases identified in Schedule 2.1(a).
"Assumed Liabilities" has the meaning given to such term in Section
4.1.
"Base Amount" has the meaning given to such term in Section 3.1.
45
"Base Earn-Out Amount" has the meaning given to such term in Section
3.2(c)).
"Base Earn-Out Payment" has the meaning given to such term in Section
3.2(c).
"Base Net Tangible Assets" has the meaning given to such term in
Section 3.5.
"Books and Records" means all books, records, and documentation
relating to the Business and the Purchased Assets, whether maintained by Seller
in written or electronic form.
"Business" as used in this Agreement means the business of customs
brokerage, freight forwarding, warehousing and distribution and other related
services as carried on by the Seller immediately prior to the Closing Date.
"Business Day" means a calendar day other than Saturday, Sunday or any
day on which banks located in Philadelphia, Pennsylvania are required or
authorized to close.
"Business Records" means all books, records, ledgers, and files or
other similar information used in the conduct of the Business by Seller, in
written or electronic form, including, without limitation, price lists, customer
lists, vendor lists, mailing lists, warranty information, catalogs, sales
promotion literature, advertising materials, brochures, records of operations,
standard forms of documents, manuals of operations or business procedures,
research materials and product testing reports required by any federal, foreign,
state, provincial, local or other governmental, regulatory or administrative
agency, commission, department, board, governmental subdivision, court,
tribunal, arbitrating body or other authority.
"Buyer" has the meaning given to such term in the first paragraph of
this Agreement and, where applicable, shall mean and include Newco.
"Buyer Indemnified Party" has the meaning given to such term in Section
11.2.
"Closing" has the meaning given to such term in Section 5.1.
"Closing Date" has the meaning given to such term in Section 5.1.
"Closing Date Cash Payment" has the meaning given to such term in
Section 3.2(a).
"Company Competitor" has the meaning given to such term in Section
8.15(a).
"Company Secretary" means Xxxxxxx Xxxxxx Xxxxx & Le of 45 Blvd
Suramarit, (P.O. Box No. 7) Phnom Penh, Cambodia.
"Competing Business" had the meaning given to such term in Section
6.28.
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"Contracts" means all the written or oral Third Party contracts,
agreements, instruments, leases and subleases, supply contracts, purchase
orders, sales orders and instruments, including, without limitation, those which
are identified in Schedule 2.1(e).
"Damages" has the meaning given to such term in Section 11.2.
"Earn-Out Payment Date" has the meaning given to such term in Section
3.2(c)(i).
"Earn-Out Period" has the meaning given to such term in Section 3.2(c).
"Effective Time" has the meaning given to such term in Section 5.1.
"Employee Benefit Plans" has the meaning given to such term in Section
6.21(a).
"Employment Agreement " has the meaning given to such term in 5.2(d).
"Encumbrance" means any claim, lien, pledge, option, charge, easement,
security interest, deed of trust, conditional sales agreement, encumbrance,
license or other right of third parties, whether voluntarily incurred or arising
by operation of law, and includes any agreement to give any of the foregoing in
the future, and any contingent sale or other title retention agreement or lease
in the nature thereof.
"Environmental Laws" means any and all laws, rules, and regulations,
whether civil, criminal or administrative, applicable to the Seller or the
conduct of the Business (i) regulating the use, treatment, generation,
transportation, storage, control or disposal of any Hazardous Material, and/or
(ii) relating to the protection, preservation or conservation of the environment
and public or worker health and safety, all as existing, defined or interpreted
as of the Closing Date.
"Equipment" means Seller's plant, machinery and equipment (including
related spare parts, dies, molds, tools, and tooling), computers, servers,
trucks, automobiles, computing and telecommunications equipment and other items
of personal property and other similar items, but not including the Leased
Equipment or the Furnishings and Supplies. Equipment includes rights to the
warranties received from the manufacturers and distributors of the said items
and to any related claims, credits, rights or recovery and setoff with respect
to such items.
"Excess Amount" has the meaning given to such term in Section
3.2(c)(ii).
"Financial Statements" has the meaning given to such term in Section
6.6(a).
"Furnishings and Supplies" means all of Seller's furniture, furnishings
and other tangible personal property (other than the Equipment) including,
without limitation, desks, tables, chairs, file cabinets, and other storage
devices and office supplies.
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"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such entity as may be in general use by significant segments
of the U.S. accounting profession, which are applicable to the facts and
circumstances on the date of determination.
"Goodwill" means all goodwill incident to the Business.
"Governmental Authority" means any:
(i) nation, state, county, city, town, village, district or
other jurisdiction of any nature;
(ii) federal, state, local, municipal, foreign or other
government;
(iii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, board, commission,
department, instrumentality, office or other entity, and any court or other
tribunal);
(iv) multi-national organization or body; and/or
(v) body exercising, or entitled or purporting to exercise,
any administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power of any nature.
"Hazardous Material" means any and all (i) dangerous, toxic or
hazardous pollutants, contaminants, chemicals, wastes, materials or substances
listed or identified in, or directly or indirectly regulated by, any Applicable
Laws, including Environmental Laws, and (ii) any of the following, whether or
not included in the foregoing: polychlorinated biphenyls, asbestos in any form
or condition, urea-formaldehyde, petroleum, including crude oil or any fraction
thereof, natural gas, natural gas liquids, liquefied natural gas, synthetic gas
usable for fuel or mixtures thereof, nuclear fuels or materials, chemical
wastes, radioactive materials, explosives and known possible carcinogens.
"Holdings' Ownership Percentage" means the percentage of capital stock
of Buyer held by Holdings' or its assignees at the time such percentage is to be
determined. Holdings' Ownership Percentage on the date of this Agreement is
seventy percent (70%).
"Indebtedness" means all outstanding bank and other loans, notes, lines
of credit, debt instruments and other indebtedness, excluding trade payables,
capital leases and other current liabilities (other than the current portions of
long-term liabilities which otherwise are considered "Indebtedness").
"Independent Accountants" has the meaning given to such term in Section
3.7(c).
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"Independent Accountant Required Payment" has the meaning given to such
term in Section 3.7(c).
"Instruments" has the meaning given to such term in Section 6.3.
"Intellectual Property" means all intellectual property rights of
Seller and its Affiliates relating to the Business, including (a) all
inventions, discoveries and ideas, whether patentable or not in any
jurisdiction, patents, applications for patents (including, without limitation,
divisions, continuations, continuations in part and renewal applications), and
any renewals, extensions or reissues thereof, in any jurisdiction; (b)
trademarks, service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification of or renewal of any such registration or application;
(c) computer software (including software, data, and related documentation); (d)
non-public information, trade secrets, know-how (including, without limitation,
research and development, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings and specifications)
and confidential information and rights in any jurisdiction to limit the use or
disclosure thereof by any Person; (e) writings or other works, whether
copyrightable or not in any jurisdiction, registrations or applications for
registration of copyrights in any jurisdiction, and any renewals or extensions
thereof; (f) any similar intellectual property rights, and (g) any claims or
causes of action arising our of or related to any infringement or
misappropriation of any of the foregoing.
"Interim Financial Statements" has the meaning given to such term in
Section 6.6(a).
"Interim Operating Agreement" means the Interim Operating Agreement
between Seller and Holdings in the form attached to the Agreement as Exhibit C.
"Knowledge" or "to the knowledge" of a Party (or similar phrases) means
to the extent of matters (i) which are actually known by such Party or (ii)
which, based on facts of which such Party is aware, would or should be known to
a reasonable Person in similar circumstances, and shall be deemed to include the
knowledge of each Party's executive officers.
"Lease" means the lease for any of the Leased Premises.
"Leased Equipment" means the computers, servers, machinery and
equipment and other similar items leased by Seller and used, held for use,
necessary for use or intended to be used primarily in the operation or conduct
of the Businesses as currently conducted or as currently proposed to be
conducted.
"Leased Premises" means the real property identified on Schedule
2.1(k).
"Liabilities" means any and all debts, liabilities and/or obligations
of any type, nature or description (whether known or unknown, asserted or
unasserted, secured or unsecured, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due).
49
"Material" or "material provision" means a claim, liability, expense,
term, provision or other right, whether contractual or otherwise, that will
result in liability to the Seller or any Shareholder, as applicable, in excess
of $25,000.
"Material Adverse Change" means a material adverse change (i) in the
business, assets, condition (financial or otherwise), working capital,
liabilities, results of operations or prospects of the Business, (ii) in the
ability of Seller and the Buyer to perform its obligations under this Agreement
and the Ancillary Agreements or (iii) in the ability of Seller or Buyer to
consummate the sale and purchase of the Business and the other transactions
contemplated by this Agreement and the Ancillary Agreements.
"Material Contracts" has the meaning given to such term in Section
6.14(a).
"Minority Share Percentage" has the meaning given to such term in
Section 3.6(b).
"Newco" means a subsidiary of Holdings to be incorporated in the
Kingdom of Cambodia for the purpose of subsequently acquiring the Business (as
operated by Seller pursuant to the Interim Operating Agreement with Holdings)
and certain rights and obligations of Holdings hereunder.
"Net Income Before Taxes of the Business" means the net income before
federal, state and local income taxes generated by the Business after the
Closing Date, determined in accordance with the provisions of Section 3.1(c) of
this Agreement and GAAP. Net Income Before Taxes of the Business shall be
derived from separate financial statements of the Buyer derived from the audited
consolidated financial statements of Stonepath Group, Inc. for each of the years
in the Earn-Out Period. It is understood by Seller that, following the Closing,
the operation of the Business by Buyer may be combined or merged with an
Affiliate of Buyer, or Buyer may acquire other businesses, in a manner in which
the Buyer may no longer exist as a separate entity or in which the operations of
the Buyer include businesses other than the Business acquired from Seller. For
the purpose of computing the Net Income Before Taxes of the Business following
any such combination, merger, or acquisition, the following principles shall
apply:
(i) Net Income Before Taxes of the Business will be measured
as the Net Income Before Taxes of the Buyer for so long as the Business
continues to be operated within the Buyer and Buyer has not combined or merged
with another business or acquired another Business.
(ii) Once the Buyer is merged into or combined with another
business or Buyer acquires another business, Net Income Before Taxes of the
Business shall continue to be accounted for separately, and shall be measured
thereafter based upon the separate operations of the Business as it was operated
by the Buyer immediately prior to any such change.
50
"Net Tangible Assets" means the product of (i) seventy percent (70%),
and (ii) the amount obtained by subtracting all liabilities of the Seller
assumed hereunder as of the Closing Date from the net tangible assets acquired
hereunder of the Seller as of the Closing Date, as determined by the Net
Tangible Assets Statement, less any Closing Date account receivable outstanding
for more than 120 days. For the further purposes hereof, the Net Tangible Assets
of Seller shall exclude: (x) all assets of the Seller that are attributable to
amounts due and owing from Related Persons; and (y) all liabilities of the
Seller that are attributable to amounts due and owing to Related Persons.
"Net Tangible Assets Statement" has the meaning given to such term in
Section 3.5.
"Nonassignable Assets" has the meaning given to such term in Section
8.12.
"Objection Notice" has the meaning given to such term in Section
3.7(a).
"Option" has the meaning given to such term in Section 3.6(a).
"Option Notice" has the meaning given to such term in Section 3.6(a).
"Option Shares" has the meaning given to such term in Section 8.23
"Option Shares Closing" has the meaning given to such term in Section
3.6(f).
"Option Shares Purchase Price" has the meaning given to such term in
Section 3.6(b).
"Option Shares Purchase Price Certificate" has the meaning given to
such term in Section 3.6(d).
"Ordinary Course of Business" means an action taken by a Person if such
action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person.
"Partial Earn-Out Period" has the meaning given to such term in Section
3.2(c)(i)
"Party" means Seller, the Shareholders, or Buyer, individually, as the
context so requires, and the term "Parties" means Seller, the Shareholders, and
Buyer together.
"Permits" means all governmental permits, licenses, registrations,
orders and approvals relating to or necessary to own or use the Purchased
Assets.
"Person" means any person or entity, whether an individual, trustee,
corporation, limited liability company, general partnership, limited
partnership, trust, unincorporated organization, business association, firm,
joint venture, Governmental Authority or any similar entity.
51
"Principal Exchange" means (a) the American Stock Exchange or (b) if at
any time in the future the Common Stock of Stonepath Group is not listed on the
American Stock Exchange, then the NASDAQ SmallCap Market, the NASDAQ National
Market, or the New York Stock Exchange (each, a "Subsequent Market") or (c) if
the Common Stock of Stonepath Group is not then listed on the American Stock
Exchange or any Subsequent Market, then the OTCBB, as reported by the National
Quotation Bureau Incorporated.
"Proceeding" means any suit, litigation, arbitration, hearing, audit,
investigation or other action (whether civil, criminal, administrative or
investigative) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Authority or arbitrator.
"Purchase Price" has the meaning given to such term in Section 3.1.
"Purchased Assets" has the meaning given to such term in Section 2.1.
"Regulated Substance" means any substance the manufacturing,
processing, sale, generation, treatment, transportation, storage, disposal,
labeling or other management or use of which is regulated by applicable
Environmental Law.
"Related Person" or "Related Persons" means, with respect to a
particular individual:
(i) each other member of such individual's Family (as
hereafter defined); and
(ii) any Affiliate of one or more members of such
individual's family.
With respect to a specified Person other than an individual:
(i) any Affiliate of such specified Person; and
(ii) each Person that serves as a director, governor,
officer, manager, general partner, executor or trustee
of such specified Person (or in a similar capacity).
"Response Period" has the meaning given to such term in Section 3.4(a).
"Xxxxx" means the currency of the Kingdom of Cambodia.
"Schedules" has the meaning given to such term in the first paragraph
of Article 6.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" has the meaning given to such term in the first paragraph of
this Agreement.
"Seller Indemnified Party" has the meaning given to such term in
Section 11.3.
"Shortfall Amount" has the meaning given to such term in Section
3.2(c)(ii).
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"Stonepath Shares" has the meaning given to such term in Section
3.2(b).
"Targeted Amount" has the meaning given to such term in Section
3.2(c)(ii).
"Tax Return" or "Tax Returns" means any return, declaration, report,
claim for refund or information return or statement relating to Taxes,
including, without limitation, any schedule or attachment thereto, any amendment
thereof, and any estimated report or statement.
"Tax" or "Taxes" means any and all Net Income Before Taxes, gross
income, gross revenue, gross receipts, net receipts, ad valorem, franchise,
profits, transfer, sales, use, social security, Medicare, employment,
unemployment, disability, license, withholding, payroll, privilege, excise,
value-added, severance, stamp, occupation, property, customs, duties, real
estate and/or other taxes, assessments, levies, fees or charges of any kind
whatsoever imposed by any Governmental Authority, together with any interest or
penalty relating thereto.
"Tangible Personal Property" has the meaning given to such term in
Section 6.12.
"Third Person" has the meaning given to such term in Section 11.4.
"Trading Day" means any day on which shares of Common Stock of
Stonepath Group, Inc. are traded for a full day on the Principal Exchange.
"U.S." or "United States" means the United States of America.
"$" or "U.S. Dollar" means the currency of the United States.
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