MUTUAL AGREEMENT
This MUTUAL AGREEMENT dated as of March 21, 2005 ("Agreement") is entered
into by and between POWER2SHIP, INC., a Nevada corporation ("P2S"), COMMODITY
EXPRESS TRANSPORTATION, INC., a Delaware corporation and indirect wholly owned
subsidiary of P2S ("CET-DEL"), POWER2SHIP HOLDINGS, INC., a Florida corporation
and wholly owned subsidiary of P2S ("P2S Holdings"), COMMODITY EXPRESS
TRANSPORTATION, INC., a South Carolina corporation ("CET-SC"), XXXXXX LOGISTICS
CONSULTING, LLC, a South Carolina limited liability company ("SLC"), TPS
LOGISTICS, INC., a South Carolina corporation ("TPS") and W. A. XXXXXX, an
individual resident in the State of South Carolina ("Xxxxxx"), together the
parties ("Parties").
PREAMBLE
WHEREAS, CET-SC engages in the business of motor carriage (the "Business");
WHEREAS, CET-SC, in connection with its operation of the Business, owns and
lawfully uses certain assets (as more fully described below and referred to
hereafter as the "Assets"), maintains certain tractor leases, owns and operates
a freight terminal in Columbia, South Carolina, owns and maintains freight
trailers, and owns and maintains various leases that contribute to the
successful operation of the Business;
WHEREAS, Xxxxxx is a principal shareholder in CET-SC and the principal
person in control of the operations of the CET-SC and possesses over thirty
years experience in the Business;
WHEREAS, SLC and TPS are businesses maintained and operated by Xxxxxx and
his business associates for the purpose of acquiring and servicing freight
hauling clients.
WHEREAS, CET-SC, upon the terms and conditions contained in this Agreement,
desires to convey, sell and assign to CET-DEL all of CET-SC's right, title and
interest in and to the Assets, desires to lease to CET-DEL its freight terminal,
desires to lease to CET-DEL certain trailers, desires to allow CET-DEL to assume
its tractor leases and desires to complete other associated transactions with
CET-DEL, as more fully described below; and
WHEREAS, CET-DEL is a wholly owned subsidiary of P2S Holdings, and P2S
Holdings is a wholly owned subsidiary of P2S; and
WHEREAS, CET-DEL, upon the terms and conditions contained in this
Agreement, desires to complete the transactions described above, desires to
employ Xxxxxx to assist in managing the Business, and desires to remunerate
Xxxxxx companies for services associated with maintaining certain valuable
business contracts; and
WHEREAS, P2S desires to financially support commitments made by CET-DEL in
relation to the transactions contemplated by this Agreement.
NOW THEREFORE, in consideration of the mutual promises and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. Sale and Purchase of Assets.
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1.1 Sale and Purchase of Assets. Subject to the terms and conditions
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of this Agreement, at the closing described in Section 13 (the "Closing"),
CET-SC shall sell to CET-DEL, and CET-DEL shall purchase from CET-SC, those
assets of CET-SC identified on Schedule 1.1, including the assets described in
Section 2 (the "Assets").
1.2 Liabilities Assumed and Excluded. In connection with CET-DEL's
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purchase of the Assets, CET-DEL shall assume and become responsible for the
payment of only that liability of CET-SC that is identified on Schedule 1.2 (the
"Liability"). CET-DEL shall assume no other liabilities or obligations of
CET-SC. No assets will be purchased or transferred to CET-DEL except as
provided in Section 1.1. Specifically, but not limited to, the following assets
are excluded: (a) certain current assets (b) real property or leasehold property
or improvements, and (c) all trailers owned by CET-SC or Xxxxxx.
1.3 Purchase Price; Payment. The purchase price for the Assets shall
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be $200,000 (the "Purchase Price"), payable on the Closing Date (as defined
herein) as follows:
(a) the sum of $100,000 payable in cash; and
(b) the assumption of liability identified on Schedule 1.2 in
the amount of $100,000.
2. Assignment and Assumption of Leases. Subject to the terms and
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conditions of this Agreement, at the Closing, CET-SC shall assign and CET-DEL
shall assume the following CET-SC leases as of the closing date:
(a) All CET-SC tractor leases identified on Schedule 2(a);
(b) All CET-SC trailer leases identified on Schedule 2(b);
(c) Amcor warehouse lease, to be prorated as of the Closing
Date; and
(d) All CET-SC owner/operator leases identified on Schedule
2(d).
3.0 Lease of Trailers
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3.1 Lease of Trailers. Subject to the terms and conditions of this
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Agreement, at the Closing, CET-SC shall lease ("Trailer Leases") to CET-DEL
trailers ("Trailers"), identified on Schedule 3.1, under terms substantially the
same as those shown in Exhibit A.
4.0 Commercial Lease.
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4.1 Commercial Lease. Subject to the terms and conditions of this
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Agreement, at the Closing, CET-SC shall lease ("Commercial Lease") to CET-DEL
its terminal facilities, including property and buildings ("Terminal") for
$4,200 per month, under terms and conditions substantially in the form of
Exhibit B.
5.0 Consulting Agreement
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5.1 Consulting Agreement. Subject to the terms and conditions of this
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Agreement, at the Closing, CET-DEL shall enter into a five year consulting
agreement with SLC for provision of professional services and advice for which
SLC shall be paid 1.0% of all CET-DEL annual revenues for the five year period,
but in any case not less than $100,000 and not more than $200,000 in any one
year, which consulting agreement shall be substantially in the form of Exhibit
C.
6.0 Amcor Commission Agreement
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6.1 Amcor Commission Agreement. Subject to the terms and conditions of
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this Agreement, at the Closing, CET-DEL shall enter into a five-year commission
agreement with TPS which will pay TPS 1.0% of all revenues derived by CET-DEL
from Amcor PET Packaging, Incorporated ("Amcor") for freight hauled to and from
its Blythewood, SC, facility, which commission agreement shall be substantially
in the form of Exhibit D.
7.0 Intentionally Omitted
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7.1 Intentionally Omitted
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8.0 Employment Agreement
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8.1 Employment Agreement. Subject to the terms and conditions of
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this Agreement, at the Closing, CET-DEL shall enter into an employment agreement
with Xxxxxx for $150,000 per year for one year with two one-year renewal
options, which employment agreement shall be substantially in the form of
Exhibit E.
9.0 Additional Agreements and Provisions.
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9.1 Employment. Schedule 9.1 is a list of all employees leased by
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CET-SC, including their positions and salaries as of the date hereof (the
"CET-SC's Leased Employees"). On the Closing Date, CET-DEL shall continue to
lease the CET-SC's Leased Employees on an "at will" basis.
9.2 Escrowed Funds. All funds held in escrow by CET-SC on behalf of
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"owner/operator leased" as identified on Schedule 9.2, shall be transferred to
CET-DEL on the Closing Date, as reflected on Exhibit G.
9.3 Letters of Credit and Deposits. On the Closing Date, CET-DEL shall
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replace all Deposits and CET-SC Letters of Credit, or issue Letters of Credit,
as identified on Schedule 9.3 and reflected on Exhibit G, supporting obligations
to be assumed by CET-DEL, provided, however:
(a) CET-SC shall keep the existing Letter of Credit in place with
TSL Employee Leasing until it expires on 6/10/2005 and CET-DEL shall
replace this Letter of Credit on or before 6/10/2005; and
(b) CET-DEL shall replace the current Letter of Credit with
Sirius Insurance Company on the Closing Date, and CET-SC agrees that
any additional premiums assessed against CET-DEL based on the year end
audit (year ending 6/01/05) will be paid by CET-SC.
9.4 Escrow of CET-DEL Shares. CET-SC has agreed to waive the $50,000
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deposit pursuant to the Trailer Leases and the $10,500 deposit on the Commercial
Lease and in exchange CET-DEL and P2S Holdings have agreed to place all of the
issued and outstanding shares of common stock of CET-DEL owned by P2S Holdings
in escrow pursuant to the terms of an escrow agreement substantially in the form
as Exhibit F.
9.5 P2S Liability. P2S and P2S Holdings shall be jointly and severally
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liable for all obligations of CET-DEL contained in this Agreement and in the
ancillary agreements referenced in this Agreement.
10.0 Representations and Warranties of CET-SC. Except as otherwise
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set forth in a disclosure schedule delivered by CET-SC and Xxxxxx at the time
this Agreement is executed and delivered (the "CET-SC Disclosure Schedule"),
CET-SC and, to the best of his knowledge, Xxxxxx hereby makes the following
representations and warranties to CET-DEL and P2S as of the date hereof. Nothing
in the CET-SC Disclosure Schedule shall be deemed adequate to disclose an
exception to a representation or warranty made herein, unless the CET-SC
Disclosure Schedule identifies the exception with reasonable particularity and
describes the relevant facts in reasonable detail. The CET-SC Disclosure
Schedule will be presented with paragraph numbers corresponding to the numbered
paragraphs contained in this Agreement.
10.1 Organization and Good Standing. CET-SC is a corporation duly
---------------------------------
incorporated, validly existing and in good standing under the laws of its
jurisdiction of formation, with full corporate power and authority to own, lease
and operate its business and properties and to carry on business in the places
and in the manner as presently conducted or proposed to be conducted. CET-SC is
in good standing as a foreign corporation in each jurisdiction in which the
properties owned, leased or operated, or the business conducted by it requires
such qualification except where the failure to so qualify would not have a
material adverse effect on the Assets or consummation of the transactions
contemplated hereby (a "CET-SC Material Adverse Effect").
10.2 Authority and Enforcement. CET-SC has all requisite corporate
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power and authority to execute and deliver this Agreement, and to consummate the
transactions contemplated hereby. CET-SC has taken all corporate action
necessary for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, and this Agreement constitutes the
valid and binding obligation of CET-SC, enforceable against CET-SC in accordance
with its terms, except as may be affected by bankruptcy, insolvency, moratoria
or other similar laws affecting the enforcement of creditors' rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore may
be brought.
10.3 No Conflicts or Defaults. The execution and delivery of this
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Agreement by CET-SC and the consummation of the transactions contemplated
hereby do not and shall not (a) contravene the Certificate or Articles of
Incorporation or Bylaws of CET-SC or (b) with or without the giving of notice or
the passage of time (i) violate, conflict with, or result in a material breach
of, or a material default or loss of rights under, any covenant, agreement,
mortgage, indenture, lease, instrument, permit or license to which CET-SC is a
party or by which CET-SC is bound, or any judgment, order or decree, or any law,
rule or regulation to which CET-SC is subject, (ii) result in the creation of,
or give any party the right to create, any lien, charge, encumbrance or any
other right or adverse interest ("Liens") upon any of the Assets, (iii)
terminate or give any party the right to terminate, amend, abandon or refuse to
perform, any material agreement, arrangement or commitment relating to the
Assets or the consummation of the transactions contemplated hereby, or (iv)
result in a CET-SC Material Adverse Effect.
10.4 Consents of Third Parties. The execution, delivery and
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performance of this Agreement and the consummation of the transactions
contemplated hereby by CET-SC do not require the consent of any person, or such
consent has or will be obtained in writing, prior to the Closing.
10.5 Actions Pending. Except as set forth on the CET-SC Disclosure
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Schedule, there is no action, suit, claim, investigation or proceeding pending
or, to the knowledge of CET-SC, threatened against CET-SC, which questions the
validity of this Agreement or the transactions contemplated hereby or any action
taken or to be taken pursuant hereto or thereto. There is no action, suit,
claim, investigation or proceeding pending or, to the knowledge of CET-SC,
threatened against or involving CET-SC or any of its properties or assets.
There are no outstanding orders, judgments, injunctions, awards or decrees of
any court, arbitrator or governmental or regulatory body against CET-SC or
affecting its assets.
10.6 Title to Assets. CET-SC has either good and marketable title to,
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or valid and enforceable leasehold interest in the Assets, free and clear of all
Liens, other than those disclosed in the CET-SC Financial Statements (as
hereafter defined). No person or entity has any right or option to acquire any
of the Assets. CET-SC has the right to operate all of its facilities in its
present locations, and the operation of such facilities does not violate the
material provisions of (a) any agreement to which CET-SC is a party, (b) the
requirements of applicable laws, rules or regulations, and/or (c) any order of
any court or regulatory body of competent jurisdiction that is binding on CET-SC
or any of the Assets.
10.7 Financial Statements. CET-SC has delivered, to CET-DEL the
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Compiled, Balance Sheet of CET-SC as of December 31, 2003, and Income Statement
for the Year Ended December 31, 2003 (the "CET-SC 2003 Financial Statements").
In addition CET-SC has delivered, to CET-DEL management's internally prepared,
Balance Sheet of CET-SC as of December 31, 2004, and Income Statement for the
Year Ended December 31, 2004 (the "CET-SC 2004 Financial Statements"). The
CET-SC 2003 Financial Statements have been prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") applied on a basis consistent
throughout all periods presented, and present fairly the financial position of
CET-SC as of the date and for the periods indicated. The CET-SC 2004 Financial
Statements are a compilation of internal accounting software reports that have
not been generated or reviewed by a certified public accountant. Accordingly,
CET-SC cannot represent that the CET-SC 2004 Financial Statements have been
prepared in accordance with U.S. generally accepted accounting principles
("GAAP") applied on a basis consistent throughout all periods presented.
However, to the best of CET-SC's knowledge, the CET-SC 2004 Financial Statements
present fairly the financial position of CET-SC as of the date and for the
periods indicated.
CET-SC hereby represents and warrants to CET-DEL and P2S that it has no
reason to believe that the CET-SC 2003 Financial Statements cannot be audited
and prepared in accordance with GAAP and SEC requirements, including the
instructions to Form 8-K. CET-SC further represents and warrants that it
believes that upon final preparation of its 2004 financial reports by a
certified public accountant, such records will be auditable, and capable of
being prepared in accordance with GAAP and SEC requirements, including the
instructions to Form 8-K.
10.8 No Undisclosed Liabilities. CET-SC and, to the best of his
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knowledge, Xxxxxx represents and warrants to CET-DEL and P2S that they have no
reason to believe that CET-SC has or will have any liabilities, obligations,
claims or losses (whether liquidated or unliquidated, secured or unsecured,
absolute, accrued, contingent or otherwise) that would be required to be
disclosed on a balance sheet of CET-SC (including the notes thereto) in
conformity with GAAP which are not disclosed in the CET-SC Financial Statements,
other than those incurred in the ordinary course of CET-SC's business since the
date of the CET-SC Financial Statements, which, individually or in the
aggregate, do not or would not result in a CET-SC Material Adverse Effect.
10.9 Books and Records. To the best of CET-SC's and Xxxxxx' knowledge,
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the books, records and documents of CET-SC accurately reflect, in all material
respects, the information relating to the business of CET-SC, the location and
collection of it's assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of CET-SC. CET-SC (i) maintains books and
records that, in reasonable detail, accurately and fairly reflect transactions
and dispositions of its assets, and (ii) has devised and maintains a system of
accounting controls sufficient to provide reasonable assurances that
transactions are recorded so as to permit financial statements to be prepared in
accordance with GAAP and maintain accountability for assets (including cash).
10.10 Absence of Contracts and Liabilities. To the best of CET-SC's
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and Xxxxxx' knowledge, CET-SC is not a party to any written or oral agreement or
understanding with regard to the Assets, and CET-SC has no liabilities,
contingent or otherwise with regard to the Assets or the transactions
contemplated by this Agreement, that would result in a CET-SC Material Adverse
Effect.
10.11 Customers/Shippers. The CET-SC Disclosure Schedule identifies the
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names of each shipper for CET-SC's services in alphabetical order, and sets
forth the annual revenues derived from each shipper for CET-SC's last fiscal
year or interim period in the event the shipper became such following the
conclusion of CET-SC's last fiscal year. To the best of CET-SC's and Xxxxxx'
knowledge, no shipper has indicated its intention to terminate its relationship
with CET-SC or has reached the conclusion of its term of relationship and has
not renewed or expressed its intention not to renew its relationship with
CET-SC.
10.12 Contracts. The CET-SC Disclosure Schedule identifies each
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material agreement to which CET-SC is a party. Each such agreement is in full
force and effect. No party to any such agreement is in default of any material
obligation thereunder and CET-SC has received no notice of the termination of
any such agreement prior to its scheduled termination date. To the best
knowledge of CET-SC and Xxxxxx, no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene, conflict with, or
result in a violation or breach of, or give CET-SC or any other person the right
to declare a default or exercise any remedy under, or to accelerate the maturity
or performance of, or to cancel, terminate, or modify, any material agreement to
which CET-SC is a party. CET-SC has not given to nor received from any other
person, any notice or other communication (whether oral or written) regarding
any actual, alleged, possible, or potential violation or breach of, or default
under, any material contract to which CET-SC is a party.
10.13 Insurance.
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(a) All insurance policies covering the Assets and the Business:
(i) are valid, outstanding, and enforceable;
(ii) to the best knowledge of CET-SC, are issued by an insurer that is
financially sound and reputable;
(iii) taken together, provide adequate insurance coverage for the
Assets for all risks normally insured against by a person carrying on the
type of business conducted by CET-SC;
(iv) are sufficient for compliance with all legal requirements and
material agreements involving the Assets; and
(v) do not provide for any retrospective premium adjustment or other
experienced-based liability on the part of CET-SC.
(b) CET-SC has paid all premiums due, and has otherwise performed all of
its obligations, under each policy to which it is a party or that provides
coverage to it.
(c) CET-SC has given notice to the insurer of all claims that may be
insured thereby.
10.14 Compliance with Laws.
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(a) CET-SC is, and at all times has been, in material compliance with each
law, rule and/or regulation ("Legal Requirement") that is or was applicable to
it or to the ownership or use of any of its assets and the Assets being
purchased hereby.
(b) No event has occurred or circumstance exists that (with or without
notice or lapse of time) (i) may constitute or result in a material violation by
CET-SC of, or a failure on the part of CET-SC to comply with, any Legal
Requirement, or (ii) may give rise to any obligation on the part of CET-SC to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature that would encumber the Assets.
Notwithstanding the foregoing, neither the South Carolina Department of
Transportation nor the federal Department of Transportation has conducted a
CET-SC safety compliance review since 1998, at which time CET-SC received a
satisfactory safety rating. CET-SC has no reason to believe that a safety audit
performed by federal or state authorities would result in anything other than a
satisfactory safety rating; though such lack of knowledge may not prevent CET-SC
from receiving an adverse safety rating.
10.15 Tax Matters. CET-SC has filed or caused to be filed (on a timely
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basis since inception) all federal, state and local tax returns that are or were
required to be filed by or with respect to CET-SC and the Assets being purchased
hereby pursuant to applicable Legal Requirements, except for the tax returns for
the year ended 2004 which are currently on extension. CET-SC has paid, or made
provision for payment, all taxes that have or may have become due regarding
CET-SC and the Assets, except for the tax returns for the year ended 2004 which
are currently on extension.
10.16 Employees. CET-SC is not a party to any collective bargaining
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arrangements or agreements covering any of the CET-SC Leased Employees nor is
CET-SC in breach of any employment contract, agreement regarding proprietary
information, non-competition agreement, non-solicitation agreement,
confidentiality agreement, or any other similar contract or restrictive
covenant, relating to the right of any CET-SC Leased Employee, officer, employee
or consultant to be employed or engaged by CET-SC. No CET-SC Leased Employee,
officer, consultant or key employee of CET-SC whose termination, either
individually or in the aggregate, would have a CET-SC Material Adverse Effect,
has terminated or, to the knowledge of CET-SC, has any present intention of
terminating his or her employment or engagement with CET-SC.
10.17 Employee Benefits. Except as set forth on the CET-SC Disclosure
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Schedule, CET-SC has not contributed to any pension, profit sharing, option or
other incentive plan or any other type of employment benefit plan or maintains,
or is or was a party to, or otherwise participates or participated in, on its
own behalf or on behalf of any former employee, any pension, profit sharing,
option or other incentive plan, or any other type of employee benefit plan.
CET-SC has no obligation to, or arrangement with, former employees for bonuses,
incentive compensation, vacation, severance pay, sick pay, sick leave, insurance
service awards, relocation, disability or other benefits whether written or
oral.
10.18 Environmental, Health, and Safety Matters.
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(a) CET-SC has complied and is in compliance with all federal and state
environmental laws, rules and regulations ("Environmental Laws") applicable to
CET-SC, the Business, Assets and the real property where the Terminal (as
defined herein) and related facilities are located.
(b) Without limiting the generality of the foregoing, CET-SC has obtained
and complied with, and is in compliance with, all permits, licenses and other
authorizations that are required pursuant to Environmental Laws for the
occupation of its facilities, the operation of its Business and the Terminal,
and the ownership of the Assets.
(c) CET-SC has not received any written or oral notice, report or other
information regarding any actual or alleged violation of Environmental Laws, or
any liabilities or potential liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or corrective
obligations, relating to its facilities, the Terminal, the Business or the
Assets arising under any Environmental Law.
(d) None of the following exists at any property or facility, including the
Terminal, owned or operated by CET-SC: (i) underground storage tanks, (ii)
asbestos-containing material in any form or condition, (iii) materials or
equipment containing polychlorinated biphenyls, or (iv) landfills, surface
impoundments, or disposal areas.
(e) CET-SC has not treated, stored, disposed of, arranged for or permitted
the disposal of, transported, handled, or released any substance, including
without limitation any hazardous substance, or owned or operated any property or
facility, including the Terminal (and no such property or facility is
contaminated by any such substance) in a manner that has given or would give
rise to liabilities, including any liability for response costs, corrective
action costs, personal injury, property damage, natural resources damages or
attorney fees, pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), the Solid Waste
Disposal Act, as amended ("SWDA") or any other Environmental Law.
(f) No facts, events or conditions relating to the past or present
facilities, properties or operations of CET-SC, including the Terminal, will
prevent hinder or limit continued compliance with CERCLA, SWDA or any other
Environmental Law, give rise to any investigatory, remedial or corrective
obligations pursuant to any Environmental Law, or give rise to any other
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise)
pursuant to any Environmental Law, including without limitation any relating to
onsite or offsite releases or threatened releases of hazardous materials,
substances or wastes, personal injury, property damage or natural resources
damage.
10.19 Certain Payments. To the best of CET-SC's and Xxxxxx' knowledge,
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neither CET-SC nor any officer, director, shareholder, agent or employee of
CET-SC, nor any other person associated with or acting for or on behalf of
CET-SC, directly or indirectly (a) made any contribution, gift, bribe, rebate,
payoff, influence payment, kickback, or other payment to any person, private or
public, regardless of form, whether in money, property, or services, (i) to
obtain favorable treatment in securing business, (ii) to pay for favorable
treatment for business secured, (iii) to obtain special concessions or for
special concessions already obtained, for or in respect of CET-SC, or (iv) in
violation of any Legal Requirement, (b) established or maintained any fund or
asset that has not been recorded in the books and records of CET-SC. CET-SC has
given Christmas and other special occasion gifts in a nominal amount to
employees of customers all in the normal course of business.
10.20 Disclosure. To the best knowledge of CET-SC and Xxxxxx, after
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reasonable inquiry, the representations, warranties and acknowledgments of
CET-SC set forth herein are true, complete and accurate in all material
respects, and do not fail to state any material fact, or omit any fact,
necessary to make such representations, warranties and acknowledgments, in light
of the circumstances under which they are made, not misleading.
11.0 Representations and Warranties of CET-DEL. Except as otherwise
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set forth in a disclosure schedule delivered by CET-DEL at the time this
Agreement is executed (the "CET-DEL Disclosure Schedule"), CET-DEL and P2S
hereby make the following representations and warranties to CET-SC, as of the
date hereof. Nothing in the CET-DEL Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty made herein,
however, unless the CET-DEL Disclosure Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable detail.
The CET-DEL Disclosure Schedule will be arranged in paragraphs corresponding to
the lettered and numbered paragraphs contained in this Agreement.
11.1 Organization and Good Standing. CET-DEL and P2S is each a
---------------------------------
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of formation, with full corporate power and authority
to own, lease and operate its business and properties and to carry on its
business in the places and in the manner as presently conducted or proposed to
be conducted. CET-DEL and P2S is each in good standing as a foreign corporation
in each jurisdiction in which the properties owned, leased or operated, or the
business conducted by it requires such qualification, except where the failure
to so qualify would not have a material adverse effect on the business of
CET-DEL and P2S, taken as a whole, or consummation of the transactions
contemplated hereby (a "CET-DEL Material Adverse Effect").
11.2 Authority and Enforcement. CET-DEL and P2S each have all
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requisite corporate power and authority to execute and deliver this Agreement,
and to consummate the transactions contemplated hereby. CET-DEL and P2S each
have taken all corporate action necessary for the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, and this
Agreement constitutes the valid and binding obligation of CET-DEL and P2S,
enforceable against each in accordance with its terms, except as may be affected
by bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought.
11.3 No Conflicts or Defaults. The execution and delivery of this
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Agreement by CET-DEL and P2S and the consummation of the transactions
contemplated hereby do not and shall not (a) contravene the Certificate or
Articles of Incorporation or Bylaws of CET-DEL or P2S or (b) with or without the
giving of notice or the passage of time (i) violate, conflict with, or result in
a material breach of, or a material default or loss of rights under, any
covenant, agreement, mortgage, indenture, lease, instrument, permit or license
to which CET-DEL or P2S is a party or by which CET-DEL or P2S is bound, or any
judgment, order or decree, or any law, rule or regulation to which CET-DEL or
P2S is subject, (ii) result in the creation of, or give any party the right to
create, any Lien upon any assets or properties of CET-DEL or P2S, (iii)
terminate or give any party the right to terminate, amend, abandon or refuse to
perform, any material agreement, arrangement or commitment relating to which
CET-DEL or P2S is a party, or (iv) result in a CET-DEL Material Adverse Effect.
11.4 Consents of Third Parties. The execution, delivery and
----------------------------
performance of this Agreement and the consummation of the transactions
contemplated hereby by CET-DEL and P2S do not require the consent of any person,
or such consent has been obtained in writing.
11.5 Actions Pending. There is no action, suit, claim, investigation
-----------------
or proceeding pending or, to the knowledge of CET-DEL or P2S, threatened against
CET-DEL or P2S which questions the validity of this Agreement or the
transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto. There is no action, suit, claim, investigation or proceeding
pending or, to the knowledge of CET-DEL or P2S, threatened against or involving
CET-DEL or P2S or any of its properties or assets. There are no outstanding
orders, judgments, injunctions, awards or decrees of any court, arbitrator or
governmental or regulatory body against CET-DEL or P2S or affecting its assets.
11.6 Status of CET-DEL. CET-DEL was recently formed, has engaged in no
------------------
business operations and was formed for the purpose of acquiring the Assets,
assuming the above-described leases, and operating the Business following the
Closing.
11.7 Disclosure. To the best knowledge of CET-DEL and P2S after
----------
reasonable inquiry, the representations, warranties and acknowledgments of
CET-DEL and P2S set forth herein are true, complete and accurate in all material
respects and do not omit any fact necessary to make such representations,
warranties and acknowledgments not misleading.
12.0 Intentionally Omitted.
----------------------
13.0 Closing; Closing Date. A closing of the transactions contemplated
---------------------
hereby (the "Closing") will take place upon the execution of this Agreement by
the Parties hereto, at the offices of CET-SC located at 000 Xxxx Xxxx Xxxx, Xxxx
Xxxxxxxx, XX 00000. The date on which the Closing is held is referred to in
this Agreement as the "Closing Date."
14.0 Documents to be Delivered at the Closing.
----------------------------------------------
14.1 Documents to be Delivered by CET-SC and or Xxxxxx. At the
---------------------------------------------------------
Closing, CET-SC shall deliver, or cause to be delivered, to CET-DEL the
following:
(a) a duly executed xxxx of sale, dated the Closing Date, transferring to
CET-DEL all of CET-SC's right, title and interest in and to the Assets together
with possession of the Assets;
(b) a duly executed assignment and assumption, transferring to CET-DEL all
of CET-SC's right, title and interest in and to the contracts, agreements,
contract rights, leases, specifically including those identified in Section 2
hereof, and intellectual property included in the Assets, accompanied by any
third party consents contemplated by Section 10.4;
(c) a copy of resolutions of the board of directors and all shareholders of
CET-SC, certified by an executive officer of CET-SC, authorizing the execution,
delivery and performance of this Agreement by CET-SC;
(d) duly executed Trailer Leases for the trailer leases identified on
Schedule 3.1 and substantially in the form of Exhibit A hereto ;
(e) a duly executed Employment Agreement substantially in the form of
Exhibit E hereto;
(f) a duly executed Commercial Lease substantially in the form of Exhibit B
hereto;
(g) a duly executed Escrow Agreement substantially in the form of Exhibit
F;
(h) payment of the funds held in escrow as identified on Schedule 9.2 and
reflected on Exhibit G;
(i) a duly executed Closing Statement attached as Exhibit G;
(j) a duly executed Fee Assumption Agreement substantially in the form of
Exhibit H; and
(k) such other certificates, documents and instruments as CET-DEL may have
reasonably requested in connection with the transaction contemplated hereby.
14.2 Documents to be Delivered by CET-DELand or P2S and or P2S
------------------------------------------------------------------
Holdings. At the Closing, CET-DEL shall deliver to CET-SC, or Xxxxxx, TPS or
SLC as otherwise described below, the following:
(a) a duly executed assignment and assumption, transferring to CET-DEL all
of CET-SC's right, title and interest in and to the contracts, agreements,
contract rights, leases, specifically including those identified in Section 2
hereof, and intellectual property included in the Assets, accompanied by any
third party consents contemplated by Section 11.4;
(b) a copy of resolutions of the board of directors of CET-DEL, P2S and P2S
Holdings, each certified by an executive officer of each company authorizing the
execution, delivery and performance of this Agreement by each company;
(c) payment satisfactory to CET-SC of the Purchase Price set per Section
1.3, as reflected on Exhibit G;
(d) duly executed Trailer Leases for the trailers identified on Schedule
3.1 and substantially in the form of Exhibit A hereto;
(e) a duly executed Commission Agreement to TPS substantially in the form
of Exhibit D, pertaining to revenues derived by CET-DEL from Amcor for hauling
freight to and from Amcor's Blythewood SC facility;
(f) a duly executed Employment Agreement to Xxxxxx substantially in the
form of Exhibit E hereto;
(g) a duly executed Commercial Lease substantially in the form of Exhibit B
hereto;
(h) a duly executed Consulting Agreement to SLC substantially in the form
of Exhibit C hereto;
(i) Letters of Credit and Deposits, identified on Schedule 9.3 and
reflected on Exhibit G, supporting obligations to be assumed by CET-DEL;
(j) a duly executed Closing Statement attached as Exhibit G;
(k) a duly executed Fee Assumption Agreement substantially in the form of
Exhibit H;
(l) a duly executed Escrow Agreement substantially in the form of Exhibit
F; and
(m) such other certificates, documents and instruments as CET-SC may have
reasonably requested in connection with the transaction contemplated hereby.
14.3 Documents to be Delivered by SLC. At the Closing, SLC shall
-------------------------------------
deliver to CET-DEL the following:
(a) a duly executed Consulting Agreement substantially in the form of
Exhibit C hereto.
14.4 Documents to be Delivered by TPS. At the Closing, TPS shall
-------------------------------------
deliver to CET-DEL the following:
(a) a duly executed Commission Agreement substantially in the form of
Exhibit D, pertaining to revenues derived by CET-DEL from Amcor for hauling
freight to and from Amcor's Blythewood SC facility.
15.0 Additional Covenants.
---------------------
15.1 Further Assurances. If, at any time after the Closing, the
-------------------
Parties shall consider or be advised that any further deeds, assignments or
assurances in law or that any other things are necessary, desirable or proper to
complete the transactions contemplated hereby in accordance with the terms of
this agreement or to vest, perfect or confirm, of record or otherwise, the title
to any property or rights of the Parties hereto, the Parties agree that their
proper officers and directors shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest, perfect or confirm title to such property or rights and
otherwise to carry out the purpose of this Agreement, and that the proper
officers and directors the Parties are fully authorized to take any and all such
action.
15.2 No Public Disclosure. Without the prior written consent of the
----------------------
other, which written consent will not be unreasonably withheld, no party to this
Agreement will, and will each cause their respective representatives not to,
make any release to the press or other public disclosure with respect to either
the fact that discussions or negotiations have taken place concerning the
transactions contemplated by this Agreement, the existence or contents of this
Agreement or any prior correspondence relating to this transactions contemplated
by this Agreement, except for such public disclosure as may be necessary, in the
written opinion of outside counsel (reasonably satisfactory to the other
Parties) for the party proposing to make the disclosure not to be in violation
of or default under any applicable law, regulation or governmental order. If
either party proposes to make any disclosure based upon such an opinion, that
party will deliver a copy of such opinion to the other party, together with the
text of the proposed disclosure, as far in advance of its disclosure as is
practicable, and will in good faith consult with and consider the suggestions of
the other party concerning the nature and scope of the information it proposes
to disclose.
16.0 Indemnification and Related Matters.
---------------------------------------
16.1 Indemnification by CET-SC. CET-SC shall hereby indemnify and hold
--------------------------
CET-DEL and P2S, and their respective officers, directors, affiliates,
successors and assigns, harmless from and against any and all damages, losses,
liabilities, obligations, costs or expenses incurred by CET-DEL or P2S and
arising out of the breach of any representation or warranty of CET-SC hereunder,
and/or CET-SC's failure to perform any covenant or obligation required to be
performed by it hereunder. All such representations, warranties, covenants and
agreements, including this indemnification, of CET-SC shall survive the
execution and delivery hereof and the Closing Date hereunder for 36 months
following the Closing.
16.2 Indemnification by CET-DEL and P2S. CET-DEL and P2S hereby
--------------------------------------
shall indemnify and hold CET-SC, and its respective officers, directors,
affiliates, successors, legal representatives and assigns, harmless from and
against any and all damages, losses, liabilities, obligations, costs or expenses
incurred by CET-SC and arising out of the breach of any representation or
warranty of CET-DEL or P2S hereunder, and/or CET-DEL's or P2S's failure to
perform any covenant or obligation required to be performed by it hereunder.
All such representations, warranties, covenants and agreements, including this
indemnification, of CET-DEL and P2S shall survive the execution and delivery
hereof and the Closing Date hereunder for 36 months following the Closing.
16.3 Procedure for Indemnification. Any party entitled to
-------------------------------
indemnification under this Section 16 (an "Indemnified Party") will give written
notice to the indemnifying party of any matters giving rise to a claim for
indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Section 16 except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
Indemnified Party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of counsel to the Indemnified Party a conflict of interest
between it and the indemnifying party may exist with respect of such action,
proceeding or claim, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. In the event that the indemnifying party
advises an Indemnified Party that it will contest such a claim for
indemnification hereunder, or fails, within 30 days of receipt of any
indemnification notice to notify, in writing, such person of its election to
defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it commences
such defense), then the Indemnified Party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and
until the indemnifying party elects in writing to assume and does so assume the
defense of any such claim, proceeding or action, the Indemnified Party's costs
and expenses arising out of the defense, settlement or compromise of any such
action, claim or proceeding shall be losses subject to indemnification
hereunder. The Indemnified Party shall cooperate fully with the indemnifying
party in connection with any settlement negotiations or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party, which
relates to such action or claim. The indemnifying party shall keep the
Indemnified Party fully apprised at all times as to the status of the defense or
any settlement negotiations with respect thereto. If the indemnifying party
elects to defend any such action or claim, then the Indemnified Party shall be
entitled to participate in such defense with counsel of its choice at its sole
cost and expense. The indemnifying party shall not be liable for any settlement
of any action, claim or proceeding affected without its prior written consent.
Notwithstanding anything in this Section 16 to the contrary, the indemnifying
party shall not, without the Indemnified Party's prior written consent, settle
or compromise any claim or consent to entry of any judgment in respect thereof
which imposes any future obligation on the Indemnified Party or which does not
include, as an unconditional term thereof, the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of
such claim. The indemnity agreements contained herein shall be in addition to
(a) any cause of action or similar rights of the Indemnified Party against the
indemnifying party or others, and (b) any liabilities the indemnifying party may
be subject to.
17.0 Miscellaneous.
-------------
17.1 Finders. Except for the commission of $100,000 CET-SC owes Xxxxx
-------
Xxxxxxx Associates, Inc. which shall be paid by CET-DEL in shares of common
stock of CET-DEL, CET-DEL and P2S, on the one hand, and CET-SC and Xxxxxx, on
the other hand, represent and warrant that they have not employed or utilized
the services of any broker or finder, and do not owe a commission, in connection
with this Agreement or the transactions contemplated by it. CET-SC and Xxxxxx
jointly and severally, shall indemnify and hold CET-DEL and P2S harmless from
and against any and all claims for brokers' commissions, except as set forth
herein, made by any party as a result of this Agreement and transaction
contemplated hereunder to the extent that any such commission was incurred, or
alleged to have been incurred, by, through or under CET-SC. CET-DEL and P2S
shall indemnify and hold CET-SC and Xxxxxx harmless from and against any and all
claims for brokers' commissions made by any party as a result of this Agreement
and transaction contemplated hereunder to the extent that any such commission
was incurred, or alleged to have been incurred, by, through or under CET-DEL or
P2S.
17.2 Expenses. Except as otherwise specifically provided in this
--------
Agreement, CET-DEL, P2S, CET-SC, TPS, SLC and Xxxxxx shall bear their own
respective expenses incurred in connection with this Agreement and in connection
with all obligations required to be performed by each of them under this
Agreement.
17.3 Spousal Consent. No consent of the spouse of Xxxxxx or the spouse
---------------
of any other person is required in order to consummate the transactions
contemplated by this Agreement.
17.4 Entire Agreement; No Waiver. This Agreement, the Schedules, the
-----------------------------
Exhibits and any instruments and agreements to be executed pursuant to this
Agreement, sets forth the entire understanding of the Parties hereto with
respect to its subject matter, merges and supersedes all prior and
contemporaneous understandings with respect to its subject matter and may not be
waived or modified, in whole or in part, except by a writing signed by each of
the Parties hereto. No waiver of any provision of this Agreement in any
instance shall be deemed to be a waiver of the same or any other provision in
any other instance. Failure of any party to enforce any provision of this
Agreement shall not be construed as a waiver of its rights under such provision.
17.5 Jurisdiction and Governing Law. This Agreement shall in all
---------------------------------
respects be governed by and construed in accordance with the laws of the State
of Florida applicable to agreements made and fully to be performed in such
state, without giving effect to conflicts of law principles.
17.6 Construction. Headings contained in this Agreement are for
------------
convenience only and shall not be used in the interpretation of this Agreement.
References herein to Articles, Sections and Exhibits are to the articles,
sections and exhibits, respectively, of this Agreement. The CET-SC Disclosure
Schedule is hereby incorporated herein by reference and made a part of this
Agreement. As used herein, the singular includes the plural, and the masculine,
feminine and neuter gender each includes the others where the context so
indicates.
17.7 Notices. All notices and other communications under this
-------
Agreement shall be in writing and shall be deemed given when delivered
personally (including by confirmed legible telecopier transmission) or mailed by
certified mail, return receipt requested, or by overnight mail properly
receipted to the Parties at the following addresses (or to such address as a
party may have specified by notice given to the other party pursuant to this
provision):
If to CET-SC, SLC, TPS or Xxxxxx:
W. A Xxxxxx
Commodity Express Transportation, Inc.
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone No.:(000) 000-0000
Telecopy No.: (000) 000-0000
If to CET-DEL, P2S Holdings or P2S, to:
Commodity Express Transportation, Inc.
c/o Power2Ship, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
17.8 Severability. In the event that any provision hereof would, under
------------
applicable law, be invalid or enforceable in any respect, such provision shall
be construed by modifying or limiting it so as to be valid and enforceable to
the maximum extent compatible with, and permissible under, applicable law. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
17.9 Binding Effect; Assignment. This Agreement shall be binding upon
---------------------------
and inure to the benefit of the Parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any person or entity not a party to
this Agreement. No assignment of this Agreement or of any rights or obligation
hereunder may be made by either party (by operation of law or otherwise) without
the prior written consent of the other and any attempted assignment without the
required consent shall be void.
17.10 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be an original, but which together shall constitute one and
the same Agreement.
COMMODITY EXPRESS TRANSPORTATION,
INC. - DEL
By: /s/ Xxxxxxx Xxxxx
-----------------------
Xxxxxxx Xxxxx, Chief
Executive Officer
POWER2SHIP, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------------
Xxxxxxx Xxxxx, Chief
Executive Officer
POWER2SHIP HOLDINGS, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------------
Xxxxxxx Xxxxx, Chief
Executive Officer
COMMODITY EXPRESS TRANSPORTATION,
INC. - SC
By: /s/ W.A. Xxxxxx
-----------------------
W. A. Xxxxxx, President
XXXXXX LOGISTICS CONSULTING, LLC
By: W.A. Xxxxxx
-----------------------
W. A. Xxxxxx, Principal
TPS LOGISTICS, INC.
By: W.A. Xxxxxx
-----------------------
W. A. Xxxxxx, Vice President
W. A. XXXXXX
W.A. Xxxxxx
-----------------------
W. A. Xxxxxx
List of Schedules
Schedule 1.1 List all Assets, including equipment, accessories,
contracts, purchase orders, customer lists, permits, etc.
Schedule 1.2 List of Assumed Liabilities
Schedule 2(a) All CET-SC tractor leases being assumed
Schedule 2(b) All CET-SC trailer leases being assumed
Schedule 2(d) All CET-SC owner/operator leases being assumed
Schedule 3.1 The CET-SC trailers being leased to CET-DEL.
Schedule 9.1 List of leased employees of CET-SC including their
positions and salaries
Schedule 9.2 Funds held in escrow and being transferred to CET-DEL
Schedule 9.3 Letters of Credit/Deposits
CET-SC Disclosure Schedule
List of Exhibits
Exhibit A Trailer lease
Exhibit B Commercial Lease
Exhibit C Consulting Agreement
Exhibit D Commission Agreement (Amcor/Blythewood)
Exhibit E Employment Agreement
Exhibit F Escrow Agreement
Exhibit G Closing Statement
Exhibit H Assumption Fee Agreement
SCHEDULE 1.1
SCHEDULE 1.2
1. Commission/liability to Xxxxxxx Associates in the amount of $100,000, as
reflected on Exhibit H.
