KENAN TRANSPORT COMPANY EXHIBIT 2
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into
as of this 31st day of October, 1997, by and between Transport South,
Inc., a Georgia corporation ("Seller"), and Kenan Transport Company, a
North Carolina corporation ("Purchaser"), with reference to the following
circumstances:
A .Purchaser desires to purchase from Seller and Seller desires
to sell to Purchaser certain of Seller's assets;
B. Purchaser and Seller desire to effect such acquisition upon
the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
the parties hereby agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.01 AGREEMENT TO SELL AND PURCHASE. Seller will sell,
assign and deliver to Purchaser, and Purchaser will purchase, assume
and accept, at the Closing hereunder, the following assets, rights
and obligations of Seller (collectively referred to hereinafter as
the "Assets" or the "Purchased Assets"): (i) the assets referred to
in Schedule 1.01A (the "Personal Property"), (ii) the goodwill
related to Seller's common carrier business (the "Goodwill") and the
customer lists referred to in Schedule 1.01B (the "Customer Lists"),
(iii) all rights and obligations of Seller in and under the leases,
contracts and other agreements referred to in Schedule 1.01C (the
"Assumed Contracts"), including the property which is the subject of
such leases and agreements and any improvements thereto, subject to
the applicable Assumed Contract (the "Leased Property"), (iv) the
real property referred to in Schedule 1.01D (the "Real Property")
and (v) the automated dispatch system described on Schedule 1.01E
(the "Automated Dispatch System"). The Purchased Assets shall be
conveyed to Purchaser free and clear of all liabilities,
obligations, liens and encumbrances excepting only those liabilities
and obligations referred to in Schedule 1.01C.
1.02 XXXXXXX MONEY. Purchaser shall deliver to Seller, within
seven (7) days after the execution of this Agreement by both
parties, the sum of $100,000 as xxxxxxx money (the "Xxxxxxx Money").
At Closing, the Xxxxxxx Money shall be applied as part
payment of the purchase price. In the event the sale is not
consummated in accordance with the terms and conditions of this
Agreement due solely to Purchaser's default, Seller shall be
entitled to retain the Xxxxxxx Money; otherwise the Xxxxxxx Money
shall be returned to Purchaser upon request. In addition, a
nondefaulting party may seek specific performance of the obligations
and covenants set forth herein against a defaulting party.
1.03 PURCHASE PRICE; PAYMENT OF PURCHASE PRICE; ALLOCATION OF
PURCHASE PRICE. In consideration of the sale, assignment and
delivery of the Assets by Seller to Purchaser, Purchaser will pay to
Seller a total purchase price of eleven million dollars
($11,000,000), payable as follows:
(a) By application of the Xxxxxxx Money at Closing;
and
(b) By wire transfer on or before Closing of ten
million nine hundred thousand dollars ($10,900,000) to bank
accounts of Seller as per written instructions of Seller
given to Purchaser at least twenty-four (24) hours prior to
the Closing.
The purchase price shall be allocated among the Purchased Assets in
accordance with Schedule 1.03, and that allocation shall be binding
upon Purchaser and Seller for all purposes (including financial
accounting purposes, financial and regulatory reporting purposes and
tax purposes). Purchaser and Seller shall each file tax returns
consistently with the foregoing and in accordance with Section 1060
of the Internal Revenue Code.
1.04 LIABILITIES NOT ASSUMED. Purchaser does not assume and
shall not in any fashion be responsible or liable for any
obligations or liabilities of Seller except liabilities and
obligations arising under the Assumed Contracts, or incurred by
Purchaser thereunder, with respect to the period after midnight on
the Closing Date (the "Assumed Contract Liabilities").
1.05 RETAINED ASSETS. Notwithstanding the foregoing, the
Assets shall not include and Seller shall retain all right, title
and interest in and to all assets not specifically conveyed herein,
including but not limited to (i) any and all intangible assets other
than the Goodwill and those assets expressly set forth in the
Schedules to this Agreement; (ii) all contracts of insurance under
which Seller is an insured and any reserves accumulated thereunder;
(iii) all books and records relating to the business of Seller; and
(iv) all accounts receivable, notes receivable, cash, cash
equivalents, utility deposits, prepaid charges or security deposits
of any type in the name of or owned by Seller. It is understood and
agreed that Purchaser shall not acquire any of Seller's accounts
receivable and all such accounts receivable which are outstanding
and/or have been generated but not yet billed, as of the Closing
Date shall remain the property of Seller. Any monies received by
Seller after the Closing generated by operations of Purchaser after
midnight of the Closing Date shall be transmitted to Purchaser
without
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delay. Any monies that may be received by Purchaser after Closing
generated by Seller prior to midnight of the Closing Date, or
otherwise intended for Seller and not sold hereunder, shall be
transmitted to Seller without delay. Seller shall be responsible
for all liabilities and obligations arising under the Assumed
Contracts, or incurred by Seller thereunder, with respect to the
period prior to midnight on the Closing Date and, accordingly, all
liabilities and obligations under the Assumed Contracts shall be
prorated and adjusted as of the Closing Date.
1.06 SOFTWARE
(a) Seller shall transfer its rights to the software listed
on Schedule 1.01A, part 5 by an assignment of the software licenses
associated therewith (the "Software Licenses").
(b) The Automated Dispatch system described in Schedule
1.01E has been developed by employees of Racetrac Petroleum, Inc.
("Racetrac") and Seller. Seller shall transfer the right to use the
Automated Dispatch System by granting Purchaser a nonexclusive
license to use such system. Racetrac and Seller shall retain the
right to use the Automated Dispatch System. Neither Racetrac nor
Seller makes or shall make any representation or warranty, express
or implied, of any kind or nature whatsoever, with respect to the
Automated Dispatch System, and without limitation specifically
disclaims and excludes any warranty of merchantability, or fitness
for a particular purpose or copyright or lack of infringement.
There are no written instructions or manuals nor any telephone or
other support available with respect to the Automated Dispatch
System. Seller will provide Purchaser with the source code of the
Automated Dispatch System on disk and loaded on computers in the
dispatch terminals. If neither Xxxx Xxxxxx nor Xxxxx Xxxxxxxxxxxx
remain employed with Purchaser for at least ninety (90) days after
the Closing, then Seller will provide Purchaser, at no cost to
Purchaser, up to three (3) days of consultation with respect to the
Automated Dispatch System, such consultation to take place in
Atlanta, Georgia, or by telephone.
(c) The Automated Dispatch System is a software application
which must coexist with the software programs listed on Schedule
1.06 part 1 and part 2. The software programs listed on Schedule
1.06 part 1 are included in the Personal Property on Schedule 1.01A
part 5. The software listed on Schedule 1.06 part 2 cannot be
transferred by Seller to Purchaser, and Purchaser shall be
responsible for the acquisition of such software.
(d) Seller will allow Purchaser's employees to use the
accounting system software on Purchaser's hardware for up to six
months after Closing, if requested by Purchaser.
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2. CLOSING; CLOSING DATE.
2.01 CLOSING. Provided that all terms and conditions hereof
required to be satisfied, or satisfaction thereof have been waived
by the party entitled to require satisfaction thereof, the closing
of the transactions contemplated hereby ("Closing") shall take place
on a date and at a place to be determined by the parties, not later
than November 28, 1997. The date of the Closing is referred to
herein as the "Closing Date". The "Closing" shall mean the
deliveries to be made by Purchaser and Seller on the Closing Date in
accordance with the provisions of this Agreement. The Closing and
all transactions contemplated hereunder shall be effective at
midnight on the Closing Date.
2.02 DELIVERIES OF PURCHASER AT CLOSING. At the Closing,
Purchaser will deliver or cause to be delivered, all duly and
properly executed, where appropriate:
(i) A sum equal to the purchase price paid as provided
in Section 1.03(b);
(ii) Assignment and Assumption Agreement(s) with
respect to the Assumed Contracts substantially in the form
attached hereto as EXHIBIT "A";
(iii) A Transportation Agreement with Racetrac
Petroleum, Inc. in the form attached hereto as EXHIBIT "C";
and
(iv) All other items required to be delivered hereunder
or as may be requested by Seller which are necessary or would
reasonably facilitate consummation of the transactions
contemplated hereby.
2.03 DELIVERIES OF SELLER AT CLOSING. At the Closing, Seller
will deliver or cause to be delivered to Purchaser, all properly and
duly executed, where appropriate:
(i) A Xxxx of Sale with respect to the Personal
Property substantially in the form attached hereto as EXHIBIT
"B";
(ii) Limited warranty deeds with respect to the Real
Property;
(iii) Assignment and Assumption Agreement(s) with
respect to the Assumed Contracts substantially in the form
attached hereto as EXHIBIT "A";
(iv) Certificates of title with respect to those Assets
for which title is evidenced by same;
(v) The Customer Lists;
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(vi) A Transportation Agreement with Racetrac
Petroleum, Inc. in the form attached hereto as EXHIBIT "C";
(vii) An Assignment of the Software Licenses in a form
reasonably acceptable to Purchaser and Seller;
(viii) A license with respect to the Automated Dispatch
System in a form reasonably acceptable to Purchaser and Seller
and meeting the requirements of Section 1.06, above; and
(ix) All other items required to be delivered hereunder
or as may be requested by Purchaser which are necessary or
would reasonably facilitate consummation of the transactions
contemplated hereby.
2.04 CONCURRENT CONDITIONS. The performance or tender of
performance of all matters applicable to a party under this
Agreement shall be deemed concurrent conditions and no party shall
be required to perform, or tender performance of, the obligations of
such party hereunder unless, coincident therewith, each other party
from whom performance is required under this Agreement performs or
tenders performance of its obligations hereunder.
2.05 EXPENSES; PRORATION. Whether or not the transactions
described in this Agreement are consummated, each of the parties
hereto shall pay its own expenses and costs incurred or to be
incurred in negotiating, closing and carrying out this Agreement and
in consummating the transactions described herein. Notwithstanding
the foregoing, Purchaser shall be responsible for the payment of the
costs of all transfer, documentary or sales taxes, and all other
expenses incident to the transfer of the Assets, including the
recordation of deeds and instruments of transfer and the costs of
all title examinations, title insurance premiums and lien searches,
if any. All real estate taxes, ad valorem taxes, personal property
and other taxes, fees, licenses and other charges attributable to
the ownership or use of the Assets shall be prorated as of the
Closing Date. If the actual amount of taxes is not known on the
Closing Date, the same shall be prorated on the basis of the amount
of taxes payable in 1996 and shall be adjusted between the parties
when the actual amount of taxes payable in 1997 is known to
Purchaser and Seller. Charges for utility services to each
respective Real Property or Leased Property, including water, sewer,
trash pickup, electric, gas and telephone, shall be prorated as of
the Closing Date outside of the Closing. Utility deposits, security
deposits and prepaid rent shall be credited to Seller at Closing.
Seller may contact all utility companies serving the Real Property
or Leased Property and request that service be discontinued or
placed in the name of Purchaser as of the Closing Date, and
Purchaser shall be responsible for payment for all bills for such
utilities based on usage from and after the Closing Date.
2.06 SALES AND PAYROLL ALLOCATION. Sales and accounts
receivable generated after midnight of the Closing Date, as
determined by the loading manifest time, shall
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belong to Purchaser. Driver payroll generated after midnight of the
Closing Date, as determined by the loading manifest time, shall be
the responsibility of Purchaser.
2.07 CONSENTS AND WAIVERS. Seller and Purchaser will co-
operate to obtain the consent, waiver or approval of any other party
which may be required with respect to the assignment and assumption
of any Assumed Contract. Closing may be extended by either party if
additional time is necessary to obtain any such consent, waiver or
approval which is not waived by Purchaser.
3. REPRESENTATION AND WARRANTIES BY SELLER. Seller represents
and warrants to Purchaser as follows:
3.01 ORGANIZATION, STANDING AND QUALIFICATION. Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Georgia. Seller has all requisite
corporate power and authority and is entitled to carry on its
business as now being conducted and to own, lease or operate its
properties as and in the places where such business is now
conducted; and it is duly qualified and in good standing as a
foreign corporation authorized to do business in those states listed
on Schedule 3.01, which are all of the states where the nature of
the activities conducted by it or the character of the properties
owned, leased or operated by it require such qualification,
licensing or domestication.
3.02 AUTHORIZATION AND APPROVAL. All corporate proceedings
or corporate action required to be taken by Seller relating to the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been taken at or prior
to the Closing.
3.03 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT,
AUTHORITY. Neither the execution, delivery nor performance of this
Agreement by Seller will, with or without the giving of notice or
the passage of time, or both, conflict with, result in a default,
right to accelerate or loss of rights under, or result in the
creation of any lien, charge or encumbrance pursuant to, any
provision of Seller's Certificate of Incorporation or Bylaws or any
mortgage, deed of trust, lease, license, agreement, understanding,
law, rule or regulation or any order, judgment or decree to which
Seller is a party or by which it may be bound or affected. Seller
has full power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby, and this Agreement
constitutes a valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
3.04 CONSENTS. By their express terms, the Assumed Contracts
may require the consent or approval of a third person in connection
with the assignment and assumption thereof. There are no other
consents, permits, authorizations and approvals required in
connection with the performance of Seller's obligations under this
Agreement.
3.05 ASSUMED CONTRACTS. Schedule 1.01C sets forth all of the
Assumed Contracts. There have been delivered to the Purchaser true
and complete copies of all of
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the Assumed Contracts (and all amendments, waivers or other
modifications thereto). All of such Assumed Contracts are valid,
subsisting, in full force and effect, binding upon the Seller, and
to the best knowledge of the Seller, binding upon the other parties
thereto in accordance with their terms, and the Seller is not in
material default under any of them, nor, to the best knowledge of
the Seller, is any other party to any such contract or other
agreement in default thereunder, nor does any condition exist that
with notice or lapse of time or both would constitute a default
thereunder.
3.06 TITLE OF ASSETS; LIENS. The Seller owns outright and
has good and marketable title to the Personal Property, the
Goodwill, the Customer Lists and the Real Property (the "Owned
Assets"), free and clear of any deed of trust, mortgage, security
interest, claim, lien (including any tax lien) or other encumbrance,
except for liens or other encumbrances securing AD VALOREM taxes for
the current year or the claims of materialmen, carriers, landlords
and like persons, all of which are not yet due and payable, and
except for the liens and other encumbrances listed in Schedule
1.01C. Upon delivery of and payment for the Owned Assets as herein
provided, the Purchaser will acquire all of the Seller's right,
title and interest thereto, free and clear of any claim, lien or
other encumbrance.
3.07 FINANCIAL STATEMENTS.
(a) Seller has heretofore delivered to Purchaser copies of
its audited financial statements for the years ended December 31,
1996 and December 31, 1995, together with the report of Xxxxx
Xxxxxxxx thereon (hereinafter referred to as the "Financial
Statements"). The Financial Statements contain the balance sheets
of the Seller at such dates and the related statements of income and
retained earnings. The Financial Statements, together with the
notes thereto, present fairly the financial position of the Seller
and the results of its operations for the years then ended, in
conformity with generally accepted accounting principles applied on
a consistent basis.
(b) The Interim Financial Statements of the Seller for the
nine months ended September 30, 1997, which will be delivered to the
Purchaser prior to the Closing, will present fairly the financial
position of the Seller as of September 30, 1997 and the results of
its operations for the nine months then ended in conformity with
generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the Financial
Statements.
3.08 BROKERAGE. Other than The Xxxxxxxx-Xxxxxxxx Group, Inc.
(to which Purchaser has no liability or obligation of any kind
whatsoever), no broker, finder, agent or similar intermediary has
acted on behalf of the Seller in connection with this Agreement or
the transactions contemplated hereby, and there are no brokerage
commissions, finders fees or similar fees or commissions payable in
connection therewith based on any agreement, arrangement or
understanding with the Seller, or any action taken by it.
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3.09 ABSENCE OF CERTAIN CHANGES. Since July 31, 1997, there
has not been:
(a) any material net loss of customers or any other
material net adverse change in the Seller's relationships with
its customers; or
(b) any other material adverse change in the business
or prospects of the Seller, other than economic or regulatory
changes generally known throughout the Seller's industry as a
whole and not unique to the Seller's business.
3.10 COMPLIANCE WITH LAW. Seller has conducted its business
so as to comply with, and is in compliance in all material respects
with, all laws, statutes, regulations, rules and other requirements
of any governmental authority applicable to it.
3.11 ENVIRONMENTAL MATTERS. The use, maintenance, operation
and condition of the Real Property and the Leased Property are
presently, and at all times have been, in compliance with all laws
relating to pollution, waste disposal or the protection,
preservation or restoration of the environment.
3.12 CONDITION OF PERSONAL PROPERTY. The Personal Property
and those items of Leased Property constituting personal property
are in good operating condition, order and repair, ordinary wear and
tear excepted.
3.13 CUSTOMER LISTS. The customers listed on the Customer
Lists are all current customers of Seller, and Seller does not know
or have any reason to believe that any such customer will not do
business with the Purchaser after the Closing or that there will be
any material net decrease in the volume or revenue of the business
of any such customer with the Purchaser after the Closing from the
volume or revenue of its business with Seller before the Closing.
4. REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser
represents and warrants to Seller as follows:
4.01 ORGANIZATION, STANDING AND QUALIFICATION. Purchaser is
a corporation duly organized, validly existing and in good standing
under the laws of the State of North Carolina. Purchaser has all
requisite corporate power and authority and is entitled to carry on
its business as now being conducted and to own, lease or operate its
properties as and in the places where such business is now
conducted; and it is duly qualified and in good standing as a
foreign corporation authorized to do business in all states where
the nature of the activities conducted by it or the character of the
properties owned, leased or operated by it require such
qualification, licensing or domestication.
4.02 AUTHORIZATION AND APPROVAL OF AGREEMENT. Subject to the
approval of this Agreement by Purchaser's Board of Directors, all
corporate proceedings or corporate action required to be taken by
Purchaser relating to the execution and delivery of this
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Agreement and the consummation of the transactions contemplated
hereby shall have been taken at or prior to the Closing.
4.03 EXECUTION, DELIVERY AND PERFORMANCE OF AGREEMENT.
Neither the execution, delivery nor performance of this Agreement by
Purchaser will, with or without the giving of notice or the passage
of time, or both, conflict with, result in a default, right to
accelerate or loss of rights under, or result in the creation of any
lien, charge or encumbrance pursuant to, any provision of
Purchaser's Certificate of Incorporation or Bylaws or any mortgage,
deed of trust, lease, license, agreement, understanding, law,
ordinance, rule or regulation or any order, judgment or decree to
which Purchaser is a party or by which it may be bound or affected.
Purchaser has the full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and
this Agreement constitutes a valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its
terms.
5. COVENANTS OF SELLER PENDING CLOSING.
5.01 CO-OPERATION. Prior to the Closing, Seller will
cooperate with Purchaser and use reasonable efforts to assist
Purchaser in obtaining the consent of any other party to any Assumed
Contracts where the consent of such other party may be required by
reason of the transactions contemplated hereby.
5.02 ACCESS TO INFORMATION AND DOCUMENTS. Upon reasonable
notice and during regular business hours, Seller will give Purchaser
and Purchaser's attorneys, accountants and other representatives
full access to Seller's personnel and all properties, documents,
contracts, books and records of Seller. No investigation by the
Purchaser shall diminish or obviate any of the representations,
warranties, covenants or agreements of the Seller.
5.03 NOTICE OF CHANGE; SUBSEQUENT AMENDMENT OF DISCLOSURE
SCHEDULES. Seller shall give Purchaser prompt written notice of any
change in any of the information contained in the representations
and warranties made in this Agreement or the Schedules referred to
herein which occurs prior to the Closing.
5.04 CONDUCT OF BUSINESS PRIOR TO CLOSING. During the period
from the date hereof to the Closing Date, Seller will conduct its
business only in the ordinary course, will use reasonable efforts to
keep its workforce in place for the purposes of maintaining a level
of service consistent with the Seller's past practice and preserving
the Seller's customer base and the goodwill associated with the
Purchased Assets, and will perform and comply in all material
respects with the terms of the Assumed Contracts.
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6. ADDITIONAL COMMITMENTS, COVENANTS, AGREEMENTS AND ARRANGEMENTS
BETWEEN PARTIES.
6.01 BULK SALES COMPLIANCE. Purchaser hereby waives
compliance by Seller with the provisions of the Bulk Sales Law of
any state, and Seller warrants and agrees to pay and discharge when
due all claims of creditors which could be asserted against
Purchaser by reason of such non-compliance to the extent that such
liabilities are not specifically assumed by Purchaser under this
Agreement. Seller hereby indemnifies and agrees to hold Purchaser
harmless from, against and in respect of (and shall on demand
reimburse Purchaser for) any loss, liability, cost or expense,
including, without limitation, attorneys' fees, suffered or incurred
by Purchaser by reason of the failure of Seller to pay or discharge
such claims.
6.02 EMPLOYEE MATTERS. Seller intends to retain the
employees set forth on Schedule 6.02 (the "Retained Employees") for
the continuation of its retained business interests. Seller intends
to terminate all other employees as of the Closing Date. Prior to
Closing, Seller shall provide Purchaser reasonable opportunity to
interview, test and evaluate employees of Seller other than the
Retained Employees to determine which employees it wishes to hire.
Purchaser shall notify Seller at least 48 hours prior to Closing of
which employees of Seller (other than the Retained Employees) that
it does not intend to hire. Seller will be responsible for all
accrued pay and benefits as of midnight of the Closing Date under
any employee benefit plan or arrangement and for the payment of any
severance or other termination-related obligations to employees
terminated by Seller as may be required by applicable law or
otherwise. All offers of employment by the Purchaser will be for
employment on an at-will basis.
6.03 NO PENDING LITIGATION REGARDING AGREEMENT. Neither
Purchaser nor Seller shall be obligated to consummate the
transactions contemplated herein, if on the Closing Date, any action
or proceeding shall have been threatened or commenced against Seller
or Purchaser by a third party seeking to restrain or prohibit the
performance of, or to obtain damages or other relief in conjunction
with, this Agreement or any of the transactions contemplated hereby.
6.04 ACKNOWLEDGMENTS. Purchaser hereby represents and
acknowledges that: Purchaser is familiar with the business in which
Seller is engaged, is fully aware of the problems and risks involved
in engaging in such business, and based on its knowledge and
experience in financial and business matters, is capable of
evaluating the merits and risks of the purchase contemplated
hereunder; Purchaser's decision to purchase the Assets is based
solely on its own investigation, and Purchaser is not relying on any
representation, warranty or information provided by Seller except as
expressly set forth in this Agreement; Purchaser has been given
ample time and opportunity to consult with advisors of Purchaser's
own choosing about the potential benefits and risks of entering into
this Agreement; No one is authorized on behalf of Seller to make any
representations regarding this Agreement or the business of Seller
other than as expressly set forth in this Agreement, and if any such
representations have been made, Purchaser may not rely on such
representations, but must look solely to the terms of this
Agreement.
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6.05 USE OF NAME/TRANSITION. Seller will cooperate with
Purchaser with respect to the transition of business operations from
Seller to Purchaser. Effective upon Closing and for a period of one
hundred eighty (180) days thereafter, Seller hereby grants to
Purchaser the right and license to use the name "Transport South"
and "Transport South, Inc." and any applicable operating authority
or vehicle registration of Seller in connection with the operation
of the trailers and tractors to be conveyed hereunder. At all times
while Purchaser may use such names, authority or registration,
Purchaser shall maintain in full force and effect, comprehensive
general liability, auto and workers' compensation insurance covering
liability for bodily injury, including death, and property damage
with combined single limits of at least $10,000,000 per occurrence.
Such insurance shall list Seller as an additional insured, shall
contain a waiver of the insurer's right of subrogation against
Seller, and shall provide that the policy cannot be canceled as to
Seller, nor shall a material change in coverage be effective, except
after the insurer gives thirty (30) days' written notice to Seller.
Purchaser shall provide a certificate of insurance evidencing same
to Seller including such 30-day notice, at Closing. Seller retains
the right to use the name "Transport South" and "Transport South,
Inc."
6.06 TRADEMARK/SIGN USAGE. Subject to the rights of
Purchaser under Section 6.05 above, Seller shall have the right to
de-image and/or remove from each of the Assets, before or after the
Closing, any personal property or signage on which Seller's name or
logo appears. Purchaser hereby agrees not to use any trademarks,
trade names, logos, emblems or other forms of identification in any
way associated with Seller or Seller's business, except as permitted
by Section 6.05 above.
6.07 RISK OF LOSS. The risk of loss or damage to the Assets
shall be borne by Seller through and including the Closing Date.
Upon the occurrence of any loss or damage to any of the Assets,
Seller shall notify Purchaser of such damage in writing within three
(3) business days and stating with particularity the extent of such
damage, and the purchase price of the Assets shall be adjusted by
mutual agreement of the parties, which agreement shall not be
unreasonably withheld. If the parties cannot agree with respect to
such adjustment, the amount of the adjustment shall be equal to the
estimated cost to repair or replace the damaged or lost Asset, not
to exceed the fair market value of such Asset based upon the
wholesale blue book value or other available wholesale broker
information.
6.08 POST CLOSING SERVICES. Upon request from time to time
for a period of one hundred eighty (180) days after Closing,
Purchaser shall, free of charge, a) provide Seller with such
services as may be reasonably requested by Seller in connection with
the wind-up of that portion of Seller's business which was related
to the Assets, and b) cause its employees to assist Seller in the
investigation, defense or resolution of any ongoing matters in which
such employee was involved or may have knowledge, including without
limitation, resolution of workers' compensation, litigation,
unemployment and tax issues.
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6.09 ONGOING BUSINESS/NONCOMPETE.
(a) Purchaser acknowledges that Seller intends to
continue in business following the Closing and will retain all
assets and employees related to services performed exclusively for
Racetrac Petroleum, Inc. ("Racetrac") and its affiliates. As used
herein, "affiliate" shall mean any entity now or hereafter
controlled by, under the control of, or under common control with
Racetrac or any of its shareholders.
(b) For a period of five (5) years from and after the
Closing Date, neither Seller, Racetrac nor any of their affiliates
shall, directly or indirectly within the market where Seller is
currently operating or within any other market, own, manage,
operate, control, participate in or be engaged in any business that
transports gasoline, diesel or aviation fuels, in bulk or in fuel
tanks, in competition with the business of Purchaser. The
provisions of this Section 6.09(b) shall not apply to services
performed exclusively for Racetrac or its affiliates.
(c) Seller and Racetrac acknowledge that the covenants
contained in Section 6.09(b) are reasonable and necessary for the
protection of the interests of Purchaser in the Assets being
purchased pursuant to this Agreement and that any violation thereof
shall give rise to irreparable injury to Purchaser inadequately
compensable in damages. Accordingly, in addition to other remedies
provided by law or equity upon any breach by Seller or Racetrac or
any of their affiliates of the covenants contained in Section
6.09(b), Purchaser shall be entitled to have a court of competent
jurisdiction enter injunctive relief prohibiting any further breach
of the covenants contained therein, and neither Seller, Racetrac nor
any of their affiliates shall assert in any such action that
Purchaser has an adequate remedy at law.
6.10 FURTHER ASSURANCES. Each of the parties shall execute
such documents, further instruments of transfer and assignment and
other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the
transactions contemplated hereby.
6.11 PUBLIC ANNOUNCEMENTS. Any press release or other
information to the press or any third party with respect to this
Agreement or the transactions contemplated hereby shall require the
prior approval of the Purchaser and the Seller, which approval shall
not be unreasonably withheld, provided that a party shall not be
prevented from making such disclosure as it shall be advised by
counsel is required by law. Seller acknowledges that information
with respect to this Agreement and the negotiations of the parties
with respect hereto may constitute "material inside information" for
the purpose of federal and state securities laws.
6.12 PURCHASER'S ACCESS. After the Closing, Purchaser shall
have access, at reasonable times and on reasonable notice, to all of
Seller's books and records pertaining to the Purchased Assets and
Seller's business prior to the Closing.
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6.13 ENVIRONMENTAL AUDITS. Seller will provide Purchaser and
its representatives such access to the Leased Property and the Real
Property as Purchaser may reasonably request from time to time for
the purpose of having performed Phase I environmental audits. In
the event that the Purchaser determines, in its sole discretion,
that the audit report with respect to any Leased Property is
unacceptable, then Purchaser may elect not to assume the lease or
contract covering that Leased Property. In the event that Purchaser
determines, in its sole discretion, that the audit report with
respect to any Real Property is unacceptable, then Purchaser may
elect not to purchase that Real Property and the purchase price for
the Assets will be reduced by the fair market value of that Real
Property.
7. CONDITIONS TO PURCHASER'S PERFORMANCE. The obligation of the
Purchaser to consummate the transactions provided for herein is subject to
the fulfillment of the following conditions, any one or more of which may
be waived by Purchaser:
7.01 REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Seller contained in this
Agreement shall be true on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date. The
Seller shall have performed and complied with all covenants and
agreements required by this Agreement to be performed or complied
with by the Seller on or prior to the Closing Date. Seller shall
have delivered to the Purchaser a certificate, dated the Closing
Date and signed by an officer of the Seller on behalf of the Seller
to the foregoing effect and stating that to the knowledge of such
officer all conditions to the Purchaser's obligations hereunder have
been satisfied.
7.02 THIRD PARTY CONSENTS. Except to the extent waived by
Purchaser in writing, the Purchaser shall have received (a)
evidence of the receipt of all authorizations, consents and permits
of others required to permit the consummation of the transactions
contemplated by this Agreement, including without limitation the
consents referenced in Section 3.04, or (b) with respect to any
Assumed Contract for which Seller and Purchaser are unable to obtain
the required consent, waiver or approval of a third party, any one
of the following in lieu of the assignment and assumption of such
Assumed Contract:
(i) a sublease of, or a similar transfer of
rights and obligations under, such Assumed Contract
where Seller remains primarily liable thereunder,
provided such sublease or similar transfer does not
require the consent, waiver or approval of any third
party, or
(ii) an assignment and assumption of a substitute
lease, contract or agreement for which all consents,
waivers and approvals have been obtained and which
provides Purchaser with rights and obligations of equal
value as the rights and obligations which Purchaser
would have realized under the Assumed Contract.
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7.03 LITIGATION. No action, suit or proceeding shall have
been instituted before any court or governmental or regulatory body,
or instituted or threatened by any governmental or regulatory body,
that has or may have, in the reasonable opinion of the Purchaser, a
materially adverse effect on the Purchased Assets.
7.04 DELIVERY OF INSTRUMENTS OF TRANSFER AND OTHER DOCUMENTS.
Seller shall have delivered or caused to be delivered to the
Purchaser the instruments of transfer and other documents described
in Section 2.03 above.
7.05 CONSENTS. Seller and Xxxxx Xxxxxxxx shall have
delivered to Purchaser such consents as Purchaser may reasonably
request with respect to the inclusion of the Financial Statements
and the Interim Financial Statements (as defined in Section 3.07
above) in reports required to be filed by Purchaser with the
Securities and Exchange Commission. Any and all costs associated
with an SEC filing, including costs or expenses of Xxxxx Xxxxxxxx,
shall be paid by Purchaser.
7B. NOTICE AND CURE. If Purchaser is not obligated to consummate
the transactions provided for herein due to the occurrence of any default
by Seller hereunder or failure of the fulfillment of any condition set
forth in Section 7 above, then Purchaser shall provide Seller with written
notice thereof, and Seller shall have the opportunity to cure such default
or fulfill such condition and the Closing shall be extended until such
time as Seller has cured such default or fulfilled such obligation, but in
no event later than thirty (30) days after the date on which the Closing
would otherwise have been held.
8. INDEMNIFICATION.
8.01 SURVIVAL. Notwithstanding any right of any party to
investigate fully the affairs of the other party and notwithstanding
any knowledge of facts determined or determinable by such party
pursuant to such investigation or right of investigation, each party
has the right to rely fully upon the representations, warranties,
covenants and agreements of each other party in this Agreement or in
any Schedule, certificate or financial statement delivered by any
party pursuant hereto. All such representations, warranties,
covenants and agreements shall survive the execution and delivery
hereof and the Closing hereunder and be indemnified in accordance
with this Section 8.
8.02 CLAIMS. As used in this Section 8, (i) "CLAIM" means
any Purchaser Claim or Seller Claim, (ii) "PURCHASER CLAIM" means a
claim based upon, arising out of or otherwise in respect of (a) any
inaccuracy in or any breach of any representation, warranty,
covenant or agreement of the Seller contained in this Agreement or
any other agreement delivered by Seller at the Closing or (b) any
liability or obligation of Seller of any kind whatsoever (other than
the Assumed Contract Liabilities) and (iii) "SELLER CLAIM" means a
claim based upon, arising out of or otherwise in respect of (a) any
inaccuracy in or any breach of any representation, warranty,
covenant or agreement of the Purchaser contained in this Agreement
or any other agreement delivered by Purchaser at the Closing, (b)
any liability or obligation or Purchaser of any kind whatsoever
(including the Assumed Contract Liabilities), or (c) any use by
Purchaser of the name "Transport
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South" or "Transport South, Inc." after the Closing in accordance
with Section 6.05 above (including use of Assets by Purchaser which
bear decals with such name).
8.03 OBLIGATION OF THE SELLER TO INDEMNIFY. Seller agrees to
indemnify, defend and hold harmless the Purchaser (and its
directors, officers, employees, affiliates and assigns) from and
against all losses, liabilities, damages, deficiencies, costs or
expenses (including interest and penalties imposed or assessed by
any judicial or administrative body and reasonable attorneys' fees)
("LOSSES") based upon, arising out of or otherwise in respect of any
Purchaser Claim.
8.04 OBLIGATION OF THE PURCHASER TO INDEMNIFY. Purchaser
agrees to indemnify, defend and hold harmless the Seller (and its
directors, officers, employees, affiliates and assigns) from and
against any Losses based upon, arising out of or otherwise in
respect of any Seller Claim.
9. GENERAL PROVISIONS.
9.01 LEGAL COSTS. In the event that any party (the
"Defaulting Party") defaults in its obligations under this Agreement
and, as a result thereof, the other party ("Non-Defaulting Party")
commences an action to legally enforce its rights hereunder against
the Defaulting Party, then the Defaulting Party shall promptly pay
to the Non-Defaulting Party an amount equal to all costs and
expenses (including reasonable attorneys' fees) paid or incurred by
the Non-Defaulting Party in connection with such enforcement.
9.02 NOTICES. Any and all notices or other communications
required or permitted to be given under any of the provisions of
this Agreement shall be in writing and shall be deemed to have been
duly given when personally delivered or upon receipt when mailed by
first class registered or certified mail, return receipt requested,
addressed to the parties at the addresses set forth on the signature
pages hereto (or at such other address as any party may specify by
notice to all other parties given as aforesaid.)
9.03 INTEGRATION, AMENDMENT. This writing (including the
schedules) constitutes the entire agreement of the parties with
respect to the subject matter hereof and may not be modified,
amended or terminated except by a written agreement specifically
referring to this Agreement signed by all of the parties hereto.
9.04 WAIVER. No waiver of any breach or default hereunder
shall be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of
any subsequent breach or default of the same or similar nature.
9.05 BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of each party hereto, its successors and
assigns.
9.06 CAPTIONS. The section headings contained herein are
for the purposes of convenience only and are not intended to define
or limit the contents of said paragraphs.
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9.07 COOPERATION. Each party hereto shall cooperate, shall
take such further action and shall execute and deliver such further
documents as may be reasonably requested by any other party in order
to carry out the provisions and purposes of this Agreement.
9.08 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed one
original.
9.09 GOVERNING LAW. This Agreement and all amendments
thereof shall be governed by and construed in accordance with the
law of the State of Georgia applicable to contracts made and to be
performed therein, without reference to its conflict of laws
provisions.
9.10 BROKERAGE COMMISSION. The parties acknowledge that The
Xxxxxxxx-Xxxxxxxx Company, Inc. has been involved in the
negotiations for this property and Seller agrees to pay said Broker
outside of Closing.
9.11 SEVERABILITY. The provisions of this Agreement are
severable, it being the intention of the parties that the invalidity
or unenforceability of any provision hereof shall not affect or
impair any other provision.
9.12 SURVIVAL. The provisions of this Agreement shall
survive Closing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
"SELLER":
TRANSPORT SOUTH, INC.
By: ________________________________________
Name: _______________________________________
Title: ______________________________________
Address: ____________________________________
____________________________________
____________________________________
"PURCHASER":
KENAN TRANSPORT COMPANY
By: ________________________________________
Name: _______________________________________
Title: ______________________________________
Address: ____________________________________
____________________________________
____________________________________
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JOINDER AGREEMENT
Racetrac Petroleum, Inc. joins in this Agreement for the purpose of
agreeing, on behalf of itself and its affiliates (as defined in Section
6.09(a)) and their respective successors and assigns, to be bound by the
provisions of Section 6.09 of this Asset Purchase Agreement.
RACETRAC PETROLEUM, INC.
By: ________________________________________
Name: _______________________________________
Title: ______________________________________
Address: ____________________________________
____________________________________
____________________________________
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SCHEDULES AND EXHIBITS
Schedule 1.01A PERSONAL PROPERTY
Schedule 1.01B CUSTOMER LISTS
Schedule 1.01C ASSUMED CONTRACTS
Schedule 1.01D REAL PROPERTY
Schedule 1.01E AUTOMATED DISPATCH SYSTEM
Schedule 1.03 PURCHASE PRICE ALLOCATION
Schedule 1.06 SOFTWARE THAT CO-EXISTS WITH AUTOMATED DISPATCH SYSTEM
Schedule 3.01 STATES WHERE SELLER IS AUTHORIZED TO TRANSACT BUSINESS
Schedule 6.02 RETAINED EMPLOYEES
Exhibit A ASSIGNMENT AND ASSUMPTION AGREEMENT
Exhibit B XXXX OF SALE
Exhibit C TRANSPORTATION AGREEMENT
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