ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT dated as of February 16, 2005 (the
"Agreement") is entered into by and between POWER2SHIP, INC., a Nevada
corporation ("P2S"); POWER2SHIP, INC., a Delaware corporation and a wholly owned
subsidiary of P2S that is in the process of changing its name to Power2Ship
Intermodal, Inc. ("Buyer"); G.F.C., INC., a South Carolina corporation
("Seller"); and, XXXXXXX XXXXXX, an individual resident in the State of New
Jersey ("Allora").
PREAMBLE
WHEREAS, Seller engages in the business of intermodal transportation (the
"Business");
WHEREAS, Seller, 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");
WHEREAS, Allora (sometimes referred to hereafter as the "Principal") is a
principal shareholder of Seller and the principal person in control of the
operations of the Business;
WHEREAS, Seller desires to convey, sell and assign to Buyer all of Seller's
right, title and interest in and to the Assets, upon the terms and conditions
contained in this Agreement; and
WHEREAS, Buyer desires to purchase the Assets upon the terms and conditions
contained in 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 6 (the "Closing"), Seller
shall sell to Buyer, and Buyer shall purchase from Seller, those assets of
Seller identified on Schedule 1.1 (the "Assets").
1.2 Liabilities Assumed and Excluded. In connection with Buyer's
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purchase of the Assets, Buyer shall assume and become responsible for the
payment of only those liabilities of Seller that are identified on Schedule 1.2
(the "Liabilities"). Buyer shall assume no other liabilities or obligations of
Seller.
1.3 Insurance Deposits. At the Closing, Buyer shall reimburse Seller
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for those insurance deposits as are mutually agreed upon by Seller and Buyer at
the time of Closing.
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2. Purchase Price; Payment; Allocation.
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2.1 Purchase Price. The purchase price for the Assets (the "Purchase
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Price") shall be (a) the sum of $300,000 (the "Cash Purchase Price"), plus (b)
the issuance to the Seller of warrants to purchase 200,000 shares of the common
stock of P2S (the "Warrants) in the form attached hereto as Exhibit 2.1.
2.2 Cash Purchase Price. The Cash Purchase Price shall be paid as
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follows:
(a) $100,000 shall be paid at Closing by P2S's delivery to Seller of
Seller's $100,000 secured promissory note dated November 10, 2004 issued by
Seller in favor of P2S (the "Note") marked 'PAID IN FULL"; and
(b) $200,000 shall be paid by Buyer, in twenty-four equal, consecutive
monthly installments of $8,333.33, without interest. The first installment shall
be paid on the first monthly anniversary of the Closing Date, and succeeding
installments shall be paid on or before the same day of each of the 23
consecutive months thereafter. The foregoing to the contrary notwithstanding:
(i) In the event that the gross freight revenues of Buyer for the
first full calendar month commencing one year following the Closing, equals
or exceeds $667,000, then, within 30 days from such date, Buyer shall pay
to Seller the sum of $50,000, and Buyer shall thereafter make six equal,
consecutive monthly installments of $8,333.33, without interest, until the
entire $200,000 described in paragraph (b) of this Section 2.2 has been
paid in full; and
(ii) In the event that the gross freight revenues of Buyer for the
first full calendar month commencing one year following the Closing, equals
or exceeds $834,000, then, within 30 days from such date, Buyer shall pay
to Seller the sum of $100,000, which payment shall constitute full
satisfaction of Buyer's $200,000 obligation described in paragraph (b);
provided that Buyer has made all required payments pursuant to this
paragraph (b).
At and subject to Closing, P2S shall waive accrued but unpaid interest on the
Note. P2S hereby unconditionally guarantees the payment obligations of Buyer
under this Section 2.2(b). In the event that Buyer fails to make one or more
required payments under this Section 2.2(b) as and when due, and such failure
continues for a period of 90 days from the due date thereof, Seller may declare
all unpaid amounts under this Section 2.2(b) to be immediately due and payable
upon written notice to Buyer and P2S.
2.3 The Warrants. Each of the Warrants shall entitle Seller to
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purchase one share of common stock of P2S during the three year period
commencing on the Closing Date, at an exercise price equal to the closing bid
price for the P2S common stock on the trading day immediately preceding the
Closing Date. The Warrants shall vest and become exercisable 100,000 shares on
the Closing Date and 100,000 shares on the one-year anniversary of the Closing
Date. Neither the Warrants nor the shares of P2S common stock issuable upon
exercise of the Warrants (the "Warrant Shares") have been registered under the
Securities Act of 1933, as amended (the "Act"), and neither the Warrants nor the
Warrant Shares may be sold, assigned, pledged, transferred or otherwise disposed
of absent registration under the Act or the availability of an available
exemption from such registration requirements. Neither P2S nor Buyer has agreed
to register the Warrants or the Warrant Shares under the Act.
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3. Representations and Warranties of Seller and the Principal.
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Except as otherwise set forth in a disclosure schedule delivered by Seller at
the time this Agreement is executed and delivered (the "Seller Disclosure
Schedule"), the Principal and Seller, jointly and severally, hereby make the
following representation and warranties to Buyer as of the date hereof and as of
the Closing Date.
3.1 Organization and Good Standing. Seller is a corporation duly
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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. Seller 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 "Seller Material Adverse Effect").
3.2 Authority and Enforcement. Seller has all requisite corporate
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power and authority to execute and deliver this Agreement, and to consummate the
transactions contemplated hereby. Seller 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 Seller, enforceable against Seller 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 therefor may
be brought.
3.3 No Conflicts or Defaults. The execution and delivery of this
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Agreement by Seller and the consummation of the transactions contemplated hereby
do not and shall not (a) contravene the Certificate or Articles of Incorporation
or Bylaws of Seller 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 Seller is a party or by
which Seller is bound, or any judgment, order or decree, or any law, rule or
regulation to which Seller 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 (iv)
result in a Seller Material Adverse Effect.
3.4 Consents of Third Parties. The execution, delivery and performance
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of this Agreement and the consummation of the transactions contemplated hereby
by Seller does not require the consent of any person, or such consent has or
will be obtained in writing, prior to the Closing.
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3.5 Actions Pending. There is no action, suit, claim, investigation or
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proceeding pending or, to the knowledge of Seller or the Principal, threatened
against Seller or the Principal, 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 Seller or the Principal, threatened
against or involving Seller or any of the Assets, other than claims against
Seller that are covered by insurance and that will not result in a Seller
Material Adverse Effect. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against Seller or affecting the Assets.
3.6 Title to Assets. Seller 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 Seller Financial Statements (as
hereafter defined). No person or entity has any right or option to acquire any
of the Assets. Seller has the right to use the Assets as presently being used in
the conduct of its Business, and its use of the Assets does not violate the
material provisions of (a) any agreement to which Seller 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
Seller, the Business or any of the Assets.
3.7 Financial Statements. Seller has delivered or prior to the
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Closing, will deliver to Buyer the internally prepared balance sheets of Seller
as at December 31, 2004 and January 31, 2005 (the "Seller Financial
Statements").
3.8 No Undisclosed Liabilities. Seller has and will have no
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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 Seller (including the notes
thereto) in conformity with generally accepted accounting principles ("GAAP")
which are not disclosed in the Seller Financial Statements, other than those
incurred in the ordinary course of Seller's business since the date of the
Seller Financial Statements, which, individually or in the aggregate, do not or
would not result in a Seller Material Adverse Effect.
3.9 Books and Records. The books, records and documents of Seller
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accurately Reflect, in all material respects, the information relating to the
business of Seller, the location and collection of their assets, and the nature
of all transactions giving rise to the obligations or accounts receivable of
Seller.
3.10 Absence of Contracts and Liabilities. Seller is not a party to
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any written or oral agreement or understanding that could result in a Seller
Material Adverse Effect.
3.11 Contracts. The Seller Disclosure Schedule identifies each
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material agreement to which Seller is a party and to which Buyer will succeed
following the Closing (each, a "Continuing Contract"). Each Continuing Contract
is in full force and effect, no party thereto is in default of any material
obligation thereunder and Seller has received no notice of the termination of
any such Continuing Contract. To the knowledge of the Principal, 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
Seller or 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 Continuing Contract. Seller 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 Continuing Contract.
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3.12 Insurance. Seller owns and is the beneficiary under valid and
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enforceable insurance policies (a) issued by an insurer that is financially
sound and reputable (b) providing adequate insurance coverage for all risks
normally insured against by an owner of assets similar to the Assets, (c) are
sufficient for compliance with all legal requirements and Continuing Contracts
to which Seller is a party or by which any of the Assets is bound and (d) that
will continue in full force and effect following the consummation of the
transactions contemplated hereby. Seller 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. To the knowledge of the Principal,
Seller has given notice to the insurer of all claims that may be insured
thereby.
3.13 Compliance with Laws.
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(a) Seller 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 conduct or operation of its Business or the ownership or use of
any of the Assets.
(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
Seller of, or a failure on the part of Seller to comply with, any Legal
Requirement, or (ii) may give rise to any obligation on the part of Seller to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature; and
(c) Seller has not received any notice or other communication (whether
oral or written) from any governmental or regulatory authority ("Authority")
having or purporting to have jurisdiction over Seller or any of its assets
regarding (i) any actual, alleged, possible, or potential violation of, or
failure to comply with, any Legal Requirement, or (ii) any actual, alleged,
possible, or potential obligation on the part of Seller to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature.
(d) Seller is, and at all times has been, in material compliance with
all of the terms and requirements of each license, permit and/or authorization
issued by any Authority ("Governmental Authorization") that is held by Seller or
that otherwise relates to the Business.
(e) Each Governmental Authorization is valid and in full force and
effect.
(f) No event has occurred and no circumstance exists that may
(with or without notice or lapse of time) (i) constitute or result directly or
indirectly in a material violation of or a material failure to comply with any
term or requirement of any such Governmental Authorization, or (ii) result
directly or indirectly in the revocation, withdrawal, suspension, cancellation,
or termination of, or any modification to, any such Governmental Authorization.
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(g) All Governmental Authorizations collectively constitute all of
the governmental Authorizations necessary to permit Seller to lawfully conduct
and operate the Business and to permit Seller to own and use the Assets.
3.14 Tax Matters. Seller 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 it pursuant to applicable Legal
Requirements ("Tax Returns"). Seller has paid, made provision for payment or
has included on its most recent balance sheet included in the Seller Financial
Statements, all taxes that have or may have become due pursuant to those Tax
Returns or otherwise, or pursuant to any assessment received by Seller, except
such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided in the Seller Financial Statements. All
such tax returns are true, complete and accurate. No tax return of Seller has
been audited or is currently under audit, nor has Seller or any Principal been
notified that any such audit will or may take place.
3.15 Employees. Seller is not a party to any collective bargaining
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arrangements or agreements covering any of its employees nor is Seller in breach
of any employment contract, agreement regarding proprietary information,
noncompetition agreement, nonsolicitation agreement, confidentiality agreement,
or any other similar contract or restrictive covenant, relating to the right of
any officer, employee or consultant to be employed or engaged by Seller. No
officer, consultant or key employee of Seller whose termination, either
individually or in the aggregate, would have a Seller Material Adverse Effect,
has terminated or, to the knowledge of Seller and the Principal, has any present
intention of terminating his or her employment or engagement with Seller.
3.16 Employee Benefits. Seller has not contributed to any pension,
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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. Seller 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.
3.17 Absence of Certain Developments. Since the date of the most
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recent balance sheet included in the Seller Financial Statements, Seller has not
suffered a Seller Material Adverse Effect or entered into any agreement or
engaged in any conduct that could result in a Seller Material Adverse Effect.
3.18 Spousal Consent. No consent of the spouse of the Principal or the
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spouse of any other person is required in order to consummate the transactions
contemplated by this Agreement, or to transfer to Buyer at the Closing, good and
marketable title to the Assets.
3.19 Acknowledgment. The Warrants, and, to the extent the Warrants are
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exercised, the Warrant Shares, are being acquired by Seller for investment
purposes only and not with a view to their distribution or resale, except in
compliance with applicable securities laws. Seller and the Principal
acknowledge and understand that (a) neither the Warrants nor the Warrant Shares
have been registered under the Act, (b) there is no market for the Warrants or
the Warrant Shares, (c) following exercise of the Warrants, the Warrant Shares
may have to be held for at least one year prior to their being available for
public resale, and (d) the Warrants and the Warrant Shares are a speculative
investment and there is no assurance that either the Warrants or the Warrant
Shares can be sold at a profit, or at all.
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3.20 Disclosure. The representations, warranties and acknowledgments
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of Seller set forth herein are true, complete and accurate in all material
respects, do not omit 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.
4. Representations and Warranties of Buyer and P2S. Except as
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otherwise set forth in a disclosure schedule delivered by Buyer at the time this
Agreement is executed (the "Buyer Disclosure Schedule"), Buyer and P2S hereby
make the following representations and warranties to Seller and the Principal,
as of the date hereof and as of the Closing Date.
4.1 Organization and Good Standing. Buyer and P2S is each a
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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. Buyer 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 Buyer
and P2S, taken as a whole, or consummation of the transactions contemplated
hereby (a "Buyer Material Adverse Effect").
4.2 Authority and Enforcement. Buyer and P2S each has all requisite
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corporate power and authority to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby. Buyer and P2S has each 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 Buyer 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.
4.1 No Conflicts or Defaults. The execution and delivery of this
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Agreement by Buyer 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 Buyer 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
Buyer or P2S is a party or by which Buyer or P2S is bound, or any judgment,
order or decree, or any law, rule or regulation to which Buyer 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 Buyer 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 Buyer or P2S is
a party, or (iv) result in a Buyer Material Adverse Effect.
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4.2 Consents of Third Parties. The execution, delivery and performance
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of this Agreement and the consummation of the transactions contemplated hereby
by Buyer or P2S does not require the consent of any person, or such consent has
been or will be obtained in writing prior to the Closing.
4.3 Actions Pending. There is no action, suit, claim, investigation or
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proceeding pending or, to the knowledge of Buyer or P2S, threatened against
Buyer 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 Buyer or P2S, threatened against or involving Buyer or
P2S or any of their respective properties or assets. There are no outstanding
orders, judgments, injunctions, awards or decrees of any court, arbitrator or
governmental or regulatory body against Buyer or P2S or affecting their
respective assets.
4.4 Disclosure. The representations, warranties and acknowledgments of
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Buyer 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.
5. Conditions to Closing.
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5.1 Conditions Precedent to P2S and Buyer's Obligation to Close. The
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obligation of Buyer and P2S to consummate the transactions contemplated by this
Agreement is subject to satisfaction of the following conditions on or prior to
the Closing Date:
(a) The representations and warranties of Seller and the Principal set
forth in Section 3 above shall be true and correct in all material respects at
and as of the Closing Date.
(b) Seller and the Principal shall have performed and complied with all of
their respective covenants hereunder in all material respects through the
Closing Date.
(c) No action, suit, or proceeding shall be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or before any arbitrator wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (i) prevent or
adversely affect Buyer's or P2S's consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation; and no
such injunction, judgment, order, decree, ruling, or charge shall be in effect.
(d) No material adverse change shall have taken place with respect to the
assets, and no event shall have occurred that could result in a Seller Material
Adverse Effect.
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(e) Seller shall have held a duly convened meeting of its shareholders upon
such notice and otherwise as required by the laws of the State of South Carolina
(the "Shareholders Meeting"). At least ten days prior to the Shareholders
Meeting, Seller shall have delivered to each of Seller's shareholders entitled
to notice of and to vote at the Shareholders Meeting (i) a copy of this
Agreement, (ii) the Schedules and Exhibits hereto and (iii) a copy of the
dissenter's rights statute of the State of South Carolina in a manner that
complies with the corporate laws of the State of South Carolina. The foregoing
documents and information shall also be delivered to each member of a class or
group entitled under the laws of the State of South Carolina to vote as a class
or group in connection with the transactions contemplated by this Agreement. At
the Shareholders Meeting, this Agreement and the transactions contemplated
hereby shall be approved by holders of the outstanding capital stock of Seller
entitled to vote at the Shareholders Meeting in an amount sufficient to satisfy
the requirements of the laws of the State of South Carolina.
(f) No shares entitled to vote at the Shareholders Meeting shall have
exercised dissenter's rights.
(g) Seller shall have delivered to Buyer and P2S a certificate executed by
a duly authorized executive officer of Seller, and by the Principal, stating
that all of the conditions specified above in Section 5.1(a) - (f) have been
complied with;
(h) Buyer shall be reasonably satisfied with the results of its due
diligence review of Seller, the Business and the Assets;
(i) Seller shall have executed and delivered to Buyer a Consulting
Agreement in form and substance mutually acceptable to Buyer and the Principal
(the "Consulting Agreement");
(j) Buyer and P2S shall receive confirmation from their professional
financial advisers, in form and substance satisfactory to them in their sole
reasonable discretion, that the books and records of Seller are sufficient to
permit audited financial statements of Seller to be prepared for the years ended
December 31, 2204 and December 31, 2003,or such shorter period as Seller has
been in existence in accordance with GAAP and the rules and regulations of the
Securities and Exchange Commission;
(k) Buyer and Seller shall have mutually agreed upon those insurance
deposits to be reimbursed to Seller at the time of Closing; and
(l) All actions to be taken by Seller in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer and P2S.
5.2 Conditions Precedent to Seller's and the Principal's Obligation to
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Close. The obligation of Seller and the Principal to consummate the
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transactions contemplated hereby is subject to satisfaction of the following
conditions on or prior to the Closing Date:
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(a) The representations and warranties of Buyer and P2S set forth in
Section 4 above shall be true and correct in all material respects at and as of
the Closing Date.
(b) Buyer and P2S shall each have performed and complied with all of
their respective covenants hereunder in all material respects through the
Closing Date.
(c) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (i)
prevent or adversely affect Buyer's consummation of any of the transactions
contemplated by this Agreement or (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation; and no
such injunction, judgment, order, decree, ruling, or charge shall be in effect;
(d) No material adverse change shall have taken place with respect to
Buyer or P2S, and no event shall have occurred that results in a Buyer Material
Adverse Effect.
(e) Buyer and P2S shall each have delivered to the Seller a certificate
to the effect that each of the conditions specified above in Sections 5.2(a) -
(d) has been complied with in all respects;
(f) Seller shall be satisfied with the results of its due diligence
review of Buyer; and P2S;
(g) Buyer shall have executed and delivered to Principal the Consulting
Agreement;
(h) Buyer and Seller shall have mutually agreed upon those insurance
deposits to be reimbursed to Seller at the time of Closing; and
(i) All actions to be taken by Buyer and P2S in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Seller and the Principal.
6. Closing; Closing Date. A closing of the transactions contemplated
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hereby the "Closing") will take place at such time, not later than March 15,
2005, at the offices of Buyer's counsel, that is agreed upon by Seller and
Buyer. The date on which the Closing is held is referred to in this Agreement
as the "Closing Date."
7. Documents to be Delivered at the Closing.
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7.1 Documents to be Delivered by Seller or the Principal. At the
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Closing, Seller and/or the Principal, as the case may be, shall deliver, or
cause to be delivered, to Buyer the following:
(a) a duly executed xxxx of sale, dated the Closing Date, transferring
to Buyer all of Seller's right, title and interest in and to the Assets together
with possession of the Assets;
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(b) a duly executed assignment, transferring to Buyer all of Seller's
right, title and interest in and to the contracts, agreements, contract rights
and Intellectual Property included in the Assets, accompanied by any third party
consents contemplated by Section 3.4;
(c) the certificate required by Section 5.1(g), above;
(d) a copy of resolutions of the board of directors and shareholders of
Seller, certified by an executive officer of Seller, authorizing the execution,
delivery and performance of this Agreement by Seller; and
(e) the Consulting Agreement executed by Principal; and
(e) such other certificates, documents and instruments as Buyer or P2S
may have reasonably requested in connection with the transaction contemplated
hereby.
7.2 Documents to be Delivered by Buyer. At the Closing, Buyer shall
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deliver or cause to be delivered to Seller and/or the Principal, as the case may
be, the following:
(a) the certificate required by Section 5.2(e);
(b) a copy of resolutions of the board of directors and shareholders,
if required, of Buyer and P2S, each certified by an executive officer of Buyer
and P2S, as the case may be, authorizing the execution, delivery and performance
of this Agreement by Buyer and P2S;
(c) certificates evidencing the P2S Warrants;
(d) the Consulting Agreement executed by Buyer; and
(e) such other certificates, documents and instruments as Seller
may have reasonably requested in connection with the transaction contemplated
hereby.
8. Additional Covenants.
---------------------
8.1 Access to Books and Records. During the course of this
-------------------------------
transaction, from the date hereof through Closing, each party agrees to make
available for inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable access to
all documentation ad other information concerning the business, financial and
legal conditions of each other for the purpose of conducting a due diligence
investigation thereof. Such due diligence investigation shall be for the
purpose of satisfying each party as to the business, financial and legal
condition of each other for the purpose of determining the desirability of
consummating the proposed transaction. The parties further agree to keep
confidential and not use for their own benefit, except in accordance with this
Agreement any information or documentation obtained in connection with any such
investigation.
11
8.2 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.
8.3 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.
8.4 Right to Rescind. The parties to this Agreement agree and confirm
-----------------
that P2S shall have the right to rescind this Agreement and the transactions
contemplated hereby, and cause the parties to be restored to their status
immediately prior to the Closing, in the event that the audited financial
statements of Seller described in the last sentence of Section 3.9 cannot be
prepared and timely filed with the Securities and Exchange Commission.
9. Indemnification and Related Matters.
--------------------------------------
9.1 Indemnification by Seller and the Principals. Seller and the
-------------------------------------------------
Principal, jointly and severally, hereby indemnify and hold Buyer 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 Buyer and P2S and arising out of the breach of any
representation or warranty of Seller and/or the Principal hereunder, and/or
Seller's and/or the Principal's failure to perform any covenant or obligation
required to be performed by it hereunder.
9.2 Indemnification by Buyer and P2S. Buyer and P2S, jointly and
------------------------------------
severally, hereby indemnify and hold Seller and Principal, and their 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 Seller and/or Principal and arising out of the
breach of any representation or warranty of Buyer or P2S hereunder, and/or
Buyer's and/or P2S's failure to perform any covenant or obligation required to
be performed by either of them hereunder.
12
9.3 Procedure for Indemnification. Any party entitled to
-------------------------------
indemnification under this Article 9 (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 Article 9 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 not 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 Article 9 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.
9.4 Basket. Notwithstanding any conflicting or inconsistent provisions
------
hereof, Seller and the Principal shall not be liable in damages, indemnity or
otherwise to Buyer or P2S in respect of the inaccuracy or breach of any
representations, warranties, covenants or agreements herein, except to the
extent that the damages to Buyer and/or P2S, singularly or in the aggregate,
exceed the sum of $10,000; provided that Seller's and Principal's maximum
obligation under this sentence shall not exceed $1,000,000 in the aggregate.
Notwithstanding any conflicting or inconsistent provisions hereof, Buyer and P2S
shall not be liable in damages, indemnity or otherwise to Seller, the Principal
(or any designee) in respect to the inaccuracy or breach of any representations,
warranties, covenants or agreements herein except to the extent that damages to
Seller exceed, individually or in the aggregate, the sum of $10,000; provided
that Buyer's and P2S's maximum obligation under this sentence shall not exceed
$1,000,000 in the aggregate.
13
10. Termination.
-----------
10.1 Termination by Mutual Consent. This Agreement may be terminated
-------------------------------
by mutual consent of the parties, in writing, signed by each of the parties
hereto.
10.2 Termination by Buyer and P2S. This Agreement may be terminated by
----------------------------
Buyer and/or P2S, by written notice to Seller, (a) if the Closing does not occur
prior to Xxxxx 00, 0000, (x) in the event of a material breach of any
representation or warranty of Seller and/or the Principal hereunder, or (c) in
the event Seller and/or Principal hereunder fail to perform any material
covenant or obligation required to be performed by it hereunder and such failure
remains uncured for ten days following such written notice.
10.3 Termination by Seller and the Principal. This Agreement may be
------------------------------------------
terminated by Seller or the Principal, by written notice to Buyer, in the event
of a material breach of any representation or warranty of Buyer or P2S
hereunder, or in the event Buyer or P2S fails to perform any material covenant
or obligation required to be performed by it hereunder and such failure remains
uncured for ten days following such written notice.
10.4 Effect of Termination. Termination of this Agreement under
-----------------------
Section 10.02 or 10.03 hereof shall not preclude the parties from pursuing all
remedies available to them under applicable law arising by reason of such
termination. In the event of termination of this Agreement, the Note [as such
term is defined in Section 2.2(a)] shall be immediately due and payable.
11. Miscellaneous.
-------------
11.1 Finders. Buyer and P2S, on the one hand, and Seller and the
-------
Principal, on the other hand, represent and warrant that they have not employed
or utilized the services of any broker or finder in connection with this
Agreement or the transactions contemplated by it. Seller and the Principal
jointly and severally, shall indemnify and hold Buyer and P2S 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 Seller. Buyer and P2S jointly and severally shall indemnify
and hold Seller and the Principal 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 Buyer or P2S.
11.2 Expenses. Except as otherwise specifically provided in this
--------
Agreement, Buyer, P2S, the Principal and Seller 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.
14
11.3 Entire Agreement; No Waiver. This Agreement, the Schedules 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. Without limiting the foregoing, the parties
hereby agree and acknowledge that the version of this Agreement dated "February
, 2005" and signed by the parties shall be superceded by this Agreement, and
--
upon execution of this Agreement, such other agreement shall be of no further
force or effect.
11.4 Jurisdiction and Governing Law. This Agreement shall be governed
-------------------------------
by and interpreted in accordance with the laws of the state of Florida without
regard to the principles of conflict of laws. Each of the parties irrevocably
and unconditionally agrees that any suit, action or legal proceeding arising out
of or relating to this Agreement shall be settled by binding arbitration
conducted in accordance with the Commercial Rules of Arbitration of the American
Arbitration Association ("AAA"). The arbitration shall take place in Palm Beach
County, Florida, and shall be heard by one arbitrator selected in accordance
with AAA Rules of Commercial Arbitration. The arbitrator shall render a
reasoned award and such award shall be signed and dated. The decision of the
arbitrator shall be final and binding upon the parties, and the arbitration
award may be entered in any court of competent jurisdiction. Pending final
determination by the arbitrator, each of the parties shall pay one-half of the
fees of the AAA (other than filing fees), including without limitation hearing
and arbitrator's fees, and the parties' obligation to pay such fees in
accordance with AAA rules shall be enforceable in any court of competent
jurisdiction. The parties to any arbitration hereunder agree to submit for
determination by the arbitrator, the amount of fees and expenses, including
reasonable attorney's fees, to be borne by each party.
11.5 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 Seller 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.
11.6 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):
15
If to Seller or the Principal:
Xxxxxxx Xxxxxx
G. F. C., Inc.
000 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000
Telephone No.:(000) 000-0000
Telecopy No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxx, Esq.
Lampf, Lipkind, Prupis & Petigrow, P.A.
00 Xxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000-0000
If to P2S, to:
Power2Ship, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Buyer, to:
Power2Ship, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
11.7 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.
11.8 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.
16
11.9 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.
17
IN WITNESS WHEREOF, we have executed this Agreement as of the day and year first
above written.
POWER2SHIP, INC., A NEVADA CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------------
Xxxxxxx Xxxxx, President
POWER2SHIP , INC., A DELAWARE CORPORATION
By: /s/ Xxxxxxx Xxxxx
----------------------
Xxxxxxx Xxxxx, President
G.F.C., INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------
Xxxxxxx Xxxxxx, President
THE PRINCIPAL
/s/ Xxxxxxx Xxxxxx
-----------------------------
Xxxxxxx Xxxxxx
18
SCHEDULE 1.1
ASSETS
------
(a) Xxxx trucking and brokerage authority permits identified (by attaching
copies or otherwise) on Annex 1.1(a).
(b) Those contracts with shipping customers that are identified (by
attaching copies or otherwise) on Annex 1.1(b).
(c) Those contracts with agents that are identified (by attaching copies
or otherwise) on Annex 1.1(c).
(d) Those lease contracts with owner-operators as are identified (by
attaching copies or otherwise) on Annex 1.1(d).
(e) All of Buyer's right, title and interest in and to escrow deposits
from those owner-operators and agents as are identified on Annex
1.1(e).
(f) All of Buyer's right, title and interest in and to the telephone
number(s) used by Buyer in the conduct of its business.
19
SCHEDULE 1.2
LIABILITIES
-----------
(a) Obligations corresponding to the owner-operator and agent escrow
deposits identified on Annex 1.1(e).
20
