ASSET PURCHASE AGREEMENT
EXECUTION
VERSION
THIS
ASSET PURCHASE AGREEMENT
("Agreement") is effective as of the date last appearing on the signature page
to this Agreement evidencing the approval hereof by Purchaser and Seller (the
"Effective Date"), by and between WAREHOUSE ON WHEELS, INC., a Nebraska
corporation (hereinafter referred to as “Seller”), AMERICAN TRAILER &
STORAGE, INC., a Missouri corporation (hereinafter referred to as the
"Purchaser"), and XXXXXXX X. XXXX, majority stockholder of Seller
(“Owner”).
WITNESSETH:
WHEREAS,
Seller owns certain storage
containers, semi-trailers and related business assets located at its place
of
business and is engaged in the business of leasing such containers and
semi-trailer assets to others for use in the storage and transportation of
goods
(the "Seller's Business") and Seller desires to sell and Purchaser desires
to
purchase certain of the assets and properties, tangible and intangible, of
Seller used by Seller in connection with Seller's Business, as more specifically
set forth in this Agreement.
NOW,
THEREFORE, for and in
consideration of the premises, mutual promises, covenants, conditions,
agreements, representations, and warranties contained in the Agreement, and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties hereto agree as follows:
1. PURCHASE
AND SALE OF ASSETS
1.1 Purchase
and Sale of
Assets. Subject
to the terms and conditions in this Agreement, on the Closing Date (as
hereinafter defined) Seller agrees to sell to the Purchaser, and Purchaser
agrees to purchase, free and clear of any liens or encumbrances, the following
assets (collectively the "Assets”):
(a) all
of Seller’s containers, operating equipment, semi-trailers, furnishings, tools,
electronic devices, supplies, inventory, records and all other tangible items
associated with the operation of Seller’s Business. A list describing
such tangible assets including containers, operating equipment and
semi-trailers, with agreed values, is attached hereto as Exhibit
A1; Seller has advised Purchaser that certain semi-trailers are
not properly titled in the name of Seller; those semi-trailers with defective
title certificates are identified on Exhibit A-2;
(b) all
goodwill associated with or arising and growing out of Seller’s Business,
including Seller’s trade name and telephone numbers, a list of all the Seller’s
customers that have rented or purchased containers and semi-trailers and all
non-disclosure, non-compete and similar agreements with current or former
employees of Seller that have not expired on their face; the parties hereto
recognize such goodwill as a valuable property right, distinct and apart from
the other assets herein conveyed; (a list describing such customers and their
contact information is attached hereto as Exhibit B-1; a list of such
non-disclosure and non-compete agreements is attached hereto as Exhibit
B-2).
1.2 Assumption
of Certain Obligations of Seller. Subject to the terms and
conditions in this Agreement, on the Closing Date Purchaser shall assume and
agree to perform the rental agreements of Seller that relate to containers
and
semi-trailers leased by Seller to others (the “Rental Agreements”). A
list of such Rental Agreements is attached hereto as Exhibit
C.
Purchaser
shall assume no other
obligations of Seller.
Seller
shall retain all other assets
used in the operation of Seller’s Business, including but not limited to
accounts receivable.
1.3 Conveyance
Documents. The sale and delivery of the Assets shall be made by
such Bills of Sale and other instruments of assignment and transfer, including
certificates of title showing no liens thereon, as Purchaser shall reasonably
request, in recordable form where appropriate.
1.4 Purchase
Price. The purchase price for the Assets shall be Five Hundred
Thirty-two Thousand Dollars ($532,000.00), payable at Closing as follows: (i)
by
wire transfer or other available funds of Four Hundred Eighty-two Thousand
Dollars ($482,000.00); and (ii) by depositing Fifty
Thousand Dollars ($50,000.00) (the “Escrow Fund”) with the Escrow Agent (as
hereinafter defined) to be held and disposed of pursuant to the Escrow Agreement
(as hereinafter defined).
1.5 Allocation
of Purchase Price. The Purchase Price shall be allocated among
the Assets in the manner required by Section 1060 of the Internal Revenue Code
of 1986, as amended (the “Code”), as shown on an allocation schedule to be
agreed upon by Purchaser and Seller on or prior to the date of
Closing. After the Closing, the parties will make consistent use of
the allocations set forth in such allocation schedule for all
purposes. Any subsequent adjustment to the Purchase Price will be
allocated in accordance with Section 1060 of the Code. Purchaser
and Sellers agree that the form of the transactions, the consideration provided
for in this Agreement and the allocation of the Purchase Price as provided
above
were arrived at on the basis of arm’s length negotiation between Purchaser and
Seller, and shall be respected by each of them for federal, state, local and
other tax reporting purposes, and that none of them will assert or maintain
a
position inconsistent with the foregoing.
2. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER AND OWNER
2.1 Representations
and Warranties. Seller and Owner represent, warrant and
covenant that:
(a) Organization
and Authorization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nebraska. Seller has all of the requisite corporate power and
authority to own, lease, and operate its properties, to carry on its business
as
now being conducted and to execute, deliver, and perform this Agreement and
all
writings relating thereto. The execution, delivery and performance of
this Agreement have been duly and validly authorized by the Board of Directors
of the Seller and by its shareholders. This Agreement constitutes the
valid and binding obligation of Seller and Owner enforceable in accordance
with
its terms. Neither the execution and delivery of this Agreement nor
the consummation by Seller of the transactions contemplated hereby nor
compliance with any of the provisions hereof will: (i) conflict with
or result in a breach of the Articles of Incorporation or By-Laws of Seller;
(ii) violate any statute, law, rule or regulation or any writ, injunction,
or
decree of any court or governmental authority; or (iii) violate or conflict
with
or constitute a default under or give rise to right of any termination,
cancellation or acceleration under any agreement to which Seller is a party
or
by which it or its assets or properties may be bound. Except for such
consents or notifications as may be required by the State of Nebraska respecting
the sale of titled assets, no consent or approval or notification to any
governmental authority is required in connection with execution and delivery
by
Seller of this Agreement or the consummation of the transactions contemplated
hereby.
(b) Title
to Assets. Seller has good and marketable title to all the
Assets, free and clear of all security interests, liens, pledges, claims,
encumbrances, options, rights of first refusal, mortgages, security agreements
or other agreements, except for the Rental Agreements (collectively, the
"Encumbrances"). Purchaser shall take subject only to the
Encumbrances, and all other leases, security interests, liens, pledges, claims,
options, rights of first refusal, mortgages, security agreements or other
agreements shall have been properly terminated to the satisfaction of Purchaser
by or on the date of Closing.
(c) Taxes. At
or by Closing Seller will have paid all taxes, assessments, and penalties due
and payable to the United States and any State (“Taxes”), and Seller shall
provide proof of the above at or prior to Closing.
(d) Financial
and Asset Information. Seller has made available to Purchaser for
inspection all of Seller’s material assets, contracts, books and
records. The financial and asset information provided to Purchaser
fairly present the material condition and revenue results of Seller’s Assets and
Seller’s Business as of the dates thereof and such information is complete in
all material respects. Seller has no material undisclosed liabilities
respecting the Assets or Seller’s Business.
(e) Conduct
of
Business. Seller
has since June 12, 2007 and will until Closing conduct business in the ordinary
course and has not since June 12, 2007 sold and will not sell any of its assets
except in the ordinary course of business.
(f) Compliance
with Laws. Seller has complied with, and is not in violation of,
applicable federal, state or local statutes, laws and regulations affecting
the
Assets or the operation of Seller's Business (“Laws”), specifically including
(i) any federal, state or local laws and regulations respecting protection
of
the environment and (ii) the Employee Retirement Income Security Act of 1974,
as
amended from time to time and related Treasury Regulations
(“ERISA”).
(g) Litigation. Except
as set forth on Schedule 2.1(g) attached hereto, there are no suits,
actions, or other legal or administrative proceedings, including, but not
limited to, breach of lease, warranty, product or personal injury claims,
pending or threatened against or affecting Seller, Seller's Business or the
Assets.
(h) Full
Disclosure. None of the representations and warranties made by
Seller or on its behalf contains or will contain any untrue statement of
material fact, or omit any material fact the omission of which would be
misleading.
(i) Defective
Title Matters. Seller shall use its best efforts to obtain
properly issued certificates of title for all of the semi-trailers identified
on
Exhibit A-1 prior to Closing. Seller shall reimburse Purchaser for
all costs, including any fines, penalties, attorneys’ fees and any other costs
that are incurred by Purchaser after Closing that arise from the defective
titles and Purchaser’s actions to properly title the semi-trailers identified in
Exhibit A-1. The covenants of Seller under this Section 2.1(i) shall
survive Closing.
(j) Trade
Name; Seller’s Name Change. Following the Closing, Purchaser
may file all such documents necessary to register the trade name of Seller
as a
trade or fictitious name, in any jurisdiction Purchaser shall deem
necessary. As of the Closing, Seller shall have taken all necessary
action that may be necessary to change Seller’s names after the Closing to a
name bearing no similarity to “Warehouse on Wheels.” Seller will
file, on the date of Closing, all necessary documents or certificates with
the
Secretary of State of Nebraska that are necessary to effectuate the change
of
Seller’s name as contemplated by this Section 2.1(j), including name change
amendment to Seller’s articles of incorporation, and will provide written
evidence of the same to Purchaser, which shall be acceptable to Purchaser in
its
reasonable discretion. Seller shall cooperate fully with Purchaser
with regard to all trade name registration filings.
3. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF PURCHASER
Purchaser
represents, warrants and covenants that it is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Missouri. Purchaser has all of the requisite corporate power and
authority to own, lease, and operate its properties and to carry on its business
as now being conducted and to execute, deliver, and perform this
Agreement. The execution, delivery and performance of this Agreement
have been duly and validly authorized by the Board of Directors of
Purchaser. This Agreement constitutes the valid and binding
obligation of Purchaser enforceable in accordance with its
terms. Neither the execution and delivery of this Agreement nor the
consummation by Purchaser of the transactions contemplated hereby nor compliance
with any of the provisions hereof will: (i) conflict with or result
in a breach of the Articles of Incorporation or By-Laws of Purchaser; (ii)
violate any statute, law, rule or regulation or any writ, injunction, or decree
of any court or governmental authority; or (iii) violate or conflict with or
constitute a default under or give rise to right of any termination,
cancellation or acceleration under any agreement to which Purchaser is a party
or by which it or its assets or properties may be bound. Except for
notification by Purchaser’s parent corporation to the Securities and Exchange
Commission and, if required, certain state securities commissioners, no consent
or approval or notification to any governmental authority is required in
connection with execution and delivery by Purchaser of this Agreement or the
consummation of the transactions contemplated hereby or thereby.
4. WARRANTIES
AT CLOSING
All
covenants, representations and
warranties of Seller and Owner set forth in this Agreement and in any written
statements delivered to Purchaser by Seller under this Agreement will also
be
true and correct as of the Closing Date as if made on that date. All
covenants, representations and warranties of Purchaser set forth in this
Agreement and in any written statements delivered to Seller by Purchaser under
this Agreement will also be true and correct as of the Closing Date as if made
on that date.
5. CONDITIONS
PRECEDENT TO PURCHASER'S PERFORMANCE
The
obligations of Purchaser to
purchase the Assets under this Agreement are subject to the satisfaction, at
or
before the closing, of all the conditions set out below in this
Article. Purchaser may waive any or all of these conditions, in whole
or in part, without prior notice; provided however, that no such waiver of
a
condition shall constitute a waiver by Purchaser of any of its other rights
or
remedies, at law or in equity, if Seller shall be in default of any of its
representations, warranties, or covenants under this Agreement.
5.1 Performance
of Seller. Seller shall have performed, satisfied, and complied
with all covenants, agreements, and conditions required by this Agreement to
be
performed or complied with by Seller on or before the Closing Date.
5.2 No
Material Changes. From June 12, 2007 to the Closing Date, there
shall not have been any material adverse changes in the Assets or Seller's
Business.
5.3 Absence
of Litigation. No action, suit, or proceeding before any court or
any governmental body or authority pertaining to the transaction contemplated
by
this Agreement or to its consummation shall have been instituted or threatened
against Seller on or before the Closing Date.
5.4 Corporate
Approval. The execution and delivery of this Agreement by the
Seller and the performance of its covenants and obligations under this
Agreement, shall have been duly authorized by all necessary corporate
action.
5.5 Conveyance
Documents. At the Closing, Seller shall have executed and
delivered to Purchaser the necessary instruments and documents to vest in
Purchaser title to the Assets, free and clear of all liens, encumbrances, and
security interests, save and except for the obligations respecting the
Encumbrances, including, but not limited to (i) assignment of all Rental
Agreements (the “Assignment of Contracts and Leases”); (ii) Xxxx(s) of Sale;
(iii) certificates of title to each semi-trailer owned by Seller with such
releases as may be necessary to remove any notation of lien on any such
certificates; (iv) Escrow Agreement; and (v) such other assignments, consents
or
other instruments of conveyance as Purchaser may reasonably
request.
5.6 Certificate
of Good Standing. At the Closing, the Seller shall provide to
Purchaser a Certificate of Good Standing from the Secretary of State of
Nebraska.
5.7 Approval
of Documents / Consents. The form and substance of all
certificates, instruments, and other documents delivered to Purchaser under
this
Agreement shall be satisfactory in all reasonable respects to Seller, Purchaser
and their counsel, and Purchaser shall have obtained consents to the assignment
of Rental Agreements (the “Consents”) (or waived such Consents).
5.8 Purchaser’s
Due Diligence. The results of Purchaser’s investigations and
review of accounting, legal, regulatory, environmental and other due diligence
investigations and review shall be satisfactory in all reasonable respects
to
Purchaser.
5.9 Financing. Purchaser
shall have executed definitive loan documents containing economic terms and
other provisions satisfactory to Purchaser in its sole discretion, and all
conditions of funding under such documents shall have been
satisfied.
5.10 Owner’s
Employment Agreement. Purchaser and Owner shall have entered into
an employment agreement (“Employment Agreement”) acceptable in form to Purchaser
and Owner.
5.11 Nebraska
Dealer’s License. Purchaser shall have obtained such
licenses, including a license as a dealer of tractors and semi-trailers, as
Purchaser deems necessary in its discretion for the operation of its
business.
6. ESCROW
6.1 Escrow
Agreement. The performance by Seller of its covenants,
agreements, indemnities and obligations under this Agreement shall be secured
by
the Escrow Fund to be held and disposed of by the escrow agent (“Escrow Agent”)
pursuant to an Escrow Agreement in the form set forth on Exhibit D
attached hereto (the “Escrow Agreement”), which shall be executed and delivered
by Seller and Buyer at Closing.
6.2 Purchase
Price Adjustment. In the event that during the three-month period
following the Closing (the “Escrow Period”) there is a breach of any Rental
Agreement by any lessee of any container or semi-trailer acquired hereunder,
Purchaser shall immediately notify Seller and will use reasonable commercial
efforts at Purchaser’s cost and expense to recover possession of any container
semi-trailer(s). If after such reasonable commercial efforts,
Purchaser is unable to recover possession of any container(s) or semi-trailer(s)
Purchaser shall deliver notice of failure to recover possession to Seller
specifying the container(s) or semi-trailer(s) not recovered and the value
thereof as set forth on Exhibit A (the “Stated Value”). If
Seller has not paid the Stated Value to Purchaser within five (5) business
days
after receipt of such notice, Purchaser shall be entitled to receive immediately
from the Escrow Fund an amount equal to the Stated Value for each unrecovered
container or semi-trailer. Upon disbursement of such payment from the
Escrow Fund to Purchaser, (i) Purchaser shall deliver to Seller any certificate
of title in its possession, properly endorsed to Seller, or a xxxx of sale
if
there is no certificate of title in its possession, for any such container(s)
or
semi-trailer(s), and (ii) Purchaser shall assign to Seller any and all of
Purchaser's interest in or to any rental agreement respecting any such
container(s) or semi-trailer(s). Seller may thereafter take such actions as
it
deems appropriate to acquire, use or dispose of the container(s) or
semi-trailer(s) in question. Seller’s obligation to pay the Stated
Value as set forth in this Section 6 is limited to the amount of the Escrow
Fund, and Seller shall have no liability to Purchaser for any rentals not paid
under any of the Rental Agreements, nor for any costs incurred by Purchaser
in
seeking to recover the possession of any containers or
semi-trailers.
6.3 Escrow
Fund Release. Provided that no dispute then exists under this
Section 6 or under Section 9 or 10 of this Agreement as to any claim by
Purchaser to all or a portion of the Escrow Fund, the remaining Escrow Fund
balance will be released to Seller as follows: (i) fifty percent
(50%) of the undisbursed Escrow Fund shall be released on the first business
day
following the expiration of six (6) months after the date of Closing; (ii)
fifty
percent of the then-undisbursed balance of the Escrow Fund shall be released
on
the first business day following the expiration of twelve (12) months after
the
date of Closing; and (iii) all of the undisbursed balance of the Escrow Fund
shall be released on the first business day following the expiration of three
(3) years after the date of Closing, at which time the Escrow Period and the
Escrow Agreement shall be deemed terminated. Release of the Escrow
Fund and termination of the Escrow Agreement shall have no effect upon any
liability of Seller or Owner to Purchaser under any other provision of this
Agreement.
7. CLOSING
7.1 Closing. The
sale, transfer and assignment of the Assets and performance of the other
transactions contemplated herein shall be consummated at a closing (herein
referred to as the “Closing”) to be held at the offices of McDowell, Rice, Xxxxx
& Xxxxxxxx, counsel to Purchaser, or such other location as the parties may
select, on or before August 22, 2007.
7.2 Seller’s
Obligations. At
the Closing, Seller shall deliver to Purchaser all instruments of conveyance,
assignment and transfer, the Assets and possession thereof, and any other
documents necessary to conclude the agreements between the parties.
7.3. Purchaser’s
Obligation. At the Closing, Purchaser shall deliver to Seller
cash or certified or bank cashier’s check in the amount of the purchase price
less the Seller Note and the Escrow Fund, shall fund the Escrow Fund, shall
deliver the Seller Note, and shall deliver any other documents necessary to
conclude the agreements between the parties.
7.4 Employment
Agreement. At the Closing Purchaser and Owner shall enter into
and execute the Employment Agreement.
7.5 Cooperation. At
any time before or after the Closing as appropriate, Seller will execute,
acknowledge, and deliver any further assignments, conveyances, and other
assurances, documents, and instruments of transfer that may be reasonably
requested by Purchaser and will take any other action consistent with the terms
of this Agreement that may reasonably be requested by Purchaser for the purpose
of assigning, transferring, granting, conveying, and confirming to Purchaser,
or
reducing to possession, the Assets. Seller shall use its best efforts
to obtain the Consents and to assist Purchaser in obtaining the Consents after
Closing if not earlier obtained by Seller.
7.6 Employees. At
or immediately prior to the Closing, Seller shall pay any and all obligations
to
all of its employees (“ Employees”) with respect to any periods prior to the
Closing including any obligations arising out of, or provided by, any employee
benefit plan. Purchaser shall have no obligation to employ any
Employees and is assuming no liabilities with respect to any
Employees. All Employees whom Purchaser elects to employ on or after
the date of Closing shall be employees “at will” and “new employees” of
Purchaser and any prior employment by Seller of such employees shall not affect
entitlement to, or the amount of, salary or other cash compensation, current
or
deferred, or any benefits, that Purchaser may make available to its
employees. At the election of Purchaser, Seller will assign Seller’s
workers’ compensation and unemployment experience ratings to
Purchaser. Notwithstanding anything to the contrary contained in this
Agreement, Seller shall take all action required to assure that Purchaser
experiences no liability or obligation with respect to any Employee’s employment
with Seller, whether arising out of, or provided by, any employee benefit plan
or otherwise.
7.7 Prorations. Rentals,
prepaid rentals and prepaid payments, if any (collectively,
“Rent”) shall be prorated on the basis that Purchaser shall
receive a credit for all Rent that Seller has actually received before the
Closing that is allocable to the period after the Closing and for all security
deposits held by Seller. Seller shall not receive a credit for any
Rent Seller has not received as of the Closing that is allocable to the period
prior to the Closing. If Purchaser shall collect any such Rent after
the Closing, Buyer shall promptly pay the same to Seller. Prepaid fees for
equipment retrieval (“Pick-up Fees”) for equipment not retrieved by Seller as of
Closing shall be credited to Purchaser. Purchaser and Seller shall
account to one another thirty (30) days after Closing respecting any Rents
or
Pick-up Fees owed and any amounts due as shown on such accounting shall be
paid
within sixty (60) days of Closing.
8. COSTS
Each
of the parties shall pay all of
their own costs and expenses (including attorneys’ fees) incurred or to be
incurred in the negotiation and preparation of this Agreement and in closing
and
carrying out the transactions contemplated by this Agreement.
9. INDEMNIFICATION
9.1 Seller’s
and Owner’s Indemnification. Seller and Owner jointly and
severally indemnify and agree to hold Purchaser, its shareholders, officers,
directors and representatives (collectively, the “Purchaser Parties”) harmless
from, against and in respect of, and shall (subject to the limitations set
forth
in this Section 9) on demand reimburse the Purchaser Parties for, any payment,
loss, cost or expense (including reasonable attorneys’ fees and reasonable costs
of investigation incurred in defending against such payment, loss, cost or
expense or claim therefor) (collectively, “Damages”) made or incurred by or
asserted against Purchaser Parties at any time after the date of Closing in
respect of
(a)
any and all liabilities or
obligations of Seller, or claims against or imposed on Purchaser Parties, of
any
nature (whether accrued, absolute, contingent or otherwise and whether a
contractual, tax or other type of liability, obligation or claim) not assumed
by
Purchaser pursuant to this Agreement;
(b) any
and all damage or
deficiency resulting from any omission, misrepresentation, breach of warranty,
or nonfulfillment of any term, provision, covenant or agreement on the part
of
Seller contained in this Agreement, or from any misrepresentation in, or
omission from, any instrument furnished to Purchaser pursuant to this
Agreement;
(c) any
and all liabilities,
obligations, claims, damage or deficiency arising out of or related to any
matter relating to the operation of Seller’s Business prior to the date of
Closing or relating to Seller’s or Owner’s relationship with any other
stockholder, employee, former employee, contractor or other party to any
agreement with Seller or Owner; and
(d)
to the extent not otherwise covered
in subsections (a) – (c) of this Section 9.1, the obligations of Seller under
Section 2.1(i) of this Agreement.
9.2 Purchaser’s
Indemnification. Purchaser agrees to indemnify and hold Seller
harmless against, and will reimburse Seller on demand for Damages made or
incurred by or asserted against Seller at any time after the date of Closing
in
respect of any omission, misrepresentation, breach of warranty, or
nonfulfillment or any term, provision, covenant or agreement on the part of
Purchaser contained in this Agreement, or from any misrepresentation in, or
omission from, any instrument furnished or to be furnished to Seller pursuant
to
this Agreement.
9.3 Conditions
of Indemnification. With respect to any actual or potential
claim, any written demand, the commencement of any action, or the occurrence
of
any other event that involves any matter or related series of matters (a
“Claim”) against which a party hereto is indemnified (the “Indemnified Party”)
by another party (the “Indemnifying Party”) under Section 9.1 or 9.2
hereof:
(a) Promptly
after the Indemnified Party first receives written documents pertaining to
the
Claim, or if such Claim does not involve a third party Claim (a “Third Party
Claim”), promptly after the Indemnified Party first has actual knowledge of such
Claim, the Indemnified Party shall give notice to the Indemnifying Party of
such
Claim in reasonable detail and stating the amount involved, if known, together
with copies of any such written documents.
(b) The
Indemnifying Party shall have no obligation to indemnify the Indemnified Party
with respect to any Claim if (i) the Indemnified Party fails to give the notice
with respect thereto in accordance with subsection (a) of this Section 9.3,
or
(ii) the notice with respect thereto is not given on or before the third
anniversary of the date of Closing.
(c) If
the Claim involves a Third Party Claim, then the Indemnifying Party shall have
the right, at its sole cost, expense and ultimate liability regardless of the
outcome, and through counsel of its own choice (which counsel shall be
reasonably satisfactory to the Indemnified Party), to litigate, defend, settle
or otherwise attempt to resolve such Third Party Claim; provided, however,
that
if in the Indemnified Party’s reasonable judgment a conflict of interest may
exist between the Indemnified Party and the Indemnifying Party with respect
to
such Third Party Claim, then the Indemnified Party shall be entitled to select
counsel of its own choosing, reasonably satisfactory to the Indemnifying Party,
in which event the Indemnifying Party shall be obligated to pay the fees and
expense of such counsel. Notwithstanding the preceding sentence, the
Indemnified Party may elect, at any time and at the Indemnified Party’s sole
cost, expense and ultimate liability, regardless of the outcome, and through
counsel of its choice, to litigate, defend, settle or otherwise attempt to
resolve such Third Party Claim. If the Indemnified Party so elects
(for reasons other than the Indemnifying Party’s failure or refusal to provide a
defense to such Third Party Claim), then the Indemnifying Party shall have
no
obligation to indemnify the Indemnified Party with respect to such Third Party
Claim, but such disposition will be without prejudice to any other right the
Indemnified Party may have to indemnification under Section 9.1 or 9.2 hereof,
regardless of the outcome of such Third Party Claim. If the
Indemnifying Party fails or refuses to provide a defense to any Third Party
Claim, then the Indemnified Party shall have the right to undertake the defense,
compromise or settlement of such Third Party Claim, through counsel of its
own
choice, on behalf of and for the account and at the risk of the Indemnifying
Party, and the Indemnifying Party shall be obligated to pay the costs, expenses
and attorneys’ fees incurred by the Indemnified Party in connection with such
Third Party Claim. In any event, Purchaser and Seller shall fully
cooperate with each other and their respective counsel in connection with any
such litigation, defense, settlement or other attempted resolution.
9.4 Escrow
Balance Applicable to Claims. If Purchaser Parties make a Claim
under Section 9.1 and such Claim remains unresolved at the expiration of the
Escrow Period, then any then-existing Escrow Balance shall be distributed to
Purchaser and held in trust for application against such Claim. If
the Claim is finally resolved in such a manner that there remains an Escrow
Balance after such resolution, such Escrow Balance shall be transferred to
Seller promptly after such final resolution. Purchaser shall pay no
interest on any Escrow Balance distributed to it and may commingle such funds
with other Purchaser assets.
9.5 Limitation.
(a) The
total aggregate
liability of Seller or Owner for Damages under Section 9 shall not
exceed Three Hundred Sixty Thousand Dollars ($360,000.00);
provided
however, that the foregoing limitation shall not apply to any Claim relating
to
Taxes, title to the Assets, violation of environmental Laws or of ERISA, fraud,
intentional misrepresentation or willful misconduct on the part of
Seller.
(b) The
total aggregate
liability of Purchaser for Damages under Section 9 shall not exceed Three
Hundred Sixty Thousand Dollars ($360,000.00); provided, however, that the
foregoing limitation shall not apply to any Claim relating to any fraud,
intentional misrepresentation or willful misconduct on the part of
Purchaser.
10. COVENANT
NOT TO COMPETE / NON-SOLICITATION
Seller
covenants and agrees that, as a
material consideration running to Seller for Purchaser’s payments hereunder, for
a period of three (3) years after the date of Closing Seller shall not engage
in, carry on, directly or indirectly, either for itself or as a member of a
partnership or as a stockholder, investor, agent, associate or consultant of
any
person, partnership or corporation, compete in container or semi-trailer sales
or the portable storage business (i.e., semi-trailer leasing, container rental,
dry-van storage and portable office rental) within the states of Kansas,
Missouri, Illinois, Nebraska, Colorado, Wisconsin, Minnesota, South Dakota
and
Iowa (the “States”). The parties intend that the covenants contained
in this Section 10 shall be deemed to be a series of separate covenants, one
for
each of the States and, except for geographic coverage, each such separate
covenant shall be identical in terms to the covenant contained in this Section
10. Seller further covenants and agrees that for a period of three
(3) years after the date of Closing Seller shall not (i) recruit, hire, assist
others in recruiting or hiring, discuss employment with, or refer to others
concerning employment, any of Seller’s former employees who are employed by
Purchaser or any employees of Purchaser, or (ii) solicit any customers of
Purchaser or former customers of Seller. Purchaser may enforce these
provisions by any remedy under law or equity, including the seeking of temporary
and permanent injunctive relief, and the term of the covenants contained in
this
Section 10 shall be tolled for the period commencing on the date any successful
action is filed for injunctive relief or damages arising out of a breach by
Seller of this Section 10 and ending upon final adjudication (including appeals)
of such action. The parties acknowledge that Purchaser and Owner
intend to incorporate provisions similar to those in this Section 10 into the
Employment Agreement.
11. EXCLUSIVE
DEALING / NONDISCLOSURE
Seller
agrees not to offer to sell any of Seller’s assets to any other person or entity
and not to solicit, negotiate or accept any agreement with any third party
respecting the sale of any of Seller’s assets until such time as this Agreement
has been rightfully terminated by Seller or Purchaser. Each party
agrees that it will not, without the prior written consent of the other,
disclose publicly or to any third party (other than attorneys, lenders and
advisors) the terms and conditions of this Agreement except to the extent
required by law or regulation.
12. TERMINATION
AND ABANDONMENT
12.1 Termination
and Abandonment. This Agreement may be terminated and abandoned
at any time prior to Closing
(a)
by
mutual written consent of Purchaser and Seller; or
(b)
by
Purchaser, if the conditions set forth in Section 5 have not been complied
with
or performed in any material respect; or
(c)
by Seller, if the conditions set forth in Section 5 have been satisfied and
Purchaser declines or refuses to close.
12.2 Notice
of Termination. In the event of termination of this
Agreement by either Purchaser or Seller pursuant to Section 12.1, the
terminating party must give prompt written notice thereof to the non-terminating
party.
12.3 Effect
of Termination by Agreement. In the event of the
termination or abandonment of this Agreement by Purchaser or Seller pursuant
to
the provisions of Section 12.1 (a), this Agreement shall be void and of no
effect and there shall be no further liability on the part of Seller or
Purchaser.
12.4 Default
by Seller. In the event of termination by Purchaser pursuant to
the provisions of 12.1 (b), Purchaser may xxx Seller for specific performance
and for damages that Purchaser may incur or has incurred as a result of such
default, but subject to the limitations of Section 9 hereof.
12.5 Default
by Purchaser. In the event of termination by Seller
pursuant to the provisions of 12.1 (b), Seller may xxx Purchaser for damages
that Seller may incur or has incurred as a result of such default, but subject
to the limitations of Section 9 hereof.
13. MISCELLANEOUS
PROVISIONS
13.1 Headings. The
subject headings of the sections and subsections of this Agreement are included
for purposes of convenience only, and shall not affect the construction or
interpretation of any of its provisions.
13.2 Modification
and Waiver. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained herein and
supersedes all prior and contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by
all
the parties. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
13.3 Counterparts. This
Agreement may be executed simultaneously in one or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
13.4 Rights
of Parties. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of
this
Agreement on any persons other than the parties to it and their respective
successors and assigns.
13.5 Survival. The
terms, conditions, covenants, agreements, warranties and representations
contained in this Agreement shall survive payment of the purchase price by
Purchaser, transfer of the Assets and other incidents of Closing.
13.6 Binding
Affect; Assignment. This Agreement shall be binding on, and shall
inure to the benefit of, the parties to it and their respective heirs, legal
representatives, successors, and assigns. This Agreement may not be
assigned by Purchaser (except to a controlled subsidiary of or parent of
Purchaser) without the written consent of Seller, which consent may be withheld
for any reason.
13.7 Notices. All
notices, requests, demands, and other communications under this Agreement shall
be in writing and shall be deemed to have been duly given on the date served
personally on the party to whom notice is given, or on the third day after
mailing if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid, or one day after deposit for
overnight delivery with a reputable overnight delivery service, and properly
addressed as follows:
If
to
Seller or
Owner: Xx.
Xxxxxxx X. Xxxx
Warehouse
on Wheels, Inc.
0000
Xxxxx Xxxx
Xxxxxxx,
XX 00000
With
a copy
to: Xxxx
Xxxxxxxx
600
Xxxxx Fargo Center
0000
“X”
Xxxxxx
Xxxxxxx,
XX 00000
If
to
Purchaser: American
Trailer & Storage, Inc.
Attn: Xx.
Xxxx
Xxxxx
0000
Xxxxxxxxxx Xxxxxxxxxx
Xxxxxx
Xxxx, XX
00000 .
With
a copy
to: Xxxxxxx
X. Xxxxxx
McDowell,
Rice, Xxxxx &
Xxxxxxxx
000
X. 00xx Xx., Xxx.
000
Xxxxxx
Xxxx, XX 00000
13.8 Broker. Seller
agrees that it did not employ a broker in connection with this transaction
and
will indemnify Purchaser from any claim for any broker's or finder's fees,
costs
or expenses relating to the transactions contemplated by this
Agreement. Purchaser will indemnify Seller from any claim for any
broker's or finder's fees, costs or expenses relating to the transactions
contemplated by this Agreement.
13.9 Governing
Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of Nebraska.
[SIGNATURE
PAGE FOLLOWS]
[SIGNATURE
PAGE TO ASSET PURCHASE AGREEMENT AMONG AMERICAN TRAILER & STORAGE,
INC., WAREHOUSE ON WHEELS, INC. AND XXXXXXX X.
XXXX]
IN
WITNESS WHEREOF, the parties to this Agreement have duly executed it on the
day
and year first above written.
SELLER:
WAREHOUSE
ON WHEELS, INC.
a
Nebraska
corporation
Dated: August
22,
2007 By: //s//Xxxxxxx
X. Xxxx//s//
Name: Xxxxxxx
X.
Xxxx
Title: President
OWNER:
//s//Xxxxxxx
X.
Xxxx//s//
Xxxxxxx
X. Xxxx
PURCHASER:
|
Dated:
_August 22, 2007________
|
AMERICAN
TRAILER & STORAGE, INC., a Missouri
corporation
|
By: //s//Xxxxxxx
X. Xxxxx
XX//s//
Name: Xxxxxxx
X. Xxxxx
XX
Title: President
