ASSET PURCHASE AGREEMENT dated as of June 6, 2007 by and among COMTRAK LOGISTICS, INC., HUB CITY TERMINALS, INC., INTERDOM PARTNERS, COMMERCIAL CARTAGE, INC., PRIDE LOGISTICS, L.L.C. and THE OTHER PARTIES SIGNATORY HERETO
EXHIBIT
10.1
dated
as of June 6, 2007
by
and among
COMTRAK
LOGISTICS, INC.,
HUB
CITY TERMINALS, INC.,
INTERDOM
PARTNERS,
COMMERCIAL
CARTAGE, INC.,
PRIDE
LOGISTICS, L.L.C.
and
THE
OTHER PARTIES SIGNATORY HERETO
TABLE
OF CONTENTS
ARTICLE
I Definitions
|
1.1
|
Previously
Defined Terms
|
|
|
1.2
|
Definitions
|
|
1.3
|
Interpretation
|
|
ARTICLE
II Purchase and Sale, Purchase Price, Allocation and Other Related
Matters
|
2.1
|
Purchase
and Sale
|
|
|
2.2
|
Purchase
Price
|
|
|
2.3
|
Payment
of the Purchase Price
|
|
|
2.4
|
Closing
Balance Sheet
|
|
|
2.5
|
Purchase
Price Settlement
|
|
|
2.6
|
Assumed
Liabilities
|
|
|
2.7
|
Retained
Liabilities
|
|
|
2.8
|
Accounts
Receivable Guarantee and Return
|
|
|
2.9
|
Transfer
Taxes
|
|
|
2.10
|
Allocation
|
|
ARTICLE
III Closing and Closing Date Deliveries
|
3.1
|
Closing
|
|
|
3.2
|
Closing
Deliveries by Sellers
|
|
|
3.3
|
Closing
Deliveries by Purchasers
|
|
|
3.4
|
Cooperation
|
|
ARTICLE
IV Pre-Closing Filings
|
4.1
|
Government
Filings
|
|
ARTICLE
V Pre-Closing Covenants
|
5.1
|
Due
Diligence Review
|
|
|
5.2
|
Maintenance
of Business and Notice of Changes
|
|
|
5.3
|
Pending
Closing
|
|
|
5.4
|
Consents
|
|
|
5.5
|
Commercially
Reasonable Efforts to Close
|
|
|
5.6
|
Pre-Closing
Use of Names
|
|
|
5.7
|
Transfer
of Related Business Assets
|
|
|
5.8
|
Retained
Entities Reconciliation
|
|
ARTICLE
VI Financial Statements; Disclosure Schedule
|
6.1
|
Pre-Signing
Deliveries
|
|
ARTICLE
VII Representations and Warranties of Sellers
|
7.1
|
Due
Formation
|
|
|
7.2
|
Authority
|
|
|
7.3
|
No
Violations and Consents
|
|
|
7.4
|
Brokers
|
|
|
7.5
|
Required
Assets
|
|
|
7.6
|
Related
Party Transactions
|
|
|
7.7
|
Title
to Purchased Assets
|
|
|
7.8
|
Condition
of Assets
|
|
|
7.9
|
Real
Property
|
|
|
7.10
|
Litigation
and Compliance with Laws
|
|
|
7.11
|
Intellectual
Property
|
|
|
7.12
|
Contracts
|
|
|
7.13
|
Financial
Statements and Related Matters
|
|
|
7.14
|
Changes
Since the Most Recent Year-End Balance Sheet Date
|
|
|
7.15
|
Insurance
|
|
|
7.16
|
Licenses
and Permits
|
|
|
7.17
|
Environmental
Matters
|
|
|
7.18
|
Employee
Benefit Plans
|
|
|
7.19
|
Taxes
|
|
|
7.20
|
Suppliers;
Customers; BNSF and NS.
|
|
|
7.21
|
Full
Disclosure
|
|
ARTICLE
VIII Representations and Warranties of Purchasers
|
8.1
|
Due
Incorporation
|
|
|
8.2
|
Authority
|
|
|
8.3
|
No
Violations
|
|
|
8.4
|
Brokers
|
|
ARTICLE
IX Conditions to Closing Applicable to Purchasers
|
9.1
|
No
Termination
|
|
|
9.2
|
Bring-Down
of Sellers' Warranties and Covenants
|
|
|
9.3
|
No
Material Adverse Change
|
|
|
9.4
|
Pending
Actions
|
|
|
9.5
|
Required
Contract Consents
|
|
|
9.6
|
Required
Governmental Approvals
|
|
|
9.7
|
Required
Permits
|
|
|
9.8
|
Due
Diligence
|
|
|
9.9
|
Environmental
Assessment Report
|
|
|
9.10
|
Retained
Earnings
|
|
|
9.11
|
Non-Foreign
Person Certification
|
|
|
9.12
|
All
Necessary Documents
|
|
ARTICLE
X Conditions to Closing Applicable to Sellers
|
10.1
|
No
Termination
|
|
|
10.2
|
Bring-Down
of Purchasers' Warranties and Covenants
|
|
|
10.3
|
Pending
Actions
|
|
|
10.4
|
All
Necessary Documents
|
|
ARTICLE
XI Termination
|
11.1
|
Termination
|
|
ARTICLE
XII Indemnification
|
12.1
|
Indemnification
by Sellers
|
|
|
12.2
|
Indemnification
by Purchaser
|
|
|
12.3
|
Claim
Procedure/Notice of Claim
|
|
|
12.4
|
Survival
of Representations, Warranties and Covenants; Determination of Adverse
Consequences
|
|
|
12.5
|
Limitations
on Indemnification Obligations
|
|
|
12.6
|
Right
of Set-Off
|
|
ARTICLE
XIII Confidentiality
|
13.1
|
Confidentiality
of Materials
|
|
|
13.2
|
Remedy
|
|
ARTICLE
XIV Employee Matters
|
14.1
|
Employees
to be Hired by Purchasers
|
|
|
14.2
|
Workers'
Compensation, Medical Claims and Retirees
|
|
ARTICLE
XV Certain Other Agreements
|
15.1
|
Post-Closing
Access to Records
|
|
|
15.2
|
Consents
Not Obtained at Closing
|
|
|
15.3
|
Post-Closing
Tax Matters
|
|
|
15.4
|
Bulk
Sale Waiver and Indemnity
|
|
|
15.5
|
Non-Competition;
Non-Solicitation
|
|
|
15.6
|
Use
of Sellers' Names
|
|
|
15.7
|
Guarantees
|
|
ARTICLE
XVI Miscellaneous
|
16.1
|
Cost
and Expenses
|
|
|
16.2
|
Entire
Agreement
|
|
|
16.3
|
Counterparts
|
|
|
16.4
|
Assignment,
Successors and Assigns
|
|
|
16.5
|
Savings
Clause
|
|
|
16.6
|
Headings
|
|
|
16.7
|
Risk
of Loss
|
|
|
16.8
|
Governing
Law
|
|
|
16.9
|
Press
Releases and Public Announcements
|
|
16.10 | U.S. Dollars |
16.11 | Survival |
16.12 | Notices |
16.13 | SUBMISSION TO JURISDICTION; VENUE |
16.14 | No Third-Party Beneficiary |
16.15 | Disclosures |
16.16 | Enforcement Costs |
16.17 | Sellers' Obligations |
- -
Exhibit
Index
Exhibit
|
Description
|
Section
Reference
|
A
|
Earnout
Payments
|
Definitions
|
B
|
Illustrative
Calculation of Net Working Capital
|
Definitions
|
C
|
Proprietary
Interest Protection and Non-Solicitation Agreement
|
Definitions
|
D
|
Restricted
Stock Agreement
|
Definitions
|
E
|
[Intentionally
Omitted]
|
|
F
|
Stockholder
Employment and Non-Compete Agreement
|
Definitions
|
G
|
Purchase
Price Allocation
|
2.9
|
H
|
Sellers'
Bills of Sale
|
3.2
|
I
|
Sellers'
Counsel's Opinion
|
3.2
|
J
|
Landlord
Consent and Estoppel Certificate
|
3.2
|
K
|
Assumption
Agreement
|
3.3
|
- -
Disclosure
Schedule Index
Section
5.3
-
Pending Closing
Section
7.1
-
Foreign Qualifications
Section
7.3
-
Required Consents and Approvals
Section
7.6
-
Related Party Transactions
Section
7.7
-
Personal Property
Section
7.8
-
Condition of Assets
Section
7.9
-
Leased Real Property
Section
7.10(a)
-
Litigation and Compliance with Laws
Section
7.10(c)
- Labor
Section
7.11
- Intellectual
Property
Section
7.12
- Contracts
Section
7.13(a)
- Financial
Statements
Section
7.13(e)
- Indebtedness
Section
7.14
- Changes
Since the Most Recent Year-End Balance Sheet
Section
7.15
- Insurance
Section
7.16
- Licenses
and Permits
Section
7.17
- Environmental
Matters
Section
7.18
- Employee
Benefits
Section
7.20(a)
- Suppliers
Section
7.20(b)
- Customers
Section
7.20(c)
- BNSF
and NS
Schedule
Index
Schedule
2.1
- Certain
Retained Assets
Schedule
2.3
- Illustrative
Calculation of Earnout Payments and Catch-Up Payments
Schedule
9.5
- Certain
Required Consents and Approvals
Schedule
9.9
- Environmental
Assessment Reports
Schedule
12.1(f)
- Certain
Indemnified Matters
- -
This
Asset Purchase Agreement is made and entered into as of June 6, 2007 (this
"Agreement") by and among COMTRAK LOGISTICS, INC., a Delaware corporation
("Comtrak"), HUB CITY TERMINALS, INC., a Delaware corporation ("Hub
City" and, together with Comtrak, the "Purchasers"), HUB GROUP, INC.,
a Delaware corporation ("Parent"), INTERDOM PARTNERS, a general
partnership organized under the laws of Illinois (the "Partnership"),
COMMERCIAL CARTAGE, INC., a Nevada corporation (the "Company"), PRIDE
LOGISTICS, L.L.C., an Illinois limited liability company (the "LLC" and,
together with the Partnership and the Company, "Sellers"), INTERDOM,
INC., an Illinois corporation ("Interdom"), MIDAS INVESTMENTS OF NAPLES,
INC., a Florida corporation ("Midas" and, together with Interdom, the
"Partners"), Xxxxxxx X. Xxxxx, an individual residing in Palos Heights,
Illinois ("Xxxxx"), and Xxxxxx Xxxxxxxxx, an individual residing in Oak
Brook, Illinois ("Xxxxxxxxx" and, together with Xxxxx, the "Principal
Stockholders"), Xxxxxx Xxxxx, an individual residing in Mooresville, North
Carolina ("Xxxxx" and, collectively with the Principal Stockholders, the
"Stockholders"), XXXXXX CONSULTANTS, LTD., an Illinois corporation
("Xxxxxx Consultants"), and BOGFID, INC., an Illinois corporation
("BOGFID" and, together with Xxxxxx Consultants, the
"Members").
RECITALS:
A. Each
of the Company and the LLC engages in, and arranges for, the transportation
of
goods in interstate and intrastate commerce as a common carrier, contract
carrier and broker pursuant to permits issued by various federal and state
authorities (respectively, the "Company's Business" and the "LLC's
Business") and the Partnership engages in the provision of intermodal
services to the shipping industry (the "Partnership's Business" and,
together with the Company's Business and the LLC's Business, the
"Business").
X. Xxxxxxx
desire to sell the Business and substantially all of their assets and properties
and Purchasers desire to acquire the Business and substantially all of the
assets and properties of Sellers, on the terms and subject to the conditions
hereinafter set forth.
C. The
Partners own, beneficially and of record, all of the outstanding partnership
interests of the Partnership; Xxxxx owns, beneficially and of record,
96.7% of the outstanding capital stock of Interdom; and
Xxxxxxxxx owns, beneficially and of record, all of the outstanding capital
stock
of Midas.
D. Collectively,
the Stockholders own, beneficially and of record, all of the outstanding capital
stock of the Company; and the Principal Stockholders together own, beneficially
and of record, 98% of the outstanding capital stock of the Company.
E. Collectively,
the Members own, beneficially and of record, all of the outstanding membership
interests of the LLC; W. Xxx Xxxxxx, an individual residing in New Lenox,
Illinois ("Xxxxxx") owns, beneficially and of record, all of the
outstanding capital stock of Xxxxxx Consultants; and collectively, Rudie, Kranz,
J. Xxxxxxx X'Xxxxx, an individual residing in Holmdel, New Jersey, Xxxxx Xxxxx,
an individual residing in Hinsdale, Illinois, Xxxxx Xxxxx, an individual
residing in Batavia, Illinois, Xxxx Xxxx Xxxxx, an individual residing in Los
Alamitos, California, and Xxx Xxxxxx, an individual residing in Chicago,
Illinois, own, beneficially and of record, all of the outstanding capital stock
of BOGFID.
NOW,
THEREFORE, in consideration of the foregoing recitals, the representations,
warranties and covenants set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto hereby agree as follows:
ARTICLE
I
Definitions
1.1 Previously
Defined Terms. Each term defined in the first paragraph or
Recitals shall have the meaning set forth above whenever used herein, unless
otherwise expressly provided or unless the context clearly requires
otherwise.
1.2 Definitions. Whenever
used herein, the following terms shall have the meanings set forth below unless
otherwise expressly provided or unless the context clearly requires
otherwise:
"Accounts
Receivable" means the Company Accounts Receivable, the Partnership Accounts
Receivable and the LLC Accounts Receivable.
"Adjustment
Report" - As defined in Section 2.4(b).
"Adverse
Consequences" means all allegations, charges, complaints, actions, suits,
proceedings, hearings, investigations, claims, demands, Orders, damages, dues,
penalties, fines, costs, amounts paid in settlement, Liabilities, Taxes,
interest, Liens, losses, expenses and fees, including all reasonable accounting
and attorneys' fees and court costs, costs of expert witnesses and other
expenses of litigation.
"Affiliate"
means a Person which, directly or indirectly, is controlled by, controls, or
is
under common control with, another Person. As used in the preceding
sentence, "control" shall mean and include, but not necessarily be limited
to,
(i) the ownership of more than 50% of the voting securities or other voting
interest of any Person, or (ii) the possession, directly or indirectly, of
the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise. With respect to any individual, the immediate family
members thereof shall be deemed Affiliates of such individual.
"Alternative
Proposal" - As defined in Section 5.3(s).
"Assumed
Liabilities" means the Company Assumed Liabilities, the Partnership Assumed
Liabilities and the LLC Assumed Liabilities.
"Assumed
Taxes" means (i) real and personal property Taxes related to the Purchased
Assets to the extent that such Taxes are not yet due and payable on or before
the Closing Date and have been reserved for as a Current Liability on the Final
Closing Balance Sheet; and (ii) withholdings, payroll, employment, social
security or similar Taxes related to the Transferred Employees to the extent
such Taxes are not yet due and payable on or before the Closing Date and have
been reserved for as a Current Liability on the Final Closing Balance
Sheet.
"Base
Purchase Price" means $24,467,168.
"Benefit
Plans" - As defined in Section 7.18(b).
"BOGFID"
- As defined in the introductory paragraph to this Agreement.
"Business" -
As defined in the Recitals.
"Business
Day" means any day other than a Saturday or Sunday or other day on which
banks in Chicago, Illinois are authorized or required to be closed.
"Business
EBITDA" means, for any Earnout Period, the combined income of the Business
before interest, income taxes, depreciation and amortization for such Earnout
Period, calculated in accordance with GAAP and based on the same accounting
principles and procedures applied in the preparation of Sellers' Most Recent
Year-End Financial Statements. The parties hereto acknowledge and
agree that (a) Business EBITDA shall not include any gain or loss on the sale
of
equipment or investments and (b) Business EBITDA shall not include any income
or
gain attributed to the write-off of accounts payable.
"Business
EBITDA Shortfall" - As defined in Section 2.3(c)(ii).
"Xxxxxxxxx"
- As defined in the introductory paragraph to this Agreement.
"Cap"
- As defined in Section 12.5(b).
"Cash"
means the Company Cash and the Partnership Cash.
"Cash
Purchase Price" - As defined in Section 2.2(a).
"Catch-Up
Payment" - As defined in Section 2.3(c)(iii).
"CERCLA"
- As defined in clause (i) of the definition of Hazardous Material.
"Claim
Notice" - As defined in Section 12.3(a).
"Claimed
Amount" - As defined in Section 12.3(a).
"Closing"
- As defined in Section 3.1.
"Closing
Accounts Receivable" means all Accounts Receivable outstanding as of the
Closing Date.
"Closing
Date" - As defined in Section 3.1.
"COBRA"
means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code
Section 4980B.
"Code"
means the Internal Revenue Code of 1986, as amended and the rules and
regulations promulgated thereunder.
"Company"
- As defined in the introductory paragraph to this Agreement.
"Company
Accounts Receivable" - As defined in clause (ii) of the definition of
Company Purchased Assets.
"Company
Assumed Liabilities" - As defined in Section 2.6(a).
"Company
Cash" - As defined in clause (i) of the definition of Company Purchased
Assets.
"Company
Prepaids" - As defined in clause (iii) of the definition of Company
Purchased Assets.
"Company
Purchased Assets" means the Company's Business and, except for the Company
Retained Assets, all assets, rights and properties owned by the Company on
the
Closing Date, whether or not carried and reflected on the books of the Company,
including the following:
(i) All
cash
and cash equivalents and marketable securities of the Company (collectively,
"Company Cash");
(ii) All
accounts, notes, contract and other receivables of the Company (collectively,
"Company Accounts Receivable");
(iii) All
deposits and advances, prepaid expenses and other prepaid items of the Company,
to the extent the foregoing are transferable to Comtrak and the full amount
thereof is realizable by Comtrak after the Closing, but not including any
prepaid insurance, taxes and licenses (collectively, "Company
Prepaids");
(iv) All
tangible assets, including vehicles and other transportation equipment,
machinery, equipment, tools, spare parts, operating supplies, furniture and
office equipment, fixtures, leasehold improvements, telephone systems,
telecopiers, photocopiers and computer hardware of the Company, including all
tangible assets listed in Section 7.7 of the Disclosure
Schedule;
(v) All
of
the Company's right, title and interest in and to the Leased Real
Property;
(vi) All
of
the Company's right, title and interest in, to or under (A) the Contracts
described in Section 7.12 of the Disclosure Schedule, (B) any executory
Contracts of the Company which relate to the Company's Business and are not
required to be listed in the Disclosure Schedule pursuant to Section 7.12
of this Agreement; and (C) any executory Contracts entered into by the Company
relating to the Company's Business after the date hereof in the Ordinary Course
and in compliance with the terms and provisions of this Agreement;
(vii) All
of
the Company's right, title and interest in and to the following intellectual
property: the name "Commercial Cartage" and all derivatives thereof; trade
names, trademarks, trademark registrations, trademark applications, service
marks, service xxxx registrations, service xxxx applications; copyrights,
copyright registrations, copyright applications; patent rights (including issued
patents, applications, divisions, continuations and continuations-in-part,
reissues, patents of addition, utility models and inventors' certificates);
domain names; licenses with respect to any of the foregoing; trade secrets,
proprietary manufacturing information and know-how; computer software,
inventions, inventors' notes, drawings and designs; customer and vendor lists
and the goodwill associated with any of the foregoing, including any of the
foregoing described in the Disclosure Schedule;
(viii) All
permits and licenses of the Company to the extent transferable or assignable
to
Comtrak;
(ix) All
of
the Company's right, title and interest in choses in action, claims and causes
of action or rights of recovery or set-off of every kind and character,
including under warranties, guarantees and indemnitees;
(x) All
of
the Company's files, papers, documents and records, including credit, sales
and
accounting records, price sheets, catalogues and sales literature, books,
processes, advertising material, stationery, office supplies, forms, catalogues,
manuals, correspondence, logs, employment records and any other information
reduced to writing;
(xi) A
copy of
the Company's general ledgers and books of original entry;
(XII) All
other
assets of the Company relating to the Company's Business wherever located;
and
(xiii) The
Company's Business as a going concern.
"Company
Retained Assets" means the following:
(i) the
Company's corporate seal, minute books and stock record books, the general
ledgers and books of original entry, all tax returns and other tax records,
reports, data, files and documents;
(ii) all
Company Accounts Receivable that are owed to it by the Partnership or the LLC,
any other Affiliate of any Seller (including any Stockholder, Partner or Member)
or any Retained Entity;
(iii) all
of
the Company's right, title and interest in choses of action, claims and causes
of action or rights of recovery or set-off of every kind and character,
including under warranties, guarantees and indemnitees, but only to the extent
related solely to another Company Retained Asset or a Company Retained Liability
(and not related to any Company Purchased Asset or Company Assumed
Liability);
(iv) the
Company's rights under this Agreement;
(v) all
of
the Company's right, title and interest in any insurance policies, including
those identified in Section 7.15 of the Disclosure Schedule, together
with the right to make claims thereunder and to seek refunds of premiums paid
on
account thereof; and
(vi) all
of
the Company's right, title and interest in, to and under the assets identified
on Schedule 2.1.
"Company
Retained Liabilities" - As defined in Section 2.7(a).
"Company's
Business" - As defined in the Recitals.
"Company's
Unaudited Financial Statements" - As defined in Section
6.1(b).
"Comtrak"
- As defined in the introductory paragraph to this Agreement.
"Contract"
means, with respect to any Person, any contract, agreement, deed, mortgage,
lease, license, commitment, arrangement or undertaking, written or oral, or
other document or instrument to which or by which such Person is a party or
otherwise subject or bound or to which or by which any asset, property or right
of such Person is subject or bound.
"Controlling
Party" - As defined in Section 12.3(d).
"Current
Assets" means Sellers' combined Cash, Accounts
Receivable and Prepaids; provided, that Current
Assets does not include interest receivable, "due from Impact Transload", "due
from Commercial Cartage", "investment in Intermodal MGMT Systems", "investment
in IT & ITR", "loan to Regal Transportation", "due from Impact
Transportation", "prepaid insurance", "insurance deposits" and "Computer
Equipment" (as referenced in the Financial Statements) or any other Retained
Assets.
"Current
Liabilities" means those combined liabilities of Sellers that constitute
trade and other normal operating payables and accrued expenses incurred in
the
Ordinary Course; provided, that Current Liabilities does not include any claims
payable, "line of credit" or "due to Interdom" (as referenced in the Financial
Statements) or other Retained Liabilities.
"Disclosure
Schedule" means the letter dated even date herewith delivered to Purchasers
by Sellers pursuant to Section 6.1(d) simultaneously with the execution
and delivery of this Agreement.
"Disposition
Period" - As defined in Section 15.5(e).
"Earnout
Payment" - As defined in Section 2.3(c)(i).
"Earnout
Payment Penalty" - As defined in Section 2.3(c)(ii).
"Earnout
Period" - As defined in Section 2.3(c)(i).
"Environmental
Claim" means any and all Adverse Consequences (including expenditures for
investigation and remediation) incurred by reason of the presence, Release,
threatened Release, handling or transportation of Hazardous Materials or
otherwise related to a violation or alleged violation of Environmental
Laws.
"Environmental
Laws" means any and all Laws, permits, approvals, authorizations, Orders and
other requirements having the force and effect of law, whether local, state,
territorial or national, at any time in force or effect relating
to: (i) emissions, discharges, spills, releases or threatened
releases of Hazardous Materials; (ii) the use, treatment, storage, disposal,
handling, manufacturing, transportation or shipment of Hazardous Materials;
(iii) the regulation of storage tanks; or (iv) otherwise relating to pollution
or the protection of human health, safety or the environment, including the
following statutes as now written and amended, and as amended hereafter,
including any and all regulations promulgated thereunder and any and all state
and local counterparts: CERCLA, the Federal Water Pollution Control
Act, 33 U.S.C. §1251 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the
Toxic Substances Xxxxxxx Xxx, 00 X.X.X. §0000 et seq., the Xxxxx Xxxxx Xxxxxxxx
Xxx, 00 X.X.X. §0000 et seq., the Emergency Planning and Community Right-to-Know
Act of 1986, 00 X.X.X. §00000 et seq., and the Safe Drinking Xxxxx Xxx, 00
X.X.X. §000x et seq.
"ERISA"
means the Employee Retirement Income Security Act of 1974 and the rules and
regulations promulgated thereunder.
"ERISA
Affiliate" means, with respect to any Person, each corporation, trade or
business that is, along with such Person, part of the controlled group of
corporations, trades or businesses under common control within the meaning
of
sections 414(b), (c), (m) or (o) of the Code.
"Estimated
Net Working Capital" - As defined in Section 2.3(a).
"Estimated
Retained Earnings" - As defined in Section 2.3(a).
"Estimated
Retained Earnings Adjustment Amount" means an amount equal to (i) the amount
of the Estimated Retained Earnings, minus (ii) the amount by which the
Estimated Net Working Capital is less than the Estimated Retained
Earnings.
"Excess
Business EBITDA" - As defined in Section 2.3(c)(iii).
"Final
Closing Balance Sheet" - As defined in Section 2.4(d).
"Final
Closing Statements" - As defined in Section 2.4(a).
"Final
Net Working Capital" means the Net Working Capital as reflected on the Final
Closing Balance Sheet.
"Final
Net Working Capital Calculation" - As defined in Section
2.4(a).
"Final
Retained Earnings" means the Retained Earnings as reflected on the Final
Closing Balance Sheet.
"Final
Retained Earnings Adjustment Amount" means an amount equal to (i) the amount
of the Final Retained Earnings, minus (ii) the amount by which the Final
Net Working Capital is less than the Final Retained Earnings.
"Final
Retained Earnings Calculation" - As defined in Section
2.4(a).
"Final
Statement of Earnings" - As defined in Section 2.4(a).
"Financial
Statements" means the Partnership's Financial Statements, the Company's
Unaudited Financial Statements, the LLC's Unaudited Financial Statements and
the
Interim Financial Statements.
"GAAP"
means United States generally accepted accounting principles as in effect from
time to time.
"Governmental
Authority" means the government of the United States or any foreign country
or any state or political subdivision thereof and any entity, body or authority
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including quasi-governmental entities
established to perform such functions.
"Hazardous
Material" means (i) all substances, wastes, pollutants, contaminants and
materials (collectively, "Substances") regulated, or defined or
designated as hazardous, extremely or imminently hazardous, dangerous or toxic,
under the following federal statutes and their state counterparts, as well
as
these statutes' implementing regulations: the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq. ("CERCLA") the Federal Insecticide, Fungicide, and Rodenticide
Act, 7 U.S. C. Section 136 et seq; the Atomic Energy Act, 42 U.S.C. Section
22011 et seq; and the Hazardous Materials Transportation Act, 42 U.S.C. Section
1801 et seq; (ii) all Substances with respect to which any Governmental
Authority otherwise requires environmental investigation, monitoring, reporting,
or remediation; (iii) petroleum and petroleum products and by products including
crude oil and any fractions thereof; (iv) natural gas, synthetic gas, and any
mixtures thereof; and (v) radon, radioactive substances, asbestos, urea
formaldehyde, and polychlorinated biphenyls ("PCBs").
"Hub
City" - As defined in the introductory paragraph to this
Agreement.
"Indebtedness"
shall mean (a) all indebtedness for borrowed money or for the deferred purchase
price of property or services (including reimbursement and all other obligations
with respect to surety bonds, letters of credit and bankers' acceptances,
whether or not matured), including the current portion of such indebtedness,
(b)
all obligations evidenced by notes, bonds, debentures or similar instruments,
(c) all capital lease obligations and (d) all guarantees of any of the items
set
forth in clauses (a) - (c) above.
"Indemnified
Party" - As defined in Section 12.3(a).
"Indemnifying
Party" - As defined in Section 12.3(a).
"Independent
Auditors" - As defined in Section 2.4(c).
"Information"
- As defined in Section 13.1.
"Interdom"
- As defined in the introductory paragraph to this Agreement.
"Interdom
Related Entities" - As defined in Section 5.7.
"Interim
Balance Sheet" means, for each Seller, such Seller's balance sheet included
in the Interim Financial Statements.
"Interim
Balance Sheet Date" means March 31, 2007.
"Interim
Financial Statements" - As defined in Section 6.1(c).
"IRS"
means the Internal Revenue Service.
"Xxxxx"
- As defined in the introductory paragraph to this Agreement.
"Law"
means any law, statute, code, regulation, ordinance, rule, Order, or
governmental requirement enacted, promulgated, entered into, agreed, imposed
or
enforced by any Governmental Authority.
"Lease"
- As defined in Section 7.9(b).
"Leased
Real Property" - As defined in Section 7.9(b).
"Liabilities"
means any obligation or liability (whether known or unknown, whether asserted
or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated and whether due or to become due), including
any liability for Taxes.
"Lien"
means any mortgage, lien, charge, restriction, pledge, security interest,
option, lease or sublease, claim, right of any third party, easement,
encroachment or encumbrance or other charges or rights of others of any kind
or
nature.
"LLC"
- As defined in the introductory paragraph to this Agreement.
"LLC
Accounts Receivable" - As defined in clause (ii) of the definition of LLC
Purchased Assets.
"LLC
Assumed Liabilities" - As defined in Section 2.6(c).
"LLC
Cash" - As defined in clause (i) of the definition of LLC Purchased
Assets.
"LLC
Prepaids" - As defined in clause (iii) of the definition of LLC Purchased
Assets.
"LLC
Purchased Assets" means the LLC's Business and, except for the LLC Retained
Assets, all assets, rights and properties owned by the LLC on the Closing Date,
whether or not carried and reflected on the books of the LLC, including the
following:
(i) All
cash
and cash equivalents and marketable securities of the LLC (collectively, "LLC
Cash");
(ii) All
accounts, notes, contract and other receivables of the LLC (collectively,
"LLC Accounts Receivable");
(iii) All
deposits and advances, prepaid expenses and other prepaid items of the LLC,
to
the extent the foregoing are transferable to Comtrak and the full amount thereof
is realizable by Comtrak after the Closing, but not including any prepaid
insurance, taxes and licenses (collectively, "LLC
Prepaids");
(iv) All
tangible assets, including vehicles and other transportation equipment,
machinery, equipment, tools, spare parts, operating supplies, furniture and
office equipment, fixtures, leasehold improvements, telephone systems,
telecopiers, photocopiers and computer hardware of the LLC, including all
tangible assets listed in Section 7.7 of the Disclosure
Schedule;
(v) All
of
the LLC's right, title and interest in and to the Leased Real
Property;
(vi) All
of
the LLC's right, title and interest in, to or under (A) the Contracts described
in Section 7.12 of the Disclosure Schedule, (B) any executory Contracts
of the LLC which relate to the LLC's Business and are not required to be listed
in the Disclosure Schedule pursuant to Section 7.12 of this Agreement;
and (C) any executory Contracts entered into by the LLC relating to the LLC's
Business after the date hereof in the Ordinary Course and in compliance with
the
terms and provisions of this Agreement;
(vii) All
of
the LLC's right, title and interest in and to the following intellectual
property: the name "Pride Logistics" and all derivatives thereof; trade names,
trademarks, trademark registrations, trademark applications, service marks,
service xxxx registrations, service xxxx applications; copyrights, copyright
registrations, copyright applications; patent rights (including issued patents,
applications, divisions, continuations and continuations-in-part, reissues,
patents of addition, utility models and inventors' certificates); domain names;
licenses with respect to any of the foregoing; trade secrets, proprietary
manufacturing information and know-how; computer software, inventions,
inventors' notes, drawings and designs; customer and vendor lists and the
goodwill associated with any of the foregoing, including any of the foregoing
described in the Disclosure Schedule;
(viii) All
permits and licenses of the LLC to the extent transferable or assignable to
Comtrak;
(ix) All
of
the LLC's right, title and interest in choses in action, claims and causes
of
action or rights of recovery or set-off of every kind and character, including
under warranties, guarantees and indemnitees;
(x) All
of
the LLC's files, papers, documents and records, including credit, sales and
accounting records, price sheets, catalogues and sales literature, books,
processes, advertising material, stationery, office supplies, forms, catalogues,
manuals, correspondence, logs, employment records and any other information
reduced to writing;
(xi) A
copy of
the LLC's general ledgers and books of original entry;
(XII) All
other
assets of the LLC relating to the LLC's Business wherever located;
and
(xiii) The
LLC's
Business as a going concern.
"LLC
Retained Assets" means the following:
(i) the
LLC's
record books, the general ledgers and books of original entry, all tax returns
and other tax records, reports, data, files and documents;
(ii) all
LLC
Accounts Receivable that are owed to it by the Company or the Partnership,
any
other Affiliate of any Seller (including any Stockholder, Partner or Member)
or
any Retained Entity;
(iii) all
of
the LLC's right, title and interest in choses of action, claims and causes
of
action or rights of recovery or set-off of every kind and character, including
under warranties, guarantees and indemnitees, but only to the extent related
solely to another LLC Retained Asset or a LLC Retained Liability (and not
related to any LLC Purchased Asset or LLC Assumed Liability);
(iv) the
LLC's
rights under this Agreement;
(v) all
of
the LLC's right, title and interest in any insurance policies, including those
identified in Section 7.15 of the Disclosure Schedule, together with the
right to make claims thereunder and to seek refunds of premiums paid on account
thereof; and
(vi) all
of
the LLC's right, title and interest in, to and under the assets identified
on
Schedule 2.1.
"LLC
Retained Liabilities" - As defined in Section 2.7(c).
"LLC's
Business" - As defined in the Recitals.
"LLC's
Unaudited Financial Statements" - As defined in Section
6.1(c).
"Material
Adverse Change" means a change that is, or could reasonably be expected to
be, materially adverse to (a) the results of operations, financial condition,
business, prospects, rights, properties, assets or liabilities of Sellers,
(b)
Sellers' relations with their management, employees, drivers, creditors,
suppliers, customers, regulators, insurers or others having business
relationships with Sellers, or (c) the ability of any Seller to consummate
the
transactions contemplated hereby or perform its obligations hereunder;
provided, that none of the following shall be deemed to constitute, and
none of the following shall be taken into account in determining whether there
has been, a Material Adverse Change: (i) any adverse change or development
relating to the United States financial, banking or securities markets or (ii)
national or international political or social conditions.
"Xxxxxx"
- As defined in the Recitals.
"Xxxxxx
Consultants" - As defined in the introductory paragraph to this
Agreement.
"Maximum
Aggregate Earnout Payments" - As defined in Section
2.3(c).
"Maximum
Annual Earnout Payment" means, for either Earnout Period, an amount equal to
fifty percent (50%) of the Maximum Aggregate Earnout Payments, subject to the
provisions of Section 2.3(c)(iii) regarding the "Catch-Up
Payment".
"Members"
- As defined in the introductory paragraph to this Agreement.
"Midas"
- As defined in the introductory paragraph to this Agreement.
"Most
Recent Year-End Balance Sheet" means, for the Partnership, the Partnership's
special purpose balance sheet as of December 31, 2006, for the Company, the
Company's unaudited balance sheet as of December 31, 2006, and, for the LLC,
the
LLC's unaudited balance sheet as of December 31, 2006.
"Most
Recent Year-End Balance Sheet Date" means December 31, 2006.
"Most
Recent Year-End Financial Statements" means, for each Seller, such Seller's
financial statements as of, and for the year ended, December 31,
2006.
"Multiemployer
Plan" - As defined in Section 7.18(a)(i).
"Net
Working Capital" means the Current Assets minus the Current Liabilities,
which shall be calculated in accordance with the accounting principles and
methodology set forth in Exhibit B.
"Non-controlling
Party" - As defined in Section 12.3(d).
"NS"
- As defined in Section 7.20(c).
"Objection
Notice" - As defined in Section 12.3(b).
"Order"
means any decree, order, judgment, writ, award, injunction, stipulation or
consent of or by, or settlement agreement with, a Governmental
Authority.
"Ordinary
Course" means the ordinary course of business of Sellers, consistent with
past practice and custom.
"Parent"
means Hub Group, Inc., a Delaware corporation.
"Partners"
- As defined in the introductory paragraph to this Agreement.
"Partnership"
- As defined in the introductory paragraph to this Agreement.
"Partnership
Accounts Receivable" - As defined in clause (ii) of the definition of
Partnership Purchased Assets.
"Partnership
Assumed Liabilities" - As defined in Section 2.6(b).
"Partnership
Cash" - As defined in clause (i) of the definition of Partnership Purchased
Assets.
"Partnership
Prepaids" - As defined in clause (iii) of the definition of Partnership
Purchased Assets.
"Partnership
Purchased Assets" means the Partnership's Business and, except for the
Partnership Retained Assets, all assets, rights and properties owned by the
Partnership on the Closing Date, whether or not carried and reflected on the
books of the Partnership, including the following:
(i) All
cash
and cash equivalents and marketable securities of the Partnership (collectively,
"Partnership Cash");
(ii) All
accounts, notes, contract or other receivables of the Partnership (collectively,
"Partnership Accounts Receivable");
(iii) All
deposits and advances, prepaid expenses and other prepaid items of the
Partnership, to the extent the foregoing are transferable to Hub City and the
full amount thereof is realizable by Hub City after the Closing, but not
including any prepaid insurance, taxes and licenses (collectively,
"Partnership Prepaids");
(iv) All
tangible assets, including vehicles and other transportation equipment,
machinery, equipment, tools, spare parts, operating supplies, furniture and
office equipment, fixtures, leasehold improvements, telephone systems,
telecopiers, photocopiers and computer hardware, of the Partnership, including
all tangible assets listed in Section 7.7 of the Disclosure
Schedule;
(v) All
of
the Partnership's right, title and interest in and to the Leased Real
Property;
(vi) All
of
the Partnership's right, title and interest in, to or under (A) the Contracts
described in Section 7.12 of the Disclosure Schedule; (B) any executory
Contracts of the Partnership which relate to the Partnership's Business and
are
not required to be listed in the Disclosure Schedule pursuant to Section
7.12 of this Agreement; and (C) any executory Contracts entered into by the
Partnership relating to the Partnership's Business after the date hereof in
the
Ordinary Course and in compliance with the terms and provisions of this
Agreement;
(vii) All
of
the Partnership's right, title and interest in and to the following intellectual
property: the name "Interdom" and all derivatives thereof (including "Interdom
Partners"); trade names, trademarks, trademark registrations, trademark
applications, service marks, service xxxx registrations, service xxxx
applications; copyrights, copyright registrations, copyright applications;
patent rights (including issued patents, applications, divisions, continuations
and continuations-in-part, reissues, patents of addition, utility models and
inventors' certificates); domain names; licenses with respect to any of the
foregoing; trade secrets, proprietary manufacturing information and know-how;
computer software, inventions, inventors' notes, drawings and designs; customer
and vendor lists and the goodwill associated with any of the foregoing,
including any of the foregoing described in the Disclosure
Schedule;
(viii) All
permits and licenses of the Partnership to the extent transferable or assignable
to Hub City;
(ix) All
of
the Partnership's right, title and interest in choses in action, claims and
causes of action or rights of recovery or set-off of every kind and character,
including under warranties, guarantees and indemnitees;
(x) All
of
the Partnership's files, papers, documents and records, including credit, sales
and accounting records, price sheets, catalogues and sales literature, books,
processes, advertising material, stationery, office supplies, forms, catalogues,
manuals, correspondence, logs, employment records and any other information
reduced to writing;
(xi) A
copy of
the Partnership's general ledgers and books of original entry;
(XII) All
other
assets of the Partnership relating to the Partnership's Business wherever
located; and
(xiii) The
Partnership's Business as a going concern.
"Partnership
Retained Assets" means the following:
(i) the
Partnership's record books, the general ledgers and books of original entry,
all
tax returns and other tax records, reports, data, files and
documents;
(ii) all
Partnership Accounts Receivables that are owed to it by the Company or the
LLC,
any other Affiliate of any Seller (including any Stockholder, Partner or Member)
or any Retained Entity;
(iii) all
of
the Partnership's right, title and interest in choses of action, claims and
causes of action or rights of recovery or set-off of every kind and character,
including under warranties, guarantees and indemnitees, but only to the extent
related solely to another Partnership Retained Asset or a Partnership Retained
Liability (and not related to any Partnership Purchased Asset or Partnership
Assumed Liability);
(iv) the
Partnership's rights under this Agreement;
(v) all
of
the Partnership's right, title and interest in any insurance policies, including
those identified in Section 7.15 of the Disclosure Schedule, together
with the right to make claims thereunder and to seek refunds of premiums paid
on
account thereof;
(vi) all
of
the membership interests of each Retained Entity;
(vii) all
of
the Partnership's right, title and interest in, to and under the assets
identified on Schedule 2.1; and
(viii) all
of
the Partnership's right, title and interest in its sublease from National
Distribution Agency, Inc. of premises located at 000 Xxxx Xxxxxxx Xxxxxxxxx,
Xxxxxxxx, Xxxxxxxxxx.
"Partnership
Retained Liabilities" - As defined in Section 2.7(b).
"Partnership's
Audited Financial Statements" - As defined in Section
6.1(a).
"Partnership's
Financial Statements" - As defined in Section 6.1(a).
"Partnership's
Special Purpose Financial Statements" - As defined in Section
6.1(a).
"Partnership's
Business" - As defined in the Recitals.
"Past
Due Rate" means an interest rate equal to five percent (5%) per
annum.
"PCBs"
- As defined in clause (v) of the definition of Hazardous Material.
"Permits"
- As defined in Section 7.16.
"Permitted
Liens" means (a) liens for Taxes not yet due and payable, (b) landlord and
lessor liens existing under the terms and conditions of leases of real or
personal property, but not any such lien that has arisen or exists as a result
of a default or breach by any Seller of any obligation thereunder or the failure
of any condition thereunder to be satisfied and (c) liens on Retained
Assets.
"Person"
means any natural person, corporation, partnership, limited liability company,
joint venture, trust, association or unincorporated entity of any
kind.
"Prepaids"
means the Company Prepaids, the Partnership Prepaids and the LLC
Prepaids.
"Principal
Stockholders" - As defined in the introductory paragraph to this
Agreement.
"Proprietary
Interest Protection and Non-Solicitation Agreements" means the Proprietary
Interest Protection and Non-Solicitation Agreements substantially in the form
of
Exhibit C, to be entered into on the Closing Date between Parent and each
of the Restricted Stock Grantees.
"Purchase
Price" - As defined in Section 2.2.
"Purchased
Assets" means the Company Purchased Assets, the Partnership Purchased Assets
and the LLC Purchased Assets.
"Purchaser
Indemnitees" - As defined in Section 12.1.
"Purchasers"
- As defined in the introductory paragraph to this Agreement.
"Purchasers'
ISO Business" - As defined in Section 15.8.
"Purchasers'
Projected 2007 ISO Business" means an amount equal to the product of (i) the
number of ISO shipments made by Purchasers' ISO Business during the six-month
period ending June 30, 2007 multiplied by (ii) two (2).
"Related
Business Assets" - As defined in Section 5.7.
"Release"
means releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping.
"Response"
- As defined in Section 12.3(b).
"Restricted
Stock Agreements" means the Terms of Restricted Stock Award under Hub Group,
Inc. 2002 Long-Term Incentive Plan in the form of Exhibit D, to be
executed by Parent in favor of each of the Restricted Stock Grantees, pursuant
to which Parent shall grant to the Restricted Stock Grantees on the Closing
Date
restricted shares of Parent's Class A Common Stock having
an aggregate value equal to $1.0 million, in such proportion as may be mutually
agreed prior to the Closing by Xxxxx and Parent, which shares shall vest ratably
over the five years following the Closing Date, subject to the terms and
conditions of the Restricted Stock Agreements. The number of shares
to be granted on the Closing Date will be determined based on the closing market
price of such shares on the Business Day immediately preceding the Closing
Date.
"Restricted
Stock Grantees" means those employees of the Sellers that are mutually
agreed by Xxxxx and Parent for the receipt of shares of Parent's restricted
stock at the Closing.
"Retained
Assets" means the Company Retained Assets, the Partnership Retained Assets
and the LLC Retained Assets.
"Retained
Business" means the business of the Retained Entities.
"Retained
Earnings" means (i) for the Company, the "retained earnings" set forth on
the Company's balance sheet, (ii) for the Partnership, an amount equal to the
"current earnings," "capital - Midas" and "capital Interdom Inc." on the
Partnership's balance sheet, and (iii) for the LLC, the "retained earnings"
set
forth on the LLC's balance sheet; provided, that in no
event shall Retained Earnings include any revenues, gains, losses, costs or
expenses of any Retained Business.
"Retained
Entities" means Impact Transportation, LLC, a California limited liability
company, Impact Transload & Rail, LLC, a California limited liability
company, and Intermodal Management System, LLC, a New Jersey limited liability
company; and "Retained Entity" means any one of such
entities.
"Retained
Liabilities" means the Company Retained Liabilities, the Partnership
Retained Liabilities and the LLC Retained Liabilities.
"Xxxxx"
- As defined in the introductory paragraph to this Agreement.
"Seller
Bills of Sale" - As defined in Section 3.2(a).
"Seller
Indemnitees" - As defined in Section 12.2.
"Sellers"
- As defined in the introductory paragraph to this Agreement.
"Sellers'
401(k) Plans" - As defined in Section 14.1(c).
"Sellers'
Knowledge" means the actual knowledge of Xxxxx, Calvanese, Kranz, Xxxxx
Xxxxx, Xxxxxx and each Restricted Stock Grantee in each
case, after due inquiry and reasonable investigation.
"Sellers'
Percentage Interest" means (a) with respect to payments attributed to the
Base Purchase Price, for the Partnership, 93.57%, for the Company, 5.35%, and
for the LLC, 1.08%, and (b) with respect to payments attributed to the Estimated
Retained Earnings Adjustment Amount or the Final Retained Earnings Adjustment
Amount, each Seller’s proportionate contribution of Retained Earnings (whether
positive or negative) to such amount.
"Set-Off
Notice" - As defined in Section 12.6.
"Settlement
Date" - As defined in Section 2.4(d).
"Stockholder
Employment and Non-Compete Agreement" means the Employment and Non-Compete
Agreement, substantially in the form of Exhibit F, to be entered into on
the Closing Date by Xxxxx and Hub City.
"Stockholders"
- As defined in the introductory paragraph to this Agreement.
"Substances"
- As defined in clause (i) of the definition of Hazardous Material.
"Target
Business EBITDA" means, for an Earnout Period, the "Target Business EBITDA"
indicated on Exhibit A for such Earnout Period; provided, however, that
in the event Parent fails to combine at least fifty percent (50%) of Purchasers'
Projected 2007 ISO Business with the Partnership's Business in calendar year
2008, the Target Business EBITDA for 2008 will be reduced by an amount equal
to
the product of (a) the Partnership's 2007 average operating income per shipment
multiplied by (b) an amount equal to (i) fifty percent (50%) of
Purchasers' Projected 2007 ISO Business minus (ii) the number of ISO
shipments of Purchasers' ISO Business which are combined with the Partnership's
Business in calendar year 2008. If Xxxxx, in his capacity as an
employee of Hub City or any of its Affiliates, objects to the conversion of
any
ISO shipments from Purchasers' ISO Business to the Partnership's Business,
the
number of ISO shipments that are the subject of such objection shall be deemed
to be combined with the Partnership's Business solely for purposes of
determining whether Parent has combined at least fifty percent (50%) of
Purchaser's Projected 2007 ISO Business with the Partnership's Business in
calendar year 2008.
"Tax
Return" means any report, return or other information required to be
supplied to a Governmental Authority in connection with any Taxes.
"Taxes"
means all taxes, charges, fees, duties (including custom duties), levies or
other assessments, including net income, gross income, capital gains, gross
receipts, net receipts, gross proceeds, net proceeds, ad valorem, profits,
real
and personal property (tangible and intangible), gaming, sales, use, franchise,
capital, excise, value added, stamp, leasing, lease, user, transfer, fuel,
excess profits, occupational, interest equalization, windfall profits, license,
payroll, employment, environmental, capital stock, disability, severance,
employee's income withholding, other withholding unemployment and Social
Security taxes, which are imposed by any Governmental Authority, and other
taxes, charges or fees assessed by any Governmental Authority, including any
interest, penalties or additions to tax attributable thereto.
"Transferred
Employees" - As defined in Section 14.1(a).
1.3 Interpretation. Unless
the context of this Agreement otherwise requires, (a) words of any gender shall
be deemed to include each other gender, (b) words using the singular or plural
number shall also include the plural or singular number, respectively, (c)
references to "hereof", "herein", "hereby" and similar terms shall refer to
this
entire Agreement, (d) all references in this Agreement to Articles, Sections
and
Exhibits shall mean and refer to Articles, Sections and Exhibits of this
Agreement, (e) all references to statutes and related regulations shall include
all amendments of the same and any successor or replacement statutes and
regulations, (f) references to any Person shall be deemed to mean and include
the successors and permitted assigns of such Person (or, in the case of a
Governmental Authority, Persons succeeding to the relevant functions of such
Person) and (g) "including" shall mean "including without
limitation".
ARTICLE
II
Purchase
and Sale, Purchase Price,
Allocation
and Other Related Matters
2.1 Purchase
and Sale. Upon the terms and subject to the conditions of this
Agreement, at the Closing on the Closing Date, (a) the Company shall sell,
assign, convey, transfer and deliver to Comtrak, and Comtrak shall acquire
from
the Company, the Company Purchased Assets, (b) the Partnership shall sell,
assign, convey, transfer and deliver to Hub City, and Hub City shall acquire
from the Partnership, the Partnership Purchased Assets and (c) the LLC shall
sell, assign, convey, transfer and deliver to Comtrak, and Comtrak shall acquire
from the LLC, the LLC Purchased Assets, in each case, free and clear of any
Liens, other than Permitted Liens. Notwithstanding anything herein to
the contrary, the Company Retained Assets will be retained by the Company and
not sold, assigned, conveyed, transferred or delivered to Comtrak hereunder,
the
Partnership Retained Assets will be retained by the Partnership and not sold,
assigned, conveyed, transferred or delivered to Hub City hereunder and the
LLC
Retained Assets will be retained by the LLC and not sold, assigned, conveyed,
transferred or delivered to Comtrak hereunder.
2.2 Purchase
Price. The aggregate purchase price (the "Purchase Price")
payable by Purchasers to Sellers for the Purchased Assets shall be the
following:
(a) the
sum
of (i) the Base Purchase Price, plus or minus (ii) the Final
Retained Earnings Adjustment Amount (with such sum being referred to herein
as
the "Cash Purchase Price"); and
(b) the
assumption by Purchasers at the Closing of the Assumed Liabilities in accordance
with Section 2.6.
The
Purchase Price shall be allocated between the Sellers in accordance with their
respective Sellers' Percentage Interests.
2.3 Payment
of the Purchase Price. The Purchase Price shall be payable as
follows:
(a) Ten
(10)
Business Days prior to the Closing, Sellers shall provide to Purchasers (i)
each
Seller's then most recently completed balance sheet and statement of earnings
for the portion of the fiscal year then ended, (ii) Sellers' calculation of
the
Net Working Capital as of the date of, and based on, such balance sheets (the
"Estimated Net Working Capital"), (iii) Sellers' calculation of the
Sellers' combined Retained Earnings as of the date of, and based on, such
balance sheets and statements of earnings (the "Estimated Retained
Earnings") and (iv) access to the appropriate personnel and all supporting
financial statements, work sheets and other documentation used to determine
the
Estimated Net Working Capital and Estimated Retained Earnings that are
reasonably requested by Purchasers.
(b) On
the
Closing Date, Purchasers shall pay to Sellers an amount equal to the sum of
(i)
the product of (A) eighty percent (80%) multiplied by (B) the Base
Purchase Price, plus or minus (ii) the Estimated Retained Earnings
Adjustment Amount.
(c) Purchasers
shall pay Earnout Payments to Sellers in an aggregate amount not to exceed
the
product of (i) twenty percent (20%) multiplied by (ii) the Base Purchase
Price (with such sum being referred to herein as the "Maximum Aggregate
Earnout Payments") on the following terms and conditions:
(i) for
each
of (A) calendar year 2007 and (B) calendar year 2008 (each, an "Earnout
Period"), Purchasers shall make a cash payment (each, an "Earnout
Payment") to Sellers based on the Business EBITDA for that Earnout
Period;
(ii) for
each
Earnout Period, (A) if the Business EBITDA for that Earnout Period is equal
to
or exceeds the Target Business EBITDA for such Earnout Period, the Earnout
Payment shall be an amount equal to the Maximum Annual Earnout Payment for
such
Earnout Period, or (B) if the Business EBITDA for that Earnout Period is less
than the Target Business EBITDA for that Earnout Period (a "Business EBITDA
Shortfall"), the Earnout Payment shall be in an amount equal to (I) the
Maximum Annual Earnout Payment for such Earnout Period minus (II) the
product of (x) 2.0 and (y) the Business EBITDA Shortfall (the "Earnout
Payment Penalty") (provided, that in no event shall the Earnout Payment
calculated pursuant to this clause (B) be less than zero);
(iii) if
in the
first Earnout Period, the Business EBITDA is less than the Target Business
EBITDA for such Earnout Period, but the Business EBITDA in the second Earnout
Period exceeds the Target Business EBITDA for the second Earnout Period
("Excess Business EBITDA"), Purchasers shall make a "catch-up" payment (a
"Catch-Up Payment") to Sellers with respect to the first Earnout Period
in an amount equal to the lesser of (I) the Earnout Payment Penalty for the
first Earnout Period and (II) the product of (x) 2.0 and (y) the Excess Business
EBITDA (an illustrative calculation of Earnout Payments and Catch-Up Payments
is
set forth on Schedule 2.3);
(iv) if
in the
first Earnout Period, the Business EBITDA exceeds the Target Business EBITDA,
such excess shall be added to the Business EBITDA for the second Earnout Period
to determine whether the Target Business EBITDA for the second Earnout Period
is
reached;
(v) for
the purpose of calculating Earnout Payments and Catch-Up Payments, Business
EBITDA shall include (A) income from the Business sold to Purchasers at Closing
and (B) income from Purchasers' ISO Business, but only if Parent causes the
Purchasers' ISO Business to be combined with the Partnership's Business, as
contemplated by Section 15.8;
(vi) notwithstanding
anything in this Agreement to the contrary, in no event shall Purchasers be
obligated to pay to Sellers aggregate Earnout Payments (including any Catch-Up
Payment) in excess of the Maximum Aggregate Earnout Payments;
(vii) the
Earnout Payments and Catch-Up Payment, if any, are subject to set-off in
accordance with Section 12.6;
(viii) for
each Earnout Period, Purchasers shall make the Earnout Payment (and any Catch-Up
Payment) within ten (10) days after Parent's public announcement of its
financial results for such Earnout Period; and
(ix) Purchasers
shall provide Sellers with all supporting documentation reasonably requested
by
Sellers for purposes of verifying Purchasers' calculation of any Earnout Payment
and Catch-Up Payment. In the event Purchasers and Sellers disagree as
to the amount of an Earnout Payment or Catch-Up Payment, such dispute shall
be
resolved in accordance with the procedures described in Section
2.4(c).
(d) All
payments to be made pursuant to this Section 2.3 shall be by the wire
transfer of immediately available funds to an account designated by Sellers
in
writing and shall be allocated between Sellers in accordance with their Sellers'
Percentage Interests.
2.4 Closing
Balance Sheet. (a) Within ninety (90) days after the
Closing, Purchasers shall provide to Sellers (i) a balance sheet of the Business
based upon the Purchased Assets and Assumed Liabilities as of the Closing Date
(the "Final Closing Balance Sheet"); (ii) a statement of earnings of the
Business based upon the Purchased Assets and Assumed Liabilities for the portion
of the fiscal year ending on the Closing Date (the "Final Statement of
Earnings"); (iii) a calculation of the Net Working Capital as reflected on
the Final Closing Balance Sheet (the "Final Net Working Capital
Calculation"); (iv) a calculation of the Retained Earnings of the Business
as reflected on the Final Closing Balance Sheet (the "Final Retained Earnings
Calculation") and (v) access to the appropriate Purchaser personnel and all
supporting financial statements, work sheets and other documentation used to
make the Final Net Working Capital Calculation and the Final Retained Earnings
Calculation that are reasonably requested by Sellers. The Final
Closing Balance Sheet, Final Statement of Earnings, Final Net Working Capital
Calculation and Final Retained Earnings Calculation are collectively referred
to
herein as the "Final Closing Statements."
(b) Within
sixty (60) days after the Final Closing Statements are delivered to Sellers
pursuant to Section 2.4(a), Sellers shall complete their examination
thereof and shall deliver to Purchasers either (i) a written acknowledgement
accepting the Final Closing Statements; or (ii) a written report setting forth
in reasonable detail any proposed adjustments to the Final Closing Statements
("Adjustment Report"). If Sellers fail to respond to
Purchasers within such sixty (60) day period, Sellers shall be deemed to have
accepted and agreed to the Final Closing Statements as delivered pursuant to
Section 2.4(a).
(c) In
the
event Sellers and Purchasers fail to agree on any of Sellers' proposed
adjustments contained in the Adjustment Report within thirty (30) days after
Purchasers receive the Adjustment Report, then Sellers and Purchasers agree
that
a mutually acceptable nationally recognized independent accounting firm or
other
mutually acceptable nationally recognized financial services provider
("Independent Auditors") shall make the final determination with respect
to the correctness of the proposed adjustments in the Adjustment Report in
light
of the terms and provisions of this Agreement. Purchasers and Sellers
shall use their commercially reasonable efforts to select the Independent
Auditors within ten (10) days of the expiration of such period and to cause
the
Independent Auditors to resolve all disagreements as soon as practicable, but
in
any event within sixty (60) days after submission of the dispute to the
Independent Auditors. The decision of the Independent Auditors shall
be final and binding on Sellers and Purchasers. The non-prevailing
party shall pay the entire cost of the Independent Auditors' fees and expenses
in connection with this Section 2.4(c). The Independent
Auditor shall determine whether the Sellers or the Purchasers are the
non-prevailing party for purposes of the preceding sentence based on whether
the
Sellers' or the Purchasers' position on the disputed items are different in
aggregate amount from the Independent Auditor's final determination of the
same.
(d) The
term
"Final Closing Balance Sheet" as that term has been hereinbefore and will
be hereinafter used, shall mean the Final Closing Balance Sheet delivered
pursuant to Section 2.4(a), as adjusted, if at all, pursuant to this
Section 2.4. The date on which the Final Closing Statements
are finally determined pursuant to this Section 2.4 shall hereinafter be
referred to as the "Settlement Date."
2.5 Purchase
Price Settlement. (a) In the event the Final Retained
Earnings Adjustment Amount is less than the Estimated Retained Earnings
Adjustment Amount, then Sellers shall pay to Purchasers within five (5) days
after the Settlement Date an amount equal to such deficiency.
(b) In
the
event the Final Retained Earnings Adjustment Amount is more than the Estimated
Retained Earnings Adjustment Amount, then, within five (5) days after the
Settlement Date, Purchasers shall pay to the Sellers an amount equal to such
excess in accordance with their respective Sellers' Percentage
Interests.
(c) Any
payment required pursuant to Section 2.5(a) or 2.5(b) shall be by
the transfer of immediately available funds for credit to the recipient at
a
bank account designated by the recipient in writing.
2.6 Assumed
Liabilities.
(a) As
additional consideration for the purchase of the Company Purchased Assets,
Comtrak shall, at the Closing, by its execution and delivery of an Assumption
Agreement, assume, agree to perform, and in due course pay and discharge, only
the following obligations and liabilities of the Company relating to the
Company's Business (collectively, the "Company Assumed
Liabilities"):
(i) The
Company's trade and other normal operating payables and accrued expenses
incurred in the Ordinary Course, but only to the extent reflected or reserved
for on the Final Closing Balance Sheet as Current Liabilities and only to the
extent of the monetary amount of such payables and expenses so reflected or
otherwise approved in writing by Comtrak;
(ii) The
obligations and liabilities of the Company arising after the Closing Date under
(A) Contracts described in Section 7.12 of the Disclosure Schedule; (B)
any executory Contracts which relate to the Company's Business and are not
required to be listed in the Disclosure Schedule pursuant to Section
7.12(a) of this Agreement; and (C) executory Contracts entered into by the
Company relating to the Company's Business after the date hereof in compliance
with the terms and provisions of this Agreement; provided,
however, Comtrak is not assuming any Liabilities of the Company in
respect of a breach of or default by the Company under any such Contracts which
shall occur prior to the Closing;
(iii) any
liability for Assumed Taxes relating to the Company's Business; and
(iv) any
penalties or interest required to be paid under any Contract that is a Company
Purchased Asset as a result of any default thereunder by Comtrak after the
Closing.
(b) As
additional consideration for the purchase of the Partnership Purchased Assets,
Hub City shall, at the Closing, by its execution and delivery of an Assumption
Agreement, assume, agree to perform, and in due course pay and discharge, only
the following obligations and liabilities of the Partnership relating to the
Partnership's Business (collectively, the "Partnership Assumed
Liabilities"):
(i) The
Partnership's trade and other normal operating payables and accrued expenses
incurred in the Ordinary Course, but only to the extent reflected or reserved
for on the Final Closing Balance Sheet as Current Liabilities and only to the
extent of the monetary amount of such payables and expenses so reflected or
otherwise approved in writing by Hub City;
(ii) The
obligations and liabilities of the Partnership arising after the Closing Date
under (A) Contracts described in Section 7.12 of the Disclosure Schedule;
(B) any executory Contracts which relate to the Partnership's Business and
are
not required to be listed in the Disclosure Schedule pursuant to Section
7.12(a) of this Agreement; and (C) executory Contracts entered into by the
Partnership relating to the Partnership's Business after the date hereof in
compliance with the terms and provisions of this Agreement; provided,
however, Hub City is not assuming any Liabilities of the Partnership
in
respect of a breach of or default by the Partnership under any such Contracts
which shall occur prior to the Closing;
(iii) any
liability for Assumed Taxes relating to the Partnership's Business;
and
(iv) any
penalties or interest required to be paid under any Contract that is a
Partnership Purchased Asset as a result of any default thereunder by Hub City
after the Closing.
(c) As
additional consideration for the purchase of the LLC Purchased Assets, Comtrak
shall, at the Closing, by its execution and delivery of an Assumption Agreement,
assume, agree to perform, and in due course pay and discharge, only the
following obligations and liabilities of the LLC relating to the LLC's Business
(collectively, the "LLC Assumed Liabilities"):
(i) The
LLC's
trade and other normal operating payables and accrued expenses incurred in
the
Ordinary Course, but only to the extent reflected or reserved for on the Final
Closing Balance Sheet as Current Liabilities and only to the extent of the
monetary amount of such payables and expenses so reflected or otherwise approved
in writing by Comtrak;
(ii) The
obligations and liabilities of the LLC arising after the Closing Date under
(A)
Contracts described in Section 7.12 of the Disclosure Schedule; (B) any
executory Contracts which relate to the LLC's Business and are not required
to
be listed in the Disclosure Schedule pursuant to Section 7.12(a) of this
Agreement; and (C) executory Contracts entered into by the LLC relating to
the
LLC's Business after the date hereof in compliance with the terms and provisions
of this Agreement; provided, however, Comtrak is not assuming any
Liabilities of the LLC in respect of a breach of or default by the LLC under
any
such Contracts which shall occur prior to the Closing;
(iii) any
liability for Assumed Taxes relating to the LLC's Business; and
(iv) any
penalties or interest required to be paid under any Contract that is a LLC
Purchased Asset as a result of any default thereunder by Comtrak after the
Closing.
2.7 Retained
Liabilities.
(a) Comtrak
shall not assume or pay any, and the Company shall continue to be responsible
for each, Liability of the Company whether or not relating to the Company's
Business, not expressly assumed by Comtrak in Section 2.6(a)
(collectively, the "Company Retained
Liabilities"). Specifically, without limiting the foregoing, the
Company Retained Liabilities shall include the following:
(i) any
Indebtedness or bank over-draft of the Company;
(ii) any
legal
or administrative action pending, including Environmental Claims, as of the
Closing Date, notwithstanding the disclosure thereof in the Disclosure Schedule,
or any subsequent claim, action, suit or proceeding arising out of or relating
to (A) such pending matters, (B) any other event occurring on or prior to the
Closing Date, or (C) resulting from the Company's conduct of the Company's
Business;
(iii) any
Liability to the extent arising out of or relating to the Company Retained
Assets;
(iv) any
Liability (whether direct or as a result of transferee liability, joint and
several liability, or contractual liability) of the Company for Taxes (including
all income Taxes incurred on, after, or before the Closing Date) that are
unrelated to the Company Purchased Assets, the Company's Business, or the
Transferred Employees (whether accrued or payable on, after, or before the
Closing Date and whether or not reserved for on the Closing Balance Sheet)
and
any liability (whether direct or as a result of transferee liability, joint
and
several liability, or contractual liability) for Taxes (other than Assumed
Taxes) for periods (or portions thereof) ending on the Closing Date that are
related to the Company Purchased Assets, the Company's Business, or the
Transferred Employees (whether accrued or payable on, after, or before the
Closing Date and whether or not reserved for on the Closing Balance
Sheet);
(v) any
Liability arising from claims, proceedings or causes of action resulting from
property damage (including cargo claims) or personal injuries (including death)
caused by services rendered by the Company prior to Closing, notwithstanding
the
disclosure thereof in the Disclosure Schedule;
(vi) any
Liability arising from guarantees, warranty claims or other Contract terms
with
respect to services rendered by the Company prior to Closing;
(vii) any
accrued insurance charges or insurance claims, retroactive insurance rate
adjustments or insurance premiums payable for pre-Closing periods;
and
(viii) any
amounts payable to the Partnership or the LLC, any other Affiliate of any Seller
(including any Stockholder, Partner or Member) or any Retained
Entity.
(b) Hub
City
shall not assume or pay any, and the Partnership shall continue to be
responsible for each, Liability of the Partnership whether or not relating
to
the Partnership's Business, not expressly assumed by Hub City in Section
2.6(b) (collectively, the "Partnership Retained
Liabilities"). Specifically, without limiting the foregoing, the
Partnership Retained Liabilities shall include the following:
(i) any
Indebtedness or bank over-draft of the Partnership;
(ii) any
legal
or administrative action, including Environmental Claims, as of the Closing
Date, notwithstanding the disclosure thereof in the Disclosure Schedule, or
any
subsequent claim, action, suit or proceeding arising out of or relating to
(A)
such pending matters, (B) any other event occurring on or prior to the Closing
Date, or (C) resulting from the Partnership's conduct of the Partnership's
Business;
(iii) any
Liability to the extent arising out of or relating to the Partnership Retained
Assets;
(iv) any
Liability (whether direct or as a result of transferee liability, joint and
several liability, or contractual liability) of the Partnership for Taxes
(including all income Taxes incurred on, after, or before the Closing Date)
that
are unrelated to the Partnership Purchased Assets, the Partnership's
Business, or the Transferred Employees (whether accrued or payable on, after,
or
before the Closing Date and whether or not reserved for on the Closing Balance
Sheet) and any liability (whether direct or as a result of transferee liability,
joint and several liability, or contractual liability) for Taxes (other than
Assumed Taxes) for periods (or portions thereof) ending on the Closing Date
that
are related to the Partnership Purchased Assets, the Partnership's Business,
or
the Transferred Employees (whether accrued or payable on, after, or before
the
Closing Date and whether or not reserved for on the Closing Balance
Sheet);
(v) any
Liability arising from claims, proceedings or causes of action resulting from
property damage (including cargo claims) or personal injuries (including death)
caused by services rendered by the Partnership prior to Closing, notwithstanding
the disclosure thereof in the Disclosure Schedule;
(vi) any
Liability arising from guarantees, warranty claims or other Contract terms
with
respect to services rendered by the Partnership prior to Closing;
(vii) any
accrued insurance charges or insurance claims, retroactive insurance rate
adjustments or insurance premiums payable for pre-Closing periods;
and
(viii) any
amounts payable to the Company or the LLC, any other Affiliate of any Seller
(including any Stockholder, Partner or Member) (provided, that Hub City shall
assume those accounts payable to the Retained Entities to the extent such
payables are included in the Final Closing Balance Sheet as Current
Liabilities).
(c) Comtrak
shall not assume or pay any, and the LLC shall continue to be responsible for
each, Liability of the LLC whether or not relating to the LLC's Business, not
expressly assumed by Comtrak in Section 2.6(c) (collectively, the "LLC
Retained Liabilities"). Specifically, without limiting the
foregoing, the LLC Retained Liabilities shall include the
following:
(i) any
Indebtedness or bank over-draft of the LLC;
(ii) any
legal
or administrative action pending, including Environmental Claims, as of the
Closing Date, notwithstanding the disclosure thereof in the Disclosure Schedule,
or any subsequent claim, action, suit or proceeding arising out of or relating
to (A) such pending matters, (B) any other event occurring on or prior to the
Closing Date, or (C) resulting from the LLC's conduct of the LLC's
Business;
(iii) any
Liability to the extent arising out of or relating to the LLC Retained
Assets;
(iv) any
Liability (whether direct or as a result of transferee liability, joint and
several liability, or contractual liability) of the LLC for Taxes (including
all
income Taxes incurred on, after, or before the Closing Date) that are unrelated
to the LLC Purchased Assets, the LLC's Business, or the Transferred Employees
(whether accrued or payable on, after, or before the Closing Date and whether
or
not reserved for on the Closing Balance Sheet) and any liability (whether direct
or as a result of transferee liability, joint and several liability, or
contractual liability) for Taxes (other than Assumed Taxes) for periods (or
portions thereof) ending on the Closing Date that are related to the LLC
Purchased Assets, the LLC's Business, or the Transferred Employees (whether
accrued or payable on, after, or before the Closing Date and whether or not
reserved for on the Closing Balance Sheet);
(v) any
Liability arising from claims, proceedings or causes of action resulting from
property damage (including cargo claims) or personal injuries (including death)
caused by services rendered by the LLC prior to Closing, notwithstanding the
disclosure thereof in the Disclosure Schedule;
(vi) any
Liability arising from guarantees, warranty claims or other Contract terms
with
respect to services rendered by the LLC prior to Closing;
(vii) any
accrued insurance charges or insurance claims, retroactive insurance rate
adjustments or insurance premiums payable for pre-Closing periods;
and
(viii) any
amounts payable to the Partnership or the Company, any other Affiliate of any
Seller (including any Stockholder, Partner or Member) or any Retained
Entity.
2.8 Accounts
Receivable Guarantee and Return.
(a) Purchasers
may elect to return to Sellers any of the Closing Accounts Receivable which
remain uncollected one hundred twenty (120) days after the Closing
Date. Subject to Section 2.8(b) below, Sellers shall pay
to the applicable Purchaser the aggregate amount of all uncollected Closing
Accounts Receivable returned to Sellers within ten (10) days after the date
of
return of the uncollected Closing Accounts Receivable.
(b) Purchasers
agree to execute such bills of sale or other assignment documents reasonably
necessary to effect a transfer to Sellers, without recourse, of the uncollected
Closing Accounts Receivable returned to Sellers pursuant to this Section
2.8.
(c) Purchasers
agree that Transferred Employees designated by Xxxxx shall be assigned to
attempt to collect the Closing Accounts Receivable after Closing, in addition
to
their other employment duties with Purchasers. Purchasers agree to
use commercially reasonable efforts to collect the Closing Accounts
Receivable. The parties agree "commercially reasonable efforts" shall
not require Purchasers to retain any third parties (i.e.,
collection agencies or attorneys) to seek collection of the Closing Accounts
Receivable. To the extent either Purchaser receives a payment from an
account debtor of a Closing Account Receivable who also has an account
receivable owing to such Purchaser resulting from post-Closing transactions,
such Purchaser agrees to apply such payment to the oldest invoice first unless
such account debtor otherwise specifically designates the application of such
payment.
2.9 Transfer
Taxes. Any and all transfer, sales, use, purchase, value added,
excise, real property, personal property, intangible stamp, or similar Taxes
(collectively, "Transfer Taxes") imposed on, or resulting from, the
transfer of any Purchased Assets (including those Transfer Taxes imposed on
the
Purchaser or the Purchased Assets) shall be paid equally by the Purchasers
and
the Sellers; provided, however, that Purchasers and Sellers agree
to cooperate in good faith to take such reasonable steps as are necessary or
appropriate to minimize the Transfer Taxes imposed on the sale of the Business
and Purchased Assets as contemplated by this Agreement. To the extent
that any Purchaser or Seller is required to pay any Transfer Taxes, or incurs
any out-of-pocket expenses in transferring title of any (or all) of the
Purchased Assets, the Sellers or the Purchasers, as applicable, shall promptly
reimburse such party for 50% of such Transfer Tax or out-of-pocket
expense. Purchasers shall, at their own expense, file all necessary
Tax Returns and other documentation with respect to all such Transfer Taxes,
fees and charges, and, if required by applicable Law, the Sellers will join
in
the execution of any such Tax Returns and other documentation.
2.10 Allocation. The
parties hereto (a) mutually agree on the methodology for the allocation of
the
Purchase Price among the Purchased Assets and Related Business Assets set forth
on Exhibit G for income tax purposes, and (b) acknowledge that the
allocation methodology set forth on Exhibit G was the result of
arms-length negotiations. The parties hereto agree that for income tax purposes
they shall report the transactions contemplated by this Agreement in accordance
with the allocation methodology set forth on Exhibit G.
ARTICLE
III
Closing
and Closing Date Deliveries
3.1 Closing. The
term "Closing" as used herein shall refer to the actual conveyance,
transfer, assignment and delivery of the Purchased Assets and Related Business
Assets to Purchasers in exchange for the payment delivered to Sellers pursuant
to Section 2.3 of this Agreement. The Closing shall take place
at the offices of Winston & Xxxxxx LLP, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, at 10:00 a.m. local time on the fifth (5th) Business
Day
following the date upon which all of the conditions precedent set forth in
Articles IX and X are satisfied or waived by the appropriate party
hereto, subject to Article XI, or at such other place and time or on such
other date as is mutually agreed to in writing by Sellers and Purchasers
("Closing Date").
3.2 Closing
Deliveries by Sellers. At the Closing, Sellers shall deliver to
Purchasers:
(a) A
Xxxx of
Sale and Assignment Agreement, substantially in the form of Exhibit H
(the "Seller Bills of Sale"), as executed by each Seller; and all such
other bills of sale, lease assignments, trademark assignments, copyright
assignments, patent assignments, employee work product assignments, contract
assignments, vehicle titles and other documents and instruments of sale,
assignment, conveyance and transfer, as Purchasers may deem necessary or
desirable;
(b) A
certificate of the Secretary or an Assistant Secretary of the Company certifying
as to: (i) the articles of incorporation of the Company, as certified
by the Secretary of State of the State of Nevada not earlier than ten (10)
days
prior to the Closing Date; (ii) the by-laws, as amended, of the Company; (iii)
resolutions of the Board of Directors and shareholders of the Company
authorizing and approving the execution, delivery and performance by the Company
of this Agreement and any agreements, instruments, certificates or other
documents executed by the Company pursuant to this Agreement; and (iv) the
incumbency and signatures of the officers of the Company;
(c) A
certificate of the Partners certifying as to: (i) the partnership agreement
of
the Partnership; (ii) resolutions of the Partners authorizing and approving
the
execution, delivery and performance by the Partnership of this Agreement and
any
agreements, instruments, certificates and other documents executed by the
Partnership pursuant to this Agreement; and (iii) the incumbency and signatures
of the officers of the Partnership;
(d) A
certificate of the Secretary or an Assistant Secretary of the LLC certifying
as
to: (i) the articles of organization of the LLC, as certified by the
Secretary of State of the State of Illinois not earlier than ten (10) days
prior
to the Closing Date; (ii) the limited liability company agreement, as amended,
of the LLC; (iii) resolutions of the Members of the LLC authorizing and
approving the execution, delivery and performance by the LLC of this Agreement
and any agreements, instruments, certificates or other documents executed by
the
LLC pursuant to this Agreement; and (iv) the incumbency and signatures of the
officers of the LLC;
(e) A
certificate of the Secretary of State of the state of incorporation or
organization (as applicable) and of each other state set forth in Section
7.1 of the Disclosure Schedule, in each case as of a date not earlier than
ten (10) days prior to the Closing Date, as to the good standing and foreign
qualification of Sellers in such states;
(f) A
certificate, dated the Closing Date, executed by the appropriate officers of
each Seller, required by Section 9.2;
(g) The
opinion of Xxxxxx & Xxxxxxx LLC, counsel for Sellers, dated the Closing
Date, with respect to the matters set forth in Exhibit I;
(h) The
consents, authorizations and approvals of the Governmental Authorities and
other
Persons set forth in Schedule 9.5, together with any and all other
consents, authorizations and approvals of other Persons under additional
Contracts identified in Section 7.3(b) of the Disclosure Schedule
that have been obtained by Sellers as of the Closing;
(i) With
respect to each Lease, a Landlord Consent and Estoppel Certificate substantially
in the form of Exhibit J executed by the landlord
thereunder;
(j) The
Proprietary Interest Protection and Non-Solicitation Agreements as executed
by
each of the Restricted Stock Grantees;
(k) The
Stockholder Employment and Non-Compete Agreement as executed by
Xxxxx;
(l) All
documents necessary to amend each Seller's name to not include "Interdom",
"Commercial Cartage", "Pride Logistics" or any derivative of any thereof or
any
other similar name (including "Interdom Partners"), which shall be duly executed
and in a form that Purchasers may file in the state of formation of each such
entity and in each other state in which such entity is qualified to transact
business;
(m) Such
other documents as Purchasers may reasonably request to carry out the purposes
of this Agreement, including the documents to be delivered pursuant to
Article IX.
3.3 Closing
Deliveries by Purchasers. At the Closing, Purchasers shall
deliver to Sellers:
(a) The
payment to be delivered by Purchaser pursuant to Section
2.3;
(b) A
certificate of the Secretary or an Assistant Secretary of each Purchaser
certifying as to: (i) the certificate of incorporation of such
Purchaser, as certified by the Secretary of State of the State of Delaware
not
earlier than ten (10) days prior to the Closing Date; (ii) the by-laws, as
amended, of such Purchaser; (iii) resolutions of the Board of Directors of
such
Purchaser authorizing and approving the execution, delivery and performance
by
such Purchaser of this Agreement and any agreements, instruments, certificates
or other documents executed by such Purchaser pursuant to this Agreement; and
(iv) the incumbency and signatures of the officers of such
Purchaser;
(c) A
certificate of the Secretary of State of Delaware, as of a date not earlier
than
ten (10) days prior to the Closing Date, as to the good standing of each
Purchaser in the State of Delaware;
(d) The
certificate, dated the Closing Date, executed by the appropriate officer of
each
Purchaser, required by Section 10.2;
(e) An
Assumption Agreement executed by each Purchaser reflecting the assumption of
the
liabilities set forth in Section 2.6, substantially in the form of
Exhibit K;
(f) The
Restricted Stock Agreements as executed by Parent;
(g) The
Proprietary Interest Protection and Non-Solicitation Agreements as executed
by
Parent;
(h) The
Stockholder Employment and Non-Compete Agreement as executed by Hub City;
and
(i) Such
other documents as Sellers may reasonably request to carry out the purposes
of
this Agreement, including the documents to be delivered pursuant to Article
X.
3.4 Cooperation. Sellers
and Purchasers shall, on request, on and after the Closing Date, cooperate
with
one another by furnishing any additional information, executing and delivering
any additional documents and/or instruments and doing any and all such other
things as may be reasonably required by the parties to consummate or otherwise
implement the transactions contemplated by this Agreement.
ARTICLE
IV
Pre-Closing
Filings
4.1 Government
Filings. Sellers and Purchasers covenant and agree with each
other to (a) promptly file, or cause to be promptly filed, with any Governmental
Authorities all such notices, applications or other documents as may be
necessary to consummate the transactions contemplated hereby and (b) thereafter
diligently pursue all consents or approvals from any such Governmental
Authorities as may be necessary to consummate the transactions contemplated
hereby.
ARTICLE
V
Pre-Closing
Covenants
5.1 Due
Diligence Review. Sellers, the Partners, the Principal
Stockholders and the Members shall at all reasonable times prior to the Closing
make the properties, assets, books and records, including supplier and customer
lists, receivables records, equipment lists, accountants' work papers and
reports, real estate and environmental records and reports, personnel records
and all agreements, pertaining to the Business, the Purchased Assets and the
Related Business Assets available for examination, inspection and review by
Purchaser and its representatives. As part of such examination,
Purchasers may make such inquiries of such Persons having business relationships
with each Seller, including customers, suppliers and employees, as Purchasers
shall reasonably determine, upon reasonable notice to and with the prior consent
of Xxxxx, which consent shall not be unreasonably withheld. No such
examination, inspection or review by Purchasers or its representatives shall
in
any way affect, diminish or terminate any of the representations, warranties
or
covenants of Sellers expressed in this Agreement.
5.2 Maintenance
of Business and Notice of Changes. (a) Pending the
Closing, each Seller shall, and the Partners, the Principal Stockholders and
the
Members shall cause each Interdom Related Entity that owns Related Business
Assets to, (i) use all commercially reasonable efforts to preserve and protect
the goodwill, rights, properties and assets of its Business and the Related
Business Assets, to keep available to the Business and Purchasers the services
of its employees, and to preserve and protect such Seller's relationships with
its employees, creditors, suppliers, customers and others having business
relationships with it; and (ii) consult with Purchasers regarding all
significant developments, transactions and proposals relating to the Business,
the Related Business Assets or the operations of such Seller.
(b) Sellers
shall give Purchasers prompt written notice of (i) any Material Adverse Change
which occurs between the date hereof and the Closing Date, or (ii) any
development or event that occurs between the date hereof and the Closing Date
which causes a breach of any of the representations and warranties in Article
VII. Subject to Purchasers' right to terminate this Agreement
pursuant to Section 11.1(d) by reason of such Material Adverse Change,
development or event, the written notice pursuant to this Section 5.2(b)
will be deemed to have (A) amended the Disclosure Schedule, and (B) qualified
the representations and warranties contained in Article VII.
5.3 Pending
Closing. Without limiting the generality of Section
5.2(a), pending the Closing, Sellers shall, and with respect to clause
(r) below the Partners, the Principal Stockholders and the Members shall,
except as set forth in Section 5.3 of the Disclosure
Schedule:
(a) conduct
and carry on its Business only in the Ordinary Course;
(b) not
purchase, sell, lease, mortgage, pledge or otherwise acquire or dispose of
any
properties or assets of or used in connection with its Business, except for
supplies purchased, sold or otherwise disposed of in the Ordinary
Course;
(c) not
suffer or permit the creation of any Lien upon any of the Purchased Assets,
other than in the Ordinary Course;
(d) not
waive, release or cancel any claims against third parties or debts owing to
it,
or any rights which have any value;
(e) not
increase or otherwise change the rate or nature of the compensation (including
wages, salaries, bonuses, and benefits under pension, profit sharing, deferred
compensation and similar plans or programs) which is paid or payable to any
employee of any Seller;
(f) keep
the
tangible personal property used in the operation of the Business in good working
order and repair, and replace any of it which shall be worn out, lost, stolen
or
destroyed;
(g) not
enter
into, or become obligated under, any Contract with respect to the Business,
except for any Contract (i) having a term of one (1) year or less, (ii)
involving either a payment by or to a Seller of less than $25,000 and (iii)
entered into in the Ordinary Course;
(h) not
change, amend, terminate or otherwise modify any Contract to which a Seller
is a
party other than in the Ordinary Course;
(i) maintain
in full force and effect with respect to the Business, policies of insurance
of
the same type, character and coverage as the policies currently carried and
described in Section 7.15 of the Disclosure Schedule;
(j) except
as
disclosed in Section 7.18 of the Disclosure Schedule, not make, or commit
to make, any payment, contribution or award under or into any bonus, pension,
profit sharing, deferred compensation or similar plan, program or trust (other
than any such payment, contribution or award paid in cash by any Seller prior
to
the Closing);
(k) refrain
from doing any act or omitting to do any act, or permitting any act or omission
to act, which will cause a breach by any Seller of any Contract of such
Seller;
(l) not
make
any changes in its accounting systems, policies, principles or
practices;
(m) not
make
any loans, advances or capital contributions to, or investments in, any other
Person;
(n) not
authorize or make any capital expenditures which individually or in the
aggregate are in excess of $25,000;
(o) not
change its historical practice with respect to the payment of current
liabilities or the collection of Accounts Receivable;
(p) duly
comply with all Laws, including Environmental Laws, applicable to the Business
or Purchased Assets or as may be required for the valid and effective transfer
and assignment of the Purchased Assets;
(q) (i)
for
the LLC, furnish to Purchasers by June 15, 2007 an unaudited balance sheet
as of
April 30, 2007 and statement of income for the LLC for the portion of the fiscal
year then ended, and (ii) for each of the Sellers, furnish to Purchasers within
twenty-five (25) days after the end of each fiscal month, beginning with the
month ending May 31, 2007, an unaudited balance sheet as of such month end
and
statement of income of each Seller for the portion of the fiscal year then
ended;
(r) (i)
not
directly, or indirectly through any of Sellers', the Partners', the Principal
Stockholders' or the Members' Affiliates, directors, officers, employees, agents
or advisors, solicit, initiate, pursue or encourage (by way of furnishing
information or otherwise) any inquiries or proposals, or enter into any
discussions, negotiations or agreements (whether preliminary or definitive)
with
any Person, contemplating or providing for any merger, acquisition, purchase
or
sale of stock or all or any material part of the assets or any business
combination or change in control of any Seller or the Business (any thereof,
an
"Alternative Proposal"); (ii) deal exclusively with Purchasers with
respect to the sale of the Business and the Purchased Assets; and (iii) notify
Purchasers immediately upon receipt by any Seller, Partner, Principal
Stockholder or Member or any Affiliate, director, officer, employee or agent
thereof of any Alternative Proposal; or
(s) not
agree
to do any of the items prohibited by Section 5.3(b), (c),
(d), (e), (g), (h), (j), (k),
(l), (m),
(n),
(o)
or (r).
5.4 Consents. Pending
the Closing Date, Sellers shall proceed with all reasonable diligence and use
all commercially reasonable efforts to obtain the written consent, authorization
or approval to the consummation of this Agreement from all necessary Persons,
including all consents, authorizations and approvals under the Contracts
identified in Section 7.3 of the Disclosure Schedule (other than the
Contract referenced on Schedule 12.1(f)).
5.5 Commercially
Reasonable Efforts to Close. (a) Subject to the terms
and conditions hereof, each party hereto covenants and agrees to use all
commercially reasonable efforts to consummate the transactions contemplated
hereby and will fully cooperate with the other parties hereto for such
purpose.
(b) Sellers
agree to immediately notify Purchasers of any event, fact or circumstance of
which any Seller becomes aware that could reasonably be expected to result
in
the failure of a condition set forth in Article IX or X to be
satisfied and, if such condition is curable, to allow Purchasers a reasonable
opportunity to satisfy such condition.
5.6 Pre-Closing
Use of Names.
(a) Sellers
and Purchasers acknowledge that Purchasers will be required, prior to the
Closing, to obtain certain licenses (including transportation licenses),
permits, certifications and other approvals and authorizations from, and to
make
certain filings and registrations with and notifications and applications to,
Governmental Authorities in order to conduct the Business from and after the
Closing, including qualifications to transact business as a foreign entity
in
the jurisdictions in which the conduct of the Business so requires.
(b) Solely
for such purposes, the Partners, the Principal Stockholders, the Members and
Sellers hereby grant, without charge, to Purchasers (or any permitted assignee
hereunder) until the earlier of the Closing or 30 days following any termination
of this Agreement pursuant to Article XI, the right to use the names
"Interdom", "Interdom Partners", "Commercial Cartage" and "Pride Logistics"
as
part of its name and agrees that it shall provide to Purchasers such consent
letters and other approvals regarding the use of the "Interdom", "Interdom
Partners", "Commercial Cartage" and "Pride Logistics" names as are reasonably
requested by Purchasers for such purposes.
(c) In
the
event of any termination of this Agreement pursuant to Article XI,
Purchasers shall, at its own expense, promptly take all actions necessary to
eliminate all use by Purchasers (or any assignee thereof) of the names
"Interdom", "Interdom Partners", "Commercial Cartage" and "Pride Logistics"
and
provide written evidence thereof to Sellers.
5.7 Transfer
of Related Business Assets. In partial consideration for the
Purchase Price, the Partners, the Principal Stockholders and the
Members covenant and agree to, and further covenant and agree to cause each
of
their Affiliates, other than Sellers and other than Impact Transportation,
LLC,
Impact Transload & Rail, LLC and Intermodal Management System, LLC
(collectively, the "Interdom Related Entities"), that owns or has a
leasehold interest in or contract right to assets used in the Business (the
"Related Business Assets") to (a) sell, assign, convey, transfer and
deliver to Purchasers at the Closing the Related Business Assets held by such
Interdom Related Entity and (b) execute and deliver all such bills of sale,
agreements and other instruments as may be necessary or reasonably requested
by
Purchasers to effect the foregoing. Without limiting the generality
of the foregoing, the parties agree that (i) the Related Business Assets include
any equipment lease held by an Interdom Related Party that covers equipment
used
in the Business, and (ii) the bills of sale, agreements and other instruments
for the conveyance of any Related Business Assets shall include representations
and warranties from any applicable Interdom Related Entity that are
substantially similar to those set forth in Article VII.
5.8 Retained
Entities Reconciliation. By no later than the fifth (5th) Business
Day
prior to the Closing Date, the Partnership shall deliver to the Purchasers
a
schedule of all accounts receivable and accounts payable between the Retained
Entities and the Sellers as of December 31, 2006 and a reconciliation of such
schedule with the Partnership's Special Purpose Financial
Statements.
ARTICLE
VI
Financial
Statements; Disclosure Schedule
6.1 Pre-Signing
Deliveries. On or prior to the date hereof, Sellers have
delivered to Purchasers:
(a) The
(i)
audited consolidated balance sheets of the Partnership as of December 31, 2004
and 2005 and the related audited consolidated statements of earnings and cash
flows for the years then ended, together with the report thereon of Xxxx Xxxxxx
Xxxxxx, LLC, the Partnership's independent auditors (the "Partnership's
Audited Financial Statements"), and (ii) the special purpose balance sheet
of the Partnership as of December 31, 2006 and the related special purpose
statements of earnings and changes in partners capital for the year then ended,
together with the special purpose financial report thereon of Xxxx Xxxxxx
Xxxxxx, LLC, the Partnership's independent auditors (the "Partnership's
Special Purpose Financial Statements" and, together with the Partnership's
Audited Financial Statements, the "Partnership's Financial
Statements");
(b) The
unaudited balance sheet of the Company as of December 31, 2004, 2005 and 2006
and the related unaudited statements of earnings and cash flows for the years
then ended (the "Company's Unaudited Financial Statements");
(c) The
unaudited balance sheet of the LLC as of December 31, 2004, 2005 and 2006 and
the related unaudited statements of earnings and cash flows for the years then
ended (the "LLC's Unaudited Financial Statements"); and
(d) The
unaudited balance sheet of each of the Partnership and the Company as of the
Interim Balance Sheet Date and the related unaudited statements of earnings
and
cash flows for the portion of the fiscal year then ended, as certified as true
and complete by the chief financial officer of each such Seller (the "Interim
Financial Statements").
(e) A
disclosure schedule (as amended, if at all, in accordance with Section
5.2(b), the "Disclosure Schedule") dated even date herewith addressed
to Purchasers and signed by each Seller, accompanied or preceded by a copy
of
each Contract or plan or other document or instrument referred to in the
Disclosure Schedule.
ARTICLE
VII
Representations
and Warranties of Sellers
Sellers
represent and warrant to Purchasers (which representations and warranties shall
survive the Closing regardless of what examinations, inspections, audits and
other investigations Purchasers have heretofore made, or may hereafter make,
with respect to such representations and warranties) as follows:
7.1 Due
Formation. (a) The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada. The Partnership is a general partnership duly formed and
validly existing under the laws of the State of Illinois. The LLC is
a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Illinois. No Seller is
required to be qualified as a foreign entity in any jurisdiction, other than
in
the States set forth in Section 7.1 of the Disclosure Schedule and each
Seller is so qualified and in good standing therein. Each Seller has
all requisite corporate or partnership power and authority to carry on the
Business and to own and use the assets and properties owned and used by
it.
(b) The
Partners own, beneficially and of record, all of the issued and outstanding
partnership interests of the Partnership. The Stockholders own,
beneficially and of record, all of the issued and outstanding capital stock
of
the Company. The Members own, beneficially and of record, all of the
issued and outstanding membership interests of the LLC.
(c) Other
than the Retained Entities, no Seller owns or holds, directly or indirectly,
any
capital stock of, or other equity interests in, any corporation, partnership,
limited liability company, joint venture or other entity.
7.2 Authority. Each
Seller has the corporate or partnership right and power to enter into, and
perform its obligations under this Agreement and each other agreement delivered
in connection herewith to which it is a party; and has taken all requisite
corporate or partnership action to authorize the execution, delivery and
performance of this Agreement and each such other agreement and the consummation
of the sale of the Purchased Assets and other transactions contemplated by
this
Agreement; and this Agreement has been duly authorized, executed and delivered
by such Seller and is binding upon, and enforceable against, such Seller in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors' rights generally and by general principles
of equity (whether applied in a proceeding at law or in equity.)
7.3 No
Violations and Consents. (a) Neither the execution,
delivery and performance of this Agreement by any Seller nor the consummation
of
the sale of the Purchased Assets or any other transaction contemplated by this
Agreement, does or will, after the giving of notice, or the lapse of time,
or
otherwise, (i) conflict with, result in a breach of, or constitute a default
under, the articles of incorporation, partnership agreement or by-laws of such
Seller, or any Law or Order, or any Contract or plan to which such Seller is
a
party or by which such Seller or any of the Purchased Assets is subject or
bound; (ii) result in the creation of any Lien or other adverse interest upon
any of the Purchased Assets; (iii) terminate, amend or modify, or give any
party
the right to terminate, amend, modify, abandon, or refuse to perform, any
Contract or plan to which such Seller is a party; or (iv) accelerate or modify,
or give any party the right to accelerate or modify, the time within which,
or
the terms under which, any duties or obligations are to be performed, or any
rights or benefits are to be received, under any Contract or plan to which
such
Seller is a party.
(b) Except
as
set forth in Section 7.3 of the Disclosure Schedule, no consent,
authorization or approval of, filing or registration with or giving of notice
to, any Governmental Authority or any other Person is necessary in connection
with the execution, delivery and performance by any Seller of this Agreement
or
the consummation of the transactions contemplated hereby.
7.4 Brokers. Neither
this Agreement nor the sale of the Purchased Assets or any other transaction
contemplated by this Agreement was induced or procured through any Person acting
on behalf of, or representing any Seller or any of its Affiliates as broker,
finder, investment banker, financial advisor or in any similar
capacity.
7.5 Required
Assets. All of the rights, properties and assets utilized or
required by each Seller in connection with owning and operating the Business
are
(a) either owned by such Seller or licensed or leased to Seller under one of
the
Contracts conveyed to Purchaser under this Agreement; and (b) included in the
Purchased Assets or the Related Business Assets (other than the Retained
Assets).
7.6 Related
Party Transactions. Other than the Retained Entities and as set
forth in Section 7.6 of the Disclosure Schedule, no Seller, Partner,
Stockholder, Member or any of their Affiliates nor any of their respective
stockholders, directors, officers or employees (a) owns five percent (5%) or
more of any class of securities of, or has an equity interest of five percent
(5%) or more in, any Person which has any business relationship (as lessor,
supplier, customer, consultant or otherwise) with the Business; (b) owns, or
has
any interest in, any right, property or asset which is utilized or required by a
Seller in connection with owning or operating the Business; or (c) has any
other
business relationship (as lessor, supplier, customer, consultant or otherwise)
with the Business. Without limiting the generality of the foregoing,
Section 7.6 of the Disclosure Schedule sets forth a complete and accurate
list of (i) each parcel of real property that any Seller leases from any
Partner, Stockholder or Member or any Interdom Related Entity and (ii) each
Contract between any Seller, on the one hand, and any Partner, Stockholder
or
Member or any Affiliate of any Seller, Partner, Stockholder or Member or any
of
their respective stockholders, directors, officers or employees, on the other
hand.
7.7 Title
to Purchased Assets. (a) On the Most Recent Year-End
Balance Sheet Date, each Seller had, and on the date hereof such Seller has,
good and marketable title to all of the Purchased Assets existing on such date
free and clear of any Liens, other than Permitted Liens and Liens contemplated
by this Agreement to be released upon the Closing.
(b) At
the
Closing, each Seller shall, subject to the receipt of payment pursuant to
Section 2.3(a), sell, assign, convey, transfer and deliver to Purchasers
good and marketable title to all of the Purchased Assets free and clear of
any
Liens, other than Permitted Liens.
(c) Set
forth
as Section 7.7 of the Disclosure Schedule is a true and complete list of
all of each Seller's tangible personal property utilized or required by such
Seller in connection with owning or operating the Business as of April 30,
2007,
other than any item of such personal property having a cost basis of less than
$1,000.
7.8 Condition
of Assets. Except as set forth in Section 7.8 of the
Disclosure Schedule, all of the vehicles and other transportation equipment,
machinery, equipment, tools and other tangible personal property included in
the
Purchased Assets have been well maintained and are in operating condition and
repair, ordinary wear and tear excepted, and are free from defects other than
such minor defects as do not interfere with the intended use thereof in the
conduct of the Business or adversely affect the resale value
thereof.
7.9 Real
Property. (a) No Seller owns or has ever owned any
real property or interests in real property, and no Seller has any outstanding
option or right of first refusal to purchase any real property or interest
therein.
(b) Section
7.9 of the Disclosure Schedule sets forth a true and complete list of all
real property leased or subleased by any of the Sellers, licensed to any of
the
Sellers, or otherwise used or occupied by either of the Sellers for the
operation of the Business (the "Leased Real Property", together with a
true and complete list of all leases (including the parties thereto, annual
rent, expiration date and location of the real property covered thereby), lease
guaranties, subleases, licenses, easements, and agreements for the leasing,
use
or occupancy of, or otherwise granting a right in or relating to the Leased
Real
Property, including all amendments, terminations and modifications thereof
(each, a "Lease"). The Sellers have provided to the Purchasers
a true and complete copy of each Lease. With respect to each such
Lease: (i) the applicable Seller has a valid and assignable interest or
estate in such Lease, free and clear of all Liens; (ii) such Lease is in full
force and effect, valid and enforceable against the applicable Seller in
accordance with its terms; (iii) such Lease constitutes the entire agreement
to
which the applicable Seller is a party with respect to the subject Leased Real
Property; (iv) the applicable Seller has not assigned, sublet, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the interest
or estate created thereby; (v) the Leased Real Property and all facilities
located thereon have received all Permits required in connection with the
operation thereof and are in compliance with and have been operated and
maintained in accordance with all applicable Laws, including any zoning Laws;
(vi) the Sellers are not in receipt of any notice of default pursuant to
such Lease, no rentals are past due and no condition exists that is or could
be
a default by any party under such Lease; (vii) the Closing will not affect
the
enforceability against any Person of such Lease or the rights of the Purchaser
to the continued use and possession of the Leased Real Property for the conduct
of business as currently conducted; and (viii) there are no other parties
occupying, or with a right to occupy granted by the Sellers, the Leased Real
Property.
(c) All
of
the Leased Real Property, and all components of all improvements included within
each Leased Real Property, including the roofs, foundations, walls and other
structural elements thereof and the sprinkler and fire protection, heating,
ventilation, air conditioning, plumbing, electrical, mechanical, sewer, waste
water, storm water, paving and parking equipment, systems and facilities
included therein, are in operating condition, working order and repair and
do
not require material repair or replacement in order to serve their intended
purposes, including use and operation consistent with their present use and
operation, except for scheduled maintenance, repairs and replacements conducted
or required in the Ordinary Course with respect to the operation of the Leased
Real Property. The Leased Real Property is adequately serviced by all
utilities utilized or necessary for the effective operations of the Business
and
have not, during the last two years, experienced any material interruption
in
the delivery of adequate quantities of any utilities (including electricity,
telephone, natural gas, potable water, water for cooling or similar purposes
and
fuel oil, but excluding any electricity interruption due to storm damage) or
other public services, including sanitary and industrial sewer services,
utilized or required by any Seller in the operation of the Business at the
Leased Real Property.
(d) Each
parcel of Leased Real Property abuts on at least one side a public street or
road in a manner so as to permit reasonable, customary and adequate commercial
and non-commercial vehicular and pedestrian ingress, egress and access to such
parcel, or has adequate easements across intervening property to permit
reasonable, customary and adequate commercial and non-commercial vehicular
and
pedestrian ingress, egress and access to such parcel from a public street or
road.
(e) There
are
no claims, governmental investigations, litigation or proceedings which are
pending or, to the Sellers' Knowledge, threatened against the Leased Real
Property or any Seller with respect to the Leased Real Property.
(f) No
condemnation or eminent domain proceedings have been initiated by service of
process on any Seller which relate to the Leased Real Property, and no such
proceedings are, to Sellers' Knowledge, threatened or have been filed by any
Governmental Authority with respect to the Leased Real Property.
(g) No
Seller
has received written notice that any improvement on the Leased Real Property
encroaches onto (i) a parcel of land not owned or leased by any Seller or (ii)
any part of the Leased Real Property which is subject to or encumbered by a
right-of-way, easement or similar agreement. To Sellers' Knowledge,
no improvements on any parcel of property not owned or leased by any Seller
encroaches onto the Leased Real Property.
(h) No
Seller
is in default under or has breached, and the Leased Real Property is not in
violation of, and no event has occurred or is continuing which with notice
or
the passage of time, or both, would constitute a default by any Seller under
any
covenants, restrictions, rights-of-way, licenses, agreements or easements
affecting title to or relating to the use of the Leased Real Property, and
no
such covenants, restriction, right-of-way, license, agreement or easement has
impaired in any material way the right of any Seller to operate the Business
at
the Leased Real Property, nor has such Seller received any notice or, to
Sellers' Knowledge, is there any fence dispute, boundary dispute, boundary
line
question, water dispute or drainage dispute concerning or affecting the Leased
Real Property.
7.10 Litigation
and Compliance with Laws. (a) Except as set forth in
Section 7.10(a) of the Disclosure Schedule, there is no action at
law or in equity, no arbitration proceeding, and no action, proceeding,
complaint or investigation before or by any Governmental Authority, pending
or,
to Sellers' Knowledge, threatened against or affecting any Seller or the
Business, or any of the Purchased Assets or any Seller's right to own the
Purchased Assets or operate the Business; and, to Sellers' Knowledge, there
are
no facts or contemplated events which may reasonably be expected to give rise
to
any such claim, action, suit, proceeding, complaint or
investigation. No Seller or any of the Purchased Assets is subject to
any Order.
(b) There
are
no claims, actions, suits, proceedings or investigations pending or, to Sellers'
Knowledge, threatened against any Seller with respect to this Agreement, or
in
connection with the transactions contemplated hereby.
(c) Except
as
disclosed in Section 7.10(c) of the Disclosure Schedule, there is no
labor trouble, dispute, grievance, controversy or strike pending or, to Sellers'
Knowledge, threatened against Seller or affecting the Business. No
Seller is a party to or bound by any collective bargaining agreement or
otherwise required to bargain with any union, or has any of them experienced
within the last twenty-four months any strikes or other actions, grievances,
claims of unfair labor practices, or other collective bargaining disputes or
trade disputes. No organizational effort has been made or threatened
by any employee or by or on behalf of any labor union (which includes any
application or request for recognition) within the last twenty-four months
with
respect to employees of any Seller. To Sellers' Knowledge, no Seller
has committed any material unfair labor practice or violated any applicable
Laws
within the last twenty-four months relating to employment or employment
practices or termination of employment, including those relating to wages and
hours, discrimination in employment, occupational health and safety, and
collective bargaining. Except as set forth in Section 7.10(c)
of the Disclosure Schedule, there is no pending or, to Sellers' Knowledge,
threatened charge or complaint against any Seller involving any employment
matter, including any charge or complaint before the National Labor Relations
Board, the Equal Employment Opportunity Commission, or any comparable state,
local, or foreign agency.
(d) No
Seller
owns or operates, or has owned or operated, the Business or the Purchased
Assets, in violation of any Law, other than traffic and highway violations
incurred in the Ordinary Course.
7.11 Intellectual
Property. (a) Section 7.11 of the Disclosure
Schedule sets forth the true and complete schedule of all trade names,
trademarks, trademark registrations, trademark applications, domain names;
servicemarks, servicemark registrations, servicemark applications; copyrights,
copyright registrations, copyright applications; patent rights (including issued
patents, applications, divisions, continuations and continuations-in-part,
reissues, patents of addition, utility models and inventors' certificates)
and
any licenses or sublicenses with respect to the foregoing which are utilized
or
required in the conduct of the Business. All registrations listed in the
Disclosure Schedule are in good standing, valid, subsisting and in full force
and effect in accordance with their terms. Except as set forth in Section
7.11 of the Disclosure Schedule, no licenses, sublicenses, covenants or
agreements have been granted or entered into by any Seller in respect of any
of
such trade names, trademarks, servicemarks, copyrights or patents or any
applications therefor.
(b) There
are
no patents, trademarks, trade names, servicemarks or copyrights necessary for
the conduct of the Business as presently operated, except those included in
the
Purchased Assets.
(c) There
is
not now and has not been any written claim received by Sellers during the past
three (3) years asserting any infringement, misuse or misappropriation by any
Seller of any patent, trademark, trade name, servicemark, copyright or trade
secret and which is owned or licensed by any third party, and there is not
now
any existing or, to Sellers' Knowledge, threatened claim against any Seller
of
infringement, misuse or misappropriation of any patent, trademark, trade name,
servicemark, copyright or trade secret.
(d) There
is
no pending or threatened claim by any Seller against others for infringement,
misuse or misappropriation of any patent, trademark, trade name, servicemark,
copyright or trade secret owned or licensed by any Seller and which is utilized
or required in the conduct of the Business.
(e) No
stockholder, officer, director, employee or Affiliate of any Seller owns,
directly or indirectly, in whole or in part, any invention, patent, proprietary
right, trademark, servicemark, trade name, brand name or copyright or
application therefor (i) which such Seller is presently using in the conduct
of
the Business; (ii) the use of which is necessary for the Business; or (iii)
which pertains to the Business.
7.12 Contracts. (a) Section
7.12 of the Disclosure Schedule contains a true and complete list and
description of all personal property leases, Leases, and all other Contracts,
to
which any Seller is a party and relating to the Purchased Assets or operation
of
the Business, except (i) purchase and sale commitments entered into in the
Ordinary Course and involving payments to or by such Seller of $25,000 or less,
(ii) Contracts which may be terminated by such Seller on ten (10) days or less
written notice without penalty to such Seller; or (iii) Contracts which have
a
term of one (1) year or less and involve payment by or to Seller of $25,000
or
less.
(b) All
Leases or other Contracts to be transferred, assigned or conveyed to Purchasers
under this Agreement are valid, binding and enforceable against the applicable
Seller party thereto and, to Sellers' Knowledge, the other parties thereto
in
accordance with their terms. Upon consummation of the Closing, each
Lease and other Contract shall continue in full force and effect and shall
not
give rise to any termination, amendment, acceleration, cancellation, penalty
or
other adverse consequence.
(c) No
Seller
or, to Sellers' Knowledge, any other Person is in breach of, or default under,
any Lease or other Contract to be conveyed to Purchasers under this Agreement,
and no event or action has occurred, is pending, or, to Sellers' Knowledge,
is
threatened, which, after the giving of notice, or the lapse of time, or
otherwise, could constitute or result in a breach by any Seller, or to Sellers'
Knowledge, any other Person, or a default by any Seller, or, to Sellers'
Knowledge, any other Person, under any Lease or other Contract to be conveyed
to
Purchasers under this Agreement.
7.13 Financial
Statements and Related Matters. (a) Except as set
forth on Section 7.13(a) of the Disclosure Schedule, the Financial
Statements for the Partnership were prepared in accordance with GAAP
consistently applied and present fairly the financial position and results
of
operations of the Partnership at the dates and for the periods indicated
therein. The Financial Statements for the Company and for the LLC and
the Partnership's Special Purpose Financial Statements have not been
audited. Except as set forth on Section 7.13(a) of the
Disclosure Schedule, the Financial Statements for the Company and for the LLC
were prepared in accordance with GAAP consistently applied and present fairly
the financial position and results of operations of the Company or the LLC
(as
applicable) at the dates and for the periods indicated therein.
(b) Each
Seller maintains and complies in all material respects with a system of
accounting controls sufficient to provide reasonable assurances that: (i) its
business is operated in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of such Seller's financial statements in conformity with GAAP, and to maintain
accountability for items therein; (iii) access to properties and assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for items is compared with
the actual levels at regular intervals and appropriate actions are taken with
respect to any differences.
(c) On
the
Most Recent Year-End Balance Sheet Date, no Seller had any Liability of the
type
which should be reflected in balance sheets (including the notes thereto)
prepared in accordance with GAAP, which was not fully disclosed, reflected
or
reserved against in the Most Recent Year-End Balance Sheet; and, except for
Liabilities which have been incurred since the Most Recent Year-End Balance
Sheet Date in the Ordinary Course, since the Most Recent Year-End Balance Sheet
Date, no Seller has incurred any Liability.
(d) All
of
the Accounts Receivable which are reflected in the Most Recent Year-End Balance
Sheet were acquired by Sellers in the Ordinary Course; and all of the Accounts
Receivable which have been or will be acquired by Sellers since the Most Recent
Year-End Balance Sheet Date were or will be acquired in the Ordinary
Course. Each of the Accounts Receivables arose from bona fide sales
of goods or services in the Ordinary Course to Persons that are not Affiliates
of Sellers.
(e) As
of the
date hereof, no Seller has any Indebtedness, except as described in Section
7.13(e) of the Disclosure Schedule; and, as of the Closing, no Seller will
have any Indebtedness.
7.14 Changes
Since the Most Recent Year-End Balance Sheet Date. Since the Most
Recent Year-End Balance Sheet Date, except as set forth in Section 7.14
of the Disclosure Schedule:
(a) The
Business has been conducted and carried on only in the Ordinary
Course;
(b) Except
for supplies purchased, sold or otherwise disposed of in the Ordinary Course,
no
Seller has purchased, sold, leased, mortgaged, pledged or otherwise acquired
or
disposed of any properties or assets of or for the Business in an individual
amount exceeding $25,000 and the Sellers, collectively, have not purchased,
sold, leased, mortgaged, pledged or otherwise acquired or disposed of any
properties or assets of or for the Business in an aggregate amount exceeding
$150,000;
(c) No
Seller
has sustained or incurred any loss or damage (whether or not insured against)
to
its properties or assets on account of fire, flood, accident or other calamity
which has interfered with or affected in any material respect, or may interfere
with or affect in any material respect, the operation of the
Business;
(d) No
Seller
has made, or become committed to make, any payment, contribution or award under
or into any bonus, pension, profit sharing, deferred compensation or similar
plan, program or trust covering any employee of the Business, except as
disclosed in Section 7.18 of the Disclosure Schedule;
(e) There
has
been no Material Adverse Change and, to Sellers' Knowledge, no state of facts
exists which may reasonably be expected to give rise to any Material Adverse
Change;
(f) No
Seller
has made any loans, advances or capital contributions to, or investments in,
any
other Person;
(g) No
Seller
has changed any accounting systems, policies, principles or practices (including
any change in depreciation or amortization policies or rates) used with respect
to the Business; or
(h) No
Seller
has entered into, authorized or permitted any agreement or transaction with
any
Partner, Stockholder or any Interdom Related Entity that will survive the
Closing.
(i) No
Seller
has agreed to do any of the items set forth in Sections 7.14(b), (d), (e),
(f), (g) or (h).
7.15 Insurance. Section
7.15 of the Disclosure Schedule sets forth and describes all policies of
insurance which are maintained by each Seller and which relate to the Business;
and all of such policies of insurance are in good standing, valid and
subsisting, and in full force and effect in accordance with their
terms. No Seller has been refused any insurance with respect to the
Purchased Assets or Business, and its coverage has not been limited by any
insurance carrier to which it has applied for any such insurance or with which
it has carried.
7.16 Licenses
and Permits. Section 7.16 of the Disclosure Schedule sets
forth a complete and correct list of all licenses, franchises, permits, fuel
permits, operating authorities, state operating licenses or registrations and
other interstate or intrastate regulatory licenses and other governmental
authorizations held by each Seller relating to the Business (collectively,
"Permits"). The Permits are valid and in effect and no Seller
has received any notice that any Governmental Authority intends to cancel,
terminate or not renew any of the same. To Sellers' Knowledge, each
Seller holds all permits necessary for the conduct of the Business as heretofore
conducted. Section 7.16 of the Disclosure Schedule sets forth
a list of the certificates of authority that each Seller holds from the Surface
Transportation Board to operate as a motor carrier or broker of general
commodities and the certificates of authority that each Seller holds in certain
states to operate as an intrastate motor carrier or broker of general
commodities. No certificate of authority issued to any Seller to
operate as a motor carrier or broker is subject to pending or, to Sellers'
Knowledge, threatened action on the part of any Governmental Authority for
revocation, restriction or encumbrance. Neither the U.S. Department
of Transportation nor any state regulatory agency has issued to any Seller
a
safety rating of "unsatisfactory."
7.17 Environmental
Matters. (a) To Sellers' Knowledge, no Hazardous
Materials have been used, transported, manufactured, processed, stored, treated
or disposed, in, beneath or on the Leased Real Property except as necessary
to
the conduct of the Business and in compliance with Environmental
Laws. Section 7.17(a) of the Disclosure Schedule lists the
customers for which any Seller has transported, or arranged for the
transportation of, (i) one hundred (100) or more shipments of Hazardous
Materials during the year ended December 31, 2006, and (ii) forty (40) or more
shipments of Hazardous Materials during the current year period ended April
30,
2007.
(b) To
Sellers' Knowledge, no Seller has transported, used, generated, treated, stored
or disposed of Hazardous Materials on, into or beneath the surface of any of
the
parcels of Leased Real Property, except in compliance with applicable
Environmental Laws. To Sellers' Knowledge, there has not occurred,
nor is there presently occurring, a Release or threatened Release of any
Hazardous Material on, into, from or beneath the surface of any of the parcels
of Leased Real Property, and no part of the Leased Real Property or, to Sellers'
Knowledge, no part of any parcels adjacent to the Leased Real Property,
including the ground water located thereon, is presently contaminated by
Hazardous Materials.
(c) No
Seller
has treated, transported or disposed, nor has it allowed or arranged for any
third parties to treat, transport, or dispose, any Hazardous Materials or other
waste, (i) to or at a site which, was not lawfully permitted to receive such
Hazardous Material or other waste for such purpose, (ii) to or at a site which
has been placed on the National Priorities List or its state equivalent, or
(iii) to or at a site which the United States Environmental Protection Agency
or
the relevant state agency has proposed or is proposing to place on the National
Priorities List or its state equivalent, or (iv) in a manner which gives rise
to
liability under any Environmental Laws. No Seller has received
written notice, and, to Sellers' Knowledge, there are no facts which could
give
rise to any notice, that such Seller is, or may be, a potentially responsible
party for a federal or state environmental cleanup site arising from or relating
to the Business or the Purchased Assets or for corrective action arising from
or
relating to the Business or the Purchased Assets under any Environmental
Law. No Seller has (A) received any written or oral request for
information in connection with any federal or state environmental cleanup site
arising from or relating to the Business or Purchased Assets or (B) undertaken
(or been requested to undertake) any response or remedial actions or cleanup
action of any kind arising from or relating to the Business or the Purchased
Assets at the request of any Governmental Authority, or at the request of any
other Person.
(d) Except
as
identified in Section 7.17(d) of the Disclosure Schedule, to Sellers'
Knowledge, there are no underground storage tanks, aboveground storage tanks,
asbestos containing materials, or PCB containing capacitors, transformers or
other equipment on any of the parcels of Leased Real Property. To
Sellers' Knowledge, there has been no Release from any underground or
aboveground storage tank or any PCB containing transformer, capacitor or
equipment, other than in compliance with applicable Laws, and none of the
underground or aboveground storage tanks or the PCB containing capacitors,
transformers or equipment identified in Section 7.17(d) of the Disclosure
Schedule has within the last three (3) years been, and none now need to be,
repaired or replaced.
(e) Section
7.17(e) of the Disclosure Schedule identifies and Sellers have provided to
Purchasers copies of (i) all environmental audits, assessments, or occupational
health studies in the possession of any Seller with respect to the Business
or
the Purchased Assets within the past three (3) years, (ii) the results of any
groundwater, soil, air or asbestos monitoring undertaken with respect to any
of
the parcels of Leased Real Property, (iii) all citations issued with respect
to
the Business or the Purchased Assets within the past three years under the
Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.) and (iv)
all
written claims, liabilities, litigation, notices of violation, administrative
proceedings, whether pending or threatened, or Orders issued with respect to
the
Business within the past three years under applicable Environmental
Laws.
(f) No
Seller
(i) has pending or on file any application to treat, incinerate or dispose
of
PCBs or holds any permit, license or right to incinerate PCBs, (ii) engages
(or
has engaged) in the land filling of Hazardous Materials except in compliance
with applicable Environmental Laws or (iii) engages (or has engaged) in any
road
oiling activities nor have they applied or used oil or Hazardous Materials
for
dust control or paving purposes.
(g) Each
Seller has been and is in compliance with all applicable Environmental Laws,
including obtaining and maintaining in effect all permits, licenses or other
authorizations required by applicable Environmental Laws, and each Seller has
been and is currently in compliance with all such permits, licenses and
authorizations.
7.18 Employee
Benefit Plans. (a) Except as set forth in Section
7.18 of the Disclosure Schedule, no Seller maintains, sponsors, contributes
to or has any Liability (including potential liability by reason of it being
an
ERISA Affiliate with respect to another entity) with respect to:
(i) any
"employee welfare benefit plan" or "employee pension benefit plan" as those
terms are respectively defined in sections 3(1) and 3(2) of ERISA, or any
"multiemployer plan" (as defined in section 3(37) or Section 4001(3) of ERISA)
(a "Multiemployer Plan");
(ii) any
retirement or deferred compensation plan, incentive compensation plan, stock
plan, unemployment compensation plan, vacation pay, severance pay, bonus or
benefit arrangement, insurance or hospitalization program or any other fringe
benefit arrangements for any current or former employee, director, consultant
or
agent, whether pursuant to contract, arrangement, custom or informal
understanding, which does not constitute an "employee benefit plan" (as defined
in section 3(3) of ERISA); or
(iii) any
employment agreement.
(b) A
true
and complete copy of each of the plans, arrangements and agreements set forth
in
Section 7.18 of the Disclosure Schedule (collectively, the "Benefit
Plans"), and all contracts or agreements relating thereto, or to the funding
thereof, including all trust agreements, insurance contracts, administration
contracts, investment management agreements, subscription and participation
agreements, and recordkeeping agreements, each as in effect on the date hereof,
has been provided to Purchasers. In the case of any Benefit Plan
which is not in written form, Purchasers have been provided with a true and
complete description of such Benefit Plan as in effect on the date
hereof. A true and complete copy of the three most recent annual
reports, and the most recent summary plan description and IRS determination
letter with respect to each such Benefit Plan, to the extent applicable, and
a
current schedule of assets (and the fair market value thereof assuming
liquidation of any asset which is not readily tradeable) held with respect
to
any funded Benefit Plan has been provided to Purchasers.
(c) As
to all
Benefit Plans:
(i) All
Benefit Plans comply and have been administered in form and in operation with
all requirements of Law applicable thereto, and there has been no notice issued
by any Governmental Authority questioning or challenging such
compliance.
(ii) All
Benefit Plans that are employee pension benefit plans (as defined in section
3(2) of ERISA) comply in form and in operation with all applicable requirements
of sections 401(a) and 501(a) of the Code; each such Benefit Plan has a current
determination letter issued with respect thereto by the IRS; and no event has
occurred which will or could give rise to disqualification of any such Benefit
Plan under such sections or to a tax under section 511 of the Code.
(iii) None
of
the assets of any Benefit Plan is invested in employer securities or employer
real property.
(iv) Each
of
the Benefit Plans complies with the requirements of section 409A of the
Code.
(v) All
contributions and premiums required by Law or the terms of a Benefit Plan to
be
paid prior to the Closing have been or will be timely made or paid in full
prior
to the Closing.
(vi) There
has
been no act or omission which has given rise to or may give rise to fines,
penalties, taxes, or related charges under sections 502(c), 502(i), 502(l)
or
4071 of ERISA or Chapters 43, 47, or 68 of the Code for which any Seller or
any
ERISA Affiliate of any Seller may be liable. No action has been taken
to correct any defects with respect to any Benefit Plan under any IRS correction
procedure and, to Sellers' Knowledge, no such action is required.
(vii) Neither
the execution of this document nor the consummation of the transactions
contemplated by this Agreement will, either alone or in combination with another
event, result in (A) any payment of severance or other compensation to any
current or former employee of any Seller or (B) result in the acceleration
of
the time of payment or vesting of any compensation or benefit.
(viii) There
are
no actions, suits or claims (other than routine claims for benefits) pending
or,
to Sellers' Knowledge, threatened involving such Benefit Plans or the assets
thereof, and, to Sellers' Knowledge, no facts exist which could give rise to
any
such actions, suits or claims (other than routine claims or
benefits).
(ix) No
Benefit Plan is subject to Title IV of ERISA or the funding requirements of
Section 412 of the Code; and no benefit plan is a Multiemployer
Plan.
(x) Each
Benefit Plan which constitutes a "group health plan" (as defined in section
607(1) of ERISA or section 4980B(g)(2) of the Code), has been operated in
compliance with applicable Law.
(xi) No
Seller
or any ERISA Affiliate of any Seller has Liability under any Benefit Plan or
otherwise for providing post-retirement medical or life insurance benefits,
other than statutory liability for providing group health plan continuation
coverage under Part 6 of Title 1 of ERISA and section 4980B (or any predecessor
section thereto) of the Code.
(xii) There
has
been no act or omission that would impair the right or ability of any Seller
or
any ERISA Affiliate of any Seller unilaterally to amend or terminate any Benefit
Plan.
(d) Prior
to
the date hereof, Sellers have provided to Purchasers a true and complete list
of
all of its employees and their respective salary or wages.
7.19 Taxes. (a) Sellers
have complied with all Laws relating to Taxes and have duly and timely filed
all
Tax Returns relating to the Purchased Assets, the Business, or the Transferred
Employees that were due. All such returns are true, correct, and
complete and were timely prepared and filed in accordance with applicable
Law. All Taxes due and payable with respect to any returns (whether
or not shown as payable), or otherwise due and payable by the Sellers with
respect to the Purchased Assets, the Business, or the Transferred Employees
or
for which the Sellers could be liable as a result of transferee liability,
joint
and several liability, contractual liability, or otherwise, have been timely
paid to the appropriate taxing authority. There are no existing Tax
Liens (other than Liens for current Taxes not yet due and payable) upon the
properties or assets of any Seller. All applicable sales Taxes were
paid by the Sellers when the Purchased Assets were acquired. No
Seller has at any time been required to collect and remit sales and use Taxes
to
any taxing authority, nor will the transactions contemplated by this Agreement
cause any of Sellers to be subject to any such requirements. Sellers
have provided Purchasers true, correct, and complete copies of (i) all material
federal, state, local, and foreign tax returns filed by any Seller (or their
Affiliates) with respect to the Business, the Purchased Assets, or the
Transferred Employees in the past five years; and (ii) all material notices,
correspondence, and similar materials received by any Seller (or their
Affiliates) from any taxing authority relating to the Business, the Purchased
Assets, or the Transferred Employees or Taxes associated therewith.
(b) Sellers
have (i) withheld all required amounts from payments to employees and timely
remitted such amounts to the proper agencies in accordance with applicable
laws;
(ii) withheld all required amounts from payments to agents, contractors and
nonresidents related to the Business and timely remitted such amounts to the
proper agencies; (iii) timely paid all employer contributions and premiums
to
the proper agencies; and (iv) filed all federal, state, local and foreign
returns and reports with respect to employee income tax withholding, social
security Taxes and premiums, and unemployment Taxes and premiums related to
the
Business or the Transferred Employees, all in compliance with applicable
laws.
(c) No
portion of the cost of any of the Purchased Assets was financed directly or
indirectly from the proceeds of any tax exempt state or local government
obligation described in Code Section 103(a). None of the Purchased
Assets is tax exempt use property under Code Section 168(h). None of
the Purchased Assets is property that any Seller is required to treat as being
owned by any other Person pursuant to the safe harbor lease provision of former
Code Section 168(f)(8). None of the Purchased Assets constitutes
stock in a corporate subsidiary or a joint venture, partnership, limited
liability company interest, or other arrangement or contract which is taxed
as a
partnership for U.S. federal income tax purposes.
(d) No
Seller
is a foreign person within the meaning of Code Section 1445. No
Seller has (or has previously had any) permanent establishment in any foreign
country and no Seller engages (or has previously engaged) in a trade or business
within the meaning of the Code relating to the creation of a permanent
establishment in any foreign country.
(e) Neither
the Code nor any other provision of law requires the Purchasers to withhold
any
portion of the Purchase Price.
(f) No
Seller
has any obligation for Taxes pursuant to any contract that either Purchaser
is
assuming as a result of the transactions contemplated by this
Agreement. No Seller has extended any statute of limitations relating
to Taxes for which either Purchaser could be liable under this Agreement or
pursuant to applicable Law. No taxing authority has made a claim that
as a result of conducting the Business, owning any Purchased Assets, or
employing any Transferred Employee any Seller is obligated to pay Taxes in
a
jurisdiction in which such Seller is not filing tax returns. No
audits or other proceedings are ongoing or, to Sellers' Knowledge, threatened
with respect to any Taxes relating to the Business, the Purchased Assets, or
the
Transferred Employees for which either Purchaser could have liability under
this
Agreement or under applicable Laws. There are no unpaid or proposed
assessments for Taxes with respect to any of the Purchased Assets.
(g) No
Seller
is party to any contract, plan, or other arrangement with any Transferred
Employee or other person that is being assumed by Purchasers which could (either
alone or aggregated with other payments) give rise to a payment (or another
benefit) that is not deductible under Code section 280G or subject to the excise
Tax under Code section 4999.
7.20 Suppliers;
Customers; BNSF and NS.
(a) Suppliers. Section
7.20(a) of the Disclosure Schedule sets forth the ten (10) largest suppliers
of Sellers on a combined basis (based on dollar amounts
paid by Sellers for products or services supplied to Sellers) for the year
ended
December 31, 2006 and the current year period ended April 30, 2007 (the
"Material Suppliers") and the amounts paid by Sellers to such Material
Suppliers during such periods. Except as set forth in Section
7.20(a) of the Disclosure Schedule, (i) all Material Suppliers continue to
be suppliers of Sellers; (ii) no Seller has received any notice, nor is any
Seller otherwise aware, that any Material Supplier intends to reduce materially
its business with Sellers from the levels achieved during the year ended
December 31, 2006 or the current year period ended April 30, 2007; (iii) since
the Most Recent Year-End Balance Sheet Date, no Material Supplier has terminated
its relationship with any Seller or, to Sellers' Knowledge, threatened to do
so;
(iv) since the Most Recent Year-End Balance Sheet Date, no Material Supplier
has
modified or, to Sellers' Knowledge, indicated that it intends to modify its
relationship with, or rates it charges to, any Seller in a manner which is
less
favorable in any material respect to such Seller or has agreed not to or, to
Sellers' Knowledge, indicated it will not agree to do business on such rates,
terms and conditions at least as favorable as the rates, terms and conditions
provided to such Seller on the Most Recent Year-End Balance Sheet Date; and
(v)
no Seller is involved in any material claim, dispute or controversy with any
Material Supplier. No Material Supplier has threatened to take any of
the actions described in this Section 7.20(a) as a result of the
transactions contemplated by this Agreement. To Sellers' Knowledge,
since the Most Recent Year-End Balance Sheet Date, there has been no other
adverse change in the relationship between any Seller and any Material
Supplier.
(b) Customers. Section
7.20(b) of the Disclosure Schedule sets forth the nineteen (19) largest
customers of Sellers on a combined basis (based on dollar amounts of services
purchased from Sellers) for the year ended December 31, 2006 and the current
year period ended April 30, 2007 (the "Material Customers") and the
amounts for which Sellers invoiced such Material Customers during such
periods. Except as set forth in Section 7.20(b) of the
Disclosure Schedule, (i) all Material Customers continue to be customers of
Sellers, (ii) no Seller has received any notice, nor is any Seller otherwise
aware, that any Material Customer will reduce materially its business with
Sellers from the levels achieved during the year ended December 31, 2006 or
the
current year period ended April 30, 2007; (iii) since the Most Recent Year-End
Balance Sheet Date, no Material Customer has terminated its relationship with
any Seller or, to Sellers' Knowledge, threatened to do so; (iv) since the Most
Recent Year-End Balance Sheet Date, no Material Customer has modified or, to
Sellers' Knowledge, indicated that it intends to modify its relationship with,
or rates it pays to, any Seller in a manner which is less favorable in any
material respect to such Seller or has agreed not to or, to Sellers' Knowledge,
indicated it will not agree to do business on such rates, terms and conditions
at least as favorable as the rates, terms and conditions provided to such Seller
on the Most Recent Year-End Balance Sheet Date; and (v) no Seller is involved
in
any material claim, dispute or controversy with any Material
Customer. No Material Customer has threatened to take any of the
actions described in this Section 7.20(b) as a result of the transactions
contemplated by this Agreement. To Sellers' Knowledge, since the Most
Recent Year-End Balance Sheet Date, there has been no other adverse change
in
the relationship between any Seller and any Material Customer.
(c) BNSF
and NS Contract, No Seller has received any notice, nor is any
Seller otherwise aware, that either of Burlington Northern Santa Fe Corporation
("BNSF") or Norfolk Southern ("NS") will reduce materially its
business with any Seller from the levels achieved during the year ended December
31, 2006 or the current year period ended
April 30, 2007. Since the Most Recent Year-End Balance
Sheet Date, (i) neither BNSF nor NS has terminated its relationship with any
Seller or, to Sellers' Knowledge, threatened to do so; (ii) neither BNSF nor
NS
has modified or, to Sellers' Knowledge, indicated that it intends to modify
its
relationship with, or the rates it charges to, any Seller in a manner which
is
less favorable in any material respect to such Seller or has agreed not to
or,
to Sellers' Knowledge, indicated it will not agree to do business on such rates,
terms and conditions at least as favorable as the rates, terms and conditions
provided to such Seller on the Most Recent Year-End Balance Sheet Date; and
(iii) no Seller is involved in any material claim, dispute or controversy with
either BNSF or NS. Neither BNSF nor NS has notified Sellers that it
may take any of the actions described in this Section 7.20(c) as a result
of the transactions contemplated by this Agreement. To Sellers'
Knowledge, since the Most Recent Year-End Balance Sheet Date, there has been
no
other adverse change in the relationship between any Seller and either BNSF
or
NS.
7.21 Full
Disclosure. No representation or warranty of Sellers contained in
this Agreement or the Disclosure Schedule contains any untrue statement of
a
material fact or omits to state a material fact required to be stated therein
or
necessary to make the statements made, in the context in which made, not
materially false or misleading.
ARTICLE
VIII
Representations
and Warranties of Purchasers
Purchasers
represent and warrant to Sellers (which representations and warranties shall
survive the Closing regardless of what examinations, inspections, and other
investigations Sellers have heretofore made, or may hereafter make, with respect
to such representations and warranties) as follows:
8.1 Due
Incorporation. Each Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware.
8.2 Authority. Each
Purchaser has the corporate right and power to enter into, and perform its
obligations under this Agreement and each other agreement delivered in
connection herewith to which it is a party, and has taken all requisite
corporate action to authorize the execution, delivery and performance of this
Agreement and such other agreements and the consummation of the purchase of
the
Purchased Assets and other transactions contemplated by this Agreement; and
this
Agreement has been duly executed and delivered by each Purchaser and each is
binding upon, and enforceable against, such Purchaser in accordance with its
terms; except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity.)
8.3 No
Violations. Neither the execution, delivery or performance of
this Agreement by either Purchaser, nor the consummation of the purchase of
the
Purchased Assets or any other transaction contemplated by this Agreement, does
or will, after the giving of notice, or the lapse of time, or otherwise conflict
with, result in a breach of, or constitute a default under, the certificate
of
incorporation or by-laws of such Purchaser, or any Law or Order, or any Contract
or plan to which such Purchaser is a party.
8.4 Brokers. Neither
this Agreement nor the purchase of the Purchased Assets or any other transaction
contemplated by this Agreement was induced or procured through any Person acting
on behalf of, or representing, either Purchaser or any of their respective
Affiliates as broker, finder, investment banker, financial advisor or in any
similar capacity.
ARTICLE
IX
Conditions
to Closing Applicable to Purchasers
The
obligations of Purchasers hereunder (including the obligation of Purchasers
to
close the transactions herein contemplated) are subject to the following
conditions precedent:
9.1 No
Termination. Neither Purchasers nor Sellers shall have terminated
this Agreement pursuant to Section 11.1.
9.2 Bring-Down
of Sellers' Warranties and Covenants. The warranties and
representations made by Sellers herein to Purchasers shall be true and correct
in all material respects on and as of the Closing Date with the same effect
as
if such warranties and representations had been made on and as of the Closing
Date and Sellers shall have performed and complied with all agreements,
covenants and conditions on its part required to be performed or complied with
on or prior to the Closing Date; and at the Closing, Purchasers shall have
received a certificate executed by the President of each Seller to the foregoing
effect.
9.3 No
Material Adverse Change. Since the Interim Balance Sheet Date,
there shall have been no Material Adverse Change and no material change in
any
Seller's relationship with its employees or in the anticipated integration
of
any Seller's employees with any Purchaser's employees, in each case, as
determined in the reasonable discretion of Purchasers.
9.4 Pending
Actions. No investigation, action, suit or proceeding by any
Governmental Authority and no action, suit or proceeding by any other Person,
shall be pending on the Closing Date which challenges, or might result in a
challenge to, this Agreement or any transactions contemplated hereby, or which
claims, or might give rise to a claim for, damages against Purchasers in a
material amount as a result of the consummation of this Agreement.
9.5 Required
Contract Consents. Purchasers shall have received evidence
reasonably satisfactory to it of the receipt of the required consents listed
in
Schedule 9.5.
9.6 Required
Governmental Approvals. Purchasers shall have received all
required consents, approvals or authorizations of any Governmental Authority
required on the part of Sellers in connection with the performance by Sellers
of
their obligations under this Agreement and the consummation of the transactions
contemplated hereby, including any consents, approvals or authorizations
described in the Disclosure Schedule, and Sellers shall have complied with
any
applicable provisions of Law requiring any notification, declaration, filing,
registration and/or qualification with any Governmental Authority in connection
with such performance and consummation.
9.7 Required
Permits. Purchasers shall have obtained those material permits,
licenses, qualifications, registrations, authorizations and other approvals
of
Governmental Authorities necessary for Purchasers to operate the Business in
substantially the same manner as operated by Sellers prior to the
Closing.
9.8 Due
Diligence. Purchasers shall have completed their due diligence
investigation of the Business and the Sellers (including the Partnership’s
Special Purpose Financial Statements) and shall be reasonably satisfied with
the
results of such investigation.
9.9 Environmental
Assessment Report. Purchasers shall have received an
environmental Phase I report with respect to the parcels of Leased Real Property
listed in Schedule 9.9 and Purchasers shall be reasonably satisfied with
the findings, recommendations and conclusions set forth in each such
report.
9.10 Retained
Earnings. Purchasers shall be reasonably satisfied that the
Estimated Retained Earnings Adjustment Amount is a fair approximation of the
expected Final Retained Earnings Adjustment Amount.
9.11 Non-Foreign
Person Certification. Each Seller shall have delivered to
Purchasers a certificate, duly completed and executed by such Seller pursuant
to
Section 1.1445-2(b)(2) of the Treasury Regulations, certifying that such Seller
is not a "foreign person" within the meaning of Section 1445 of the
Code.
9.12 All
Necessary Documents. All proceedings to be taken in connection
with the consummation of the transactions contemplated by this Agreement and
all
documents incident thereto, shall be reasonably satisfactory in form and
substance to Purchasers and Purchasers shall have received copies of such
documents as Purchasers may reasonably request in connection therewith,
including those documents to be delivered pursuant to Section
3.2.
Purchasers
shall have the right to waive any of the foregoing conditions
precedent.
ARTICLE
X
Conditions
to Closing Applicable to Sellers
The
obligations of Sellers hereunder (including the obligation of Sellers to close
the transactions herein contemplated) are subject to the following conditions
precedent:
10.1 No
Termination. Neither Purchasers nor Sellers shall have terminated
this Agreement pursuant to Section 11.1.
10.2 Bring-Down
of Purchasers' Warranties and Covenants. All warranties and
representations made by Purchasers herein to Sellers shall be true and correct
in all material respects on and as of the Closing Date with the same effect
as
if such warranties and representations had been made on and as of the Closing
Date, and Purchasers shall have performed and complied with all agreements,
covenants and conditions on its part required to be performed or complied with
on or prior to the Closing Date, and at the Closing, Sellers shall have received
a certificate executed by the President or any Vice President of each Purchaser
to the foregoing effect.
10.3 Pending
Actions. No investigation, action, suit or proceeding by any
Governmental Authority, and no action, suit or proceeding by any other Person,
shall be pending on the Closing Date which challenges or might result in a
challenge to this Agreement or any transaction contemplated hereby, or which
claims, or might give rise to a claim for, damages against Sellers in a material
amount as a result of the consummation of the transactions contemplated
hereby.
10.4 All
Necessary Documents. All proceedings to be taken in connection
with the consummation of the transactions contemplated by this Agreement, and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to Sellers, and Sellers shall have received copies of such documents
as it may reasonably request in connection therewith, including those documents
to be delivered pursuant to Section 3.3.
Sellers
shall have the right to waive any of the foregoing conditions
precedent.
ARTICLE
XI
Termination
11.1 Termination. This
Agreement may be terminated at any time prior to the Closing only as
follows:
(a) by
mutual
consent of Purchasers and Sellers;
(b) by
Purchasers or by Sellers, if at or before the Closing any condition set forth
herein for the benefit of Purchasers or Sellers, respectively, shall not have
been timely met or cannot be timely met; provided, the party seeking to
terminate is not in breach of or default under this Agreement;
(c) by
Purchasers if the Closing of the transactions contemplated by this Agreement
shall not have occurred on or before June 30, 2007, or such later date as may
have been agreed upon in writing by the parties hereto; provided, Purchasers
are
not in breach of or default under this Agreement;
(d) by
Purchasers at any time prior to the Closing in the event Sellers have provided
any written notice to Purchasers pursuant to Section 5.2(b);
or
(e) by
Purchasers or by Sellers if any representation or warranty made herein for
the
benefit of Purchasers or Sellers, respectively, is untrue in any material
respect, or Sellers or Purchasers, respectively, shall have defaulted in any
material respect in the performance of any material obligation under this
Agreement.
If
either
party terminates this Agreement pursuant to this Article XI, all rights
and obligations of Sellers and Purchasers hereunder (except for Purchasers'
obligations under Section 5.6(c), the Partnership's and the Parent's
obligations under the Confidentiality Agreement heretofore executed by such
parties and the obligations of the parties under Article XIII) shall
terminate without any liability of either party, other than any liability of
any
party for the breach of its obligations hereunder.
ARTICLE
XII
Indemnification
12.1 Indemnification
by Sellers. Subject to the provisions of this
Article XII, Sellers covenant and agree after the Closing to
indemnify, defend and hold harmless the Purchasers and their Affiliates
(including Parent and other stockholders) (collectively, the "Purchaser
Indemnitees"), from and against any and all Adverse Consequences incurred or
suffered by the Purchaser Indemnitees arising or resulting from any of the
following:
(a) any
inaccuracy in or breach of, or, with respect to a third-party claim, any alleged
breach or inaccuracy of, any representation or warranty of Sellers set forth
in
this Agreement (or the Disclosure Schedule) or in any document or certificate
delivered by Sellers, the Partners, the Stockholders or any Interdom Related
Entity in connection with this Agreement;
(b) any
breach of any covenant or agreement of Sellers, the Partners or the Stockholders
set forth herein or in any document or certificate delivered by Sellers, the
Partners or the Stockholders or any Interdom Related Entity in connection with
this Agreement;
(c) any
Retained Liabilities;
(d) any
Retained Assets;
(e) the
following Taxes: (i) the Sellers' allocable share of any Transfer Taxes (as
determined pursuant to Section 2.9) imposed on any Purchaser Indemnitee
as a result of the transactions contemplated by this Agreement; (ii) all Taxes
of the Sellers (including Taxes for which any Seller is liable as a result
of
transferee liability, joint and several liability, contractual liability, or
otherwise) unrelated to the Purchased Assets, the Business, and the Transferred
Employees; and (iii) all Taxes (other than Assumed Taxes) for periods ending
on
or before the Closing Date that are related to the Purchased Assets, the
Business, and the Transferred Employees. For purposes of this
subsection, (i) Taxes determined by reference to income, capital gains, gross
income, gross receipts, sales, net profits, windfall profits or similar items
or
resulting from a transfer of assets incurred during a period beginning before
and ending after the Closing Date shall be allocated between the portion of
the
period beginning prior to and ending on the Closing Date and the portion of
the
period ending after the Closing Date based on the date on which such items
accrued; (ii) Taxes such as real property Taxes and personal property Taxes
shall be allocated between the portion of a period ending on the Closing Date
and the portion of the period ending after the Closing Date on a per diem basis
based on the number of days in the period; and (iii) any interest, penalties,
additions to tax or additional amounts that relate to Taxes for any period,
or a
portion of any period, ended on or before the Closing Date shall be treated
as
occurring on or prior to the Closing Date whether such items are incurred,
accrued, assessed or similarly charged on, before or after the Closing Date;
or
(f) any
liability or obligation relating to any matter described on Schedule
12.1(f).
For
the
avoidance of doubt, Sellers shall have no obligation under this Section
12.1 to indemnify the Purchaser Indemnitees in any amount in excess of the
actual Adverse Consequences incurred or suffered by the Purchaser Indemnitees;
provided, however, that actual Adverse Consequences may include damages
calculated on a "multiple of earnings" basis in the event the Adverse
Consequences incurred or suffered by the Purchaser Indemnitees arose or resulted
from a breach or default that affected the net income of any Seller during
the
three-year period ending on December 31, 2006.
12.2 Indemnification
by Purchaser. Subject to the provisions of this
Article XII, Purchasers covenant and agree after the Closing to
indemnify, defend and hold harmless Sellers, the Partners, the Principal
Stockholders and the Members (together, the "Seller Indemnitees") from
and against any and all Adverse Consequences incurred or suffered by the Seller
Indemnitees arising or resulting from, directly or indirectly, any of the
following:
(a) any
inaccuracy in or breach of, or, with respect to a third-party claim, any alleged
breach or inaccuracy of, any representation or warranty of Purchasers set forth
in this Agreement or in any document or certificate delivered by Purchasers
in
connection with this Agreement;
(b) any
breach of any covenant or agreement of Purchasers set forth herein or in any
document or certificate delivered by Purchasers in connection with this
Agreement;
(c) any
Assumed Liability; or
(d) the
Purchasers' allocable share of any Transfer Taxes (as determined pursuant to
Section 2.9) imposed on any Seller Indemnitee as a result of the
transactions contemplated by this Agreement.
12.3 Claim
Procedure/Notice of Claim.
(a) A
party
entitled, or seeking to assert rights, to indemnification under this
Article XII (an
"Indemnified Party") shall
give written notification (a
"Claim Notice") to the party
from whom indemnification is sought (an
"Indemnifying Party") which
contains (i) a description and the amount (the
"Claimed Amount"), if then
known, of any Adverse Consequences incurred or reasonably expected to be
incurred by the Indemnified Party and (ii) a statement that the Indemnified
Party is entitled to indemnification under this Article XII for such
Adverse Consequences and a reasonable explanation of the basis
therefor.
(b) Within
twenty (20) days after receipt of a Claim Notice (other than a Claim Notice
based on a third-party claim), the Indemnifying Party shall deliver to the
Indemnified Party a written response (the "Response") in which the
Indemnifying Party shall either: (i) agree that the Indemnified Party is
entitled to receive all of the Claimed Amount or (ii) dispute that the
Indemnified Party is entitled to receive any or all of the Claimed Amount and
the basis for such dispute (in such an event, the Response shall be referred
to
as an
"Objection Notice"). If
no Response is delivered by the Indemnifying Party to the Indemnified Party
within such 20-day period, the Indemnifying Party shall be deemed to have agreed
that an amount equal to the entire Claimed Amount shall be payable to the
Indemnified Party and such Claimed Amount shall be promptly paid to Purchaser
or
Sellers, as applicable.
(c) In
the
event that the parties are unable to agree on whether Adverse Consequences
exist
or on the amount of such Adverse Consequences within the 20-day period after
receipt of a Claim Notice, either Purchasers or Sellers may (but are not
required to do so) petition or file an action in a court of competent
jurisdiction for resolution of such dispute.
(d) In
the
event that the Indemnified Party is entitled, or is seeking to assert rights,
to
indemnification under this Article XII relating to a third-party claim,
the Indemnified Party shall give written notification to the Indemnifying Party
of the commencement of any suit or other legal proceeding relating to such
third-party claim. Such notification shall be given within twenty
(20) days after receipt by the Indemnified Party of notice of such suit or
proceeding, shall be accompanied by reasonable supporting documentation
submitted by such third party (to the extent then in the possession of the
Indemnified Party) and shall describe in reasonable detail (to the extent known
by the Indemnified Party) the facts constituting the basis for such suit or
proceeding and the amount of the claimed Adverse Consequences, if then known;
provided, however, that no delay or deficiency on the part of the Indemnified
Party in so notifying the Indemnifying Party shall relieve the Indemnifying
Party of any liability or obligation hereunder except to the extent of any
Adverse Consequences caused by or arising out of such failure. Within
twenty (20) days after receipt of such notification, the Indemnifying Party
may,
upon written notice thereof to the Indemnified Party, assume control of the
defense of such suit or proceeding with counsel selected by the Indemnifying
Party and reasonably satisfactory to the Indemnified Party; provided,
however, that (i) the Indemnifying Party may only assume control of
such
defense if it acknowledges in writing to the Indemnified Party that any Adverse
Consequences that may be assessed against the Indemnified Party in connection
with such suit or proceeding constitute Adverse Consequences for which the
Indemnified Party shall be indemnified pursuant to this Article XII, and
(ii) the Indemnifying Party may not assume control of the defense of a suit
or
proceeding (A) involving criminal liability, (B) in which any relief other
than
monetary damages is sought against the Indemnified Party, or (C) in which
increased statutory, enhanced or treble damages are sought based on willful
misconduct. In addition, notwithstanding anything to the contrary in
the foregoing, in the event that an Indemnified Party in good faith determines
that the conduct of the defense of any claim, suit or proceeding or any proposed
settlement of any such claim, suit or proceeding by the Indemnifying Party
might
be expected to adversely affect the Indemnified Party's Tax liability or the
ability of the Indemnified Party to conduct its business (including,
relationships with Governmental Authorities, customers, suppliers or other
Persons with whom the Indemnified Party conducts business), the Indemnified
Party shall have the right at all times to take over and assume control over
the
defense, settlement or negotiations relating to any such claim, suit or
proceeding with counsel reasonably satisfactory to the Indemnified Party at
the
sole cost of the Indemnifying Party. If the Indemnifying Party does
not so assume control of such defense, the Indemnified Party shall control
such
defense at the Indemnifying Party's expense with counsel selected by the
Indemnified Party. The party not controlling such defense (the
"Non-controlling Party")
may participate therein at its own expense; provided, however, that if the
Indemnifying Party assumes control of such defense and the Indemnified Party
reasonably concludes that the Indemnifying Party and the Indemnified Party
have
conflicting interests or different defenses available with respect to such
suit
or proceeding, the reasonable fees and expenses of counsel to the Indemnified
Party shall be considered "Adverse Consequences" for purposes of this
Agreement. The party controlling such defense (the
"Controlling Party") shall
keep the Non-controlling Party reasonably advised of the status of such suit
or
proceeding and the defense thereof and shall consider in good faith
recommendations made by the Non-controlling Party with respect
thereto. The Non-controlling Party shall furnish the Controlling
Party with such information as it may have with respect to such suit or
proceeding (including copies of any summons, complaint or other pleading which
may have been served on such party and any written claim, demand, invoice,
billing or other document evidencing or asserting the same) and shall otherwise
cooperate with and assist the Controlling Party in the defense of such suit
or
proceeding. The Indemnifying Party shall not agree to any settlement
of, or the entry of any judgment arising from, any such suit or proceeding
without the prior written consent of the Indemnified Party, which shall not
be
unreasonably withheld or delayed. The Indemnified Party shall not
agree to any settlement of, or the entry of any judgment arising from, any
such
suit or proceeding without the prior written consent of the Indemnifying Party,
which shall not be unreasonably withheld or delayed.
12.4 Survival
of Representations, Warranties and Covenants; Determination of Adverse
Consequences.
(a) Except
as
set forth in Section 12.4(b), the representations and warranties of
Sellers and Purchasers contained in this Agreement and the certificates
delivered pursuant to this Agreement shall survive until the second (2nd) anniversary
of
the Closing Date, at which time such representations and warranties and any
right to make an indemnification claim based thereon will
terminate.
(b) The
representations and warranties of Sellers contained in Section 7.4
(Brokers), Section 7.10 (Litigation and Compliance with Laws), Section
7.16 (Licenses and Permits) and Section 7.17 (Environmental Matters)
shall survive until the third (3rd) anniversary
of
the Closing Date, at which time such representations and warranties and any
right to make an indemnification claim based thereon will
terminate. The representations and warranties of Sellers contained in
Section 7.18 (Employee Benefit Plans) and Section 7.19 (Taxes)
shall survive until the third (3rd) anniversary
of
the Closing Date plus thirty (30) days, at which time such representations
and
warranties and any right to make an indemnification claim based thereon will
terminate. The representations and warranties of Sellers contained in
Section 7.7 (Title to Purchased Assets) shall survive until the fourth
(4th)
anniversary of the Closing Date, at which time such representations and
warranties and any right to make an indemnification claim based thereon will
terminate. The representations and warranties of Sellers contained in
Section 7.1 (Due Formation) (except to the extent relating to the foreign
qualification of the Sellers) and Section 7.2 (Authority) shall survive
until the seventh (7th) anniversary
of
the Closing Date, at which time such representations and warranties and any
right to make an indemnification claim based thereon will
terminate.
(c) Notwithstanding
anything to the contrary in this Agreement, if an Indemnified Party delivers
to
an Indemnifying Party, before expiration of a representation or warranty, either
a Claim Notice based upon a breach of such representation or warranty, or a
notice that, as a result of a suit or other legal proceeding instituted by
or
claim made by a third party, the Indemnified Party reasonably expects to incur
Adverse Consequences, then the applicable representation or warranty shall
survive until, but only for purposes of, the resolution of the matter covered
by
such notice.
(d) The
representations and warranties of Sellers shall not be affected or deemed waived
by reason of any investigation made by or on behalf of Purchasers.
(e) All
covenants and agreements contained in this Agreement and the documents and
certificates delivered pursuant to this Agreement shall survive the
Closing Date in accordance with their
terms.
(f) If
a
Purchaser Indemnitee's indemnification claim is based on both a breach of a
Seller representation and warranty and either a Liability of such Seller that
is
not an Assumed Liability or another matter not subject to the limitations set
forth in Section 12.4 or 12.5, such limitations shall not apply or
restrict Purchaser Indemnitee's right to indemnification.
(g) Purchasers
shall have the right in their sole discretion with respect to any particular
indemnification claim to exercise their set-off rights under Section 12.6
or to exercise any and all other remedies in connection with such claim,
including specific performance and injunctive or equitable relief.
12.5 Limitations
on Indemnification Obligations.
(a) Sellers
shall have no obligation to indemnify the
Purchaser Indemnitees with respect to Adverse
Consequences arising under Section 12.1(a) (other than Section 7.1
(Due Formation), Section 7.2 (Authority), Section 7.4 (Brokers),
Section 7.7 (Title to Purchased Assets), Section 7.10(b)
(Litigation and Compliance with Laws) and Section 7.19 (Taxes)) until the
aggregate amount of all Adverse Consequences thereunder exceeds One Hundred
Thousand Dollars ($100,000), in which event the Sellers shall be obligated
to
indemnify the Purchaser Indemnitees only for the amount of Adverse Consequences
in excess of such threshold.
(b) Sellers
shall have no obligation to indemnify the Purchaser Indemnitees with respect
to
Adverse Consequences arising under Section 12.1(a) (other than Section
7.1 (Due Formation), Section 7.2 (Authority) and Section 7.7
(Title to Purchased Assets)) in excess of Five Million Dollars ($5,000,000)
(the
"Cap").
(c) The
amount of any Adverse Consequences incurred by the Purchasers will be reduced
by
the net amount either Purchaser actually recovers from any insurer or other
party liable for such Adverse Consequences, provided, that nothing in the
foregoing shall require Purchasers to take any action whatsoever to attempt
to
notify, file a claim with or collect any amount from, any insurer or other
party
with respect to any claim, loss or occurrence which shall arise prior to the
Closing.
(d) Notwithstanding
anything to the contrary in this Agreement,
Purchaser Indemnitees' rights to indemnification
with respect to Adverse Consequences arising under Section 12.1(b),
(c), (d), (e), or (f), or based upon fraud, willful
misconduct or intentional misrepresentation, shall not be subject to the
limitations set forth in Sections 12.5(a) and
12.5(b).
(e) Any
indemnity payments made pursuant to this Article XII shall be treated for
all income tax purposes by the parties hereto as an adjustment to the Purchase
Price.
12.6 Right
of Set-Off. If a Seller is obligated to indemnify either
Purchaser or any other Purchaser Indemnitee for any indemnification claim in
accordance with Article XII, Purchasers may set-off the amount of such
claim against any amounts payable by Purchasers to Sellers under this Agreement,
including the Earnout Payments and Catch-Up Payment, as the same becomes due.
If
Purchasers intend to set-off any amount hereunder, Purchasers shall provide
not
less than twenty (20) days' prior written notice to Sellers of its intention
to
do so, together with a reasonably detailed explanation of the basis therefor
(a
"Set-Off Notice"). If, within ten (10) days of its receipt of
a Set-Off Notice, Sellers provide Purchasers with written notice of Sellers'
dispute with Purchasers' right to make such set-off, Purchasers and Sellers
shall meet in good faith within five (5) days to attempt to resolve their
dispute. If such dispute remains unresolved despite Purchasers' good
faith attempt to meet with Sellers and resolve such dispute, Purchasers may
withhold the amount contemplated by the Set-Off Notice until the matter is
resolved. If it is finally determined that Purchasers' claim is
valid, then Purchasers may effect the set-off contemplated by the Set-Off
Notice. The cost of any litigation between the parties with respect
to any contested set-off, including reasonable accounting and attorneys' fees
and court costs, costs of expert witnesses and other expenses of litigation
shall be paid by the non-prevailing party.
ARTICLE
XIII
Confidentiality
13.1 Confidentiality
of Materials. (a) The parties hereto agree with
respect to all technical, commercial and other information that is furnished
or
disclosed by the other party, including information regarding such party's
(and
its subsidiaries' and Affiliates') organization, personnel, business activities,
customers, policies, assets, finances, costs, sales, revenues, technology,
rights, obligations, liabilities and strategies ("Information"), that,
unless and until the transaction contemplated by this Agreement shall have
been
consummated, (i) such Information is confidential and/or proprietary to the
furnishing/disclosing party and entitled to and shall receive treatment as
such
by the receiving party; (ii) the receiving party will hold in confidence and
not
disclose nor use (except in respect of the transactions contemplated by this
Agreement) any such Information, treating such Information with the same degree
of care and confidentiality as it accords its own confidential and proprietary
Information; provided, however, that the receiving party shall not have any
restrictive obligation with respect to any Information which (A) is contained
in
a printed publication available to the general public, (B) is or becomes
publicly known through no wrongful act or omission of the receiving party,
or
(C) is known by the receiving party without any proprietary restrictions by
the
furnishing/disclosing party at the time of receipt of such Information; and
(iii) all such Information furnished to either party by the other, unless
otherwise specified in writing, shall remain the property of the
furnishing/disclosing party and, in the event this Agreement is terminated,
shall be returned to it, together with any and all copies made thereof, upon
request for such return by it (except for documents submitted to a Governmental
Authority with the consent of the furnishing/disclosing party or upon subpoena
and which cannot be retrieved with reasonable effort) and in the case of (x)
oral information furnished to any party by the other which shall have been
reduced to writing by the receiving party and (y) all internal documents of
any
party describing, analyzing or otherwise containing Information furnished by
the
other party, all such writings and documents shall be destroyed, upon request,
in the event this Agreement is terminated, and each party shall confirm in
writing to the other compliance with any such request.
(b) Sellers,
the Partners, the Principal Stockholders and the Members also each agree with
respect to all Information regarding the Business, the Purchased Assets and
the
Related Business Assets that, from and after the Closing, (i) such Information
is confidential and/or proprietary to Purchasers and entitled to and shall
receive treatment as such by Sellers, the Partners, the Principal Stockholders,
the Members and their respective Affiliates; (ii) Sellers, the Partners, the
Principal Stockholders and the Members shall, and shall cause their respective
Affiliates to, hold in confidence and not disclose nor use any such Information,
treating such Information with the same degree of care and confidentiality
as it
or he accords its own confidential and proprietary information; provided, that
no Seller or any Partner, Principal Stockholder or Member shall have any such
obligations with respect to Information which is of the type described in
clauses (A) through (C) of Section 13.1(a)(ii).
13.2 Remedy. Each
party hereto acknowledges that the remedy at law for any breach by either party
of its obligations under Section 13.1 is inadequate and that the other
party shall be entitled to equitable remedies, including an injunction, in
the
event of breach by the other party.
ARTICLE
XIV
Employee
Matters
14.1 Employees
to be Hired by Purchasers. (a) Upon Closing,
Purchasers shall offer employment on terms and conditions substantially
comparable to their current terms and conditions of employment to each of the
employees of the Business employed in the Business at Closing on a full-time
basis (other than those employees on long-term disability and any other
employees identified in writing by Purchasers to Sellers prior to the Closing
Date). All such employees of the Business who accept employment with
either Purchaser and commence such employment immediately after the Closing
(the
"Transferred Employees") shall receive credit for their years of service
with Sellers solely for purposes of vesting and eligibility in determining
their
employee benefits with such Purchaser.
(b) Sellers
shall be solely responsible for any severance claims or any other claims or
causes of action asserted by any employee of the Business not hired by
Purchasers at Closing.
(c) After
the
Closing Date and to the extent permitted by applicable Law and the terms and
conditions of the applicable Purchaser's 401(k) plan, Purchasers shall permit
Transferred Employees who properly elect to rollover their account balances
in
any Seller’s defined contribution plan qualified under Section 401 of the Code
(collectively, the "Sellers' 401(k) Plans") to the applicable Purchaser's
401(k) plan. Prior to or on the Closing Date, Sellers shall take all
necessary actions to fully vest the accounts of the Transferred Employees in
the
respective Sellers' 401(k) Plans.
14.2 Workers'
Compensation, Medical Claims and Retirees. (a) Sellers
shall remain solely responsible for liability arising from workers' compensation
claims, both medical and disability, or other government-mandated programs
which
are based on injuries occurring prior to Closing regardless of when such claims
are filed. Purchasers shall be solely responsible for claims of
Transferred Employees based on injuries occurring after Closing.
(b) Sellers
shall remain solely responsible in accordance with its employee welfare benefit
plans for the satisfaction of all claims for medical, dental, life insurance,
health, accident or disability benefits brought by or in respect of employees
of
the Business under any of Sellers' welfare benefit plans which claims relate
to
events or injuries incurred prior to the Closing regardless of when such claim
was filed.
(c) As
of the
Closing, with respect to former and retired employees of the Business who had
terminated employment or retired on or prior to the Closing, Sellers shall
be
liable for all Liabilities in connection with claims for benefits brought by
or
in respect of such former or retired employees of the Business under any of
Sellers' welfare benefit plans with respect to medical, dental, life insurance,
health, accident or disability benefits or otherwise and shall provide COBRA
continuation coverage to any "merger and acquisition qualified
beneficiary".
(d) Purchasers
shall not assume any Benefit Plan and Sellers shall retain responsibility for
claims for benefits, rights and payments under all Benefit Plans.
ARTICLE
XV
Certain
Other Agreements
15.1 Post-Closing
Access to Records. Each party agrees to provide the other with
such assistance as may reasonably be requested by the others in connection
with
the preparation of any Tax Return or report of Taxes, any audit or other
examination by any Governmental Authority, or any judicial or administrative
proceedings relating to liabilities for Taxes. Such assistance shall
include making employees available on a mutually convenient basis to provide
additional information or explanation of material provided hereunder and shall
include providing copies of relevant Tax Returns and supporting
material. The party requesting assistance hereunder shall reimburse
the assisting party for reasonable out-of-pocket expenses incurred in providing
assistance. Purchasers and Sellers will retain for the full period of
any statute of limitations and provide the others with any records or
information which may be relevant to such preparation, audit, examination,
proceeding or determination.
15.2 Consents
Not Obtained at Closing. (a) Sellers shall use all
commercially reasonable efforts to obtain and deliver to Purchasers at or prior
to the Closing such consents as are required to allow the assignment by Sellers
to Purchasers of the Sellers' right, title and interest in, to and under any
Contract included in the Purchased Assets, except as otherwise expressly
contemplated by Section 5.4. To the extent any Contract is not
capable of being assigned without the consent or waiver of the other party
thereto or any third party (including any Governmental Authority), or if such
assignment or attempted assignment would constitute a breach thereof or a
violation of any Law or Order, neither this Agreement nor any Seller Xxxx of
Sale shall constitute an assignment or an attempted assignment of such
Contract.
(b) Anything
in this Agreement or any Seller Xxxx of Sale to the contrary notwithstanding,
Sellers are not obligated to transfer to Purchasers any of their rights and
obligations in and to any Contract without first having obtained all necessary
consents and waivers. After the Closing Date, Sellers shall use all
commercially reasonable efforts, and Purchasers shall cooperate with Sellers
at
Sellers' expense, to obtain any consents and waivers necessary to convey to
Purchasers all Contracts intended to be included in the Purchased Assets, except
as otherwise expressly contemplated by Section 5.4.
(c) If
any
such consents and waivers are not obtained with respect to any Contract, each
applicable Seller Xxxx of Sale shall constitute an equitable assignment by
the
applicable Seller to the applicable Purchaser of all of such Seller's rights,
benefits, title and interest in and to such Contract, to the extent permitted
by
Law, and such Purchaser shall be deemed to be such Seller's agent for the
purpose of completing, fulfilling and discharging all of such Seller's rights
and liabilities arising after the Closing Date under such Contract, and such
Seller shall take all necessary steps and actions to provide such Purchaser
with
the benefits of such Contract. Sellers shall hold such Purchaser
harmless from any Adverse Consequence that results from Sellers' failure to
obtain any required consents to assignment.
15.3 Post-Closing
Tax Matters.
(a) With
respect to employment Tax matters (i) Purchasers shall assume each Seller's
entire obligation to prepare, file and furnish IRS Form W-2s with respect to
the
Transferred Employees for the year including the Closing Date; (ii) Sellers
and
Purchasers shall agree to elect the "predecessor-successor" basis with respect
to each Transferred Employee pursuant to the alternative procedure prescribed
by
Section 5 of Revenue Procedure 2004-53, 34 I.R.B 320; and (iii) Sellers and
Purchasers shall work in good faith to adopt similar procedures under applicable
wage payment, reporting and withholding Laws for all Transferred Employees
in
all appropriate jurisdictions. Sellers shall indemnify and hold
Purchasers harmless from any Taxes incurred by Purchasers as a result of
assuming Sellers' obligations to prepare and file IRS Form W-2s that result
from
Sellers' failure to comply with appropriate employment Tax matters.
(b) Sellers
shall take such actions as are reasonably requested by Purchasers to obtain
from
any taxing authority any Tax clearance certificate or similar other assurance
that there are no Transfer Taxes for which Purchasers may be held liable as
a
successor or transferee of the Business and the Purchased Assets.
15.4 Bulk
Sale Waiver and Indemnity. The parties hereto acknowledge and
agree that no filings with respect to any bulk sales or similar laws have been
made, nor are they intended to be made, nor are such filings a condition
precedent to the Closing; and, in consideration of such waiver by Purchasers,
Sellers shall indemnify, defend and hold Purchasers Indemnitees harmless against
any Adverse Consequences resulting or arising from such waiver and failure
to
comply with applicable bulk sales laws.
15.5 Non-Competition;
Non-Solicitation.
(a) Prior
to
the fourth (4th) anniversary of the Closing Date, no Seller or any Partner,
Stockholder or Member shall, directly or indirectly through any Affiliate
thereof, except as hereinafter permitted, (i) engage in, carry on, participate
in or have any interest in, whether alone or in conjunction with any Person,
or
as a holder of an equity or debt interest of any Person, or as a principal,
agent or otherwise, any business competing with the Business as conducted on
the
Closing Date by Sellers in the United States of America; (ii) assist others
in
engaging in any business competing with the Business in any manner described
in
the foregoing clause (i); or (iii) induce any supplier, customer or other Person
doing business with either Purchaser to terminate its relationship with such
Purchaser. Anything hereinabove contained to the contrary
notwithstanding, the Partnership, the Partners and the Stockholders may continue
to own, directly or indirectly, equity interests in, and Xxxxx may continue
to
perform "high-level" oversight management for Impact Transportation, LLC and
Impact Transload & Rail, LLC, each a California limited liability company,
but only if (A) neither Xxxxx nor Xxxxx actively participates in the day-to-day
management or operation of such entities, and (B) such entities do not engage
in, carry on, participate in or have any interest in, whether alone or in
conjunction with any other Person, or as a holder of an equity or debt interest
of any Person, or as a principal, agent or otherwise, any business involving
the
provision of third-party international steamship services or the reloading
of
international containers with domestic freight. Xxxxxxxxx shall have
the right to participate in the day-to-day and "high-level" oversight management
and operation of Impact Transportation, LLC and Impact Transload & Rail,
LLC, subject to the provisions of subsection (B) above. Sellers shall
engage an outside accounting firm to perform the accounting services for the
Retained Entities which were previously performed by the employees of
Sellers.
(b) Prior
to
the fourth (4th) anniversary
of
the Closing Date, no Seller or any Partner, Stockholder or Member shall,
directly or indirectly through any Affiliate, solicit for employment or hire
any
Transferred Employee that remains an employee of either Purchaser at the time
of
or within the three (3) month period prior to such hiring or solicitation by
any
Seller, Partner, Stockholder, Member or any of their Affiliates.
(c) Sellers,
the Partners, the Stockholders and the Members acknowledge that the
restrictions, prohibitions and other provisions of this Section 15.5 are
reasonable, fair and equitable in scope, terms and duration, are necessary
to
protect the legitimate business interests of Purchasers, and are a material
inducement to Purchasers to enter into the transactions contemplated by this
Agreement.
(d) It
is the
desire and intent of the parties to this Agreement that the provisions of this
Section 15.5 shall be enforced to the fullest extent permissible
under applicable Law and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of
this Section 15.5 shall be adjudicated to be invalid or unenforceable,
such provision shall be deemed amended to delete or modify (including to limit
or reduce its duration, geographical scope, activity or subject) the portion
adjudicated to be invalid or unenforceable, such deletion or modification to
apply only with respect to the operation of such provision of this Section
15.5 in the particular jurisdiction in which such adjudication is made and
to be made only to the extent necessary to cause the provision as amended to
be
valid and enforceable.
(e) Sellers,
the Partners, the Stockholders and the Members acknowledge and understand that
the provisions of this Section 15.5 are of a special and unique nature,
the loss of which cannot be accurately compensated for in damages by an action
at law and that the breach of the provisions of this Section 15.5 would
cause Purchasers irreparable harm. In the event of a breach or
threatened breach by any Seller, Partner, Stockholder or Member or any of their
Affiliates of the provisions of Section 15.5, Purchasers shall be
entitled to seek an injunction restraining it from such breach. In
the event of a breach or threatened breach of Section 15.5(a) involving
either Impact Transportation, LLC or Impact Transload & Rail, LLC, which
Sellers and the Partners, Stockholders or Members are unable to cure or prevent
after exercising their reasonable best efforts, each of Sellers and the
Partners, Stockholders and Members, as applicable, agrees to sell, assign,
transfer or otherwise dispose of its direct or indirect equity interests in
Impact Transportation, LLC or Impact Transload & Rail, LLC, as applicable,
within four (4) months of such breach or threatened breach (the "Disposition
Period"). If any Seller, Partner, Stockholder or Member, as
applicable, is unable to dispose of its direct or indirect equity interests
in
Impact Transportation, LLC or Impact Transload & Rail, LLC, as applicable,
within the Disposition Period, then (1) such Seller, Partner, Stockholder or
Member shall thereafter continue to use all commercially reasonable efforts
to
dispose of such interests as soon as possible and (2) any profits or other
economic benefits derived by or payable to such Seller, Partner, Stockholder
or
Member after the Disposition Period as a result of either Impact Transportation,
LLC or Impact Transload Rail, LLC, as applicable, providing third party
international steamship services or reloading international containers with
domestic freight shall accrue to the benefit of and shall be paid or otherwise
conveyed to Parent. Nothing herein contained shall be construed as
prohibiting Purchasers from pursuing any other remedies available for any breach
or threatened breach of this Section 15.5, and the pursuit of an
injunction or any other remedy shall not be deemed to be an exclusive election
of such a remedy.
(f) For
the
avoidance of doubt, the parties agree that nothing in Section 15.5 shall
prohibit or restrict Sellers or any Partner, Stockholder or Member from selling,
assigning, transferring or otherwise disposing of their respective equity
interests in any Retained Entity.
(g) In
the
event of a breach or threatened breach of Section 15.5(a) or (b),
Purchasers may bring an action only against the offending Seller, Partner,
Stockholder, Member or Affiliate thereof and, for the avoidance of doubt, any
Seller, Partner, Stockholder, Member or Affiliate thereof that is not involved
in the breach or threatened breach shall have no responsibility for such breach
or threatened breach.
15.6 Use
of
Sellers' Names. After the Closing, no Seller, Partner, Principal
Stockholder or Member or any Interdom Related Entity, or any Affiliate of the
foregoing, may, directly or indirectly, use the name "Interdom", "Commercial
Cartage" or "Pride Logistics" or any derivative thereof or any similar name
(including "Interdom Partners") to identify itself or
himself. Sellers shall be responsible for all filing fees required to
be paid in connection with filing the necessary change of name amendments in
the
state of its incorporation and in each other state in which it is qualified
to
transact business.
15.7 Guarantees.
(a) The
Principal Stockholders, jointly and severally, hereby unconditionally and
irrevocably guarantee for the benefit of Purchasers, the Purchaser Indemnitees
and their respective heirs, successors and assigns all of the obligations of
the
Company, the Partnership, the Partners, the Stockholders and the Interdom
Related Entities under this Agreement and under each other agreement, contract
or instrument executed and delivered by the Company, the Partnership, the
Partners, the Stockholders or any Interdom Related Entity in connection with
the
transactions contemplated by this Agreement.
(b) The
Members, jointly and severally, hereby unconditionally and irrevocably guarantee
for the benefit of Purchasers, the Purchaser Indemnitees and their respective
heirs, successors and assigns all of the obligations of the LLC under this
Agreement and under each other agreement, contract or instrument executed and
delivered by the LLC in connection with the transactions contemplated by this
Agreement.
(c) The
Parent hereby unconditionally and irrevocably guarantees for the benefit of
the
Sellers, the Partners, the Stockholders, the Members, the Seller Indemnitees
and
their respective heirs, successors and assigns all of the obligations of
Purchasers under this Agreement and each other agreement, contract or instrument
executed and delivered in connection with the transactions contemplated by
this
Agreement.
15.8 Purchasers'
ISO Business. Purchasers currently intend to cause Parent's
existing ISO Business ("Purchasers' ISO Business") to be combined after
the Closing Date with the Partnership's Business in order to create a combined
ISO and international operation, unless Purchasers, in their reasonable
discretion, make a good faith determination that it is not in their business
interests to do so, including a determination that contractual obligations
by a
party might prevent or negatively effect such a combination or a determination
that such combination would not result in materially decreased operating costs
or improved margins.
ARTICLE
XVI
Miscellaneous
16.1 Cost
and Expenses. Purchasers will pay their own costs and expenses
(including attorneys' fees, accountants' fees and other professional fees and
expenses) in connection with the negotiation, preparation, execution and
delivery of this Agreement and the consummation of the purchase of the Purchased
Assets and the other transactions contemplated by this Agreement (except as
otherwise specifically provided for herein); and Sellers will pay their own
costs and expenses (including attorneys' fees, accountants' fees and other
professional fees and expenses) in connection with the negotiation, preparation,
execution and delivery of this Agreement and the consummation of the sale of
the
Purchased Assets and the other transactions contemplated by this Agreement
(except as otherwise specifically provided for herein).
16.2 Entire
Agreement. The Disclosure Schedule and the Exhibits referenced in
this Agreement are incorporated into this Agreement and together contain the
entire agreement between the parties hereto with respect to the transactions
contemplated hereunder, and supersede all negotiations, representations,
warranties, commitments, offers, contracts and writings prior to the date
hereof, including the letter of intent dated March 30, 2007 among Parent,
Sellers, the Partners and the Principal Stockholders. No waiver and
no modification or amendment of any provision of this Agreement shall be
effective unless specifically made in writing and duly signed by the party
to be
bound thereby.
16.3 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which, together, shall constitute one and the same
instrument.
16.4 Assignment,
Successors and Assigns. The respective rights and obligations of
the parties hereto shall not be assignable without the prior written consent
of
the other parties; provided, however, that either Purchaser may assign all
or
part of its rights under this Agreement and delegate all or part of its
obligations under this Agreement to one or more of its Affiliates, in which
event all the rights and powers of such Purchaser and remedies available to
it
under this Agreement shall extend to and be enforceable by each such
Affiliate. Any such assignment and delegation shall not release such
Purchaser from its obligations under this Agreement, and further such Purchaser
guarantees to Sellers the performance by each such Affiliate of its obligations
under this Agreement. In the event of any such assignment and delegation, the
term "Purchaser" as used in this Agreement shall be deemed to refer to
each such Affiliate of either Purchaser where reference is made to actions
or to
be taken with respect to the acquisition of the Business or Purchased Assets,
and shall be deemed to include both such Purchaser and each such Affiliate
where
appropriate. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted
assigns.
16.5 Savings
Clause. If any provision hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and
shall
not affect the validity or effect of any other provision hereof.
16.6 Headings. The
captions of the various Articles and Sections of this Agreement have been
inserted only for convenience of reference and shall not be deemed to modify,
explain, enlarge or restrict any of the provisions of this
Agreement.
16.7 Risk
of Loss. Risk of loss, damage or destruction to the Purchased
Assets shall be upon Sellers until the Closing, and shall thereafter be upon
Purchasers.
16.8 Governing
Law. The validity, interpretation and effect of this Agreement
shall be governed exclusively by the laws of the State of Illinois.
16.9 Press
Releases and Public Announcements. No party hereto shall issue
any press release or make any public announcement relating to the existence,
terms and conditions or subject matter of this Agreement prior to the Closing
without the prior written approval of the other parties; provided,
however, that Parent may issue any press release or make any public
announcement in such form as it deems necessary in its sole discretion to comply
with the United States securities laws, but shall provide a copy to Xxxxx in
advance of its release.
16.10 U.S.
Dollars. All amounts expressed in this Agreement and all payments
required by this Agreement are in United States dollars.
16.11 Survival. All
representations and warranties made by any party in this Agreement shall be
deemed made for the purpose of inducing the other party to enter into this
Agreement and shall survive the Closing for the time specified in Section
12.4.
16.12 Notices. (a) All
notices, requests, demands and other communications under this Agreement shall
be in writing and delivered in person, or sent by facsimile or email or sent
by
reputable overnight delivery service and properly addressed as
follows:
To
Purchasers:
Hub
Group, Inc.
0000
Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx
Xxxxx, XX 00000
Fax: (000)
000-0000
Attention: Chief
Executive Officer and General Counsel
With
a
copy to:
Winston
& Xxxxxx LLP
00
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
XX 00000
Fax: (000)
000-0000
Attention: Xxxxxxx
X. Xxxxx
To
Sellers, any Partner, Stockholder or Member:
c/o
Interdom Partners
00000
X.
00xx
Xxx.
Xxxxx
0X
Xxxxx
Xxxxxxx, XX 00000
Email: xxxxxxx@xxxxxxxxxxxxxxxx.xxx
Attention: Xxxxxxx
X. Xxxxx
Xxxxxx
Xxxxxxxxx
00
Xxxxxxxxx Xxxxx
Xxx
Xxxxx,
XX 00000
Fax:
(000) 000-0000
With
a
copy to:
Xxxxxx
& Xxxxxxx LLC
00
X.
Xxxxx Xxxxxx
Xxxxx
0000
Xxxxxxx,
XX 00000
Fax: (000)
000-0000
Attention: Xxxxxx
X. Xxxxxx
XxXxxxx
& Xxxxx, LLC
000
X.
Xxxxxxx Xxxx
Xxxx
Xxxxx, XX 00000-0000
Fax: (000)
000-0000
Attention: Xxxxxxx
X.
Xxxxx
(b) Any
party
may from time to time change its address for the purpose of notices to that
party by a similar notice specifying a new address, but no such change shall
be
deemed to have been given until it is actually received by the party sought
to
be charged with its contents.
(c) All
notices and other communications required or permitted under this Agreement
which are addressed as provided in this Section 16.12 if delivered
personally or courier, shall be effective upon delivery; if sent by facsimile,
shall be delivered upon receipt of proof of transmission.
16.13 SUBMISSION
TO JURISDICTION; VENUE. THE PARTIES HERETO HEREBY IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT LOCATED
WITHIN XXXX COUNTY, THE STATE OF ILLINOIS OVER ANY DISPUTE ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH DISPUTE
OR ANY SUIT, ACTION OR PROCEEDING RELATED THERETO SHALL BE HEARD AND DETERMINED
IN SUCH COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH COURT
OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH
DISPUTE. EACH OF THE PARTIES HERETO AGREES THAT A JUDGMENT IN ANY
SUCH DISPUTE MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR
IN ANY OTHER MANNER PROVIDED BY LAW.
16.14 No
Third-Party Beneficiary. This Agreement is being entered into
solely for the benefit of the parties hereto and the Purchaser Indemnitees,
and
the parties do not intend that any employee or any other person shall be a
third-party beneficiary of the covenants by any Seller or Purchaser contained
in
this Agreement.
16.15 Disclosures. All
matters disclosed by Sellers in the Disclosure Schedule shall be deemed a
disclosure of such matter only for the purpose of the Section of this Agreement
referred to in the Disclosure Schedule, and shall not be deemed a disclosure
with respect to any other Section of this Agreement unless specifically so
stated in writing by Sellers in the Disclosure Schedule.
16.16 Enforcement
Costs. In the event that either party seeks to enforce its rights
or remedies under this Agreement (whether for injunctive relief or damages
or
both) or seeks a declaration of costs or obligations under this Agreement,
the
prevailing party shall be awarded its reasonable attorneys' fees, costs and
expenses.
16.17 Sellers'
Obligations. Except as otherwise expressly set forth in this
Agreement, the Company's and the Partnership's obligations hereunder shall
be
joint and several.
[signature
page follows]
- -
IN
WITNESS WHEREOF, the parties hereto have executed this Asset Purchase Agreement
as of the date first written above.
SELLERS:
INTERDOM PARTNERS | |
By: Interdom, Inc. | |
Its: General Partner | |
By: /s/ Xxxxxxx X. Xxxxx | |
Title: President |
By: Midas Investments of Naples, Inc. | |
Its: General Partner | |
By: /s/ Xxxxxx Xxxxxxxxx | |
Title: President |
COMMERCIAL CARTAGE, INC. | |
By: /s/ Xxxxxxx X. Xxxxx | |
Title: President |
PRIDE LOGISTICS, L.L.C. | |
By: Bogfid, Inc. | |
By: /s/ Xxxxxxx X. Xxxxx | |
Title: President |
By: Xxxxxx Consultants, Ltd. | |
By: /s/ Xxx Xxxxxx | |
Title: President |
PARTNERS:
INTERDOM, INC. | |
By: /s/ Xxxxxxx X. Xxxxx | |
Title: President |
MIDAL INVESTMENTS OF NAPLES, INC. | |
By: /s/ Xxxxxx Xxxxxxxxx | |
Title: President |
STOCKHOLDERS:
By: /s/ Xxxxxxx X. Xxxxx | |
Title: President |
By: /s/ Xxxxxx Xxxxxxxxx | |
Title: President |
By: /s/ Xxxxxx Xxxxx | |
Title: President |
MEMBERS:
XXXXXX CONSULTANTS, LTD. | |
By: /s/ Xxx Xxxxxx | |
Title: President |
BOGFID, INC. | |
By: /s/ Xxxxxxx X. Xxxxx | |
Title: President |
PURCHASERS:
COMTRAK LOGISTICS, INC. | |
By: /s/ Xxxxx X. Xxxxxx | |
Title: Chief Executive Officer |
HUB CITY TERMINALS, INC. | |
By: /s/ Xxxxx X. Xxxxxx | |
Title: Chief Executive Officer |
PARENT:
HUB GROUP, INC. | |
By: /s/ Xxxxx X. Xxxxxx | |
Title: Chief Executive Officer |