EXHIBIT 10.11
EXECUTION COPY
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STOCK PURCHASE AGREEMENT
by and among
UNION PACIFIC RAILROAD COMPANY
and
SOUTHERN PACIFIC TRANSPORTATION COMPANY
and
PACIFIC MOTOR TRANSPORT COMPANY
and
PMT HOLDINGS, INC.
dated as of March 31, 1997
TABLE OF CONTENTS
Page
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1. Definitions..................................................................... 1
2. Purchase and Sale of Company Shares............................................. 7
(a) Basic Transaction.......................................................... 7
(b) Purchase Price............................................................. 7
(c) The Closing................................................................ 8
(d) Deliveries at the Closing.................................................. 8
3. Representations and Warranties of the Company and the Seller.................... 8
(a) Corporate Authority........................................................ 8
(b) Binding Obligation......................................................... 8
(c) Noncontravention........................................................... 9
(d) Company Shares............................................................. 9
(e) Financial Statements.......................................................10
(f) Undisclosed Liabilities....................................................10
(g) Brokers Fees...............................................................10
(h) Acquisition of Demand Note and Warrant for Investment......................10
(i) Conduct of Business of the Company.........................................10
(j) Credit Enhancements........................................................11
4. Representations and Warranties of the Buyer.....................................11
(a) Corporate Authority........................................................11
(b) Noncontravention...........................................................12
(c) Brokers' Fees..............................................................12
(d) Acquisition of Company Shares for Investment...............................12
(e) Capitalization.............................................................12
5. Pre-Closing Covenants...........................................................13
(a) General....................................................................13
(b) Dividend by the Company to the Seller......................................13
(c) Notices and Consents.......................................................13
(d) Full Access................................................................13
(e) Notice of Developments.....................................................13
(f) Conduct of Business of the Company.........................................14
(g) Exclusivity................................................................15
(h) Financing..................................................................15
(i) Cancellation of Intercompany Obligations...................................16
(j) No Additional Representations or Warranties................................16
(k) Disclaimer Regarding, Financial Statements, Estimates and Projections......17
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6. Post-Closing Covenants.............................................17
(a) Incentive Payments............................................17
(b) Non-Solicitation of Employees.................................17
(c) Further Assurances............................................18
(d) Confidentiality...............................................18
(e) General.......................................................18
7. Employee Matters...................................................18
(a) WARN Matters..................................................18
(b) Benefit Plan Matters..........................................19
8. Tax Matters........................................................20
(a) Termination of Tax Sharing Agreements.........................20
(b) Section 338 Elections.........................................21
(c) Tax Indemnity.................................................22
(d) Refunds.......................................................22
(e) Cooperation...................................................23
(f) Contests......................................................23
(g) Survival......................................................23
9. Credit Enhancements................................................23
10. Conditions to Obligation to Close..................................25
(a) Conditions to Obligation of the Buyer.........................25
(b) Conditions to Obligation of the Seller........................26
11. Indemnification....................................................27
(a) Survival of Representations and Warranties....................27
(b) Indemnification Provisions for Benefit of the Buyer...........27
(c) Indemnification Provisions for Benefit of the Seller..........30
(d) Matters Involving Third Parties...............................30
(e) Matters Not Involving Third Parties...........................31
(f) Determination of Losses; Adjustments to Purchase Price........31
(g) Procedures Regarding Remedial Work............................32
(h) Additional Provisions Regarding Indemnification...............33
(i) Exclusive Remedy..............................................33
12. Termination........................................................33
(a) Termination of Agreement......................................33
(b) Effect of Termination.........................................34
13. Miscellaneous......................................................34
(a) Press Releases and Public Announcements.......................34
(b) No Third-Party Beneficiaries..................................35
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(c) Entire Agreement..............................................35
(d) Succession and Assignment.....................................35
(e) Counterparts..................................................35
(f) Headings......................................................35
(g) Notices.......................................................35
(h) Governing Law.................................................37
(i) Amendments and Waivers........................................37
(j) Severability..................................................37
(k) Expenses......................................................37
(l) Construction..................................................37
(m) Incorporation of Exhibits and Schedules.......................37
(n) Disclosure Schedule...........................................38
EXHIBITS
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Exhibit A Pacific Motor Transport Company, Pacer Division Key Employee Change
in Control Retention Program
Exhibit B Form of Management Certificates
Exhibit C Form of Demand Note
Exhibit D Form of Pledge Agreement
Exhibit E Form of Warrant
Exhibit F-1 Financial Statements
Exhibit F-2 Pro Forma Balance Sheet
Exhibit G Credit Enhancements
Exhibit H Form of Seller's Counsel Legal Opinions
Exhibit I Form of Buyer's Counsel Legal Opinion
Exhibit J Form of Release Agreement
Exhibit K Form of Stockholders Agreement
SCHEDULES
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Schedule I Incentive Payments
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of March
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31, 1997, by and among PMT Holdings, Inc., a Delaware corporation (the "Buyer"),
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Pacific Motor Transport Company, a California corporation (the "Company"),
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Southern Pacific Transportation Company, a Delaware corporation (the "Seller")
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and Union Pacific Railroad Company, a Utah corporation ("Union Pacific"). The
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Buyer, the Company, the Seller and Union Pacific are each referred to in this
Agreement as a "Party" and collectively as the "Parties."
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The Seller directly owns all of the outstanding capital stock of the
Company.
This Agreement contemplates a transaction in which the Buyer will
purchase from the Seller, and the Seller will sell to the Buyer, all of the
outstanding capital stock of the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties agree as follows:
1. Definitions.
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"Acquisition Proposal" has the meaning set forth in (S)5(g) below.
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"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
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promulgated under the Securities Exchange Act.
"Applicable Laws" means any and all federal, state, local or foreign laws,
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statutes, rules, directives, ordinances, requirements, rules, regulations,
Orders and restrictions of any Governmental Authority applicable to any Person
or other subject matter in question.
"Assumed Taxes" means, with respect to any Person, all road taxes, fuel
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taxes, and property taxes imposed by any foreign, federal, state, or local
taxing authority (but excluding all Other Taxes and Income Taxes), together with
any interest, penalties, additions to tax, and other additional amounts imposed
by any such taxing authority on such Person on or with respect to any of the
foregoing taxes.
"BNSF Guarantee" means that certain letter dated September 10, 1996
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pursuant to which the Seller unconditionally and irrevocably guaranteed the full
and punctual payment of all valid freight and assessorial charges incurred by
ABL-TRANS for traffic handled under that certain BNSF Contract T-399 for
Domestic Intermodal Transportation dated October 1, 1996 by and among Burlington
Northern Railroad Company, The Xxxxxxxx, Topeka and Santa Fe Railway Company and
ABL-TRANS during the course of such contract (from October 1, 1996 to September
30, 1997) and all other amounts payable by ABL-TRANS under such contract.
"Business Day" means any day that is not a Saturday, Sunday or other day
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on which banks are not required to be open in Chicago, Illinois, or New York,
New York.
"Buyer" has the meaning set forth in the preface above.
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"Buyer Common Stock" means the common stock, $.01 par value per share, of
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the Buyer.
"Buyer Preferred Stock" means the Series A Preferred Stock, $.01 par value
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per share, of the Buyer.
"Cash Purchase Price" has the meaning set forth in (S)2(b)(i) below.
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"Closing" has the meaning set forth in (S)2(c) below.
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"Closing Date" has the meaning set forth in (S)2(c) below.
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"COBRA" has the meaning set forth in (S)7(b)(iii) below.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Company" has the meaning set forth in the preface above.
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"Company Shares" means the common stock, $100.00 par value per share, of
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the Company.
"Computer Assistance Agreement" means that certain Computer Assistance
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Agreement dated October 1, 1992 among the Seller, St. Louis Southwestern Railway
Company and ABL-TRANS, as further described in paragraph 3.H. of (S)3(f) of the
Disclosure Schedule.
"Confidential Information" has the meaning set forth in (S)6(d) below.
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"Credit Enhancements" has the meaning set forth in (S)9 below.
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"Continuing Credit Enhancement Fee" has the meaning set forth in (S)9
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below.
"Current Employees" has the meaning set forth in (S)7(b)(iii) below.
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"Debt Agreements" means that certain Credit Agreement dated April 1, 1997
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by and between The Company and The First National Bank of Chicago and any other
instruments, notes, guarantees, collateral documents and agreements executed by
the Company or the Buyer in connection with any indebtedness for borrowed money
incurred in connection with the Financing, as each of the same may be amended,
restated or otherwise modified from time to time.
"December 31, 1996 Balance Sheet" has the meaning set forth in (S)3(e).
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"Demand Note" has the meaning set forth in (S)2(b)(i) below.
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"Disclosure Schedule" has the meaning set forth in (S)3 below.
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"Encumbrance" has the meaning set forth in (S)3(d).
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"Environmental Conditions" means (i) any violation by the Company, any of
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its Affiliates or any of their respective agents or independent contractors in
connection with the ownership or operation of the Company's business, of any
Environmental, Health and Safety Requirement existing or occurring on or prior
to the Closing Date or (ii) any conditions in the soil, surface water, ground
water or air caused directly or indirectly by the use, manufacture, handling,
storage, treatment, disposal, arrangement for the storage, treatment or
disposal, discharge or release of Hazardous Substances (A) by the Company, any
of its Affiliates or any of their respective agents or independent contractors
in connection with the ownership or operation of the Company's business prior to
the Closing or (B) by any other Person prior to the Closing on any property at
the time or thereafter owned, leased or operated by the Company (excluding,
however, any property acquired or first occupied or operated by the Company
after the Closing).
"Environmental, Health and Safety Requirements" means all Applicable Laws
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concerning workplace health and safety and pollution or protection of the
environment, including all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation, including, but not limited to, the Solid Waste
Disposal Act, as amended, 42 U.S.C. (S)(S)6901 et seq., the Federal Water
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Pollution Control Act, as amended, 33 U.S.C. (S)(S)1251 et seq., the Emergency
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Planning and Community Right-to-Know Act, 42 U.S.C. (S)(S)11001 et seq., the
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Comprehensive Environmental Response, Compensation, and Liability Act, as
amended, 42 U.S.C. (S)(S)9601 et seq., the Hazardous Materials Transportation
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Uniform Safety Act, as amended, 49 U.S.C. (S)1804 et seq., the Clean Air Act, as
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amended, 42 U.S.C. (S)(S)7401 et seq., the Occupational Safety and Health Act of
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1970, and the regulations promulgated under each of the foregoing, each as
amended and as now or hereafter in effect.
"ERISA Affiliate" means, with respect to any Person, any trade or business
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(whether or not incorporated) which, together with such Person, is under common
control as described in Section 414(c) of the Code, is a member of a "controlled
group", as defined in Section 414(b) of the Code, or is a member of an
"affiliated service group", as defined in Section 414(m) of the Code which
includes such Person.
"Excluded Liabilities" means any obligation, commitment or liability of the
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Company (whether asserted or unasserted, whether matured or unmatured, whether
absolute or contingent, whether served or unserved, whether liquidated or
unliquidated and whether known or unknown) that relates to, arises out of or
results from any fact, circumstance or condition existing on or prior to the
Closing but only to the extent the same does not relate to, arise out of or
result from, directly or indirectly, the ownership or operation (whether or not
in the Ordinary Course of Business) of the business, assets or properties of the
Company's PACER or ABL-TRANS divisions (which divisions shall not include any of
the business, assets or properties of SP Logistics).
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"Financial Statements" means the financial statements of the Company
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attached hereto as Exhibit F-1.
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"Financing" has the meaning set forth in (S)5(h) below.
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"GAAP" means United States generally accepted accounting principles as in
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effect from time to time.
"GE Vehicle Leases" means the leases between the Seller and GE Capital
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Fleet Services, relating to the 24 vehicles described in paragraph A of (S)3(i)
of the Disclosure Schedule, which leases are to be transferred from the Seller
to the Company as soon as practicable.
"Governmental Entity" or "Governmental Authority" means any government,
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governmental or quasi-governmental authority, instrumentality, department,
commission, board, bureau, agency, commission, court or tribunal, whether
domestic or foreign, and whether federal, state or local.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
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Act of 1976, as amended.
"Hazardous Substances" means any pollutant, contaminant, toxic or hazardous
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substance, waste, or chemical defined, listed or regulated pursuant to any
Environmental, Health and Safety Requirements, including, without limitation,
asbestos, polychlorinated biphenyls, petroleum, crude oil or any fraction
thereof.
"Incentive Agreements" means (i) the Pacific Motor Transport Company, Pacer
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Division Key Employee Change in Control Retention Program executed by the
Company on September 10, 1996 (a copy of which is attached hereto as Exhibit A)
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and (ii) the letter agreement between SPRC and Xxxxxx X. Xxxxx dated August 21,
1995 regarding SPRC's Management Continuity Plan.
"Incentive Payments" means those payments to be made by the Company
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immediately after the Closing in the amounts and to the individuals indicated on
Schedule 1 hereto pursuant to the Incentive Agreements.
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"Incentive Payment Deduction Amount" has the meaning set forth in (S)2(d)
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below.
"Income Tax" means, with respect to any Person, (A) any tax (including any
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franchise tax) that is on, based upon, measured by, or imposed with respect to
gross or net receipts, gross or net earnings, or gross or net income (including
minimum and alternative minimum taxes, capital gains taxes, personal holding
company taxes, and excess profit taxes), but excluding all Other Taxes and
Assumed Taxes, by any foreign, federal, state, or local taxing authority
together with any interest or penalties thereon or additions thereto imposed by
any such taxing authority on such Person on or with respect to any of the
foregoing taxes, and (B) any liability for the payment of any of the foregoing
types of taxes as a result of being a (i) transferee within the meaning of Code
section 6901
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of another Person, (ii) being a member of an affiliated, combined, or
consolidated group, or (iii) a contractual agreement.
"Incremental FICA Payments" has the meaning set forth in (S)2(d) below.
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"Indemnified Party" has the meaning set forth in (S)11(d)(i) below.
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"Indemnifying Party" has the meaning set forth in (S)11(d)(i) below.
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"Loss" or "Losses" means any loss, liability, damage or expense (including
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reasonable attorneys' fees and expenses) that the subject Person may suffer or
sustain.
"Management Certificates" means those certain certificates, dated the date
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hereof, substantially in the form of Exhibit B hereto, delivered to the Seller
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by each of the Management Investors to the effect that (A) each is familiar with
the provisions of this Agreement and (B) to the best of such officer's
knowledge, the representations, warranties and disclosures contained in (S)3
hereof are true and correct insofar as they relate to the business and
operations of the Company.
"Management Investors" means each of Xxxxx Xxxxxx, Xxxxxx X. Xxxxx and Don
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X. Xxxxx.
"Material Adverse Change" means a material adverse change in the assets,
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liabilities, business, financial condition or results of operations or prospects
of the Company taken as a whole, except for changes due to general economic
conditions.
"Orders" means any and all judgments, rulings, writs, decrees, injunctions,
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orders, compliance agreements or settlement agreements or decrees of any
Governmental Authority.
"Ordinary Course of Business" means the ordinary course of business
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consistent with past custom and practice (including with respect to quantity and
frequency).
"Other Taxes" means, with respect to any Person, any sales, use, transfer,
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ad valorem, franchise (other than a "franchise tax" that is an Income Tax),
withholding, payroll, employment, excise, goods and services, severance, stamp,
occupation, premium, windfall profits, customs duty, or other tax, but excluding
all Assumed Taxes and Income Taxes, imposed by any foreign, federal, state, or
local taxing authority, together with any interest or penalties thereon or
additions thereto imposed by such taxing authority with respect to such Person
on or with respect to any of the foregoing taxes.
"Party" has the meaning set forth in the preface above.
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"Person" means an individual, a partnership, a corporation, a limited
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liability company or partnership, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization or other entity or a
Governmental Entity.
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"Pledge Agreement" has the meaning set forth in (S)2(b)(i) below.
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"Pro Forma Balance Sheet" has the meaning set forth in (S)5(b) below.
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"PST Maintenance Agreement" means that certain Maintenance Agreement dated
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September 1, 1993 by and between PS Technology, Inc. and ABL-TRANS, as further
described in paragraph 3.A. of (S)3(f) of the Disclosure Schedule.
"Purchase Price" has the meaning set forth in (S)2(b) below.
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"Release Agreement" means that certain Release Agreement, dated on or
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before the date hereof, substantially in the form of Exhibit J hereto, by and
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among Xxxxxx X. Xxxxx, SPRC and the Company.
"Remedial Work" has the meaning set forth in (S)11(g) below.
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"Section 338 Elections" has the meaning set forth in (S)8(b)(i) below.
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"Section 338 Election Forms" has the meaning set forth in (S)8(b)(ii)
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below.
"Securities Act" means the Securities Act of 1933, as amended, or any
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successor federal statute, and the rules and regulations promulgated thereunder,
all as the same shall be in effect at the time in question.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
"Seller" has the meaning set forth in the preface above.
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"SPRC" means Southern Pacific Rail Corporation, a Delaware corporation.
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"SPRC Benefit Plans" has the meaning set forth in (S)7(b)(i) below.
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"Stockholders Agreement" means that certain Stockholders Agreement dated as
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of March 31, 1997, substantially in the form of Exhibit K hereto, by and among
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the Buyer, Eos Partners, L.P., a Delaware limited partnership, the Seller and
each of the Management Investors.
"Tax Indemnified Party" has the meaning set forth in (S)8(f) below.
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"Tax Indemnifying Party" has the meaning set forth in (S)8(f) below.
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"Tax" means Assumed Taxes, Income Taxes, and Other Taxes.
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"Tax Claim" means any claim arising from any covenant or agreement of the
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Parties contained in (S)8 below, including, without limitation, any claim for
Losses arising from any breach thereof.
"Tax Return" means any return, declaration, report, claim for refund, or
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information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Termination Fee" has the meaning set forth in (S)12(b) below.
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"Third Party Claim" has the meaning set forth in (S)11(d)(i) below.
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"UP Group" has the meaning set forth in (S)11(b)(i) below.
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"Union Pacific" has the meaning set forth in the preface above.
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"Warrant" has the meaning set forth in (S)2(b)(ii) below.
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2. Purchase and Sale of Company Shares.
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(a) Basic Transaction. On and subject to the terms and conditions of this
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Agreement, the Buyer agrees to purchase from the Seller, and the Seller agrees
to sell to the Buyer, all of the issued and outstanding Company Shares for the
consideration specified below in this (S)2.
(b) Purchase Price. The aggregate purchase price (the "Purchase Price") to
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be paid for the Company Shares shall consist of:
(i) an amount in cash equal to the sum of $13,162,500 (the "Cash
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Purchase Price"). The Cash Purchase Price shall be payable in cash at the
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Closing in the form of a demand note issued by the Buyer for the benefit of
the Seller in the form of Exhibit C hereto (the "Demand Note"). The
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principal amount of the Demand Note shall be reduced by the Incentive
Payment Deduction Amount as described in (S)2(d) below. The obligations
evidenced by the Demand Note shall be secured by a pledge of the Company
Shares by the Buyer for the benefit of the Seller, pursuant to a pledge
agreement substantially in the form of Exhibit D hereto (the "Pledge
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Agreement"); and
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(ii) a Warrant to purchase 18,421 units (consisting of 18,421 shares
of Buyer Preferred Stock and 18,421 shares of Buyer Common Stock)
substantially in the form of Exhibit E hereto (the "Warrant").
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(c) The Closing. The closing of the transactions contemplated by this
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Agreement (the "Closing") shall take place at the offices of Winston & Xxxxxx
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in Chicago, Illinois, commencing at 10:00 a.m. local time on March 31, 1997
(the "Closing Date").
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(d) Deliveries at the Closing. At the Closing, (i) the Company and the
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Seller will deliver to the Buyer the various certificates, instruments, and
documents referred to in (S)10(a) below, (ii) the Buyer will deliver to the
Seller the various certificates, instruments, and documents referred to in
(S)10(b) below, (iii) the Seller will deliver to the Buyer stock certificates
representing all of the Company Shares, endorsed in blank or accompanied by
duly executed assignment documents and (iv) the Buyer will execute and deliver
or cause to be executed and delivered the Demand Note, the Pledge Agreement and
the Warrant. Prior to the delivery thereof by the Buyer, the principal amount of
the Demand Note shall be decreased by $978,419 in lieu of requiring the Seller
to make certain cash transfers to the Buyer at the time of Closing. Such amount
is the sum of (i) the Incentive Payments ($960,060) and (ii) the incremental
FICA tax payable (the "Incremental FICA Payments") is respect of the Incentive
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Payments ($18,359) (such sum, the "Incentive Payment Deduction Amount").
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3. Representations and Warranties of the Company and the Seller. The
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Company and the Seller jointly and severally represent and warrant that the
statements contained in this (S)3 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this (S)3), except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged by paragraphs
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corresponding to the lettered paragraphs contained in this (S)3. Anything
contained in this Agreement (including the exhibits and schedules hereto) to the
contrary notwithstanding, any matter or item disclosed on a particular schedule
in response to the corresponding representation or warranty contained in this
Agreement shall not be deemed to be disclosed on any other schedule in response
to any other representation or warranty contained in this Agreement unless it is
explicitly evident from the disclosure of such matter or item that such
disclosure is also responsive to such other representation or warranty.
(a) Corporate Authority, Etc. Each of the Company, the Seller and Union
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Pacific is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and each of the Company, the Seller
and Union Pacific has full corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by the Company, the Seller and Union Pacific and the
performance by each of them of their respective obligations hereunder have been
duly and validly authorized by all necessary corporate action on the part of
such Party, and this Agreement has been duly and validly executed and delivered
by such Party.
(b) Binding Obligation. This Agreement constitutes the valid and legally
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binding obligation of Union Pacific, the Seller and the Company, enforceable
against each of such Parties in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, moratorium,
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reorganization or other similar laws affecting creditors' rights and remedies
generally and judicial limitations upon the specific performance of certain
types of obligations.
(c) Noncontravention. Neither the execution and the delivery of this
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Agreement by Union Pacific or the Seller, nor the performance of their
respective obligations hereunder, nor the consummation of the transactions
contemplated hereby, will (i) violate any Applicable Law to which Union Pacific
or the Seller is subject, (ii) violate or conflict with any provision of the
charter or bylaws of Union Pacific, the Seller or the Company, or (iii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice under any agreement, contract, lease, license
or instrument to which Union Pacific or the Seller is a party or by which it is
bound or to which any of its assets is subject, except where the violation,
conflict, breach, default, acceleration, termination, modification, cancellation
or failure to give notice would not have a material adverse effect on the
ability of Union Pacific or the Seller to consummate the transactions
contemplated by this Agreement. Except as set forth in (S)3(c) of the
Disclosure Schedule, neither Union Pacific nor the Seller is required to give
any notice to, make any filing with, or obtain any authorization, consent or
approval of any Governmental Entity in order for Union Pacific and the Seller to
consummate the transactions contemplated by this Agreement, except where the
failure to give notice, or to file or obtain any authorization, consent or
approval would not have a material adverse effect on the ability of Union
Pacific and the Seller to consummate the transactions contemplated by this
Agreement.
(d) Company Shares. There are no outstanding shares of capital stock of
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the Company other than the five (5) Company Shares held of record and owned
beneficially by the Seller. The Seller owns and holds of record and beneficially
the Company Shares free and clear of any and all Encumbrances, other than
restrictions on transfer of the Company Shares imposed under the Securities Act
and applicable state securities laws. As used in this Agreement, the term
"Encumbrance" means, with respect to any asset, (a) any mortgage, indenture,
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deed of trust, lien, pledge charge, claim, escrow, security agreement or
interest or other encumbrance of any kind whatsoever (whether written or oral
and whether or not relating in any way to credit or the borrowing of money) in
on or with respect to such asset (including the filing of or agreement to give
any financing statement under the Uniform Commercial Code of any jurisdiction
and including any right of first offer, right of first refusal, option or other
right to purchase, lease, license or otherwise use or occupy such asset), (b)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement relating to such asset and (c) in the
case of securities, any purchase or call option, appreciation right or similar
right of a third party with respect to such securities. All of the Company
Shares have been duly authorized and are validly issued, fully paid and
nonassessable. The Seller is not a party to, and is not otherwise subject to or
bound by, any voting trusts, proxies, or other agreements or understandings with
respect to the voting of any capital stock of the Company, other than the rights
of the Buyer under this Agreement. Except for the rights of the Buyer under the
Agreement, there are no outstanding options, warrants or rights to purchase or
acquire, or otherwise entitling the holder thereof to participate in or
otherwise receive any payment based on the value of, any securities of the
Company (including the Company Shares). The Seller acquired the Company Shares
in one or more transactions exempt from registration under the Securities Act
and in compliance with all applicable state securities laws.
-9-
(e) Financial Statements. Attached hereto as Exhibit F-1 are the unaudited
-------------------- -----------
balance sheet of the Company as of December 31, 1996 (the "December 31, 1996
-----------------
Balance Sheet") and the related unaudited statements of income and cash flows
-------------
for the year then ended and the unaudited balance sheet of the Company as of
December 31, 1995, and the related unaudited statements of income and cash flows
for the year then ended. The Financial Statements present fairly the financial
condition of the Company as of such dates and the results of operations and cash
flows of the Company for such periods.
(f) Undisclosed Liabilities. The Company does not have any liability
-----------------------
(whether asserted or unasserted, whether matured or unmatured, whether absolute
or contingent, whether secured or unsecured, whether liquidated or unliquidated,
and whether known or unknown) except for (i) liabilities set forth on the face
of the December 31, 1996 Balance Sheet, (ii) liabilities arising in the Ordinary
Course of Business since December 31, 1996 (none of which results from or is
related to any Environmental Condition, breach of contract, breach of warranty,
tort, infringement or violation of Applicable Law), (iii) liabilities for Income
Taxes, (iv) liabilities for future performance of executory contracts arising in
the Ordinary Course of Business except to the extent required under GAAP to be
reflected on the face of a balance sheet of the Company as of the date hereof
(none of which results from or is related to any Environmental Condition, breach
of contract, breach of warranty, tort, infringement or violation of Applicable
Law), and (v) liabilities reflected on the Disclosure Schedule (none of which
results from or is related to any Environmental Condition, breach of contract,
breach of warranty, tort, infringement or violation of Applicable Law, except
for any of the foregoing which is expressly disclosed in (S)3(f) of the
Disclosure Schedule).
(g) Brokers Fees. Except as set forth in (S)3(g) of the Disclosure
------------
Schedule, neither Union Pacific nor the Seller has any liability or obligation
to pay any fees or commissions to any broker, finder or agent with respect to
the transactions contemplated by this Agreement for which the Buyer or the
Company could become liable or obligated.
(h) Acquisition of Demand Note and Warrant for Investment. The Seller
-----------------------------------------------------
acknowledges that the Demand Note and the Warrant being acquired by it hereunder
have not been registered under the Securities Act or registered or qualified
under applicable state securities laws by reason of their issuance in a
transaction that does not require such registration or qualification. The
Demand Note and the Warrant acquired by the Seller pursuant to this Agreement
are being acquired for investment only and not with a view to any public
distribution thereof, and the Seller will not offer to sell or otherwise dispose
of the Demand Note or the Warrant so acquired by it in violation of any of the
registration requirements of the Securities Act or any comparable state laws.
(i) Conduct of Business of the Company. Except as set forth on (S)3(i) of
----------------------------------
the Disclosure Schedule, since December 31, 1996, the Company has conducted its
business and affairs only in the Ordinary Course of Business of the Company and
has not:
(i) disposed of any material portion of its assets, except for the
sale or other disposition of assets in the Ordinary Course of Business of
the Company for fair value (if
-10-
any), or acquired or agreed to acquire by merging or consolidating with,
or by purchasing any material portion of the capital stock or other equity
interests or assets of, any Person;
(ii) amended or modified in any way its certificate or articles of
incorporation, by-laws or similar document or instrument;
(iii) declared, paid or otherwise set aside any funds or assets for
the payment of, any dividend, distribution or other payment on or with
respect to any of its capital stock, or otherwise become obligated to do
any of the foregoing, except payments expressly contemplated by this
Agreement, including without limitation pursuant to (S)5(b) or (S)5(i)(ii)
hereof, or
(iv) entered into any transaction with the Seller, Union Pacific or
any of their Affiliates other than transactions (A) expressly contemplated
by this Agreement, (B) in the Ordinary Course of Business relating to the
provision of railroad, trucking, trailer or related transportation
services or transportation brokerage or logistics services by or for the
Seller, Union Pacific or any of their Affiliates to or from the Company,
(C) reflected in the adjustments listed on Exhibit F-2 needed to derive the
-----------
Pro Forma Balance Sheet or (D) disclosed in (S)3(i) of the Disclosure
Schedule.
(j) Credit Enhancements. The bonds, letters of credit, guarantees, credit
-------------------
support obligations and other credit enhancements listed on Exhibit G hereto
---------
(the "Credit Enhancements") are the only bonds, letters of credit, guarantees,
credit support obligations or other credit enhancements pursuant to which Union
Pacific, the Seller or any of their respective Affiliates (other than the
Company) are, as of the Closing, liable for any liability or obligation of the
Company.
4. Representations and Warranties of the Buyer. The Buyer represents and
-------------------------------------------
warrants to the Seller and the Company that the statements contained in this
(S)4 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
(S)4), except as set forth in the Disclosure Schedule. The Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this (S)4. Anything contained in this Agreement
(including the exhibits and schedules hereto) to the contrary notwithstanding,
any matter or item disclosed on a particular schedule in response to the
corresponding representation or warranty contained in this Agreement shall not
be deemed to be disclosed on any other schedule in response to any other
representation or warranty contained in this Agreement unless it is explicitly
evident from the disclosure of such matter or item that such disclosure is also
responsive to such other representation or warranty.
(a) Corporate Authority. The Buyer is a corporation duly organized,
-------------------
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and the Buyer has full corporate power and authority to execute
and deliver this Agreement, the Demand Note, the Pledge Agreement and the
Warrant and to perform its obligations hereunder and thereunder. The execution
and delivery of this Agreement, the Demand Note, the Pledge Agreement and the
Warrant by the
-11-
Buyer and the performance by the Buyer of its respective obligations hereunder
and thereunder have been duly and validly authorized by all necessary corporate
action on the part of the Buyer, and this Agreement, the Demand Note, the Pledge
Agreement and the Warrant have been duly and validly executed and delivered by
the Buyer.
(b) Binding Obligation. This Agreement constitutes, and on and after the
------------------
Closing Date each of the Demand Note, the Pledge Agreement and the Warrant will
constitute, the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors' rights and remedies generally and judicial limitations upon the
specific performance of certain types of obligations.
(c) Noncontravention. Neither the execution and the delivery of this
----------------
Agreement by the Buyer, nor the performance of its obligations hereunder nor the
consummation of the transactions contemplated hereby, will (i) violate any
Applicable Law to which the Buyer is subject or any provision of its charter or
bylaws or (ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice under any agreement,
contract, lease, license or instrument to which the Buyer is a party or by which
it is bound or to which any of its assets is subject, except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation or failure to give notice would not have a material adverse effect
on the ability of the Buyer to consummate the transactions contemplated by this
Agreement. Except as set forth in (S)4(c) of the Disclosure Schedule, the Buyer
is not required to give any notice to, make any filing with, or obtain any
authorization, consent or approval of any Governmental Entity in order for the
Buyer to consummate the transactions contemplated by this Agreement, except
where the failure to give notice, to file, or to obtain any authorization,
consent or approval would not have a material adverse effect on the ability of
the Buyer to consummate the transactions contemplated by this Agreement.
(d) Brokers' Fees. Except as set forth in (S)4(d) of the Disclosure
-------------
Schedule, the Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which the Seller or the Company could become
liable or obligated.
(e) Acquisition of Company Shares for Investment. The Buyer acknowledges
--------------------------------------------
that the Company Shares being acquired by it hereunder have not been registered
under the Securities Act or registered or qualified under applicable state
securities laws by reason of their issuance in a transaction that does not
require such registration or qualification. The Company Shares purchased by the
Buyer pursuant to this Agreement are being acquired for investment only and not
with a view to any public distribution thereof, and the Buyer will not offer to
sell or otherwise dispose of the Company Shares so acquired by it in violation
of any of the registration requirements of the Securities Act or any comparable
state laws.
(f) Capitalization. (S)4(f) of the Disclosure Schedule sets forth on the
--------------
date hereof for the Buyer (i) the number of shares of authorized capital stock
of each class of its capital stock, (ii) the
-12-
number of issued and outstanding shares of each class of its capital stock, the
names of the holders of record thereof, and the number of shares held by each
such holder, and (iii) the number of shares of its capital stock (if any) held
in treasury. Except for the Warrant, and except as otherwise disclosed in
(S)4(f) of the Disclosure Schedule, as of the date hereof there are no
outstanding stock appreciation, phantom stock or similar rights with respect to
the Buyer, and the Buyer is not a party to any option, warrant, purchase right,
or other contract or commitment that could require the Buyer to issue, sell,
transfer or otherwise dispose of any capital stock of the Buyer. Upon issuance,
the Warrant will evidence the right to purchase 5.0% of the shares of Buyer
Common Stock and 5.0% of the shares of Buyer Preferred Stock outstanding on the
Closing Date (in each case, after giving effect to the exercise of the Warrant).
5. Pre-Closing Covenants. The Parties agree as follows with respect to
---------------------
the period between the execution of this Agreement and the Closing:
(a) General. Each of the Parties will use reasonable efforts to take all
-------
action and to do all things necessary, proper or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
(S)10 below).
(b) Dividend by the Company to the Seller. Prior to the Closing, the
-------------------------------------
Parties shall adjust the December 31, 1996 Balance Sheet to reflect the items
set forth in Exhibit F-2 attached hereto. The resulting pro forma balance sheet
-----------
(the "Pro Forma Balance Sheet") reflects the net amount of cash ($3,114,880) to
-----------------------
be transferred by the Company to the Seller by means of a dividend which is to
be declared by the Company and paid to the Seller prior to the Closing. Anything
to the contrary in this Agreement notwithstanding, the Buyer hereby expressly
consents to the declaration and payment of such dividend and the other dividends
described in Exhibit F-2 hereto.
-----------
(c) Notices and Consents. Each of the Parties will give any notices to,
--------------------
make any filings with and use reasonable efforts to obtain any authorizations,
consents and approvals of governments and governmental agencies in connection
with consummation of the transaction, including, without limitation, any
authorizations, consents or approvals described in (S)3(c) and (S)4(c) of the
Disclosure Schedule.
(d) Full Access. The Seller shall cause the Company to permit
-----------
representatives of the Buyer and any prospective lender or investor relating to
the Financing to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Company, to the
premises, properties, personnel, books, records (including tax records),
contracts and documents of or pertaining to the Company.
(e) Notice of Developments.
----------------------
(i) The Seller may elect at any time on or prior to the fifth
Business Day preceding the Closing Date to notify the Buyer in writing of
any development of which the Seller becomes aware after the date hereof
that causes a breach of any of the representations
-13-
or warranties in (S)3(e), (f), (i) or (j) above. Unless the Buyer exercises
the right to terminate this Agreement pursuant to (S)12(a)(ii) below by
reason of any such development, the written notice pursuant to this
(S)5(e)(i) will be deemed to have amended the Disclosure Schedule, to have
qualified the representations and warranties contained in (S)3(e), (f), (i)
or (j) above, and to have cured any misrepresentation or breach of warranty
that otherwise might have existed under (S)3(e), (f), (i) or (j) above by
reason of such development.
(ii) Each Party will give prompt written notice to the other Parties
of any material adverse development causing a breach of any of its own
representations and warranties in (S)3 or (S)4 above. Except as otherwise
provided in (S)5(e)(i) above, no disclosure by any Party pursuant to this
(S)5(e)(ii), however, shall be deemed to amend or supplement the Disclosure
Schedule or to prevent or cure any misrepresentation or breach of warranty.
(iii) Subject to (S)11(a) hereof, prior to the Closing, each of the
Seller and the Buyer shall promptly notify the other if it obtains
knowledge that any representation or warranty of any other party in this
Agreement or in the Disclosure Schedule is not true and correct or if it
obtains knowledge of any material errors in, or omissions from, the
Disclosure Schedule.
(f) Conduct of Business of the Company. Except as otherwise consented to
----------------------------------
in writing by the Buyer, from and after the date of this Agreement until the
Closing, the Seller shall cause the Company to:
(i) conduct its business and affairs only in the Ordinary Course of
Business of the Company;
(ii) not dispose of any material portion of its assets, except for
the sale or other disposition of assets in the Ordinary Course of Business
of the Company for fair value (if any);
(iii) use its commercially reasonable efforts to maintain its
business, assets, relationships with its employees, agents, customers and
suppliers, and operations in accordance with past custom and practice;
(iv) not increase or promise to increase the compensation payable to
any of its officers, employees or agents (other than normal raises in the
Ordinary Course of Business of the Company), except for the payment of the
Incentive Payments;
(v) not reclassify, combine, split, subdivide or redeem or
otherwise repurchase any of its capital stock, or issue, deliver, pledge or
encumber any additional capital stock or other securities equivalent to or
exchangeable for capital stock of the Company;
(vi) not acquire or agree to acquire by merging or consolidating
with, or by purchasing any material portion of the capital stock or other
equity interests or assets of, any Person;
-14-
(vii) not pay, discharge or satisfy any material claim, liability
or obligation (whether absolute, accrued, contingent or otherwise), other
than the payment, discharge or satisfaction of liabilities in the Ordinary
Course of Business of the Company and as reflected in the adjustments
contained on Exhibit F-2 hereto;
-----------
(viii) not change in any material respect any of its accounting
methods or practices, including any material change in any assumption
underlying, or method of calculating, any bad debt, contingency or other
reserve, except as may be required by GAAP;
(xi) not amend or modify in any way its articles of incorporation,
by-laws or similar document or instrument; and
(x) refrain from declaring or paying, or otherwise setting aside
any funds or assets for the payment of, any dividend, distribution or
other payment on or with respect to any of its capital stock, or otherwise
become obligated to do any of the foregoing, except as may otherwise be
expressly contemplated by this Agreement, including without limitation by
(S)5(b) or (S)5(i)(ii) hereof.
(g) Exclusivity. The Seller will not (and the Seller will not cause or
-----------
permit the Company or any of its Affiliates to) (i) solicit, initiate, or
encourage the submission of any proposal (an "Acquisition Proposal") from any
--------------------
Person (other than the Buyer, any Person controlling the Buyer or any
representative retained by the Buyer or such controlling Person) relating to the
acquisition of any capital stock or other securities, or any portion of the
assets (except in the Ordinary Course of Business) of the Company or (ii)
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person (other than the Buyer, any
Person controlling the Buyer or any representative retained by the Buyer or such
controlling Person) to do or seek any of the foregoing. If the Seller, the
Company or any of their respective Affiliates receives any offer or proposal to
enter into negotiations or discussions relating to any Acquisition Proposal, the
Seller shall promptly notify the Buyer of such offer or proposal and the general
economic terms of such offer or proposal and shall furnish a copy of any written
offer or proposal to the Buyer.
(h) Financing. To facilitate the consummation of the transactions
---------
contemplated hereby, the Buyer shall use its commercially reasonable efforts to
obtain such debt and equity financing from financial institutions and other
investors which the Buyer shall in its sole discretion deem necessary for (i)
the consummation of the transactions contemplated hereby, (ii) working capital
and other purposes of the Buyer and the Company after the Closing and (iii) the
payment of all costs and expenses incurred by the Buyer in connection with any
of the foregoing (the "Financing"). The Seller and the Company shall cooperate
---------
with the Buyer and shall provide any information which the Buyer may reasonably
request in connection with its efforts in obtaining the Financing.
-15-
(i) Cancellation of Intercompany Obligations.
----------------------------------------
(i) Cancellation of Intercompany Obligations Owing From the Company.
---------------------------------------------------------------
Prior to the Closing, the Seller shall transfer to the Company in the form
of a capital contribution all of its right, title and interest in and to
any account, note or other obligation owing from the Company to the Seller
or any Affiliate of the Seller (other than any account, note or other
obligation (A) arising under or in connection with this Agreement, (B)
arising from the provision by the Seller or its Affiliates of railroad,
trucking, trailer or related transportation services or transportation
brokerage or logistics services to the Company in the Ordinary Course of
Business or (C) arising pursuant to the Computer Assistance Agreement or
the PST Maintenance Agreement, which agreements shall remain in full force
and effect) and the Company shall thereby be relieved of any and all
duties, liabilities and obligations with regard to any such account, note
or other obligation.
(ii) Cancellation of Intercompany Obligations Owing From the Seller.
--------------------------------------------------------------
Prior to the Closing, the Company shall transfer to the Seller by dividend
all of its right, title and interest in and to any account, note or other
obligation owing from the Seller or any Affiliate of the Seller to the
Company (other than any account, note or other obligation arising under or
in connection with this Agreement or arising from the Company's provision
of railroad, trucking, trailer or related transportation services or
transportation brokerage or logistics services to the Seller or any
Affiliate of Seller in the Ordinary Course of Business) and the Seller
shall thereby be relieved of any and all duties, liabilities and
obligations with regard to any such account, note or other obligation.
(j) No Additional Representations or Warranties. The Buyer acknowledges
-------------------------------------------
that its principal officers and certain of its stockholders include persons who
have been actively involved in the day-to-day management of the Company. The
Buyer also acknowledges and represents that it has conducted its own
investigation of the Company's business and operations and such other matters as
the Buyer has determined to be worthy of its investigation in connection with
the transactions contemplated hereby. The Buyer further acknowledges that none
of the Seller, the Company, Union Pacific nor any other Person has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Company, except as expressly set
forth in this Agreement or the Disclosure Schedule, and the Buyer further agrees
that none of the Seller, the Company, Union Pacific nor any other Person will
have or be subject to any liability to the Buyer or any other Person resulting
from the distribution to the Buyer, or the Buyer's use of, any such information,
including, without limitation, any Confidential Financing Memorandum prepared by
Xxxxxxxx Xxxxxxx & Co. LLC and The Chart Group, L.P. and any information,
document or material made available to the Buyer or its lenders in expectation
of the transactions contemplated by this Agreement. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN (S)3, NEITHER THE SELLER
NOR THE COMPANY MAKES ANY REPRESENTATION OF WARRANTY, EXPRESS OR IMPLIED, AT LAW
OR IN EQUITY, IN RESPECT OF THE SELLER OR THE COMPANY OR ANY OF THE ASSETS,
LIABILITIES OR OPERATIONS OF THE COMPANY, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED REPRESENTATION OR WARRANTY AS TO THE
-16-
CONDITION, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND
THE SELLER EXPRESSLY DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY. EXCEPT FOR
THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN (S)3, THE BUYER AGREES
THAT IT IS PURCHASING THE COMPANY ON AN "AS IS" AND "WHERE IS" BASIS
(k) Disclaimer Regarding Financial Statements, Estimates and Projections.
--------------------------------------------------------------------
The Buyer acknowledges that the Financial Statements have not been prepared in
accordance with GAAP and that the Buyer shall have no claim against Union
Pacific, the Seller or the Company based solely on the failure of the Financial
Statements to reflect information or liabilities otherwise required to be
disclosed by GAAP. In connection with the Buyer's investigation of the Company,
the Buyer has received from or on behalf of the Company certain estimates,
forecasts, plans and financial projections. The Buyer acknowledges that there
are uncertainties inherent in attempting to make such estimates, forecasts,
plans and projections, that the Buyer is familiar with such uncertainties, that
the Buyer is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all estimates, forecasts, plans and projections so
furnished to it (including the reasonableness of the assumptions underlying such
estimates, forecasts, plans and projections), and that the Buyer shall have no
claim against the Seller, Union Pacific or the Company with respect thereto.
Accordingly, neither the Seller nor the Company makes any representation or
warranty with respect to such estimates, forecasts, plans and projections
(including any such underlying assumptions).
(6) Post-Closing Covenants. The Parties agree as follows with respect to
----------------------
the period following the Closing.
(a) Incentive Payments. The Buyer shall cause the Company (i) promptly
------------------
after the Closing, to make the Incentive Payments in the amounts and to the
individuals specified on Schedule 1 hereto and (ii) to make the corresponding
----------
Incremental FICA Payments when such payments are due.
(b) Non-Solicitation of Employees.
-----------------------------
(i) the Buyer agrees that for a period of two years from the Closing
Date, neither the Company nor the Buyer nor any of their respective
Affiliates will directly or indirectly through another Person, solicit for
employment or hire any employee of the Seller or any of the Seller's
Affiliates; provided, however, that the foregoing provision will not
prevent the Buyer or the Company from employing any such person who
contacts the Buyer or the Company on his or her own initiative without any
solicitation by or encouragement from the Buyer or the Company directly or
indirectly through another Person.
(ii) The Seller agrees that for a period of two years from the
Closing Date, neither the Seller nor any of its Affiliates will directly or
indirectly through another Person, solicit for employment or hire any
employee of the Company; provided, however, that the foregoing provision
will not prevent the Seller (or its Affiliates) from employing any such
-17-
person who contacts the Seller (or its Affiliates) on his or her own
initiative without any solicitation by or encouragement from the Seller (or
its Affiliates) directly or indirectly through another Person.
(c) Further Assurances. The Seller shall, at any time after the Closing,
------------------
upon the reasonable request of the Buyer and at the expense of the Buyer, do,
execute, acknowledge and deliver, and cause to be done, executed, acknowledged
and delivered, all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney or assurances as may be necessary or desirable
to transfer, convey, grant and confirm to and vest in the Buyer good title to
all of the Company Shares, free and clear of any restrictions or transfers
(other than restrictions under the Securities Act or state securities laws),
security interests, claims and demands. To the extent that any asset, property,
interest in property or right that is used primarily in the business or
operations of the Company is owned by any Affiliate of the Seller (other than
the Company), then the Seller shall do, and shall cause such Affiliate to do,
any and all things necessary to convey to the Company all rights, title and
interest of such Affiliate, free and clear of all encumbrances (or, in the case
such assets, property, interest in property or right is also used by any
Affiliate of the Seller, provide the benefit thereof to the Company to the same
extent, and on terms and conditions no less favorable to the Company, than those
applicable prior to the Closing).
(d) Confidentiality. The Seller acknowledges that the Buyer and the
---------------
Company would be irreparably damaged if after the Closing, the Confidential
Information (as defined below) were disclosed to or utilized by or on behalf of
Persons other than the Buyer, the Company or their respective Affiliates. The
Seller and its Affiliates will treat and hold as confidential any and all
information relating to the business and affairs of the Company (i) as conducted
on or prior to the Closing Date or (ii) furnished to the Seller or it Affiliates
pursuant to the other terms of this Agreement and, in either case, not generally
known or available to the public (other than as a result of breach of this
Agreement) (the "Confidential Information"), and shall refrain from using any
------------------------
of the Confidential Information except in connection with this Agreement or as
compelled by judicial or administrative process or by requirement of law.
(e) General. In the event that at any time after the Closing any further
-------
action is necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as the other Party may reasonably
request, all at the sole cost and expense of the requesting Party.
7. Employee Matters.
----------------
(a) WARN Matters. The Buyer represents that it does not currently
------------
contemplate taking any actions which, in themselves, would constitute a plant
closing involving, or mass lay-off of, employees of the Company or any
terminations that, in the aggregate for all such terminations by the Buyer after
the Closing, would constitute a mass lay-off of employees of the Company, within
one year following the Closing Date (such terms "plant closing" and "mass
lay-off" having the meanings herein that are ascribed to them in the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. (S)2101 et seq.) The
-- ---
Buyer and the Company, jointly and severally, shall indemnify
-18-
and hold the Seller harmless from and against any Loss which the Seller incurs
under the Worker Adjustment and Retraining Notification Act of 1988, as
amended, or any similar state law arising out of, or relating to, any actions
taken solely by the Buyer or the Company with respect to the employees of the
Company on or after the Closing Date.
(b) Benefit Plan Matters.
--------------------
(i) Except as provided in this (S)7(b), effective on and after
March 31, 1997 the Company shall cease to be a participating employer in
any employee benefit plan sponsored by SPRC or any of its Affiliates (other
than the Company), and employees of the Company shall cease to actively
participate or accrue benefits or service under any such benefit plans
(collectively, the "SPRC Benefit Plans"). The Company shall cease to be a
------------------
participating employer in the Southern Pacific Rail Corporation Pension
Plan, and employees of the Company shall cease to actively participate and
accrue benefits and service under such plan, effective on and after the
Closing Date.
(ii) The Buyer and the Company, jointly and severally, agree to
reimburse the Seller, on or prior to April 15, 1997, for all amounts
contributed by SPRC as employer matching contributions to the Southern
Pacific Rail Corporation Thrift Plan for the month ending March 31, 1997 on
behalf of employees of the Company. As soon as practical after the Closing
Date, the Seller shall cause SPRC to amend the Southern Pacific Rail
Corporation Thrift Plan, subject to the requirements of Applicable Laws, to
permit distributions to participants in such plan who are employees of the
Company after the Closing Date.
(iii) On and after the Closing Date, the Company shall establish and
maintain in force a health plan for its employees who are actively employed
by the Company or are absent from active employment due to vacation or
leave with a right to return to active employment under the Family Medical
Leave Act (collectively, the "Current Employees"). The Company shall, on
-----------------
and after the Closing Date, comply in all respects with the health plan
continuation coverage requirements of Section 4980B of the Code ("COBRA")
-----
including, without limitation, providing COBRA coverage to the extent
required by COBRA under the Company's health plan to former employees of
the Company and/or their dependents who had a "qualifying event" under
COBRA prior to the Closing Date. Notwithstanding anything to the contrary
contained in this Agreement, the Buyer reserves the right to cause the
Company to modify, amend or terminate any of its employee benefit plans in
any respect at any time from and after the Closing.
(iv) As soon as practical after the Closing Date, the Seller shall
cause SPRC to amend the Southern Pacific Rail Corporation Pension Plan,
subject to the requirements of Applicable Law, to fully vest each
participant in such plan who is a Current Employee as of the Closing Date.
-19-
(v) The Seller shall permit those Current Employees who have health
flexible spending accounts in the Southern Pacific Rail Corporation Health
Care Reimbursement Plan on the Closing Date to continue receiving
reimbursements from such accounts, subject to the terms of such plan,
through the end of the current benefit year. The Buyer and the Company,
jointly and severally, agree to reimburse the Seller for any amounts paid
to Current Employees from their health flexible spending accounts which
exceed the premiums and/or contributions paid by Current Employees as of
the Closing Date.
(vi) The Seller shall, subject to the terms and conditions of the
Southern Pacific Rail Corporation Medical, Dental and Health Care
Reimbursement Plan and the Southern Pacific Rail Corporation Life, Personal
Accident, and Business Travel Accident Income Plan, provide retiree medical
and retiree life insurance benefits to (A) participants in such plans who
are retired employees of the Company on the Closing Date, and (B) employees
of the Company who have fulfilled all requirements for coverage under such
plans (except for actual retirement) as of the Closing Date; provided,
however, that the Seller reserves the right to cause SPRC to modify, amend
or terminate such plans in any respect at any time.
(vii) The Seller shall, subject to the terms and conditions of the
Southern Pacific Rail Corporation Long Term Disability Plan, provide long
term disability benefits to former active employees of the Company who are
receiving benefit payments under such plan as of the Closing Date;
provided, however, that the Seller reserves the right to cause SPRC to
modify, amend or terminate such plan in any respect at any time.
(viii) The Buyer and the Company, jointly and severally, shall
indemnify the Seller and its Affiliates from and against any Losses the
Seller may suffer with respect to any claim for (A) COBRA coverage by or on
behalf of any employee, former employee or dependent of any employee or
former employee of the Company, or (B) retiree medical or retiree life
insurance coverage by or on behalf of any employee or former employee of
the Company except individuals described in clause (A) or (B) of paragraph
(vi) above.
(ix) The Seller and Union Pacific, jointly and severally, shall
indemnify and hold the Buyer and the Company harmless from and against any
Loss arising out of or relating to any claim under the SPRC Benefit Plans
or any other benefit plan or arrangement of any Affiliate or ERISA
Affiliate of the Seller or Union Pacific.
(x) The Buyer and the Company agree to promptly provide, at the
request of the Seller or any of its Affiliates, all information in the
Buyer's or the Company's possession which is reasonably required by the
Seller to administer the SPRC Benefit Plans.
8. Tax Matters.
-----------
(a) Termination of Tax Sharing Agreements. Any and all Tax allocation
-------------------------------------
agreements, Tax sharing agreements, intercompany agreements, or other similar
agreements between the
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Company and the Seller or any Affiliate of the Seller that relates to any Tax or
Tax matter shall be terminated as of the Closing.
(b) Section 338 Elections.
---------------------
(i) The Seller and the Buyer agree to jointly make, or cause to be
made, in an appropriate and timely manner the elections provided for by
Section 338(h)(10) of the Code (and, to the extent necessary to allow for
an election under Section 338(h)(10) of the Code, the elections provided
for by Section 338(g) of the Code) and any corresponding election under
state, local, or foreign law (collectively, "Section 338 Elections") with
---------------------
respect to the purchase of the Company Shares.
(ii) The Seller and the Buyer shall cooperate with each other to
take all actions necessary or appropriate to effect and preserve timely
Section 338 Elections, including, but not limited to, preparing the IRS
Form 8023-A (Corporate Qualified Stock Purchase Agreement) and any related
and comparable forms for state, local, or foreign law (collectively,
"Section 338 Election Forms").
--------------------------
(iii) As reasonably requested from time to time by the Seller
(whether before, at, or after the Closing), the Buyer shall assist the
Seller in, and shall provide the necessary information to the Seller, in
connection with the preparation of any Section 338 Election Form. The Buyer
also agrees on or before the Closing to cause each Section 338 Election
Form reasonably requested by the Seller to be duly executed by the Buyer or
any Affiliate of the Buyer, as appropriate, and delivered to the Seller at
the Closing. If the Seller reasonably determines that a change is required
to any Section 338 Election Form previously executed by the Buyer or an
Affiliate of the Buyer, the Seller may prepare a new Section 338 Election
Form and deliver it to the Buyer and the Buyer shall cause such form to be
duly executed by the Buyer or an Affiliate of the Buyer, as appropriate,
and promptly delivered to the Seller. Anything contained in this (S)8(b) to
the contrary notwithstanding, the Buyer shall have the right to approve all
Section 338 Election Forms prior to filing, such approval not to be
unreasonably withheld or delayed.
(iv) The Seller shall file, or cause to be filed, all Section 338
Election Forms and shall provide the Buyer with notice of such filings.
(v) The Seller, the Buyer, and the Company agree to report, or
cause to be reported, the purchase by the Buyer of the Company consistent
with Section 338 Elections and shall take no position on any Tax return, or
in any audit, examination, investigation, or other proceeding that is
inconsistent with such elections.
(vi) The Buyer, the Company, and the Seller shall cooperate and
consult with each other in good faith in order to reach a mutually
acceptable agreement with respect to the allocation of the Modified
Aggregate Sales Price (as defined in Treasury Regulation section
-21-
1.338(h)(10)-1(e)(5)) among the assets of the Company that complies with
the applicable treasury regulations promulgated under Section 338 of the
Code.
(c) Tax Indemnity.
-------------
(i) Union Pacific and the Seller shall, jointly and severally,
indemnify and hold the Company and the Buyer and their respective
Affiliates harmless (A) from any and all Income Taxes attributable to or
payable with respect to or as a result of the operation of the Company or
the Seller's ownership of the Company for any period that ended on or prior
to the Closing Date and (B) from any and all Losses incurred as a result of
Union Pacific's or the Seller's failure to perform any other covenant or
agreement contained in this (S)8.
(ii) Union Pacific and the Seller shall, jointly and severally,
indemnify and hold the Company and the Buyer and their respective
Affiliates harmless from any and all Other Taxes attributable to or payable
with respect to or as a result of the operation of the Company that accrued
or became payable on or prior to December 31, 1996, provided, however, that
Union Pacific and the Seller will be obligated to indemnify the Company,
the Buyer and their respective Affiliates for such Other Taxes only (A) if
the aggregate amount of all such Other Taxes exceeds $50,000, in which case
Union Pacific and the Seller shall be obligated to indemnify the Company,
the Buyer and their respective Affiliates only for such excess, and (B) if
the Buyer provides Union Pacific and the Seller with written notice of such
Other Taxes on or prior to March 31, 1999 (with such notice stating with
reasonable specificity the nature, basis and amount of such Other Taxes).
(iii) The Buyer and the Company shall, jointly and severally,
indemnify and hold the Seller and its Affiliates harmless from any and all
(A) Assumed Taxes attributable to or payable with respect to or as a result
of the operation of the Company; (B) Income Taxes attributable to or
payable with respect to or as a result of the operation of the Company or
the Buyer's ownership of the Company for any period commencing after the
Closing Date; (C) Other Taxes attributable to the operation of the Company
that accrued after December 31, 1996; and (D) Losses incurred as a result
of the Buyer's or the Company's failure to perform any other covenant or
agreement contained in this (S)8.
(d) Refunds.
-------
(i) Any refund (and interest thereon) of any Income Tax or Other
Tax for which Union Pacific and the Seller are liable under (S)8(c)(i) or
(S)8(c)(ii), regardless of when paid, shall be property of the Seller. If
the Buyer or the Company or any of their respective Affiliates receives a
refund (and interest) of any Income Tax or Other Tax that is property of
the Seller, the Buyer or the Company, as the case may be, shall pay to the
Seller the amount of such refund (and interest) within fifteen (15) days of
receipt.
(ii) Any refund (and interest thereon) of any Tax for which the
Buyer and the Company are liable under (S)8(c)(iii) shall be the property
of the Buyer and the Company, as
-22-
the case may be. If the Seller or any of its Affiliates receives a refund
(and interest) of any Tax that is property of the Buyer or the Company, the
Seller shall pay to the Buyer or the Company, as the case may be, the
amount of such refund (and interest) within fifteen (15) days of receipt.
(e) Cooperation. The Company, the Buyer, and the Seller shall provide
-----------
each other Party with such assistance (including reasonable access to books,
records, and employees) as may reasonably be requested by each of them in
connection with the preparation of any Tax Return or other return or report of
Taxes, any audit or other examination by any taxing authority, or any judicial
or administrative proceedings relating to liability for Taxes. The Company, the
Buyer, and the Seller shall, and shall cause their respective Affiliates to,
retain for the full period of the statute of limitations any records or
information that may be relevant to such preparation, audit, examination,
proceeding, or determination. The party requesting assistance hereunder shall
reimburse the assisting party for reasonable out-of-pocket expenses incurred in
providing such assistance.
(f) Contests. If in connection with any audit, examination,
--------
investigation, or other proceeding, a Party (the "Tax Indemnified Party")
---------------------
receives a written or oral communication with respect to any question,
adjustment, assessment, or other matter which may give rise to a claim for
indemnification under this (S)8 against another Party (the "Tax Indemnifying
----------------
Party"), then the Tax Indemnified Party shall notify the Tax Indemnifying Party
-----
within fifteen (15) days of such communication. No failure or delay in
notification shall reduce or otherwise affect the obligations of the Tax
Indemnifying Party pursuant to this (S)8, except to the extent that such failure
or delay shall have prejudicial effect on the ability of the Tax Indemnifying
Party to defend against, settle or satisfy any liability or claim for Taxes that
the Tax Indemnifying Party is obligated to pay hereunder. The respective rights
and obligations of the Tax Indemnifying Party and the Tax Indemnified Party to
participate in and control such proceedings shall be as set forth in (S)11(d)
(ii) and (iii) below.
(g) Survival. The provisions of this (S)8 shall survive the Closing and
--------
shall remain in full force and effect until the expiration of the statute of
limitations applicable to the particular Tax Claim in question.
9. Credit Enhancements. Subject to the satisfaction of the Buyer's and
-------------------
the Company's obligations pursuant to this (S)9, Union Pacific shall, and shall
cause its Affiliates to, maintain in place until March 31, 1999 such of the
Credit Enhancements, or such alternative or replacement bonds, letters of
credit, guarantees, credit support obligations or other credit enhancements that
are substantially equivalent thereto as determined by the beneficiary thereof,
as are reasonably requested by the Buyer (collectively, the "Continuing Credit
-----------------
Enhancements"), provided, however, that (A) in no event shall the maximum
------------
aggregate obligation of Union Pacific and its Affiliates under the Continuing
Credit Enhancements exceed $300,000, (B) the Buyer shall use commercially
reasonable efforts to exclude from the Continuing Credit Enhancements those
Credit Enhancements reasonably requested by the Seller and (C) in no event shall
the BNSF Guarantee be a Continuing Credit Enhancement. The Company and the
Buyer, jointly and severally, agree to pay to Union Pacific a fee (the "Credit
------
Enhancement Fee") of 3.0% per annum of the greater of the principal or face
---------------
amount
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of the Credit Enhancements, provided, however, that solely for the purposes of
calculating the Credit Enhancement Fee the principal amount of the obligation of
Union Pacific and its Affiliates under the BNSF Guarantee shall be deemed to be
$0 until May 31, 1997 and $100,000 thereafter. Such fee shall be payable
quarterly in advance with respect to any Credit Enhancements outstanding on the
first day of each calendar quarter, provided that the first such payment shall
be due within 5 Business Days following the Closing Date. If, and to the extent,
any Credit Enhancement outstanding on the date of any such quarterly payment is
terminated prior to the date of the next such quarterly payment, then the
Company is entitled to a refund of a portion of the Credit Enhancement Fee
allocable to such terminated Credit Enhancement calculated by multiplying the
Credit Enhancement Fee which was paid in respect of such terminated Credit
Enhancement for the current calendar quarter by a fraction the numerator of
which is the number of days remaining in the current calendar quarter after the
date such Credit Enhancement is terminated and the denominator of which is 90.
In the event that after the Closing Date Union Pacific or any of its
Affiliates makes any payment as a result or on account of any of the Credit
Enhancements, the Company and the Buyer, jointly and severally, agree to
reimburse Union Pacific, on demand (accompanied by reasonable evidence of such
payment), for the amount of such payment, plus interest thereon at a rate per
annum equal to 12% from the date payment is made by Union Pacific or its
Affiliate to the date of such reimbursement.
The Buyer and the Company agree to use their commercially reasonable
efforts to, as soon as practicable but in any event prior to May 31, 1997,
terminate, without expense or liability, contingent or otherwise, to Union
Pacific or its Affiliates, each of the Credit Enhancements other than the
Continuing Credit Enhancements. Without limiting the foregoing, the Buyer
acknowledges and agrees that neither Union Pacific nor any of its Affiliates
shall have any obligation to maintain any of the Credit Enhancements after May
31, 1997 other than the Continuing Credit Enhancements and, after May 31, 1997,
Union Pacific and its Affiliates shall have the right to take whatever steps
they reasonably deem necessary to terminate such Credit Enhancements.
Without limiting the foregoing, the Buyer and the Company, jointly and
severally, agree to indemnify and hold the Seller and its Affiliates harmless
from and against any Loss which any such Party incurs as a result of, or
relating to, any of the Credit Enhancements.
The Buyer further agrees that following the Closing neither the Buyer nor
the Company will (A) (i) engage in any merger, consolidation, combination or
sale of assets, (ii) incur any indebtedness for borrowed money or Encumbrance,
(iii) make any investment, loan or advance, (iv) engage in any transactions with
any of their respective Affiliates or (v) declare or pay any dividend in respect
of their capital stock or repurchase, redeem or otherwise make any payment in
respect of their outstanding indebtedness or capital stock, in each case, to the
extent the same is prohibited by the Debt Agreements (after giving effect to any
consent or waiver granted thereunder) or (B) refinance with a lender other than
(i) The First National Bank of Chicago or (ii) a syndicate of lenders led by The
First National Bank of Chicago, or pay off all of its obligations under or
-24-
terminate the Debt Agreements, in each case, unless the Credit Enhancements
shall have been terminated without expense or liability, contingent or
otherwise, to Union Pacific and its Affiliates.
10. Conditions to Obligation to Close.
---------------------------------
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer to
-------------------------------------
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in (S)3 above
shall be true and correct in all material respects at and as of the Closing
Date as though made on and as of the Closing Date;
(ii) the Seller and the Company shall have performed and complied
in all material respects with all of the covenants to be performed by the
Seller and the Company on or prior to the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Seller and the Company shall have delivered to the Buyer a
certificate to the effect that the conditions specified above in
(S)(S)10(a)(i) and (ii) have been satisfied in all respects;
(v) all of the directors of the Company shall have delivered duly
signed resignations effective at the time of the Closing (or the Seller or
the Company shall have taken such other action as is necessary to ensure
that such persons are not directors of the Company at the time of the
Closing);
(vi) (A) all applicable waiting periods (and any extensions
thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise
been terminated and (B) the other authorizations, consents or approvals
described in (S)3(c) and (S)4(c) of the Disclosure Schedule shall have been
received;
(vii) the Buyer shall have obtained the Financing;
(viii) At the Closing, there shall be delivered to the Buyer the
opinions of Xxxxxxx X. Xxxxxxx, Esq., Assistant General Counsel to Union
Pacific and the Seller, Xxxxxx X. Xxxxxxxx, Esq., General Solicitor in Utah
of Union Pacific, and Xxxxx X. Xxxxxxx, Esq., counsel to Union Pacific and
the Seller, dated the Closing Date, in the form set forth in Exhibit H
---------
hereto; and
-25-
(xi) Except for the transactions contemplated by this Agreement,
including those reflected in the adjustments made to derive the Pro Forma
Balance Sheet, no event or condition shall have occurred or arisen since
December 31, 1996 that has resulted in or would be reasonably expected to
result in a Material Adverse Change.
The Buyer may waive any condition specified in this (S)10(a) (other than
(S)10(a)(vi)(A)) if it executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the Seller
--------------------------------------
to consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in (S)4 above
shall be true and correct in all material respects at and as of the Closing
Date as though made on and as of the Closing Date;
(ii) the Buyer shall have performed and complied in all material
respects with all of the covenants to be performed by the Buyer on or prior
to the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Seller a certificate to
the effect that each of the conditions specified above in (S)10(b)(i) and
(ii) is satisfied in all respects;
(v) (A) all applicable waiting periods (and any extensions thereof)
under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or otherwise been
terminated) and (B) the other authorizations, consents or approvals
described in (S)3(c) and (S)4(c) of the Disclosure Schedule shall have been
received;
(vi) at the Closing, there shall be delivered to the Seller the
opinion of X'Xxxxxxxx Graev & Karabell, LLP, counsel to the Buyer, dated
the Closing Date, in form set forth in Exhibit I hereto;
---------
(vii) the Management Investors shall have executed and delivered to
the Seller the Management Certificates dated the Closing Date;
(viii) Xxxxxx X. Xxxxx shall have executed and delivered to the Seller
the Release Agreement dated on or before the Closing Date; and
(ix) the Stockholders Agreement shall have been executed and
delivered by each of the parties thereto on or before the Closing Date.
-26-
The Seller may waive any condition specified in this (S)10(b) (other than
(S)10(b)(v)(A)) if it executes a writing so stating at or prior to the Closing.
11. Indemnification.
---------------
(a) Survival of Representations and Warranties. Subject to (S)11(b) and
------------------------------------------
(c) below, the representations and warranties of the Seller contained in (S)3,
and the Buyer contained in (S)4, shall survive the Closing and continue in full
force and effect. Subject to (S)11(h) below, the representations and warranties
of the Company shall not survive the Closing and shall terminate simultaneously
therewith, and if the Closing occurs, neither the Seller nor any of its
Affiliates shall, from and after the Closing, have any recourse against the
Company for any breach of any representation or warranty or covenant required to
be performed on or prior to the Closing by the Company set forth in this
Agreement or in any certificate or other writing delivered in connection with
this Agreement. Each of the covenants and other agreements of the Parties
contained in this Agreement shall survive the Closing and continue in full force
and effect until the full performance thereof or the expiration or termination
thereof in accordance with its terms; provided, however, that subject to
(S)11(h) below the covenants and other agreements of the Company contained in
this Agreement shall not survive the Closing and shall terminate simultaneously
therewith. Notwithstanding the Buyer's obligations pursuant to (S)5(e)(iii)
above, no right of the Buyer or its Affiliates, on the one hand, or the Seller
or its Affiliates, on the other hand, for indemnification hereunder shall be
affected by any examination made for or on behalf of such Party or its
Affiliates or any of their respective directors, officers, employees,
representatives or agents, the knowledge of any of the foregoing Persons, or the
acceptance by any of the foregoing Persons of any certificate or opinion.
(b) Indemnification Provisions for Benefit of the Buyer.
---------------------------------------------------
(i) Subject to the limitations set forth in this (S)11(b), Seller and
Union Pacific (collectively, the "UP Group") jointly and severally agree to
--------
indemnify and hold the Buyer and its Affiliates harmless against any Losses
which any of them may suffer, sustain, or become subject to, as the result
of:
(A) the breach of any representation or warranty contained in
(S)3 above (other than the representations and warranties set forth in
(S)3(e) or (f) above);
(B) the breach of any representation or warranty contained in
(S)3(e) or (f) above;
(C) the breach of any covenant or agreement to be performed by
the Seller or Union Pacific under this Agreement;
(D) any Excluded Liabilities; or
-27-
(E) any Environmental Conditions if, and only to the extent
that, such Loss is incurred or imposed (1) pursuant to any agreement,
Order, notice of responsibility, directive (including requirements
embodied in Environmental, Health and Safety Requirements),
injunction, judgment or similar documents (including settlements)
attributable to, connected with or arising out of or under,
Environmental, Health and Safety Requirements or (2) pursuant to any
claim by a Governmental Entity or other Person for personal injury,
property damage, damage to natural resources, remediation or response
costs or other corrective actions arising out of, connected with or
attributable to, any Environmental Condition.
(ii) With respect to claims for breaches of representations and
warranties referred to in (S)11(b)(i)(A) above, (A) the UP Group will be
liable to the Buyer for Losses only if the aggregate amount of all such
Losses relating to all such breaches exceeds $250,000, in which case Seller
will be liable only for such excess, (B) the UP Group will not be liable
for any Losses arising from the breach of any representation or warranty
contained in (S)3(i) or (j) hereof unless written notice of such breach is
given by the Buyer to the Seller on or prior to September 30, 1998 (with
such notice stating with reasonable specificity the nature and basis of the
assertion and the amount thereof to the extent known) and the
indemnification obligations of the UP Group shall continue in full force
and effect indefinitely with regard to the breach of any other
representation or warranty referred to in (S)11(b)(i)(A) above, and (C) in
no event shall the aggregate amount of Losses that the UP Group is
obligated to satisfy pursuant to (S)11(b)(i)(A) and (B) exceed $13,162,500
in the aggregate. If any Loss arising from a breach of a representation or
warranty referred to in (S)11(b)(i)(A) above also constitutes a Loss
arising out of or relating to an Excluded Liability or an Environmental
Condition, such Loss will be deemed to be arising out of or relating to an
Excluded Liability or an Environmental Condition, as applicable, for
purposes of this (S)11, and, thus, not subject to the limitations set forth
in the first sentence of this (S)11(b)(ii).
(iii) With respect to claims for breaches of representations and
warranties referred to in (S)11(b)(i)(B) above, (A) the UP Group will be
liable to the Buyer for Losses only if the aggregate amount of all such
Losses relating to all such breaches exceeds $1,000,000, in which case the
UP Group will be liable only for such excess, (B) the UP Group will not be
liable for any Losses arising therefrom unless written notice of such
breach is given by the Buyer to the Seller on or prior to March 31, 1999
(with such notice stating with reasonable specificity the nature and basis
of the assertion and the amount thereof to the extent known) and (C) in no
event shall the aggregate amount of Losses that the UP Group is obligated
to satisfy pursuant to (S)11(b)(i)(B) exceed $6,581,250. If any Loss for
which the UP Group is obligated to provide indemnification pursuant to
(S)11(b)(i)(B) above also constitutes a Loss arising out of a relating to
an Excluded Liability or an Environmental Condition, such Loss will be
deemed to be arising out of or relating to an Excluded Liability or an
Environmental Condition, as applicable, for purposes of this (S)11, and,
thus, not subject to the limitations set forth in the first sentence of
this (S)11(b)(iii).
-28-
(iv) With respect to claims for Excluded Liabilities referred to in
(S)11(b)(i)(D) above, (A) the UP Group will be liable to the Buyer for the first
dollar of any such Losses, (B) the UP Group will not be liable for any such
Losses unless written notice of the claim relating to such Excluded Liability is
given by the Buyer to the Seller on or prior to March 31, 2002 (with such notice
stating with reasonable specificity the nature and basis of the assertion and
the amount thereof to the extent known) and (C) except as set forth in
(S)11(b)(vi) below, there shall be no dollar limit on the aggregate amount of
Losses relating to Excluded Liabilities that the UP Group is obligated to
satisfy pursuant to (S)11(b)(i)(D). If any Loss arising from an Excluded
Liability pursuant to (S)11(b)(i)(D) above also constitutes a Loss arising out
of or relating to an Environmental Condition, such Loss will be deemed to be an
Excluded Liability for purposes of (S)11, and, thus, subject to the provisions
of this (S)11(b)(iv).
(v) With respect to claims for Environmental Conditions referred to in
(S)11(b)(i)(E) above, (A) the UP Group will be liable to the Buyer for Losses
only if the aggregate amount of all such Losses relating to all such
Environmental Conditions exceeds $100,000, in which case the UP Group will be
liable only for such excess, (B) the UP Group will not be liable to Buyer for
any such Losses unless written notice of the applicable Environmental Condition
is given by the Buyer to Seller on or prior to March 31, 2002 (with such notice
stating with reasonable specificity the nature and basis of the assertion and
the amount thereof to the extent known); provided, however, if the Buyer, on or
prior to March 31, 2002, gives the UP Group written notice of a potential Loss
relating to an Environmental Condition that has not been incurred or imposed
pursuant to the conditions set forth in (S)11(b)(i)(E) above and with regard to
which the Buyer reasonably believes it prudent to perform Remedial Work or other
reasonable corrective or safety measures in order to avoid a potential Loss as a
result of an Environmental Condition and the Seller determines that Remedial
Work or such other measures are not required with respect to such Environmental
Condition (it being expressly acknowledged that the Seller has the right to
assume, conduct and control the performance of the proposed Remedial Work or
other measures pursuant to (S)11(g) hereof) then this (S)11(b)(v)(B) shall not
apply to any Loss subsequently incurred or imposed pursuant to the conditions
set forth in (S)11(b)(i)(E) which relates to or results from the Environmental
Condition described in such written notice, and (C) except as set forth in
(S)11(b)(vi) below, there shall be no dollar limit on the aggregate amount of
Losses relating to Environmental Conditions that the UP Group is obligated to
satisfy pursuant to (S)11(b)(i)(E). If any Loss arising from a claim for an
Environmental Condition referred to in (S)11(b)(i)(E) above also constitutes a
Loss arising out of an Excluded Liability such Loss will be deemed to be an
Excluded Liability for purposes of this (S)11, and, thus, subject to the
provisions of (S)11(b)(iv).
(vi) The obligations of the UP Group under this (S)11 to indemnify the
Buyer in respect of Environmental Conditions and Excluded Liabilities shall be
reduced to the extent that any intentional act or failure to act by, or gross
negligence of, the Buyer or its Affiliates, successors or assigns occurring
after the Closing adversely affects such obligations, other than failures to act
where such failure is based on the Seller's determination, after receiving
-29-
written notice from the Buyer as provided in (S)11(b)(v) above, that
Remedial Work or other measures are not required.
(c) Indemnification Provisions for Benefit of the Seller Subject to the
----------------------------------------------------
limitations set forth in the following sentence, prior to the Closing, the
Buyer agrees, and on and after the Closing, the Buyer and the Company jointly
and severally agree to indemnify and hold the Seller, Union Pacific and their
respective Affiliates harmless against any Losses which any of them may suffer,
sustain or become subject to, as the result of (A) a breach by the Buyer (or,
solely with respect to the covenants to be performed by it after the Closing,
the Company) of any representation, warranty, covenant, or agreement of the
Buyer (or the Company, as applicable) contained in this Agreement or (B) any
obligation of the Seller, Union Pacific or their respective Affiliates arising
after the Closing pursuant to the GE Vehicle Leases (it being further understood
that the Parties shall cooperate and use reasonable commercial efforts in
seeking to obtain an assignment of the GE Vehicle Leases from the Seller to the
Company as soon as practicable after the Closing). The Parties acknowledge and
agree that (i) the Buyer (and the Company, as applicable) will be liable to the
Seller and Union Pacific for the first dollar of any such Losses, (ii) the
indemnification obligations of the Buyer shall continue in full force and effect
indefinitely and (iii) in no event shall the aggregate amount of Losses that the
Buyer is obligated to satisfy pursuant to this (S)11(c) for the breach of any
representation or warranty exceed $13,162,500.
(d) Matters Involving Third Parties.
-------------------------------
(i) If any third party shall notify any Party (the "Indemnified
-----------
Party") with respect to any matter (a "Third Party Claim") which may give
----- -----------------
rise to a claim for indemnification against the other Party (the
"Indemnifying Party") under this (S)11, then the Indemnified Party shall
------------------
promptly notify the Indemnifying Party thereof in writing; provided,
however, that no delay on the part of the Indemnified Party in notifying
the Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) The Indemnifying Party will have the right to assume the defense
of the Third Party Claim with counsel of its choice reasonably satisfactory
to the Indemnified Party so long as (A) the Indemnifying Party notifies the
Indemnified Party in writing within 30 days after the Indemnified Party has
given notice of the applicable Third Party Claim that the Indemnifying
Party will indemnify the Indemnified Party from and against any Losses the
Indemnified Party may suffer resulting from such Third Party Claim to the
extent required by this (S)11 and (B) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief,
provided, however, the Indemnifying Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld or delayed) unless the judgment
or proposed settlement involves only the payment of money damages by the
Indemnifying Party and does not impose an injunction or other equitable
relief upon the Indemnified Party.
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(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with (S)11(d)(ii) above, (A) the
Indemnified Party may retain separate counsel at its sole cost and expense
and participate in the defense of the Third Party Claim provided that the
Indemnified Party and, to the extent consistent with its professional
responsibilities, such separate counsel shall cooperate with the
Indemnifying Party and any counsel retained by the Indemnifying Party and
(B) the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without the
prior consent of the Indemnifying Party. In the event the Indemnifying
Party does not assume and conduct the defense of the Third Party Claim in
accordance with (S)11(d)(ii) above, however, the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate and the Indemnifying Party will pay the
reasonable fees and expenses of any legal counsel retained by the
Indemnified Party in connection with such Third Party Claim. The
Indemnifying Party will also pay the reasonable fees and expenses of any
legal counsel retained by the Indemnified Party in the event the
Indemnified Party reasonably determines that having separate counsel would
be appropriate under the circumstances because of the existence of separate
defenses or because of conflicts of interest that could arise that, in
either case, would materially prejudice the Indemnified Party if it did not
have separate counsel; provided, however, that the Indemnifying Party shall
not be required to pay the expense of more than one legal counsel of the
Indemnified Parties in any single action and that such counsel shall, to
the extent consistent with its professional responsibilities, cooperate
with the Indemnifying Party and any counsel designated by the Indemnifying
Party.
(e) Matters Not Involving Third Parties. If an Indemnified Party's notice
-----------------------------------
of indemnification does not relate to a Third Party Claim, the Indemnifying
Party shall have 30 days after receipt of such notice to object to the subject
matter and the amount of the claim for indemnification set forth in such notice
by delivering written notice thereof to the Indemnified Party. If the
Indemnifying Party does not so object within such 30-day period, it shall be
conclusively deemed to have agreed to the matters set forth in such notice of
indemnification. If the Indemnifying Party sends notice to the Indemnified Party
objecting to the matters set forth in such notice of indemnification, the
Parties shall use their best efforts to settle such claim for indemnification.
If the Parties are unable to settle such dispute, each of the Parties shall be
entitled to pursue any and all rights and remedies available to it in connection
with such matter.
(f) Determination of Losses; Adjustments to Purchase Price. For purposes
------------------------------------------------------
of determining the amount of any Losses that are the subject matter of a claim
for indemnification hereunder, the Parties shall make appropriate adjustments
for insurance proceeds actually received by the Indemnified Party. All
indemnification payments under this (S)11 shall be deemed adjustments to the
Purchase Price.
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(g) Procedures Regarding Remedial Work.
----------------------------------
Notwithstanding anything set forth in (S)11(d) above, in the event that any
cleanup, remediation, containment, investigation, restoration, removal,
treatment or other remedial work ("Remedial Work") is required with respect to
-------------
any Environmental Condition as a result of the conditions described in
(S)11(b)(i)(E)(1) or (2) or in the event that Seller otherwise elects to conduct
Remedial Work after written notice from the Buyer pursuant to (S)11(b)(v)
hereof, the Seller will have the right to assume, conduct and control the
performance of the required Remedial Work using consultants and contractors of
its own choice reasonably satisfactory to the Buyer, provided that the Seller
notifies the Buyer of the Seller's intent to conduct the Remedial Work in
writing within 30 days of receipt of written notice from the Buyer of the
Environmental Condition that is the basis for the required Remedial Work. The
Seller shall keep the Buyer reasonably apprised of the status of the Remedial
Work, provide the Buyer with material non-privileged documents and information
relating to the performance of the Remedial Work for review and comment and
permit the Buyer and its representatives to attend non-privileged material
meetings and conferences relating thereto. In addition, the Buyer shall have the
right to approve in advance (which approval shall not be unreasonably withheld
or delayed) material decisions and actions of the Seller relating to the
Remedial Work (which decisions and actions shall include, without limitation,
any reports to Governmental Authorities, the determination of appropriate
cleanup levels, the use of risk-based cleanup standards, or any other decisions
or actions, in each case, which the Buyer reasonably concludes could materially
impair or impede the ongoing ownership, operation, use or value of the business
or facilities of the Company). In connection with any Remedial Work completed
pursuant to this (S)11(g), the Buyer and the Seller shall reasonably cooperate
with one another and their respective representatives and agents, including,
without limitation, providing reasonable access to the appropriate facilities
and properties, in the exercise of their rights and obligations hereunder.
In the event that the Seller does not assume and conduct the performance
of the Remedial Work in accordance with this (S)(11)(g), the Buyer may assume
and conduct the performance of the required Remedial Work in compliance with
such Environmental, Health and Safety Requirements or orders using consultants
and contractors of its choice reasonably satisfactory to the UP Group. The
reasonable costs and expenses incurred by the Buyer in performance of such
required Remedial Work, including, the reasonable costs and fees of consultants
and contractors, and assessment, investigation, remediation, cleanup and other
necessary response costs, shall be paid as Losses by the UP Group to the extent
required under this (S)11, provided that the Buyer shall keep the Seller
reasonably apprised of the status of the Remedial Work, provide the Seller with
material non-privileged documents and information relating to the performance
of the Remedial Work for review and comment and permit the Seller and its
representatives and agents to attend non-privileged material meetings and
conferences related thereto. In addition, the Seller shall have the right to
approve (which approval shall not be unreasonably withheld or delayed) material
decisions and actions of the Buyer relating to the Remedial Work (which
decisions and actions shall include, without limitation, any reports to
Governmental Authorities, the determination of appropriate cleanup levels, the
use of risk-based cleanup standards, or any other decisions or actions, in each
case, which the Seller reasonably concludes could unreasonably increase the
cost and expenses of the Remedial Work). If the Seller is not reasonably kept
apprised of the status of the Remedial
-32-
Work, or permitted to review non-privileged documents and information or attend
material non-privileged meetings, the UP Group shall not be required to pay the
costs and expenses of the Remedial Work to the extent the UP Group is prejudiced
as a result thereof
Any Remedial Work completed pursuant to this (S)11(g) shall be deemed
adequate for purposes of satisfying the UP Group's obligations under this (S)11
to the extent that the Remedial Work (i) attains compliance in a reasonably
cost-effective manner with Environmental, Health and Safety Requirements and
applicable risk-based or other cleanup standards promulgated thereunder, and
(ii) to the extent applicable, complies with any order, decree, judgment or
directive issued by a Governmental Authority.
(h) Additional Provisions Regarding Indemnification.
-----------------------------------------------
(i) Nothing in this (S)11 shall in any way limit the duties and
obligations of the Buyer under the Demand Note, the Pledge Agreement or the
Warrant.
(ii) Nothing in this (S)11 shall in any way limit the
indemnification obligations of (A) the Buyer or the Company pursuant to
(S)7(a), (S)7(b)(viii) and (S)9 of this Agreement or (B) the UP Group
pursuant to (S)7(b)(ix) of this Agreement, which indemnification
obligations shall be without limit as to amount and shall continue in full
force and effect indefinitely.
(iii) With respect to any Tax Claim, the terms and provisions of (S)8
hereof shall govern and control and this (S)11 (other than (S)11(d) hereof,
as expressly provided in (S)8 above) shall be of no force or effect.
(i) Exclusive Remedy. The Parties acknowledge and agree that the
----------------
foregoing indemnification provisions in this (S)11 and elsewhere in this
Agreement and referred to in this (S)11 shall be the exclusive remedy of the
Buyer, the Seller, Union Pacific and the Company with respect to transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, the Buyer, the Seller, Union Pacific and the Company hereby waive any
statutory, equitable or common law rights or remedies relating to any
environmental health and safety matters, including, without limitation, any such
matters arising under any Environmental, Health and Safety Requirements, the
Comprehensive Environmental Response, Compensation and Liability Act or any
analogous state law. Notwithstanding the foregoing, this (S)11(j) shall not bar
any Party from (i) pursuing any and all remedies available to it (in addition to
rights of indemnification pursuant to this (S)11) in the event of any claim of
fraud against another Party or (ii) seeking or obtaining any remedy of specific
performance or other injunctive relief.
12. Termination.
-----------
(a) Termination of Agreement. The Parties may terminate this Agreement as
------------------------
provided below:
-33-
(i) the Buyer and the Seller may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing in the event the Seller has
within the then previous five (5) Business Days given the Buyer any notice
pursuant to (S)5(e)(i) above;
(iii) the Buyer may terminate this Agreement by giving written notice
to the Seller at any time prior to the Closing (A) in the event that the
Seller has breached any material representation, warranty or covenant
contained in this Agreement (other than (S)3(e) or (f) above) in any
material respect, the Buyer has notified the Seller of the breach, and the
breach has continued without cure for a period of 30 days after the notice
of breach or (B) if the Closing shall not have occurred on or before April
30, 1997 by reason of the failure of any condition precedent under (S)10(a)
hereof (unless the failure results primarily from the Buyer breaching any
representation, warranty or covenant contained in this Agreement); and
(iv) the Seller may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the
Buyer has breached any material representation, warranty or covenant
contained in this Agreement in any material respect, the Seller has
notified the Buyer of the breach, and the breach has continued without cure
for a period of 30 days after the notice of breach or (B) if the Closing
shall not have occurred on or before April 30, 1997, by reason of the
failure of any condition precedent under (S)10(b) hereof (unless the
failure results primarily from the Seller breaching any representation,
warranty or covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
---------------------
pursuant to (S)12(a) above, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to the other Party (except
for any liability of any Party then in breach). Notwithstanding any other
provision in this Agreement to the contrary, upon termination of this Agreement
pursuant to (S)12(a)(ii), Seller shall pay to Buyer as liquidated damages and in
full satisfaction of any claim or remedy otherwise available to the Buyer
hereunder, in cash, an amount equal to 80% of all out-of-pocket fees and
expenses incurred by Buyer in connection with this Agreement and the
transactions contemplated hereby (including, without limitation, fees and
expenses payable to counsel, prospective lenders, accountants and other third
parties in connection with this Agreement and the transactions contemplated
hereby but excluding any fees or expenses of the Buyer that the Seller is
otherwise required to reimburse pursuant to (S)13(k) below and any fees or
expenses of Buyer's financial advisor) (the "Termination Fee"); provided,
---------------
however, that in no event shall the Termination Fee exceed $300,000. Buyer
shall furnish Seller with such information and documentation as Seller shall
reasonably request to substantiate the calculation of the Termination Fee.
13. Miscellaneous.
-------------
(a) Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or public announcement relating to the subject matter of this
Agreement without prior approval
-34-
of the other Party; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Party prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
----------------------------
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents referred to
----------------
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
-------------------------
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests or obligations hereunder without the prior written approval of
the other Parties; provided, however, that, unless expressly prohibited
hereunder, the Buyer may (i) assign any or all of its rights and interests
hereunder to one or more of its wholly-owned Affiliates and designate one or
more of its wholly-owned Affiliates to perform its obligations hereunder and
(ii) assign any or all of its rights and interests hereunder as security for any
obligations arising in connection with the Financing (in any or all of which
cases the Buyer nonetheless shall remain responsible for the performance of all
of its obligations hereunder).
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims and other
-------
communications hereunder will be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given if (and then five
Business Days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
-35-
If to the Seller or Union Pacific or, prior to the Closing, the Company, to
Union Pacific Railroad Company or
Southern Pacific Transportation Company
c/o Union Pacific Corporation
Eighth and Xxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to (which shall not constitute notice to the Seller, Union
Pacific or the Company, as applicable):
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the buyer or, after the Closing, the Company to:
PMT Holdings, Inc.
c/o Eos Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to (which shall not constitute notice to the Buyer or the
Company, as applicable):
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-36-
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the domestic laws of the State of New York without giving
effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
(i) Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer, the Seller and the Company. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
------------
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Except as otherwise provided in this Agreement, each of the
--------
Parties will bear its own costs and expenses (including legal and investment
advisory fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby; provided, however, that the Seller agrees to
(i) pay the fee of $45,000 due upon the filing of the Buyer's Notification
Report Form with the Federal Trade Commission and the United States Department
of Justice pursuant to the Xxxx-Xxxxx-Xxxxxx Act and (ii) bear any costs or
expenses up to an aggregate of $10,000 associated with the Company's obtaining
the authorizations, consents and approvals set forth in (S)3(c) of the
Disclosure Schedule. Without limiting the foregoing, the Seller agrees that the
Company has not borne and will not bear any of the costs and expenses of the
Seller or Union Pacific (including any of the legal fees and expenses) in
connection with this Agreement.
(l) Construction. The Parties have participated jointly in the negotiation
------------
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
(m) Incorporation of Exhibits and Schedules. The exhibits and schedules
---------------------------------------
identified in this Agreement are incorporated herein by reference and made a
part hereof.
-37-
(n) Disclosure Schedule. The inclusion of information in the Disclosure
-------------------
Schedule shall not be construed as an admission that such information is
material to the Company and shall not imply that such matters, or similar
matters, would otherwise constitute a breach of a representation or warranty
contained in this Agreement. In addition, matters reflected in the Disclosure
Schedule are not necessarily limited to matters required by this Agreement to be
reflected in the Disclosure Schedule. Such additional matters are set forth for
informational purposes only and do not necessarily include other matters of a
similar nature.
* * * * *
-38-
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
PMT HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxx
-----------------------------
Name: Xxxxxxx X. Xxxx
Its: Vice President
PACIFIC MOTOR TRANSPORT COMPANY,
a California corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Its: Assistant Treasurer
SOUTHERN PACIFIC TRANSPORTATION
COMPANY, a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Its: Assistant Treasurer
UNION PACIFIC RAILROAD COMPANY,
a Utah corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Its: Assistant Treasurer
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