PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement") is made as of this 30th
day of December, 1998 ("Transaction Date"), by and among, MID-CAL EXPRESS, INC.,
a California corporation ("Mid-Cal"), PRIME COMPANIES, INC., a Delaware
corporation ("Prime"), U.S. Trucking, Inc., a Colorado corporation ("USTI").
RECITALS
A. Mid-Cal, a subsidiary of Prime, is engaged in the freight
transportation industry (the "Business") primarily through the use of trucks and
tractor trailers throughout the United States and the operation of a terminal
facility located at 00000 Xxxx Xxxxxx, Xxxxx Xxxxxxx, XX (the "Terminal");
B. USTI, is also engaged in the freight transportation industry and is
in the business of owning, managing and operating fleets of trucks and tractor
trailers and the operation of terminal facilities throughout various areas of
the United States;
C. Mid-Cal is the lessee of a lease of the Terminal ("Mid-Cal Terminal
Lease"), in which the Lessor is HCI, Inc. ("Landlord"). Landlord has agreed to
terminate the Mid-Cal Terminal Lease, and to enter into a new lease of the
Terminal with USTI or its nominee.
D. Mid-Cal's operating assets include those trucks, trailers and
automobiles, satellite communication equipment, office furnishings and other
personal property, furnishings and equipment, whether owned outright or leased,
as more fully described and scheduled in this Agreement ("Equipment"), and an
inventory of vehicle fuel, tires, oil, lubricating and cooling products and
other products related to the operation of the Mid-Cal business and the
Equipment, as more fully described and scheduled in this Agreement
("Inventory").
E. Mid-Cal desires to sell and USTI desires to acquire certain assets
from Mid-Cal, including, without limitation, the Equipment, the Inventory,
certain contracts, customer lists and other personal property as more fully
described in this Agreement. Mid-Cal further desires to transfer occupancy of
the Terminal to USTI and USTI desires to accept such transfer, provided,
however, that the parties agree that the obligations, if any, of
Mid-Cal under the Mid-Cal Terminal Lease shall not be assumed by USTI or its
nominee.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
As of the Transaction Date, Mid-Cal shall sell, transfer and convey to
USTI or its nominee (all references hereinafter to USTI also shall be deemed to
include its nominee), and USTI shall purchase free and clear from all claims,
liens and encumbrances, except as otherwise expressly provided in this
Agreement, the following described assets of Mid-Cal (collectively the
"Assets"):
1.1 EQUIPMENT. The Equipment as described in Exhibit "A" attached hereto
and incorporated herein by this reference. Mid-Cal and Prime acknowledges
footnote 1 on Exhibit "A" and agrees to be bound by the agreement noted therein.
1.2 INVENTORY. The Inventory as designated in Exhibit "B" attached
hereto and incorporated herein by this reference.
1.3 OTHER PERSONAL PROPERTY. The other Personal Property (including
contracts and customer lists) as designated in Exhibit "C" attached hereto and
incorporated herein by this reference.
ARTICLE 2
TERMINAL OCCUPANCY
2.1 OCCUPANCY. On the Transaction Date, Mid-Cal shall deliver to USTI,
or its nominee, the occupancy of the Terminal Lease of the Terminal, subject to
USTI, or its nominee entering into a new lease of the Terminal with the
Landlord, commencing as of January 1, 1999, such that Mid-Cal shall have no
liability for occupancy of the Terminal from and after January 1, 1999..
2.2 LANDLORD/MID-CAL STATEMENT. Prior to the delivery by USTI of the
Stock, as described in Section 3.1 herein below, Landlord and Mid-Cal shall
provide USTI with a confirmation in form acceptable to USTI that neither USTI
nor its nominee has nor shall either have any obligation under the Mid-Cal
Terminal Lease.
2.3 INSURANCE POLICIES. USTI shall have the right to request that
Mid-Cal shall assign, and, if so requested by USTI, Mid-Cal shall assign to USTI
each and every or any insurance policy as requested by USTI insuring the
lessee's interest in the Terminal and the improvements thereon, and in the event
of any such assignment, the insurance premiums paid or payable by Mid-Cal shall
be prorated as of the Transaction Date based on a 365-day year. USTI shall not
be liable for any defaults or intentional acts or omissions occurring on or
related to the Terminal during Mid-Cal's tenancy thereof or prior to the
Transaction Date. On or before April 30, 1999 USTI shall deliver to Mid-Cal a
payment equal to the appropriate amount of insurance prorations as provided in
this Section 2.3.
ARTICLE 3
PURCHASE PRICE
3.1 USTI COMMON STOCK. The purchase to be paid to Mid-Cal for the Assets
and Mid-Cal's interest in the Terminal Lease shall be 400,000 shares of
unregistered common stock of USTI accompanied by piggy-back registration rights
containing the provisions set forth in Exhibit "D" attached hereto and by this
reference incorporated herein ("Stock").
ARTICLE 4
ASSUMPTION OF LIABILITIES
4.1 MID-CAL'S LIABILITIES. As of the Transaction Date USTI shall be
deemed to have assumed Mid-Cal's rights and obligations under each of the
Equipment loans and leases set forth, identified and described in Exhibit "E"
attached hereto. By the terms of this Agreement, USTI has not assumed, will
not assume and shall not be deemed to have assumed any liabilities or
obligations of Mid-Cal or Prime, other than with respect to the assumption of
liabilities and obligations as set forth, identified and described in Exhibit
"E". Mid-Cal has informed USTI that among its liabilities are obligations to
Associates Commercial in connection with these pieces of Equipment identified
and described in Exhibit "F" attached hereto ("Associates Equipment"). Mid-Cal
specifically acknowledges that possession of the Associates Equipment has not
passed to USTI and USTI has no liability to Associates Commercial or otherwise
on account of the Associates Equipment.
ARTICLE 5
DELIVERY OF STOCK
5.1 DELIVERY. On April 14, 1999, or such other date as the parties shall
agree, USTI shall deliver the stock to Mid-Cal at the offices of Xxxx, Scholer,
Fierman, Xxxx & Handler, LLP, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 or at such other place as the parties may agree.
ARTICLE 6
CONDITIONS
6.1 ASSETS. The Assets described in Article 1 hereof are sold "AS IS
WHERE IS." As of the Transaction Date, the Assets shall be free and clear of
liens, claims and encumbrances except for the security interest, or lessor's
interest, as the case may be, if any, held by the entities described in Exhibit
"E" in the Equipment described therein.
6.2 TERMINAL CONDITION. As of the Transaction Date, the premises
comprising the Terminal shall be, (a) in good repair (b) suitable for occupation
by USTI or its nominee and for use by USTI or its nominee for operations as a
freight terminal facility, and (c) validly zoned and in
compliance with appropriate building, safety and health laws to allow for the
occupation and use of the Terminal for such purpose under the laws of the city
and county in which the Terminal is located.
ARTICLE 7
MID-CAL AND PRIME REPRESENTATION AND WARRANTIES
Mid-Cal and Prime represent and warrant to USTI as follows:
7.1 CORPORATE STATUS. Mid-Cal and Prime are corporations duly organized,
validly existing and in good standing, under the laws of the State of California
(in the case of Mid-Cal) and Delaware (in the case of Prime).
7.2 AUTHORITY. Mid-Cal and Prime each has full corporate power and
authority to execute and deliver this Agreement and all the instruments and
documents to be delivered by it pursuant to this Agreement.
7.3 LAWSUITS. No causes of action or claims for damages to persons or
property have been filed and served, or, to the best of Mid-Cal's and Prime's
knowledge, asserted or threatened for occurrences involving the Assets and/or
the Terminal.
7.4 ASSETS FREE AND CLEAR AND MARKETABILITY. Mid-Cal has and, whenever
required by USTI, will transfer good and marketable title to the Assets. USTI,
as of April 15, 1999, will acquire good and marketable title to all of the
Assets free and clear of restrictions on or conditions to transfer or assign
free and clear of liens, encumbrances, mortgages, pledges, security agreements,
conditional sale agreements, claims, charges, conditions or restrictions.
7.5 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since January 1, 1998, to the
best of Mid-Cal's reasonable efforts to determine each of the following, there
has not been any:
a. Revaluation by Mid-Cal of any of the Assets, including without
limitation writing down the value of inventory;
b. Damage, destruction or loss (whether or not covered by
insurance) adversely affecting the Assets;
c. Adverse change in employee relations which has or is reasonably
likely to have an adverse effect on the productivity, the financial condition or
results of operation of the Assets;
d. Mortgage, pledge or other encumbrance of any Assets, except as
set forth on Exhibit "E";
e. Existence of any other event or condition which in any one case
or in the aggregate has or might reasonably be expected to have an adverse
effect on the Assets; or
f. Agreement by Mid-Cal or Prime, as the case may be, to do any of
the things described in the preceding clauses (a) through (e) other than as
expressly provided for herein.
7.6 CONTRACTS AND COMMITMENTS. Neither Mid-Cal nor Prime, acting for
Mid-Cal is presently a party to any of the following:
(a) Contracts not made in the ordinary course of business;
(b) Employment contracts and severance agreements, including
without limitation, Contracts that will result in the payment by, or the
creation of any liability to pay on behalf of USTI or Mid-Cal or Prime any
severance, termination, "golden parachute," or other similar payments to any
present or former personnel following termination of employment or otherwise as
a result of the consummation of the transactions contemplated by this Agreement;
(c) Labor or union contracts;
(d) Distribution, franchise, technical assistance, sales,
commission, consulting, agency or advertising contracts related to the Assets
and which are not cancelable on thirty (30) calendar days notice;
(e) Options with respect to any property, real or personal,
whether Mid-Cal shall be the grantor or grantee thereunder; and
(f) Contracts containing covenants limiting the freedom of
Mid-Cal or any of its successors to engage in the line of business of Mid-Cal or
compete with any person.
7.7 LAWS/ZONING. To the best of Mid-Cal's and Prime's knowledge, the
Terminal and the use and occupancy of such property by Mid-Cal or USTI or its
nominee is not in violation of applicable federal, state or local statutes,
laws, regulations (including, without limitation, any applicable building,
zoning, or other law, ordinance or regulation) affecting its properties or the
operation of its business. The Terminal is properly zoned in order to enable the
business now conducted at such location lawfully.
7.8 INVESTMENT INTENTION; NO RESALES. Mid-Cal is acquiring the Stock
for investment solely for its own account and not with a view to, or for resale
in connection with, the distribution or other disposition thereof. Mid-Cal
agrees and acknowledges that it will not, directly or indirectly, offer,
transfer, sell, assign, pledge, hypothecate or otherwise dispose of any shares
of the Stock, or solicit any offers to purchase or otherwise acquire or take a
pledge of any shares of the Stock, unless such offer, transfer, sale, assignment
pledge, hypothecation or other disposition complies with the provisions of this
Agreement (including the provisions set forth in Exhibit "D" hereto) and (i)
such transfer, sale, assignment, pledge or hypothecation or other disposition is
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "Securities Act") and has been registered under all
applicable state securities or "blue sky" laws or (ii) Mid-Cal shall have
furnished the Company with a written opinion in form and substance reasonably
satisfactory to the Company of counsel reasonably satisfactory to the Company to
the effect that no such registration is required because of the availability of
an exemption from registration under the Securities Act and all applicable state
securities or "blue sky" laws.
7.9 RESTRICTIVE LEGEND. Each certificate representing shares of
Stock which is issued to Mid-Cal on or after the date hereof shall bear the
following legend on the face thereof:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR WITH THE SECURITIES COMMISSION OF ANY STATE UNDER ANY
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENT
OF THOSE SECURITIES LAWS (UPON PROVISION OF INVESTMENT LETTERS AND,
IF REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL, EACH IN FORM
SATISFACTORY TO THE COMPANY).
7.10 STOCK UNREGISTERED. Mid-Cal acknowledges and represents that it has
been advised by the Company that:
a. The acquisition of the Stock has not been registered under the
Securities Act;
b. The Stock must be held and Mid-Cal must continue to bear the
economic risk of the investment in the Stock until (i) the Stock is registered
pursuant to an effective registration statement under the Securities Act and all
applicable state securities laws or (ii) an exemption from such registration is
available;
c. When and if shares of the Stock may be disposed of without
registration under the Securities Act in reliance on Rule 144, such disposition
can be made only in limited amounts in accordance with the terms and conditions
of such Rule;
d. If the Rule 144 exemption is not available, public offer or
sale of the Stock without registration will require compliance with some other
exemption under the Securities Act;
e. A restrictive legend in the form set forth section 7.9 above
shall be placed on the certificates representing the Stock; and
f. A notation shall be made in the appropriate records of the
Company indicating that the Stock is subject to restrictions on transfer, and
appropriate stop-transfer instructions will be issued to the Company's transfer
agent with respect to the Stock.
7.11 INFORMATION ACCURATE. Based upon Mid-Cal's reasonable efforts to
determine such truth, accuracy and completeness, (i) all of the information,
documents, schedules and exhibits supplied by Mid-Cal and Prime to USTI pursuant
to this Agreement are true, accurate and complete, to the best of Mid-Cal's
knowledge, and (ii) none of the representations or warranties made by Mid-Cal
and Prime or made in any of the exhibits furnished or to be furnished under this
Agreement contains or will contain any untrue statement of a material fact, or
omit any material fact, the omission of which would be misleading.
ARTICLE 8
USTI REPRESENTATIONS AND WARRANTIES
USTI represents and warrants to Mid-Cal and Prime as follows:
8.1 CORPORATE STATUS. USTI is a corporation duly organized, validly
existing and in good standing, under the laws of the State of Colorado.
8.2 AUTHORITY. USTI has full corporate power and authority to execute,
deliver and perform all the terms and provisions of this Agreement and all
instruments and documents to be delivered by it pursuant to the terms of this
Agreement.
ARTICLE 9
INDEMNIFICATION
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Mid-Cal and Prime contained in this Agreement
shall survive the Transaction Date and continue in full force and
effect forever thereafter (subject to any applicable statutes of limitations).
9.2 INDEMNIFICATION.
a. In the event Mid-Cal or Prime breaches any of its
representations, warranties and covenants contained in this Agreement, then
Mid-Cal or Prime, as the case may be, agrees to indemnify USTI from and against
the entirety of any and all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, taxes, liens, losses, expenses and
fees, including court costs and reasonable attorneys' fees and expenses
(collectively, "Adverse Consequences") USTI may suffer through and after the
date of the claim for indemnification resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or alleged breach).
b. Mid-Cal and Prime, as the case may be, agree to indemnify USTI
from and against the entirety of any Adverse Consequences USTI may suffer
resulting from, arising out of, relating to, in the nature of, or caused by:
(i) any liability or obligation of Mid-Cal which is not
assumed by USTI as set forth on Exhibit "E" pursuant to Section 4.1 (including
any liability of Mid-Cal or Prime that becomes a liability or obligation of USTI
under any bulk transfer law of any jurisdiction, under any common law doctrine
of de facto merger or successor liability, under any environmental, health and
safety requirements, or otherwise by operation of law); or
(ii) any liability for unpaid taxes with respect to any
taxable year or portion thereof ending on or before the Transaction Date (or for
any taxable year beginning before and ending after the Transaction
Date to the extent allocable to the portion of such period beginning before and
ending on the Transaction Date).
ARTICLE 10
NOTICES
10.1 NOTICES. Any notice, consent or other communication required or
permitted by this Agreement shall be in writing and delivered in person, or sent
by certified mail, return receipt requested, or by private courier or similar
service furnishing proof of delivery to Mid-Cal, Prime or USTI as the case may
be, addressed as follows:
If to Mid-Cal and/or Prime:
Xxxxx Xxxxxxxxx
Prime Companies, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000-0000
With a copy to:
Xxxx Xxxxxx, Esq.
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
And an additional courtesy copy to:
Xxxxx X. Xxxxx, Esq.
Tilem & White LLP
000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
If to USTI:
Xxxxxxx Xxxx
U.S. Trucking, Inc.
Transportation Services Company
00000 Xxxxxxxxxx Xxxxxx, Xxxxx #0
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxx
Gulf Northern Transport, Inc.
0000 Xxxxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxxxxxx, XX 00000
With a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
Attention: Xxxxxx X. Xxxxxx
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
or to such other address or to the attention of such other person as may be
designated by written notice to the other parties.
ARTICLE 11
MISCELLANEOUS
11.1 FURTHER ASSURANCES. Each of the parties hereto agrees to use its
best efforts to obtain, and will cooperate with the other in obtaining, all
approvals, consents and permissions required to be obtained by the terms hereof
and to cause the satisfaction of all other conditions to its obligations.
Mid-Cal, Prime and USTI agree to execute and deliver any and all instruments,
agreements and other documents reasonably necessary to effect the transactions
contemplated by this Agreement.
11.2 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as specifically set forth
herein. No supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the party to bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
11.3 EMPLOYEE MATTERS.
a. EMPLOYEES OF MID-CAL AND/OR PRIME. USTI shall have no
obligation to hire any employee of Mid-Cal and/or Prime. An employee of Mid-Cal
and/or Prime who accepts an offer of employment from USTI shall become an
employee of USTI on the date such person reports to work for USTI.
b. FINAL PAYROLL. Mid-Cal or Prime, as the case may be, shall pay
the amount of salaries, wages and benefits earned through the Transaction Date
by each employee of Mid-Cal and/or Prime who may become an employee of USTI on
the Transaction Date.
11.4 EXPENSES. Each of the parties will pay its own legal and accounting
fees and other expenses incurred in the preparation of this Agreement and the
performance of any of the terms and provisions of this Agreement.
11.5 NO BROKERS. None of the parties to this Agreement was represented by
any agent or broker in connection with any transaction which is a part of this
Agreement. The parties agree that no agent or broker fees shall be paid in
connection with this Agreement.
11.6 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective legal representatives and
permitted successors and assigns.
This Agreement shall not be assign-able without the written consent of the
other parties; provided, however, the consent of Mid-Cal and Prime shall not be
required to an assignment by USTI to a corporation, partnership or other entity
that is wholly-owned by USTI.
11.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
11.8 CAPTIONS. The captions used herein are for convenience only and are
of no effect in interpretation of or construction of any provision of this
Agreement.
11.9 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement shall
entitle any person other than the parties hereto and their respective successors
and assigns permitted hereby to any claim, cause of action, remedy or right of
any kind.
11.10 COSTS AND FEES INCURRED IN ENFORCEMENT. In any legal action or
arbitration or other proceedings brought for the enforcement of this Agreement
or because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys'
fees and all other costs incurred in connection with pursuing such action or
proceeding in addition to any other relief to which the parties may be entitled.
11.11 SEVERABILITY. If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, it is the intention of the parties that such
invalidity, illegality or unenforceability shall neither impair or affect the
remaining provisions of this Agreement.
12.12 COUNTERPARTS. This Agreement may be executed in a number of
identical counterparts, all of which shall constitute collectively one
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf by its officers there unto duly authorized, as of
the date, month and year first above written.
PRIME COMPANIES, INC.
a Delaware corporation
By /s/ Xxxxxx Xxxxxxx
-------------------------------
Its duly authorized
representative
MID-CAL EXPRESS
a California corporation
By /s/ Xxxxx Xxxxxxxxx
-------------------------------
Its duly authorized
representative
U.S. TRUCKING, INC.
a Colorado corporation
By /s/ Xxx Xxxxxx
-------------------------------
Its duly authorized representative
LIST OF EXHIBITS
Exhibit "A" EQUIPMENT
Exhibit "B" INVENTORY
Exhibit "C" OTHER PERSONAL PROPERTY
Exhibit "D" PIGGY BACK REGISTRATION RIGHTS
Exhibit "E" LIENS AND ENCUMBRANCES ON EQUIPMENT
Exhibit "F" ASSOCIATED EQUIPMENT
EXHIBIT "D"
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of April 14, 1999, by and between
U. S. Trucking, Inc., a Colorado corporation (the "Company") and Mid-Cal
Express, Inc., a California corporation (the "Shareholder") which is a
wholly-owned subsidiary of Prime Companies, Inc., a Delaware corporation
("Prime").
W I T N E S S E T H
WHEREAS, pursuant to the Purchase and Sale Agreement dated as of December
30, 1998, by and among the Shareholder, Prime and the Company, the Company (the
"Purchase Agreement") will acquire certain assets from the Shareholder (the
"Purchase") for aggregate consideration of 400,000 shares of the Company's
common stock, no par value ("Common Stock");
WHEREAS, the Purchase Agreement provides that the Shareholder will have
certain piggyback registration rights and it is a condition to the consummation
of the Purchase that the Shareholder and the Company enter into this
Registration Rights Agreement.
NOW, THEREFORE, in order to implement the foregoing and in consideration
of the mutual representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE VI
DEFINITIONS
VI.1 DEFINED TERMS. Capitalized terms used herein but not otherwise
defined have the meanings given to such terms in the Purchase Agreement.
"CLOSING" means the consummation of the transactions contemplated by the
Purchase Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder as the same may be amended from
time to time.
"PERSON" means any individual, partnership, joint venture, corporation,
limited liability company, trust, joint stock company, business trust,
unincorporated association, joint venture, governmental authority or any
department or agency thereof or other entity of any nature whatsoever.
"RESTRICTED SHARES" means Shares of Shareholder Common Stock that are not
(i) covered by a registration statement declared effective under the Securities
Act by the SEC or (ii) eligible for distribution to the public pursuant to Rule
144 (or any similar provision then in force) under the Securities Act or
otherwise without registration under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and all
rules and regulations promulgated thereunder as the same may be amended from
time to time.
"SHAREHOLDER COMMON STOCK" means the 400,000 shares of Common Stock
issuable to the Shareholder under the terms and conditions of the Purchase
Agreement.
ARTICLE VII
REGISTRATION RIGHTS
VII.1 RIGHT TO INCLUDE SECURITIES. If at any time after the Closing Date,
the Company proposes to register any shares of its Common Stock under the
Securities Act on Forms X-0, X-0 or S-3 or any successor or similar forms
(except for registrations on such forms solely for registration of Common Stock
in connection with any warrant, option, employee benefit or dividend
reinvestment plan), whether or not for sale for its own account, it will each
such time as soon as practicable give written notice of its intention to do so
to the Shareholder. Upon the written request (which request shall specify the
total number of Restricted Shares intended to be disposed of by the Shareholder)
of the Shareholder made within 15 days after the receipt of any such notice (10
days if the Company gives telephonic notice with written confirmation to follow
promptly thereafter, stating that (i) such registration will be on Form S-3 and
(ii) such shorter period of time is required because of a planned filing date),
the Company will use all reasonable efforts to effect the registration under the
Securities Act of all Restricted Shares held by the Shareholder which the
Company has been so requested to register for sale in the manner initially
proposed by the Company. If the Company thereafter determines for any reason in
its sole discretion not to register or to delay registration of the Common
Stock, the Company may, at its election, give written notice of such
determination to the Shareholder and (i) in the case of a determination not to
register, shall be relieved of the obligation to register any Restricted Shares
in connection with such registration and (ii) in the case of a determination to
delay registering, shall be permitted to delay registering any Restricted Shares
for the same period as the delay in registration of such other securities.
VII.2 PRIORITY IN INCIDENTAL REGISTRATION. In a registration pursuant to
this Article II, if the managing underwriter of any underwritten offering shall
inform the Company by letter of its belief that the number of
Restricted Shares to be included in such registration would adversely affect its
ability to effect such offering, then the Company will be required to include in
such registration only that number of Restricted Shares which it is so advised
should be included in such offering. Restricted Shares proposed by the Company
to be registered for issuance by the Company or for sale by third parties
exercising "demand" registration rights shall have the first priority and all
other shares of Common Stock to be registered, including any and all shares of
Shareholder Common Stock shall be given second priority without preference among
the relevant holders.
VII.3 CUSTODY AGREEMENT AND POWER OF ATTORNEY. Upon delivering a request
under Section 3.1 of this Article II, the Shareholder will, if requested by the
Company, execute and deliver a custody agreement and power of attorney in form
and substance reasonably satisfactory to the Company with respect to the shares
of Shareholder Common Stock to be registered pursuant to this Article II (a
"Custody Agreement and Power of Attorney"). The Custody Agreement and Power of
Attorney will provide, among other things that the Shareholder will deliver to
and deposit in custody with the custodian and attorney-in-fact named therein a
certificate or certificates representing such Shareholder Common Stock (duly
endorsed in blank by the registered owner or owners thereof or accompanied by
duly executed stock powers in blank) and irrevocably appoint said custodian and
attorney-in-fact as the Shareholder's agent and attorney-in-fact with full power
and authority to act under the Custody Agreement and Power of Attorney on the
Shareholder's behalf with respect to the matters specified therein. The
Shareholder shall also execute such other agreements as the Company may request
to further evidence the provisions of this Article II.
VII.4 REGISTRATION PROCEDURES. In connection with the Company's
obligations pursuant to this Article II, the Company will use its reasonable
best efforts to effect such registration and the Company will promptly:
(a) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of
shares of Common Stock covered by such registration statement for such time as
the Company, the Shareholder or any underwriter is required under the Securities
Act to deliver a prospectus in accordance with the intended methods of
disposition by the sellers of Common Stock set forth in such registration
statement or supplement to such prospectus;
(b) furnish to the Shareholder and the managing underwriter, if
any, at least one executed original of the registration statement and such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits) such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act as may reasonably be requested by the
Shareholder;
(c) notify the Shareholder and the managing underwriter, if any,
promptly, and confirm such advice in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a registration statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC for
amendments or supplements to a registration statement or related prospectus or
for additional information, (iii) of the issuance by the SEC of any stop order
suspending the effectiveness of a registration statement or the initiation of
any proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of any of the
registered securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (v) of the happening of any
event or information becoming known which requires the making of any changes in
a registration statement or related prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and (vi) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate;
(d) upon the occurrence of any event contemplated by clause (d)(v)
above, prepare a supplement or post-effective amendment to the applicable
registration statement or related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the securities being sold thereunder, such
prospectus will not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein not misleading;
(e) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to the Shareholder an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 promulgated thereunder, no later than 90 days after the end of
any 12-month period beginning after the effective date of a registration
statement pursuant to which Restricted Shares are sold, which statement shall
cover such 12-month period;
(f) cooperate with the Shareholder and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Restricted Shares to be sold; and enable such Restricted Shares to
be in such denominations and registered in such names as the Shareholder or the
managing underwriters, if any, may request at least two business days prior to
any sale of Restricted Shares to the underwriters;
(g) use its reasonable best efforts to cause the Restricted Shares
covered by the applicable registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the Shareholder or the underwriters, if any, to consummate the
disposition of such Restricted Shares;
(h) cause all Restricted Shares covered by the registration
statement to be listed on each securities exchange, if any, or Nasdaq, on which
securities of such class, series and form issued by the Company, if any, are
then listed or traded; and
(i) cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc. (the "NASD") and in the
performance of any due diligence investigation by any underwriter (including any
qualified independent underwriter that is required to be retained in accordance
with the rules and regulations of the NASD).
The Company may require the Shareholder to furnish to the Company such
information regarding the Shareholder and the distribution of such securities as
the Company may from time to time reasonably request in writing in order to
comply with the Securities Act.
The Shareholder agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 2.4(d)(ii), (iii),
(iv), (v) or (vi) hereof, it will forthwith discontinue disposition pursuant to
such registration statement of any Restricted Shares covered by such
registration statement or prospectus until its receipt of the copies of the
supplemented or amended prospectus relating to such registration statement or
prospectus or until it is advised in writing by the Company that the use of the
applicable prospectus may be resumed and, if so directed by the Company, will
deliver to the Company all copies, other than permanent file copies then in
their possession, of the prospectus covering such securities in effect at the
time of receipt of such notice. The Shareholder agrees to furnish the Company a
signed counterpart, addressed to the Company and the underwriters, if any, of an
opinion of counsel covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) as are customarily
covered in opinions of selling stockholder's counsel delivered to the
underwriters in underwritten public offerings of securities (and dated the dates
such opinions are customarily dated) and such other legal matters as the Company
or the underwriters may reasonably request.
VII.5 INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time
proposes to register any shares of its common stock under the Securities Act as
contemplated by Section 2.1 and such shares are to be distributed by or through
one or more underwriters, the Company and the Shareholder shall be parties to
the underwriting agreement between the Company and such underwriters. The
Company may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of the Shareholder to and
for the benefit of such underwriters shall also be made to and for the benefit
of the Company.
VII.6 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER
REGISTRATION COVENANTS. The obligations of the Company to use its reasonable
efforts to cause the Restricted Shares to be registered under the Securities Act
are subject to each of the following limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone the filing or
effectiveness of, or suspend the rights of the Shareholder to make sales
pursuant to, any registration statement otherwise required to be prepared, filed
and made and kept effective by it hereunder if the Board of Directors of the
Company determines that (i) there is a material undisclosed development in the
business or affairs of the Company (including any pending or proposed financing,
recapitalization, acquisition or disposition), the disclosure of which at such
time could be adverse to the Company's interests or (ii) the Company has filed a
registration statement with the SEC, such registration statement has not yet
been declared effective, the Company is using its reasonable efforts to have
such registration statement declared effective, and the underwriters with
respect to such registration advise that such registration would be adversely
affected. If the Company shall so delay the filing of a registration statement,
it shall, reasonably promptly notify the Shareholder of such determination.
(b) The Company's obligations shall be subject to the obligations
of the Shareholder, which the Shareholder hereby acknowledges, to furnish all
information and materials and to take any and all actions as may be required
under applicable federal and state securities laws and regulations to permit the
Company to comply with all applicable requirements of the SEC and to obtain any
acceleration of the effective date of such registration statement.
(c) The Company shall not be obligated to cause any special audit
to be undertaken in connection with any registration pursuant hereto unless such
audit is requested by the underwriters with respect to such registration.
(d) If requested by the Company, Shareholder agrees not to effect
any public sale or distribution, including any sale pursuant to Rule 144 under
the Securities Act, of any Shareholder Common Stock (other than in accordance
with Section 2.1) within 90 days before or 180 days after the effective date of
a registration statement filed pursuant to Section 2.1.
VII.7 EXPENSES. The Company will pay all out-of-pocket costs and expenses
incurred in connection with each registration of Restricted Shares pursuant to
Section 2.1 of this Agreement, including, without limitation, any and all filing
fees payable to the SEC, fees with respect to filings required to be made with
stock exchanges, Nasdaq and the NASD, the fees and expenses
of compliance with state securities or blue sky laws, printing expenses, fees
and disbursements of counsel and accountants of the Company, including costs
associated with comfort letters, and fees and expenses of other Persons retained
by the Company. The Shareholder will be responsible for the payment of all
discounts, commissions and fees of underwriters and expenses of selling brokers,
dealer managers or similar securities industry professionals relating to the
distribution of the Restricted Shares being registered and legal expenses.
VII.8 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. The Shareholder may not
participate in any underwritten registration hereunder unless the Shareholder
(a) agrees to sell the Restricted Shares on the basis provided in and in
compliance with any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and to comply with Regulation M under the
Exchange Act, and (b) completes and executes all questionnaires, appropriate and
limited powers-of-attorney, escrow agreements, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements; PROVIDED that all such documents shall be consistent
with the provisions hereof.
ARTICLE VIII
MISCELLANEOUS
VIII.1 BINDING EFFECT. The provisions of this Agreement shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives and successors. This Agreement shall not
be assignable by the Shareholder without the prior written consent of the
Company.
VIII.2 AMENDMENT; WAIVER. This Agreement may be amended only by a
written instrument signed by the parties hereto. No waiver by either party
hereto of any of the provisions hereof shall be effective unless set forth in a
writing executed by the party so waiving.
VIII.3 NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery service (E.G.,
Federal Express) and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to:
(a) if to the Company, addressed to:
U.S. Trucking, Inc.
00000 Xxxxxxxxxx Xxxxxx, Xxxxx #0
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxx
(b) If to the Shareholder, addressed to:
Mid-Cal Express, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxxxx
VIII.4 GOVERNING LAW. This Agreement shall be governed by and
construed, interpreted and the rights of the parties determined in accordance
with the laws of the State of California without regard to choice of law
principles hereof.
VIII.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
VIII.6 INVALIDITY. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
VIII.7 CUMULATIVE REMEDIES. All rights and remedies of the party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
U.S. TRUCKING, INC.,
a Colorado corporation
By: /s/ Xxx Xxxxxx
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Name:
Title:
SHAREHOLDER:
MID-CAL EXPRESS,
a California corporation
By: /s/ Xxxxx Xxxxxxxxx
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Name:
Title:
