Exhibit 10.24
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STOCK PURCHASE AGREEMENT
BY AND AMONG
UNITED ROAD SERVICES, INC.,
AUCTION TRANSPORT, INC.
AND
MANHEIM SERVICES CORPORATION
January 16, 2002
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TABLE OF CONTENTS
Page
1. DEFINITIONS............................................................1
2. PURCHASE AND SALE OF SHARES............................................7
2.1 Purchase and Sale of Shares......................................7
2.2 Excluded Assets..................................................7
2.3 Consideration....................................................8
2.4 Collection of Accounts Receivable................................8
2.5 Prorations; Accounts Payable; Certain Deposits...................8
2.6 Resignations.....................................................9
2.7 Release of Obligations and Guaranties............................9
2.8 Settlement of Intercompany Amounts...............................9
2.9 Tax Matters......................................................9
2.10 Post Closing Access.............................................14
2.11 Lease...........................................................14
3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER.........................14
3.1 Organization, Standing and Authority; Capitalization;
Equity Investments..............................................14
3.2 Authorization and Binding Obligation............................15
3.3 Absence of Conflicting Agreements...............................15
3.4 Inventory.......................................................16
3.5 Title to and Condition of Personal Property.....................16
3.6 Contracts.......................................................16
3.7 Consents........................................................17
3.8 Licenses, Permits and Other Governmental Authorizations.........17
3.9 Insurance.......................................................18
3.10 Litigation......................................................18
3.11 Employee Benefit Plans..........................................19
3.12 Labor Relations.................................................20
3.13 Bank Accounts...................................................21
3.14 Compliance with Laws............................................21
3.15 Reports and Records; Financial Statements.......................21
3.16 Tax Matters.....................................................22
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TABLE OF CONTENTS
(continued)
Page
3.17 No Material Adverse Change......................................23
3.18 Environmental Matters...........................................23
3.19 Intellectual Property...........................................25
3.20 State Takeover Laws.............................................26
3.21 Disclosure......................................................26
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER...........................26
4.1 Organization and Standing.......................................26
4.2 Authorization and Binding Obligation............................26
4.3 Absence of Conflicting Agreements...............................26
4.4 Consents........................................................27
4.5 Disclosure......................................................27
5. COVENANTS OF ACQUIRED COMPANY, SHAREHOLDER AND PURCHASER..............27
5.1 Cooperation.....................................................27
5.2 Covenants Regarding Employment Matters..........................27
5.3 Inspection......................................................29
5.4 Public Announcements............................................29
6. CLOSING...............................................................30
7. CLOSING DELIVERIES BY SHAREHOLDER.....................................30
7.1 Stock Certificates..............................................30
7.2 Good Standing Certificate.......................................30
7.3 Minute Book of Acquired Company.................................30
7.4 Resignations....................................................30
7.5 Lease...........................................................30
7.6 Non-Competition Agreement.......................................30
7.7 Nonsolicitation Agreement.......................................30
7.8 Consents........................................................30
7.9 Shareholder Secretary's Certificate.............................30
7.10 Acquired Company Secretary's Certificate........................30
8. CLOSING DELIVERIES BY PURCHASER.......................................31
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TABLE OF CONTENTS
(continued)
Page
8.1 [Intentionally Omitted].........................................31
8.2 Lease...........................................................31
8.3 Non-Competition Agreement.......................................31
8.4 Nonsolicitation Agreement.......................................31
8.5 Secretary's Certificate.........................................31
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION...........31
9.1 Representations and Warranties..................................31
9.2 Indemnification of Acquired Company and Purchaser by
Shareholder.....................................................31
9.3 Indemnification of Acquired Company and Purchaser by
Shareholder--Environmental......................................32
9.4 Indemnification of Shareholder by Acquired Company and
Purchaser.......................................................33
9.5 Procedure; Conditions of Indemnification........................34
10. EXPENSES AND TAXES....................................................35
10.1 Taxes, Fees and Expenses........................................35
10.2 Brokers.........................................................35
11. MISCELLANEOUS PROVISIONS..............................................36
11.1 Investigation...................................................36
11.2 Specific Performance............................................36
11.3 Notices.........................................................36
11.4 Further Assurances..............................................37
11.5 Waiver..........................................................37
11.6 Binding Effect..................................................37
11.7 Headings........................................................37
11.8 Entire Agreement................................................37
11.9 Assignment......................................................38
11.10 Governing Law...................................................38
11.11 Counterparts....................................................38
11.12 Pronouns........................................................38
11.13 No Third Party Beneficiaries....................................38
11.14 Schedules and Exhibits Incorporated.............................38
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TABLE OF CONTENTS
(continued)
Page
11.15 Construction....................................................39
11.16 Severability....................................................39
11.17 Time of Essence.................................................39
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LIST OF EXHIBITS
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Exhibit A Form of Lease
Exhibit B Form of Resignation and Release
LIST OF SCHEDULES
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Schedule 2.2 Other Excluded Assets
Schedule 3.2 Certificate of Incorporation and Bylaws of Acquired Company.
Schedule 3.4 Inventory
Schedule 3.5 Personal Property
Schedule 3.6.1 Acquired Company Contracts
Schedule 3.6.2 Certain Excluded Contracts
Schedule 3.7 Consents
Schedule 3.8 Licenses
Schedule 3.9 Insurance Policies
Schedule 3.10 Litigation
Schedule 3.11 Employee Benefit Plans
Schedule 3.12 Labor Relations
Schedule 3.13 Bank Accounts
Schedule 3.14 Compliance with Laws
Schedule 3.16 Tax Matters
Schedule 3.17 Material Adverse Change
Schedule 3.18 Environmental Matters
Schedule 3.19 Intellectual Property
Schedule 5.2.2 Manheim Employees
Schedule 5.2.3 Transferred Employees and Certain Severance Arrangements
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), made this ___ day of
January, 2002, by and among United Road Services, Inc., a Delaware corporation
("Purchaser"), Auction Transport, Inc., a Missouri corporation ("Acquired
Company"), and Manheim Services Corporation, a Delaware corporation
("Shareholder"),
W I T N E S S E T H:
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WHEREAS, Shareholder is the sole shareholder of Acquired Company; and
WHEREAS, Purchaser desires to purchase, and Shareholder desires to sell,
all of the issued and outstanding shares of capital stock of Acquired Company
(the "Shares"), upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. DEFINITIONS. Unless otherwise stated in this Agreement, the following
terms shall have the following meanings (terms defined in the singular to have
the same meanings when used in the plural and vice versa):
1.1 "Accounts Receivable" shall mean all accounts receivable of Acquired
Company and all rights of Acquired Company to payment for goods or services
rendered by Acquired Company on or prior to the Closing Date, as reflected on
Acquired Company's balance sheet, billing or other records.
1.2 "Acquired Company Contracts" shall mean all Contracts other than the
following Contracts: (i) Excluded Contracts and (ii) such Contracts that
constitute Excluded Assets.
1.3 "Assets" shall mean all of the tangible and intangible assets owned
or held by Acquired Company which are used in the Business, except the Excluded
Assets.
1.4 "Business" shall mean the common carrier, contract carrier and
transportation brokerage business as such operations are currently conducted by
Acquired Company.
1.5 "Claimant" shall have the meaning set forth in Section 9.5.1.
1.6 "Closing" shall mean the consummation of the transactions
contemplated hereby.
1.7 "Closing Date" shall mean the date of this Agreement.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations thereunder, as in effect from time to time.
1.9 "Compensation Arrangement" shall mean any plan or compensation
arrangement other than an Employee Plan, whether written or unwritten, which
provides to employees any compensation or other benefits, whether deferred or
not, in excess of base salary or wages, including, but not limited to, any bonus
or incentive plan, stock rights plan, deferred compensation arrangement, life
insurance, stock purchase plan, severance pay plan and any other perquisites and
employee fringe benefit plan.
1.10 "Consents" shall mean all of the consents or approvals of
Governmental or regulatory authorities and other third Persons necessary to
sell, transfer and assign the Shares to Purchaser and to otherwise consummate
the transactions contemplated hereby in compliance with all Acquired Company
Contracts, Licenses, laws, legal requirements and Orders.
1.11 "Contracts" shall mean all (i) agreements; (ii) leases; (iii)
health, liability, theft, fidelity, fire and other forms of insurance policies
or commitments; (iv) software licenses; (v) employment agreements, collective
bargaining and trade agreements; (vi) barter agreements (vii) franchise
agreements, (viii) special agreements with customers, dealers and other parties,
and (ix) all other agreements, written or oral (including any amendments and
other modifications thereto), to which Acquired Company is a party or which are
binding upon Acquired Company or which affect the Assets or the Business,
together with all advances, deposits and prepaid items related thereto, which
are in effect on the Closing Date.
1.12 "Disabled Employees" shall have the meaning set forth in Section
5.2.2.
1.13 "Employee Plan" shall mean any pension, retirement, profit-sharing,
deferred compensation, vacation, severance, bonus, incentive, medical, vision,
dental, disability, life insurance or any other employee benefit plan as defined
in Section 3(3) of ERISA to which Acquired Company contributes or to which
Acquired Company or any entity related to Acquired Company sponsors, maintains
or otherwise is bound.
1.14 "Encumbrance" shall mean any charge, claim, community property
interest, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
1.15 "Environment" shall include, without limitation, indoor air, ambient
air, surface water, groundwater, land surface or subsurface strata.
1.16 "Environmental, Health, and Safety Liabilities" shall mean any cost,
damages, expense, liability, obligation, or other responsibility arising from or
under Environmental Laws and consisting of or relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off- site contamination, occupational safety and
health, and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
investigative, remedial, or inspection costs and expenses arising under
Environmental Laws;
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(c) financial responsibility under Environmental Laws for cleanup
costs or corrective action, including any investigation, cleanup, removal,
containment, or other remediation or response actions ("Cleanup") required
by applicable Environmental Law (whether or not such Cleanup has been
required or requested by any Governmental or regulatory authority or any
other Person) and for any natural resource damages; or
(d) any other compliance, corrective, investigative, or remedial
measures required under Environmental Laws.
The terms "removal," "remedial," and "response action," include the types
of activities covered by the United States Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. 9601 et seq., as
amended.
1.17 "Environmental Laws" shall mean all federal, state, regional,
county, parish, municipal and local environmental, occupational, health safety
laws, regulations, ordinances, rules and policies and the common law relating to
the use, management, refinement, recycling, handling, treatment, removal,
storage, production, manufacture, transportation, disposal, emissions,
discharges, releases or threatened releases of Hazardous Substances, or
otherwise relating to protection of human health, safety or the Environment, as
the same may be amended or modified until the date of Closing, including,
without limitation, the following statutes (as amended): Resource Conservation
and Recovery Act, 42 X.X.X.xx. 6901, et seq.; Comprehensive Environmental
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Response, Compensation, and Liability Act of 1980, 42 X.X.X.xx. 9601, et seq.;
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the federal Clean Air Act, 42 U.S.C.ss.7401, et seq.; the federal Water
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Pollution Control Act, 33 U.S.C.ss.1251, et seq.;Federal Insecticide, Fungicide,
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and Rodenticide Act, 7 U.S.C.ss.136, et seq.; Hazardous Materials Transportation
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Act, 49 X.X.X.xx. 1471, 1472, 1655 and 1801, et seq.; Toxic Substances Control
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Act, 15 U.S.C.ss.2601, et seq.; Safe Drinking Water Act, 42 X.X.X.xx. 300f, et
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seq.; the Emergency Planning and Community Right-to-Know-Act, 42 U.S.C.ss.11001,
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et seq.
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1.18 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder, as in effect from time to
time.
1.19 "ERISA Affiliate" shall mean any trade or business under common
control with Acquired Company, within the meaning of Sections 414(b) or, (c) of
the Code.
1.20 "Excluded Assets" shall have the meaning set forth in Section 2.2.
1.21 "Excluded Contracts" shall mean the Contracts identified on Schedule
3.6.2 to which Acquired Company is a party but which will be terminated or
transferred and assigned, by way of distribution or otherwise, to Shareholder or
an affiliate of Shareholder prior to the Closing.
1.22 "Facilities" shall mean any real property, leaseholds, or other
interests currently owned or operated by Acquired Company and any buildings,
plants, structures, or equipment (including motor vehicles, tank cars, and
rolling stock) currently owned or operated by Acquired Company.
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1.23 "Governmental or regulatory authority" shall mean any (i) nation,
state, county, city, town, village, district, or other jurisdiction of any
nature; (ii) federal, state, local, municipal, foreign, or other government;
(iii) governmental or quasi-governmental authority of any nature (including any
governmental agency, branch, department, official, or entity and any court or
other tribunal); (iv) multi-national organization or body; or (v) body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any nature.
1.24 "Hazardous Activity" shall mean the distribution, generation,
handling, importing, management, manufacturing, processing, production,
refinement, release, storage, transfer, transportation, treatment, or use
(including any withdrawal or other use of groundwater) of Hazardous Substances
in, on, under, about, or from the Facilities or any part thereof into the
environment, and any other act, business, operation, or thing that increases the
danger, or risk of danger, or poses an unreasonable risk of harm to Persons or
property on or off the Facilities, or that may affect the value of the
Facilities or Acquired Company.
1.25 "Hazardous Substances" shall mean any pollutant, contaminant,
hazardous or toxic substance, chemical, material, constituent or waste which is
regulated under any Environmental Law, including without limitation, asbestos,
asbestos-containing materials petroleum or petroleum products, radioactive
materials and any material or substance that is: (i) designated as a "hazardous
substance" pursuant to Section 307 of the Federal Water Pollution Control Act,
33 U.S.C. Section 1251, et seq. (33 U.S.C. ss.1317); (ii) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Solid Waste Disposal
Act, 42 U.S.C. Section 6901, et seq. (42 U.S.C. ss.6903), as amended or (iii)
defined as a "hazardous substance" pursuant to Xxxxxxx 000 xx XXXXXX; 00 X.X.X.
xx.0000.
1.26 "Idealease Agreement" shall mean that certain Vehicle Lease and
Service Agreement dated February 25, 1995, by and between Idealease Services,
Inc. and Acquired Company, as may have been modified or amended from time to
time.
1.27 "Indemnifiable Tax Damages" shall have the meaning set forth in
Section 2.9.1(a).
1.28 "Indemnifying Party" shall have the meaning set forth in Section
9.5.1.
1.29 "Intellectual Property" shall mean all of Acquired Company's
trademarks, service marks, logos, trade names and corporate names and
registrations and applications for registration thereof, copyrights and
registrations and applications for registration thereof, computer software, data
and documentation, trade secrets and confidential business information
(including financial, marketing and business data, pricing and cost information,
business and marketing plans, and customer and supplier lists and information),
other proprietary rights, and copies and tangible embodiments thereof (in
whatever form or medium) (including, without limitation, all of Acquired
Company's domestic and worldwide right, title and interest in and to all
copyrights, patents, trademarks, trade names, service names, including without
limitation, the name "Auction Transport," service marks, permits, franchise
rights, processes, trade secrets and other similar intangible rights and
interests applied for, issued to, or owned by Acquired Company or under which
Acquired Company is licensed or franchised, and any abbreviation or
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variation thereof, together with the goodwill of the business symbolized by and
associated therewith, to the extent that same are used exclusively in the
Business.
1.30 "Inventory" shall mean Acquired Company's inventory as described by
type on Schedule 3.4.
1.31 "Knowledge" shall mean, when any statement or representation
contained herein is qualified by the phrase "to the Knowledge" of a party
hereto, the party making such statement or representation shall be deemed to
have made such statement or representation based on the actual personal
knowledge of (i) each of the current officers and directors of such party, (ii)
in the case of Acquired Company, Shareholder and of those persons who were or
are officers and directors of Acquired Company at any time from October 6, 2000
to the date hereof and (iii) in the case of Shareholder, the current officers
and directors of Shareholder and those persons who were or are officers and
directors of ADT Automotive Holdings, Inc. at any time from October 6, 2000
through December 31, 2001; provided, however, that "to the Knowledge" of
Acquired Company in Sections 3.6, 3.10, 3.12, 3.18 and 9.2.4 shall include the
actual knowledge of Xxxxxx Xxxxxx, General Manager of Acquired Company on the
date hereof.
1.32 "Lease" shall mean a Lease Agreement substantially in the form
attached hereto as Exhibit A between Shareholder, as landlord, and Acquired
Company, as tenant, pursuant to which Shareholder will lease the Premises to
Acquired Company.
1.33 "Licenses" shall mean any and all approvals, consents, permits,
waivers, registrations, licenses, permits, certificates and other authorizations
or approvals issued, granted, given or otherwise made available by or under the
authority of any Governmental or regulatory authority or pursuant to applicable
law or any legal requirement. A list of all material Licenses shall be set forth
on Schedule 3.8 hereof.
1.34 "Losses" shall mean any loss, liability, claim, damage (including
incidental and consequential damages), disbursement, expense (including costs of
investigation and defense, accounting and other professional fees and reasonable
attorneys' fees), diminution of value, interest, penalty, fine, judgment or
settlement, of any kind or nature whatsoever, whether or not involving a
third-party claim.
1.35 "Manheim" shall mean Manheim Auctions, Inc., a Delaware corporation.
1.36 "Multi-employer Plan" shall mean a plan, as defined in ERISA Section
3(37), to which Acquired Company contributes or is required to contribute.
1.37 "Order" shall mean any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental or regulatory authority or by any
arbitrator.
1.38 "Permitted Encumbrances" shall have the meaning set forth in Section
3.5.1.
1.39 "Person" shall mean any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental or regulatory authority.
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1.40 "Personal Property" means all of the machinery, equipment, tools,
vehicles, furniture and furnishings, office equipment, and other tangible
personal property owned by Acquired Company and used in the conduct of the
Business as of the Closing Date but shall not include any items identified in
Section 2.2 hereof as Excluded Assets.
1.41 "Pre-Closing Period Returns" shall have the meaning set forth in
Section 2.9.3(a).
1.42 "Pre-Closing Tax Period" shall have the meaning set forth in Section
2.9.1(a).
1.43 "Premises" shall mean that certain facility used by Acquired Company
in the Business and located at 0000 XX Xxxxxxx Xxxx, Xxx'x Xxxxxx, Xxxxxxxx
00000, as more fully described in the Lease.
1.44 "Proceeding" shall mean any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental or regulatory authority or any
arbitrator.
1.45 "Real Property" means such real property interests owned by Acquired
Company, including fee simple ownership interests, leasehold interests,
easement, licenses, rights to access, rights-of-way, and all of the buildings
and other improvements located thereon, and any and all other real property
interests of Acquired Company, including surface water bodies located on the
Real Property, groundwater underneath the Real Property and all other surface
and subsurface features on and beneath the Real Property.
1.46 "Reporting Period" shall have the meaning set forth in Section
2.9.1(a).
1.47 "Shareholder Consolidated Group" shall have the meaning set forth in
Section 2.9.1(a).
1.48 "Shares" shall have the meaning set forth in the recitals.
1.49 "Straddle Period" shall have the meaning set forth in Section
2.9.1(a).
1.50 "Tax" (and, with correlative meaning, "Taxes" and "Taxable") shall
mean all federal, state, local or foreign income, state fuel, mileage and road,
federal highway use, gross receipts, windfall profits, severance, property,
production, sales, use, license, excise, franchise, capital, transfer,
employment, withholding and other taxes and assessments, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties, and any interest, additions and
penalties with respect to a failure to file a Tax Return or a failure to file a
complete and correct Tax Return and any interest in respect of such additions or
penalties.
1.51 "Tax Claim" shall have the meaning set forth in Section 2.9.6(c).
1.52 "Tax Damages" shall have the meaning set forth in Section 2.9.6(a).
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1.53 "Tax Indemnified Party" shall have the meaning set forth in Section
2.9.6(c).
1.54 "Tax Indemnifying Party" shall have the meaning set forth in Section
2.9.6(c).
1.55 "Tax Return" shall mean any return (including any information
return), report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental or regulatory authority in connection with the
determination, assessment, collection, or payment of any Tax or in connection
with the administration, implementation, or enforcement of or compliance with
any applicable law or legal requirement relating to any Tax.
1.56 "Transferred Employees" shall have the meaning set forth in Section
5.1.1.
1.57 "WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act, as amended.
2. PURCHASE AND SALE OF SHARES.
2.1 Purchase and Sale of Shares. Subject to the terms and conditions set
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forth in this Agreement, Shareholder shall, at Closing, sell, assign, transfer,
convey and deliver to Purchaser the Shares, free and clear of all liens, claims,
charges, security interests and other encumbrances of any nature whatsoever.
Such sale, transfer, conveyance and delivery shall be evidenced by duly endorsed
in blank share certificates or by instruments of transfer satisfactory in form
and substance to Purchaser.
2.2 Excluded Assets. On or prior to Closing, Shareholder shall cause
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Acquired Company to transfer and assign the following assets, by way of
distribution or otherwise, to Shareholder, affiliates of Shareholder or such
other entity or entities as Shareholder shall determine:
2.2.1 The Accounts Receivable;
2.2.2 Any cash, stocks, bonds, certificates of deposit and
similar investments;
2.2.3 The Real Property, except to the extent that any Real
Property is the subject of an Acquired Company Contract;
2.2.4 Any Employee Plan, Compensation Arrangement or
Multi-employer Plan and any employment, consulting or collective bargaining
agreements, and any agreements relating thereto, except to the extent any such
plan, arrangement or agreement is expressly and specifically identified on
Schedule 3.6.1 and, as a consequence, constitutes an Acquired Company Contract;
2.2.5 All insurance policies of Acquired Company or Shareholder,
except to the extent any such plan, arrangement or agreement is expressly and
specifically identified on Schedule 3.6.1 and, as a consequence, constitutes an
Acquired Company Contract;
2.2.6 The Excluded Contracts; and
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2.2.7 The items specifically identified in Schedule 2.2
(all of the foregoing referred to herein as the "Excluded Assets").
2.3 Consideration. Shareholder and Purchaser hereby acknowledge and
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agree that the representations, warranties, covenants and agreements set forth
in this Agreement constitute good and valuable consideration for the sale,
transfer, conveyance, assignment and delivery of the Shares.
2.4 Collection of Accounts Receivable. Acquired Company shall collect
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and receive payment in the ordinary course of business with respect to the
Accounts Receivable on behalf of Shareholder and shall make commercially
reasonable efforts to pursue collection thereof in accordance with Acquired
Company's practice (but in no event shall Acquired Company be obligated to
commence any litigation to collect any Accounts Receivable). All payments from
each obligor of an account receivable shall be applied on a "first-in,
first-out" basis so that each payment from such obligor is applied first to the
oldest outstanding account receivable of such obligor unless such obligor
designates another account receivable to which such payment applies or the
oldest account receivable is the subject of a dispute. By the fifteenth day of
each month, Acquired Company shall remit to Shareholder all collections of
Accounts Receivable received during the prior month and furnish Shareholder with
a written report of such collection activity for the preceding month.
2.5 Prorations; Accounts Payable; Certain Deposits.
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2.5.1 All expenses arising from the conduct of the Business,
including business and license fees (including any retroactive adjustments
thereof), utility charges, real and personal property taxes and assessments
levied against the Assets, property and equipment rentals, taxes (except for
income taxes), and similar prepaid and deferred items shall be prorated between
Acquired Company and Shareholder in accordance with the principle that
Shareholder shall be responsible for such expenses and similar prepaid and
deferred items allocable to the conduct of the Business for the period ending on
or prior to the Closing Date, and Acquired Company shall be responsible for such
expenses and similar prepaid and deferred items allocable to the conduct of the
Business for the period after the Closing Date. Shareholder and Acquired Company
shall deliver a statement setting forth such prorations at the time of making
any such proration payment. Notwithstanding the foregoing, there shall be no
proration with regard to, and Shareholder shall remain solely liable with
respect to, any Excluded Assets or any Excluded Contracts.
2.5.2 Any prorations will, insofar as feasible, be determined
and paid on the Closing Date, with final settlement and payment by the
appropriate party occurring no later than thirty (30) days after the actual
amount becomes known.
2.5.3 Acquired Company shall remit to Shareholder within five
(5) days of receipt all invoices relating to accounts payable arising from the
conduct of the Business for the period ending on or prior to the Closing, and
Shareholder shall be responsible for payment of such accounts payable.
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2.5.4 Shareholder shall remit to Acquired Company an amount
equal to all deposits reserved or accrued but not held as of the Closing Date by
Acquired Company pursuant to (i) Acquired Company's Damage Reduction Incentive
Policy and (ii) Acquired Company's signage security agreement with its
owner/operators. In the event that Acquired Company fails to honor the terms
under which such deposits were made, Acquired Company shall immediately remit to
Shareholder an amount equal to such reserved or accrued deposits, and
Shareholder shall return such deposits to the appropriate Persons.
2.5.5 Acquired Company shall remit to Shareholder an amount
equal to all advances made to employees, vendors and owner/operators as of the
Closing Date.
2.6 Resignations. At the Closing, Shareholder shall cause to be
delivered to Acquired Company by each of the directors and officers of Acquired
Company the resignation and release of such Person in the form attached hereto
as Exhibit B.
2.7 Release of Obligations and Guaranties. Prior to Closing, Purchaser
shall use its best efforts to secure the release of any and all guaranty
obligations with respect to the Idealease Agreement.
2.8 Settlement of Intercompany Amounts. Prior to or at the Closing, all
loans, advances or other intercompany amounts between Acquired Company and any
affiliate of Acquired Company shall be repaid or settled along with all accrued
interest, if any.
2.9 Tax Matters.
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2.9.1 Taxes of Acquired Company with respect to the period
ending on the Closing Date shall be the responsibility of Shareholder. Taxes of
Acquired Company with respect to the period ending after the Closing Date shall
be the responsibility of Purchaser.
(a) Shareholder agrees to pay and, notwithstanding any
disclosure of potential tax liabilities made by Shareholder or Acquired Company,
to indemnify, reimburse and hold harmless Purchaser and Acquired Company and
their respective successors, and their respective officers, directors,
employees, agents and representatives, from and against any and all Taxes of
Acquired Company payable with respect to, and any and all claims, liabilities,
losses, damages, costs and expenses (including, without limitation, court costs
and reasonable professional fees incurred in the investigation, defense or
settlement of any claims covered by this indemnity) (herein referred to as
"Indemnifiable Tax Damages"), arising out of or in any manner incident, relating
or attributable to Taxes of Acquired Company payable with respect to, or Tax
Returns required to be filed by Acquired Company under Section 2.9.5 with
respect to, (i) any taxable year (or other applicable reporting period) (a
"Reporting Period") of Acquired Company ending on or before the Closing Date
("Pre-Closing Tax Period") other than Indemnifiable Tax Damages arising from
transactions occurring after the Closing, and (ii) any Reporting Period of
Acquired Company that begins before the Closing Date and that ends after the
Closing Date (a "Straddle Period"), whether such Taxes are imposed directly on
Acquired Company or as a result of including Acquired Company in consolidated or
combined returns filed by the affiliated group of which Acquired Company is a
member (the "Shareholder Consolidated Group"), except that with respect to any
Straddle Period, Shareholder shall be
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responsible for the payment of such Taxes only to the extent that they relate to
the portion of such Straddle Period ending on the Closing Date. Shareholder
shall be entitled to any credits or refunds of Taxes of Acquired Company payable
with respect to any Pre-Closing Tax Period of Acquired Company and, with respect
to the Straddle Period, the portion of such Straddle Period ending on and
including the Closing Date. Purchaser shall cause the amount of any credits or
refunds of Taxes to which Shareholder is entitled under this Section 2.9, but
which are received by or credited to Acquired Company after the Closing Date, to
be paid to Shareholder within ten (10) business days following such receipt or
crediting; provided that within thirty (30) days following written notice from
Purchaser Shareholder shall reimburse Acquired Company to the extent of any
required subsequent repayment of, or reduction in, the amount of such credits or
refunds of Taxes so received or credited.
(b) Purchaser agrees to pay and to indemnify, reimburse
and hold harmless Shareholder (and other members of the Shareholder Consolidated
Group) and their successors, and their officers, directors, employees, agents
and representatives, from and against any and all Taxes of Acquired Company
payable with respect to, and any and all Indemnifiable Tax Damages, arising out
of or in any manner incident, relating or attributable to (i) Taxes of Acquired
Company payable with respect to, or Tax Returns required to be filed by Acquired
Company with respect to, any Reporting Period of Acquired Company beginning
after the Closing Date, (ii) Taxes of Acquired Company for the Straddle Period
to the extent attributable to the portion of the Straddle Period beginning after
the Closing Date and (iii) Taxes imposed on Acquired Company, or for which
Acquired Company may otherwise be liable, as a result of transactions occurring
after the Closing, whether such Taxes are imposed directly on Acquired Company
or as a result of including Acquired Company in consolidated or combined returns
filed by any consolidated group of which Acquired Company is a member.
2.9.2 Any tax sharing agreement, practice or other similar
arrangement between Acquired Company and other members of the Shareholder
Consolidated Group shall be terminated as of the Closing Date.
2.9.3
(a) Shareholder shall prepare or cause to be prepared all
Tax Returns of or including Acquired Company for any Pre-Closing Tax Period
(including amended Tax Returns) ("Pre-Closing Period Returns"). Shareholder
shall timely file, or cause to be timely filed, all such Pre-Closing Period
Returns that are due on or before the Closing Date (giving effect to any
extensions thereto), and Shareholder shall timely pay, or cause to be paid, all
Taxes with respect to such Pre-Closing Period Returns.
(b) Shareholder will include the income of Acquired
Company on the consolidated federal income Tax Returns and any consolidated,
combined, or unitary (or similar) state, local or foreign income Tax Returns of
the Shareholder Consolidated Group for all periods through the Closing Date and
pay any Taxes attributable to such income.
(c) Shareholder shall prepare or cause to be prepared and
provide Purchaser with Pre-Closing Period Returns, other than Pre-Closing Period
Returns that are described in Section 2.9.3(b), that are due after the Closing
Date (giving effect to any extensions
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thereto) at least ten (10) business days prior to the due date thereof. Promptly
upon the finalization of such Tax Returns and in any case prior to the time such
Tax Return is required to be filed, Shareholder shall deliver to Purchaser (1)
an original of such Tax Return, and (2) a check payable to the appropriate
taxing authority in the amount of any Taxes shown as due thereon. If Shareholder
timely delivers such Tax Return and check as provided in the previous sentence,
Purchaser shall cause such Pre-Closing Period Returns to be executed by the
appropriate officer and shall file such Returns, together with the appropriate
payment, on a timely basis.
(d) All Tax Returns which Shareholder is required to
prepare or cause to be prepared in accordance with this Section 2.9 shall be
prepared in a manner consistent with past practice and, on such Tax Returns, no
positions shall be taken, elections made, or method adopted that is inconsistent
with positions taken, elections made, or methods used in preparing and filing
similar Tax Returns in prior periods (including, but not limited to, positions
which would have the effect of deferring income to periods for which Purchaser
is liable or accelerating deductions to period for which Shareholder is liable).
2.9.4
(a) Purchaser shall prepare or cause to be prepared all
Tax Returns of Acquired Company for any and all tax periods ending after the
Closing Date and any and all Straddle Periods. All Tax Returns for a Straddle
Period shall be submitted to Shareholder at least twenty (20) days prior to the
last date for timely filing of such Tax Return (giving effect to any valid
extensions thereof), accompanied by a statement calculating in reasonable detail
and in accordance with Section 2.9.4(b) any payments required of Shareholder
with respect to the amounts shown as due on such Tax Returns after giving effect
to any Tax payments made prior to the Closing Date. The amount of any Tax
payment required of Shareholder shall be paid by Shareholder at least five (5)
business days prior to the last date for timely filing such Tax Return
(including any valid extensions thereof).
(b) The Tax liabilities for each Straddle Period for
Acquired Company shall be determined by closing the books and records of
Acquired Company as of the date immediately preceding the Closing Date, by
treating each such Straddle Period as if it were a separate Reporting Period and
by employing accounting methods which are consistent with those employed in
preparing the Tax Returns for Acquired Company in prior Reporting Periods and
which do not have the effect of distorting income or expenses (taking into
account the transactions contemplated by this Agreement), except that (a)
transactions occurring on the Closing Date and after the Closing shall be
allocated to the taxable year or period that is deemed to begin at the beginning
of the day following the Closing Date, (b) exemptions, allowances or deductions
that are calculated on an annual basis (including, depreciation and amortization
deductions) shall be allocated between the period ending on the Closing Date and
the period after the Closing Date in proportion to the number of days in each
such period, and (c) in the case of any Tax imposed upon the ownership or
holding of real or personal property, such Taxes shall be prorated based on the
percentage of the actual period to which such Taxes relate that precedes the
Closing Date, provided that if the transactions contemplated by this Agreement
result in the reassessment of the value of any property owned by Acquired
Company for property Tax purposes, or the imposition of any property Taxes at a
rate that is different than the rate that
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would have been imposed if such transactions had not occurred, then (1) the
portion of such property Taxes for the portion of the Straddle Period which ends
on and includes the Closing Date shall be determined on a daily basis, using the
assessed value and Tax rate that would have been applied had such transactions
not occurred, and (2) the portion of such property Taxes for the portion of such
Straddle Period beginning after the Closing Date shall be the total property
Taxes for the Straddle Period minus the amount described in clause (1) of this
sentence.
(c) All Tax Returns which Purchaser is required to
prepare or cause to be prepared in accordance with this Section 2.9 shall be
prepared in a manner consistent with past practice and, on such Tax Returns, no
positions shall be taken, elections made, or method adopted that is inconsistent
with positions taken, elections made, or methods used in preparing and filing
similar Tax Returns in prior periods (including, but not limited to, positions
which would have the effect of accelerating income to periods for which
Shareholder is liable or deferring deductions to period for which Purchaser is
liable).
2.9.5 Shareholder and Purchaser shall cooperate with one
another with respect to Tax matters as more fully set forth in this Section
2.9.5.
(a) Shareholder and Purchaser shall cooperate fully, as
and to the extent reasonably requested by the other party, in connection with
the filing of Tax Returns pursuant to this Section 2.9 and any audit, litigation
or other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of records and
information which are reasonably relevant to any such Tax Return, audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Shareholder and Purchaser agree (i) to retain all
books and records with respect to Tax matters pertinent to Acquired Company
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by
Shareholder or Purchaser, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority, and (ii) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other party so requests, Shareholder or Purchaser, as the case may be,
shall allow the other party to take possession of such books and records to the
extent they would otherwise be destroyed or discarded.
(b) Shareholder and Purchaser further agree, upon
request, to use commercially reasonable efforts to obtain any certificate or
other document from any governmental authority or any Person as may be necessary
to mitigate, reduce or eliminate any Tax that could be imposed (including Taxes
with respect to the transactions contemplated hereby).
(c) Each of Purchaser and Shareholder shall promptly
deliver to the other any notice from any Tax authority received by it relating
to Taxes for which the other is or may be liable pursuant to this Agreement.
-12-
2.9.6 The provisions set forth in this Section 2.9,
including, without limitation, the indemnification provisions, shall be separate
and distinct from the provisions of Article 9 and shall not be subject to the
limitations on indemnification obligations set forth therein.
(a) All representations, warranties, agreements,
covenants and obligations made or undertaken by Shareholder in this Section 2.9
or in any document or instrument executed and delivered pursuant to this Section
2.9 are material, have been relied upon by Purchaser and shall survive the
Closing hereunder, and shall not merge in the performance of any obligation by
any party hereto. Shareholder agrees, from and after Closing, to indemnify and
hold Purchaser or any of Purchaser's affiliates, including Acquired Company, and
their respective successors and assigns, harmless from and against all
liability, loss, damages, interest (to the extent interest is assessed prior to
initial notice to Purchaser of such interest and for up to thirty (30) days of
additional interest, if assessed) or injury and all reasonable costs and
expenses (including reasonable counsel fees and costs of any suit related
thereto) (collectively, "Tax Damages") suffered or incurred by Purchaser or any
of Purchaser's affiliates, including Acquired Company, and their respective
successors or assigns arising from, resulting from or relating to any
misrepresentation by, or breach of any covenant, agreement or warranty of,
Shareholder contained in this Section 2.9 or any certificate, schedule, document
or instrument furnished by Shareholder pursuant thereto. Any examination,
inspection or audit of the Assets or Business conducted by Purchaser shall in no
way limit, affect or impair the ability of Purchaser, its successors or assigns
to rely upon the representations, warranties, covenants and obligations of
Shareholder set forth herein.
(b) All representations, warranties, agreements,
covenants and obligations made or undertaken by Purchaser in this Section 2.9 or
in any document or instrument executed and delivered pursuant to this Section
2.9 are material, have been relied upon by Shareholder and shall survive the
Closing hereunder and shall not merge in the performance of any obligation by
any party hereto. Purchaser agrees from and after Closing to indemnify and hold
Shareholder or any of Shareholder's affiliates and their respective successors
and assigns, harmless from and against all Tax Damages suffered or incurred by
Shareholder or any of Shareholder's affiliates, and their respective successors
or assigns arising from any misrepresentation by, or breach of any covenant or
warranty of, Purchaser contained in this Section 2.9 or any certificate,
document or instrument furnished by Purchaser pursuant thereto.
(c) Any Person entitled to indemnification pursuant to
this Section 2.9 is hereinafter referred to as the "Tax Indemnified Party," and
any Person obligated to provide such indemnification hereunder is hereinafter
referred to as the "Tax Indemnifying Party." The Tax Indemnified Party shall
promptly notify the Tax Indemnifying Party in writing of any notice, letter,
correspondence, claim, determination, decision or decree (a "Tax Claim")
received by the Tax Indemnified Party that might raise a claim for
indemnification hereunder. The failure of the Tax Indemnified Party to notify
the Tax Indemnifying Party promptly shall not relieve the Tax Indemnifying Party
of any obligations under this Agreement except to the extent such failure
materially prejudices the ability of the Tax Indemnifying Party to defend the
claim. The Tax Indemnifying Party, at its cost and expense, shall have the sole
and exclusive right to (and shall promptly notify the Tax Indemnified Party as
to whether or not it will) handle, answer, defend, compromise or settle such Tax
Claim and any tax examination, audit, contest or litigation in connection
therewith. If the Tax Indemnifying Party fails within a reasonable time after
notice to
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defend or handle any Tax Claim or any examination, audit, contest or litigation
as provided herein, the Tax Indemnifying Party shall be bound by the results
obtained by the Tax Indemnified Party or its successors or assigns in connection
with such Tax Claim and such examination, audit, contest or litigation. The Tax
Indemnified Party promptly shall provide, or shall cause to be provided, to the
Tax Indemnifying Party any relevant information relating to such Tax Claim which
may be particularly within the knowledge of the Tax Indemnified Party or its
Affiliates and otherwise to cooperate fully with the Tax Indemnifying Party in
good faith with respect to such Tax Claim; provided that the Tax Indemnifying
Party shall be responsible for the payment of any interest and penalties
resulting from any delay by the Tax Indemnifying Party in payment of the Tax
Claim. Notwithstanding the foregoing, the Tax Indemnifying Party shall not
agree, without the consent of the Tax Indemnified Party (which consent shall not
be unreasonably withheld or delayed), to any adjustment, settlement or election
which will legally bind the Tax Indemnified Party.
(d) Except as otherwise provided in this Section 2.9, any
amounts owed by the Tax Indemnifying Party to the Tax Indemnified Party under
this Section 2.9 shall be paid within ten (10) business days of notice from the
Tax Indemnified Party; provided that if such party has not paid such amounts and
such amounts are being contested before the appropriate governmental authorities
in good faith, the Tax Indemnifying Party shall not be required to make payment
until it is determined finally by an appropriate governmental authority that
payment is due, provided that the Tax Indemnifying Party posts appropriate
security as necessary to protect such party from (i) the immediate imposition of
a lien that arises or attaches from nonpayment after assessment and demand of
such amounts, or (ii) seizures of assets.
2.10 Post Closing Access. In connection with any financial audit of
-------------------
Acquired Company, Shareholder or an affiliate of Shareholder or any tax audit or
other governmental investigation of Acquired Company, Shareholder or an
affiliate of Shareholder for any matter relating to any period prior to the
Closing, or for any other reasonable and lawful purpose, Purchaser shall, upon
request, permit Shareholder and its representatives to have access to the books
and records of Acquired Company which shall have been in the possession of
Acquired Company as of the Closing. Acquired Company shall not, and Purchaser
shall not permit Acquired Company to, dispose of such books and records during
the seven-year period beginning with the Closing Date without Shareholder's
consent.
2.11 Lease. At Closing, Shareholder and Acquired Company shall enter into
-----
the Lease.
3. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER.
Shareholder hereby represents and warrants to Purchaser, as of the date
hereof, as follows:
3.1 Organization, Standing and Authority; Capitalization;
----------------------------------------------------
Equity Investments.
------------------
3.1.1 Acquired Company is a corporation duly organized, validly
existing and in good standing under the laws of Missouri. Shareholder is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware. Each of Shareholder and Acquired Company has all requisite
corporate power and authority (i) to execute, deliver and perform this
-14-
Agreement, and (ii) to consummate the transactions contemplated hereby. Acquired
Company has all requisite corporate power and authority to conduct the Business
as presently conducted. Shareholder is the only shareholder of Acquired Company.
Acquired Company is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
Assets, Business or operations of Acquired Company.
3.1.2 The entire authorized capital stock of Acquired Company
consists of 30,000 shares of $1.00 par value common stock, of which 500 shares
are issued and outstanding in the name of Shareholder and no shares are held in
Acquired Company's treasury. All of the Shares are owned by Shareholder, free
and clear of all liens, claims, charges and encumbrances of any nature
whatsoever. The Shares are validly issued, fully paid and nonassessable. There
are no outstanding options, warrants, calls, commitments, or subscriptions,
rights or agreements by Acquired Company to issue any additional shares of its
capital stock, or to pay any dividends on such shares, or to purchase, redeem or
retire any outstanding shares of its capital stock, nor are there outstanding
any securities or obligations which are convertible into or exchangeable for any
shares of capital stock of Acquired Company.
3.1.3 Acquired Company, either directly or indirectly, does not
own of record or beneficially any shares, membership interests or other equity
interests in any corporation, limited liability company, partnership, limited
partnership, joint venture, trust or other business entity.
3.2 Authorization and Binding Obligation. All corporate action
------------------------------------
on the part of Acquired Company and Shareholder, and their respective directors
and shareholders necessary for the authorization, execution, delivery and
performance by Acquired Company and Shareholder of this Agreement has been
taken. Acquired Company and Shareholder have the power and authority to execute
and deliver this Agreement, to perform hereunder, and to consummate the
transactions contemplated hereby, in each case without the necessity of any act
or consent of any other Person whomsoever. This Agreement has been duly executed
and delivered by Acquired Company and Shareholder; and this Agreement and each
and every agreement, document and instrument to be executed, delivered and
performed by Acquired Company or Shareholder in connection herewith constitute
or will, when executed and delivered, constitute the valid and legally binding
obligations of Acquired Company and Shareholder, as the case may be, enforceable
against it in accordance with their respective terms. Attached hereto as
Schedule 3.2 are true, correct and complete copies of the Certificate of
Incorporation and Bylaws, as amended, of Acquired Company.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
---------------------------------
Consents, the execution, delivery and performance of this Agreement by Acquired
Company and Shareholder, as the case may be, and the consummation of the
transactions contemplated hereby (with or without the giving of notice, the
lapse of time, or both): (i) will not conflict with any provision of the
Certificate of Incorporation or Bylaws of Acquired Company or Shareholder; (ii)
will not conflict with, result in a breach of, or constitute a default under,
any applicable law, rule or regulation or any Order, (iii) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of any
-15-
performance required by the terms of, any agreement, instrument, franchise,
certificate, license or permit to which Acquired Company or Shareholder is a
party or may be bound or by which the Assets or Business are affected, (iv) will
not contravene, conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental or regulatory authority the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any License that is
held by Acquired Company or that otherwise relates to the Business of, or any of
the Assets owned or used by, Acquired Company, (v) will not result in the
imposition or creation of any Encumbrance upon or with respect to any of the
Assets. Except pursuant to this Agreement, neither Acquired Company nor
Shareholder is a party to any contract or obligation whereby there has been
granted to anyone an absolute or contingent right to purchase, obtain or acquire
any rights in any of the Shares, Assets, or any of the Business.
3.4 Inventory. The Inventory is described by type on Schedule 3.4. The
---------
Inventory consists of items of a quality and quantity readily usable in the
Business as currently conducted.
3.5 Title to and Condition of Personal Property.
-------------------------------------------
3.5.1 Set forth in Schedule 3.5 is a list of all material items
of Personal Property. Acquired Company owns and has good title to all of the
Personal Property, free and clear of all liens, mortgages, pledges, security
interests, lease obligations and encumbrances, except (i) for liens for taxes
not yet due and payable and (ii) to the extent such property is the subject of
an Acquired Company Contract (such liens and encumbrances hereinafter referred
to as "Permitted Encumbrances"). Subject to the inspection and repair process
set forth in Section 6.3 with respect to vehicles leased to Acquired Company
pursuant to the Idealease Agreement, Purchaser acknowledges and agrees that it
has inspected the vehicles, trucks, tractors and trailers included within the
Assets, including those which are the subject of Acquired Company Contracts, and
that Purchaser, by way of purchasing the Shares, is acquiring such vehicles,
trucks, tractors and trailers "AS IS," "WHERE IS," "WITH ALL FAULTS," AND
ACQUIRED COMPANY AND SHAREHOLDER DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
WITH RESPECT THERETO.
3.5.2 Acquired Company owns all the Assets (whether tangible or
intangible) that it purports to own.
3.5.3 Except for the real property that is the subject of the
Lease, the Assets, the Excluded Assets and equipment of Acquired Company are
sufficient for the continued conduct of the Business after the Closing in
substantially the same manner as conducted prior to the Closing.
3.6 Contracts.
---------
3.6.1 Schedule 3.6.1 contains a list of all of the material
Acquired Company Contracts, a copy of each of which has been provided to
Purchaser. All Acquired Company Contracts are in full force and effect and are
valid and binding upon Acquired Company and enforceable in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws from time to time in
-16-
effect affecting the enforcement of creditors' rights generally; provided,
however, that Shareholder makes no representation or warranty as to
enforceability of any restrictive covenants, including covenants regarding
nondisclosure, nonsolicitation or noncompetition. Except as set forth on
Schedule 3.6.1: (i) there is not under any Acquired Company Contract any default
by Acquired Company or, to Acquired Company's and Shareholder's Knowledge, any
other party thereto, or any event which, after notice or lapse of time, or both,
would constitute such a default; provided, however, Acquired Company and
Shareholder make no representations or warranties regarding the Idealease
Agreement with respect to which Purchaser has made its own investigation (except
as provided in Section 3.6.3); (ii) no officer, director, agent, employee,
consultant, or contractor of Acquired Company is bound by any Contract to which
Acquired Company, Shareholder or any of its affiliates is a party that purports
to limit the ability of such officer, director, agent, employee, consultant, or
contractor to (A) engage in or continue any conduct, activity, or practice
relating to the Business, or (B) assign to Acquired Company or to any other
Person any rights to any invention, improvement, or discovery; (iii) no event
has occurred or circumstance exists that (with or without notice or lapse of
time) may contravene, conflict with, or result in a violation or breach of, or
give Acquired Company or other Person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Acquired Company Contract; (iv) Acquired Company has
not given to or received from any other Person, at any time since October 6,
2000, any notice or other communication (whether oral or written) regarding any
actual, alleged, possible, or potential violation or breach of, or default
under, any Acquired Company Contract; and (v) there are no renegotiations of,
attempts to renegotiate, or outstanding rights to renegotiate any material
amounts paid or payable to Acquired Company under current or completed Acquired
Company Contracts with any Person and, to the Knowledge of Shareholder an
Acquired Company, no such Person has made written demand for such renegotiation.
3.6.2 Schedule 3.6.2 contains a complete and accurate list of
the Excluded Contracts.
3.6.3 With respect to the Idealease Agreement, (i) all sums due
and payable by Acquired Company prior to the date hereof under the Idealease
Agreement have been paid; (ii) there is no material default by Acquired Company
under the Idealease Agreement or, to Acquired Company's and Shareholder's
Knowledge, any other party thereto, or any event which, after notice or lapse of
time, or both, would constitute such a default; and (iii) Acquired Company has
not given to or received from any other Person, at any time since October 6,
2000, any notice or other communication (whether oral or written) regarding any
actual, alleged, possible, or potential violation or breach of, or default
under, the Idealease Agreement.
3.7 Consents. Except for the Consents described in Schedule 3.7, no
--------
consent, approval or authorization of, or declaration to or filing with any
Governmental or regulatory authority or any other third party is required to
permit Shareholder to transfer the Shares to Purchaser. Except as set forth on
in Schedule 3.7, transfer of the Shares to Purchaser by Shareholder will not
constitute an event of default under any Acquired Company Contracts.
3.8 Licenses, Permits and Other Governmental Authorizations. Acquired
-------------------------------------------------------
Company holds all Licenses required for the conduct of the Business, except
where the failure to
-17-
hold such Licenses would not have a material adverse effect on the Assets,
Business or operations of Acquired Company. Schedule 3.8 is a true and complete
list of all material Licenses (including transportation operating permits),
relating to the operations of Acquired Company, the environment or otherwise,
applied for, issued to, or owned by, Acquired Company or under which Acquired
Company is licensed or franchised, used in the conduct of the Business. The
Licenses listed in Schedule 3.8 collectively constitute all of the Licenses
necessary to permit Acquired Company to lawfully conduct and operate its
Business in the manner it currently conducts and operates such Business and to
permit Acquired Company to own and use its Assets in the manner in which it
currently owns and uses such Assets, except where the failure to hold such
Licenses would not have a material adverse effect on the Assets, Business or
operations of Acquired Company.
3.9 Insurance. Acquired Company now has in force fire, casualty,
---------
liability and other insurance covering the Assets and the conduct of the
Business which Acquired Company and Shareholder believe to be appropriate with
respect to amounts and coverage of risks. All such insurance policies are listed
on Schedule 3.9.
3.10 Litigation.
----------
3.10.1 Except as set forth on Schedule 3.10, no Order or
settlement agreement of any nature has been consented to or rendered against or
with respect to Acquired Company, the Shares, the Assets, or the Business by any
arbitrator or Governmental or regulatory authority which in any way affects or
relates to Acquired Company, the Shares, the Assets or the Business which has
not been fully satisfied, settled or dismissed with prejudice. Except as set
forth on Schedule 3.10, there are no material claims asserted and there is no
material Proceeding pending or, to the Knowledge of Acquired Company and
Shareholder, threatened, by or against Acquired Company or the Business or to
which Acquired Company is a party, either as a plaintiff or defendant; and to
the Knowledge of Shareholder and Acquired Company, no event has occurred or
circumstance exists that may give rise to or serve as a basis for the
commencement of any such Proceeding. Shareholder has made available to Purchaser
copies of all pleadings, correspondence, and other documents relating to each
Proceeding listed in Schedule 3.10. None of the Proceedings listed in Schedule
3.10, individually or in the aggregate, will have a material adverse effect on
the Business, operations, Assets, condition, or prospects of Acquired Company.
3.10.2 To the Knowledge of Shareholder and Acquired Company, no
officer, director, agent, or employee of Acquired Company is subject to any
Order that prohibits such officer, director, agent, or employee from engaging in
or continuing any conduct, activity, or practice relating to the Business.
Acquired Company is, and at all times since October 6, 2000 has been, in full
compliance with all of the terms and requirements of each Order to which it, or
any of the Assets owned or used by it, is or has been subject. No event has
occurred or circumstance exists that may constitute or result in (with or
without notice or lapse of time) a violation of or failure to comply with any
term or requirement of any Order to which Acquired Company, or any of the Assets
owned or used by Acquired Company, is subject. Acquired Company has not
received, at any time since October 6, 2000, any notice or other communication
(whether oral or written) from any Governmental or regulatory authority or any
other Person regarding any actual, alleged, possible, or potential violation of,
or failure to
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comply with, any term or requirement of any Order to which Acquired Company, or
any of the Assets owned or used by Acquired Company, is or has been subject.
3.11 Employee Benefit Plans.
----------------------
3.11.1 All Employee Plans and Compensation Arrangements that
provide benefits coverage to employees of Acquired Company are listed in
Schedule 3.11. Any unwritten Compensation Arrangement that provides benefits
coverage to employees of Acquired Company also are listed and described in
Schedule 3.11. Except as disclosed in Schedule 3.11, Acquired Company is not a
party to and does not have in effect or to become effective after the date of
this Agreement any plan arrangement or other scheme which will become an
Employee Plan or Compensation Arrangement (including, but not limited to, any
bonus, cash or deferred compensation, severance, medical, pension, profit
sharing or thrift, stock option, employee stock ownership, life or group
insurance, death benefit, vacation, sick leave, disability or trust agreement or
arrangement), or any amendment to an Employee Plan or Compensation Arrangement.
3.11.2 Without material exception, the Employee Plans and
Compensation Arrangements listed in Schedule 3.11 have been operated and
administered in accordance with ERISA, the Code, the Age Discrimination in
Employment Act and any other applicable federal or state laws.
3.11.3 Neither Acquired Company nor any of its ERISA Affiliates
contribute to or are required to contribute to (or otherwise maintain) any
Multi-employer Plan that provides benefits coverage to the employees of Acquired
Company.
3.11.4 Except as described in Schedule 3.11, neither Acquired
Company nor any of its ERISA Affiliates sponsors, maintains or contributes to
any Employee Plan or Compensation Arrangement that provides retiree medical or
retiree life insurance coverage to former employees of Acquired Company.
3.11.5 Except as described in Schedule 3.11, and except as would
not reasonably be expected to result in any liability imposed on Acquired
Company, with respect to each Employee Plan and, to the extent applicable, each
Compensation Arrangement: (i) no condition or event exists or is expected to
exist that could lead to the imposition of any material liability, contingent or
otherwise, or to the imposition of any lien on the Assets or any of its ERISA
Affiliates under the Code or Title IV of ERISA, whether to the Pension Benefit
Guaranty Corporation, the Internal Revenue Service, or any other person; and
(ii) all contributions, premiums or payments accrued, in whole or in part, under
each Employee Plan or Compensation Arrangement or with respect thereto as of the
Closing will be paid by or properly accrued by Shareholder, on or prior to
Closing.
3.11.6 Except as disclosed in Schedule 3.11, there are no
Employee Plans or Compensation Arrangements as to which, at any time after the
Closing, Acquired Company or Purchaser will be required to make any
contributions.
3.11.7 Except as disclosed in Schedule 3.11, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in
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any material payment (including, without limitation, severance, or unemployment
compensation) becoming due to any employee of Acquired Company.
3.12 Labor Relations.
---------------
3.12.1 There are not any controversies between Acquired Company
and any employee which might reasonably be expected to materially adversely
affect the conduct of the Business or use of the Assets. To the Knowledge of
Acquired Company and Shareholder, Acquired Company has not received any notice
or claim that it has not complied with any laws or legal requirements relating
to the employment of labor, including any provisions thereof relating to wages,
hours, collective bargaining, the payment of social security and similar taxes,
equal employment opportunity, employment discrimination and employment,
occupational or workplace safety or that Acquired Company is liable for any
arrears of wages or any taxes or penalties for failure to comply with any of the
foregoing.
3.12.2 Schedule 3.12 contains a complete and accurate list of the
following information for each employee of Acquired Company, including each
employee on leave of absence or layoff status: name; job title; current
compensation paid or payable.
3.12.3 Except as set forth in Schedule 3.12, to Shareholder's
Knowledge, no employee of Acquired Company is a party to, or is otherwise bound
by, any agreement or arrangement, including any confidentiality, noncompetition,
or proprietary rights agreement, between such employee and any other Person
("Proprietary Rights Agreement") that in any way adversely affects or will
affect the performance of his or her duties as an employee of Acquired Company.
To Shareholder's Knowledge, no officer of Acquired Company intends to terminate
his employment with such Acquired Company.
3.12.4 Since October 6, 2000, Acquired Company has not been or is
a party to any collective bargaining or other labor Contract. Except as set
forth on Schedule 3.12, since October 6, 2000, there has not been, there is not
presently pending or existing, and to Shareholder's Knowledge there is not
threatened, (i) any strike, slowdown, picketing or work stoppage, (ii) any
Proceeding against or affecting Acquired Company relating to the alleged
violation of any law or legal requirement pertaining to labor relations or
employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission, or any comparable Governmental or regulatory authority,
organizational activity, or to Shareholder's Knowledge other labor or employment
dispute against or affecting Acquired Company or its premises, or (iii) any
application for certification of a collective bargaining agent. There is no
lockout of any employees by Acquired Company, and no such action is contemplated
by Acquired Company. Acquired Company has complied in all material respects with
all laws and legal requirements relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health, and plant closing. Acquired Company is not liable for the
payment of any compensation, damages, taxes, fines, penalties, or other amounts,
however designated, for failure to comply with any of the foregoing laws and
legal requirements.
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3.12.5 Since October 6, 2000, none of Acquired Company or
director, officer, agent, or employee of Acquired Company, or to the Knowledge
of Acquired Company or Shareholder any other Person associated with or acting
for or on behalf of Acquired Company, has directly or indirectly (a) in
violation of any law or legal requirement made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other payment to any Person,
private or public, regardless of form, whether in money, property, or services
(i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, or (iii) to obtain special concessions
or for special concessions already obtained, for or in respect of Acquired
Company or any Affiliate of Acquired Company, or (b) established or maintained
any fund or asset that has not been recorded in the books and records of
Acquired Company.
3.13 Bank Accounts. Set forth on Schedule 3.13 hereto is a list of all
-------------
bank accounts and safe deposit boxes of Acquired Company and the names of all
persons authorized to draw thereon or to have access thereto.
3.14 Compliance with Laws. Except as set forth in Schedule 3.14: (i)
--------------------
Acquired Company is, and at all times since October 6, 2000 has been, in
compliance in all material respects with all laws and legal requirements that
are or were applicable to it or to the conduct or operation of the Business or
the ownership or use of any of the Assets; (ii) no event has occurred or
circumstance exists that (with or without notice or lapse of time) may be
reasonably expected to constitute or result in a violation by Acquired Company
of, or a failure on the part of Acquired Company to comply with, any law or
legal requirement; (iii) Acquired Company has not received, at any time since
October 6, 2000, any notice or other communication (whether oral or written)
from any Governmental or regulatory authority or any other Person regarding (A)
any actual, alleged, possible, or potential violation of, or failure to comply
with, any law or legal requirement, or (B) any actual, alleged, possible, or
potential obligation on the part of Acquired Company to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature; (iv) no
event has occurred or circumstance exists that may be reasonably expected to
(with or without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of any License listed on Schedule 3.8, or (B) result directly or indirectly in
the revocation, withdrawal, suspension, cancellation, or termination of, or any
modification to, any License; (v) Acquired Company has not received, at any time
since October 6, 2000, any notice or other communication (whether oral or
written) from any Governmental or regulatory authority or any other Person
regarding (A) any actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any License, or (B) any
actual, proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Licenses; and (vi) all
applications required to have been filed for the renewal of the Licenses listed
on Schedule 3.8 have been duly filed on a timely basis with the appropriate
Governmental or regulatory authorities, and all other filings required to have
been made with respect to such License have been duly made on a timely basis
with the appropriate Governmental or regulatory authorities.
3.15 Reports and Records; Financial Statements.
-----------------------------------------
3.15.1 To the Knowledge of Acquired Company and Shareholder, all
returns, reports, records and statements which Acquired Company is currently
required to file with any Governmental or regulatory authority have been filed,
and all reporting and record keeping
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requirements of Governmental or regulatory authority having jurisdiction
thereover have been complied with. All of such reports, returns, records and
statements are substantially complete and correct as filed.
3.15.2 Shareholder has delivered to Purchaser unaudited trial
balance sheets, profit and loss statements and balance sheets of Acquired
Company for the fiscal years 1999 and 2000 and for fiscal year 2001 through
November 30, 2001. Such financial statements fairly present the financial
condition and the results of operations of Acquired Company as at the respective
dates of and for the periods referred to in such financial statements, subject,
in the case of interim financial statements, to normal recurring year-end
adjustments. Such financial statements reflect the consistent application of
such accounting principles throughout the periods involved.
3.15.3 To Acquired Company's and Shareholder's Knowledge,
Acquired Company has no liabilities or obligations of any nature (whether known
or unknown and whether absolute, accrued, contingent, or otherwise) except for
liabilities or obligations reflected or reserved against in any interim balance
sheet and current liabilities incurred in the ordinary course of business since
the date thereof.
3.15.4 The minute books, stock record books, and other records of
Acquired Company that have been made available to Purchaser include all of the
minute books, stock record books and other records of Acquired Company that were
delivered to Shareholder in connection with its acquisition of Acquired Company.
The minute books of Acquired Company contain accurate and complete records of
all meetings held of, and corporate action taken by, the stockholders, the
Boards of Directors, and committees of the Boards of Directors of the Acquired
Company since October 6, 2000, and no meeting of any such stockholders, Board of
Directors, or committee has been held since October 6, 2000 for which minutes
have not been prepared and are not contained in such minute books. At the
Closing, all of those books and records will be in the possession of Acquired
Company.
3.16 Tax Matters. Except as provided in Schedule 3.16:
-----------
3.16.1 Acquired Company has filed or caused to be filed (on a
timely basis since October 6, 2000), all Tax Returns that are or were required
to be filed by or with respect to it, either separately or as a member of a
group of corporations, pursuant to applicable laws and legal requirements.
Acquired Company has paid, or made provision for the payment of, all Taxes that
have or may have become due pursuant to those Tax Returns or otherwise, or
pursuant to any assessment received by Acquired Company, except such Taxes, if
any, as are being contested in good faith.
3.16.2 Acquired Company does not have liability for Taxes of any
Person (other than the Shareholder Consolidated Group and the affiliated group
of corporations of which Acquired Company was a member prior to its acquisition
by the Shareholder Consolidated Group) under Treasury Regulations Section
1.1502-6 (or any corresponding provision of state, local or foreign income Tax
law), as transferee or successor, by contract or otherwise. All deficiencies
proposed as a result of any Tax audits of Acquired Company have been paid,
reserved against, settled, or are being contested in good faith by appropriate
Proceedings.
-22-
Acquired Company has not given or been requested to give waivers or extensions
(or is or would be subject to a waiver or extension given by any other Person)
of any statute of limitations relating to the payment of Taxes of Acquired
Company or for which Acquired Company may be liable.
3.16.3 No consent to the application of Section 341(f)(2) of the
Code has been filed with respect to any property or assets held, acquired, or to
be acquired by Acquired Company. All Taxes that Acquired Company is or was
required by any law or legal requirement to withhold or collect have been duly
withheld or collected and, to the extent required, have been paid to the proper
Governmental or regulatory authority or other Person.
3.16.4 There is no tax sharing agreement that will require any
payment by Acquired Company after the date of this Agreement. No material claim
for assessment or collection of Taxes is presently being asserted against
Acquired Company with respect to Taxes of Acquired Company. There is no
presently pending audit examination, refund claim, litigation, Proceeding,
proposed adjustment or matter in controversy with respect to any Taxes of
Acquired Company.
3.17 No Material Adverse Change.
--------------------------
3.17.1 Since November 30, 2001, there has not been any material
adverse change in the Business, operations, properties, Assets, or financial
condition of Acquired Company which would have a material adverse effect on the
Business, operations, properties, Assets or financial condition of Acquired
Company taken as a whole, and no event has occurred or circumstance exists that
could be expected to result in such a material adverse change.
3.17.2 Except as set forth in Schedule 3.17, since November 30,
2001, Acquired Company has conducted the Business only in the ordinary course of
business and there has not been any: (i) payment or increase by Acquired Company
of any bonuses, salaries, or other compensation to any officer, or (except in
the ordinary course of business) employee or entry into any employment,
severance, or similar Contract with any director, officer, or employee with
respect to which Acquired Company will have any liability; (ii) damage to or
destruction or loss of any Asset or property of Acquired Company, whether or not
covered by insurance, materially and adversely affecting the properties, Assets,
Business or financial condition of Acquired Company, taken as a whole; (iii)
material change in the accounting methods used by Acquired Company; or (iv)
agreement, whether oral or written, by Acquired Company to do any of the
foregoing.
3.18 Environmental Matters. Except as set forth in Schedule 3.18:
---------------------
3.18.1 Acquired Company is, and at all times since October 6,
2000 and, to the Knowledge of Shareholder and Acquired Company, at all times
before October 6, 2000 has been, in full compliance with, and has not been and
is not in violation of or liable under, any Environmental Law. Since October 6,
2000 and, to the Knowledge of Shareholder and Acquired Company, at all times
before October 6, 2000, neither Shareholder nor Acquired Company has any basis
to expect, nor has any of them or any other Person for whose conduct they are or
may be held to be responsible received, any actual or threatened order, notice,
or other
-23-
communication from (i) any Governmental or regulatory authority or private
citizen acting in the public interest, or (ii) the current or prior owner or
operator of any Facilities, of any actual or potential violation or failure to
comply with any Environmental Law, or of any actual or threatened obligation to
undertake or bear the cost of any Environmental, Health, and Safety Liabilities
with respect to any of the Facilities or any other properties or Assets (whether
real, personal, or mixed) in which Acquired Company has had an interest, or with
respect to any property or Facility at or to which Hazardous Substances were
generated, manufactured, refined, transferred, imported, used, or processed by
Acquired Company, or any other Person for whose conduct it is or may be held
responsible, or from which Hazardous Substances have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
3.18.2 Since October 6, 2000 and, to the Knowledge of Shareholder
and Acquired Company, at all times before October 6, 2000, there are no pending
or, to the Knowledge of Shareholder and Acquired Company, threatened claims,
Encumbrances, or other restrictions of any nature, resulting from any
Environmental, Health, and Safety Liabilities or arising under or pursuant to
any Environmental Law, with respect to or affecting any of the Facilities or any
other properties and Assets (whether real, personal, or mixed) in which Acquired
Company has or had an interest.
3.18.3 Since October 6, 2000 and, to the Knowledge of Shareholder
and Acquired Company, at all times before October 6, 2000, neither Shareholder
nor Acquired Company has Knowledge of any basis to expect, nor has any of them
or any other Person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, order, summons, warning, or
other communication that relates to Hazardous Substances, or any alleged,
actual, or potential violation or failure to comply with any Environmental Law,
or of any alleged, actual, or potential obligation to undertake or bear the cost
of any Environmental, Health, and Safety Liabilities with respect to any of the
Facilities or any other properties or Assets (whether real, personal, or mixed)
in which Acquired Company had an interest, or with respect to any property or
facility to which Hazardous Substances generated, manufactured, refined,
transferred, imported, used, or processed by Acquired Company, or any other
Person for whose conduct it is or may be held responsible, have been
transported, treated, stored, handled, transferred, disposed, recycled, or
received.
3.18.4 Since October 6, 2000 and, to the Knowledge of Shareholder
and Acquired Company, at all times before October 6, 2000, neither Shareholder
nor Acquired Company, or any other Person for whose conduct they are or may be
held responsible, has any Environmental, Health, and Safety Liabilities with
respect to the Facilities or, to the Knowledge of Shareholder and Acquired
Company, with respect to any other properties and Assets (whether real,
personal, or mixed) in which Shareholder or Acquired Company (or any
predecessor), has or had an interest.
3.18.5 Since October 6, 2000 and, to the Knowledge of Shareholder
and Acquired Company, at all times before October 6, 2000, there are no
Hazardous Substances present on or in the Facilities, including any Hazardous
Substances contained in barrels, above or underground storage tanks, landfills,
land deposits, dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water, sumps,
or any other part of the Facilities, or incorporated into any structure therein
or
-24-
thereon. Since October 6, 2000 and, to the Knowledge of Shareholder and Acquired
Company, at all times before October 6, 2000, none of Shareholder, Acquired
Company, any other Person for whose conduct they are or may be held responsible,
or to the Knowledge of Shareholder and Acquired Company, any other Person, has
permitted or conducted, or is aware of, any Hazardous Activity conducted with
respect to the Facilities or any other properties or Assets (whether real,
personal, or mixed) in which Shareholder or Acquired Company has or had an
interest except in full compliance with all applicable Environmental Laws.
3.18.6 Since October 6, 2000 and, to the Knowledge of Shareholder
and Acquired Company, at all times before October 6, 2000, there has been no
release or, to the Knowledge of Shareholder and Acquired Company, threat of
release, of any Hazardous Substances at or from the Facilities or at any other
locations where any Hazardous Substances were generated, manufactured, refined,
transferred, produced, imported, used, or processed from or by the Facilities,
or from or by any other properties and Assets (whether real, personal, or mixed)
in which Shareholder or Acquired Company has or had an interest, whether by
Shareholder, Acquired Company, or any other Person.
3.18.7 Shareholder has delivered to Purchaser true and complete
copies and results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by Shareholder or Acquired Company since October 6, 2000
pertaining to Hazardous Substances or Hazardous Activities in, on, or under the
Facilities, or concerning compliance by Shareholder, Acquired Company, or any
other Person for whose conduct they are or may be held responsible, with
Environmental Laws.
3.19 Intellectual Property.
---------------------
3.19.1 Acquired Company owns or has the right to use pursuant to
license, sublicense, agreement or permission all intellectual property necessary
for the operation of the Business as presently conducted (including, without
limitation, the Intellectual Property).
3.19.2 To the Knowledge of Shareholder and Acquired Company,
Acquired Company has not interfered with, infringed upon, misappropriated or
otherwise come into conflict with any intellectual property rights of third
Persons and neither Acquired Company, nor any of the directors or officers (and
employees with responsibility for intellectual property matters) of Acquired
Company has ever received any charge, complaint, claim or notice alleging any
such interference, infringement, misappropriation or violation. Except as set
forth on Schedule 3.19, to the Knowledge of Acquired Company and Shareholder, no
third Person has interfered with, infringed upon, misappropriated or otherwise
come into conflict with any intellectual property rights of Acquired Company.
3.19.3 Schedule 3.19 identifies each material item of
intellectual property that any third Person owns and that Acquired Company uses
pursuant to license, sublicense, agreement, or permission. Acquired Company has
made correct and complete copies of all such licenses, sublicenses, agreements
and permissions (as amended to date) available to Purchaser. With respect to
each such item of such intellectual property: (i) the license, sublicense,
agreement or permission covering the item is legal, valid, binding, enforceable
and in full force and effect; (ii) the license, sublicense, agreement or
permission will continue to be legal, valid,
-25-
binding and enforceable and in full force and effect on identical terms on and
after the Closing Date for the respective period set forth in each such license,
sublicense, agreement or permission; (iii) Acquired Company is not, and to the
Knowledge of Acquired Company and Shareholder, the other parties to the license,
sublicense, agreement or permission are not, in breach or default, and no event
of default has occurred which with notice or lapse of time, or both, would
constitute a breach or default or permit termination, modification or
acceleration thereunder; (iv) no party to the license, sublicense, agreement or
permission has repudiated any provision thereof; and (v) Acquired Company has
not granted any sublicense or similar right with respect to the license,
sublicense, agreement or permission.
3.20 State Takeover Laws. The Boards of Directors of Shareholder and
-------------------
Acquired Company have approved the transactions contemplated by
this Agreement and taken such action such that the provisions of any state or
local "takeover" law applicable to Shareholder or Acquired Company will not
apply to this Agreement or any of the transactions contemplated by this
Agreement.
3.21 Disclosure. No statement contained herein or in any certificate,
----------
Exhibit, Schedule, list or other instrument furnished to Purchaser by Acquired
Company or Shareholder pursuant to the provisions hereof contains, or will
contain, any untrue statement of any material fact or omits, or will omit, to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER .
Purchaser represents and warrants to Shareholder, as of the date hereof,
as follows:
4.1 Organization and Standing. Purchaser is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of Delaware.
Purchaser has all requisite corporate power and authority (i) to execute,
deliver and perform this Agreement and (ii) to consummate the transactions
contemplated hereby.
4.2 Authorization and Binding Obligation. All corporate action on the
------------------------------------
part of Purchaser and its directors and shareholder(s) necessary for the
authorization, execution, delivery and performance by Purchaser of this
Agreement has been taken. Purchaser has the power and authority to execute and
deliver this Agreement, to perform hereunder and to consummate the transactions
contemplated hereby without the necessity of any act or consent of any other
Person whomsoever. This Agreement has been duly executed and delivered by
Purchaser; and this Agreement and each and every agreement, document and
instrument to be executed, delivered and performed by Purchaser in connection
herewith constitute or will, when executed and delivered, constitute the valid
and legally binding obligations of each of Purchaser, enforceable against it in
accordance with their respective terms.
4.3 Absence of Conflicting Agreements. The execution, delivery and
---------------------------------
performance of this Agreement by Purchaser, and the consummation of the
transactions contemplated hereby (with or without the giving of notice, the
lapse of time, or both): (i) will not conflict with any provision of the
Certificate of Incorporation or Bylaws of Purchaser; (ii) will not conflict
with, result in a breach of, or constitute a default under, any applicable law,
rule or regulation or any
-26-
applicable judgment, order, ordinance, injunction or decree of any court or
governmental instrumentality and (iii) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, franchise, certificate, license or permit
to which Purchaser is a party or may be bound or by which its assets or business
are affected.
4.4 Consents. No consent, approval or authorization of, or declaration
--------
to or filing with any governmental or regulatory authority or any other third
party is required to permit Purchaser to perform hereunder and to consummate the
transactions contemplated hereby.
4.5 Disclosure. No statement contained herein or in any certificate,
----------
Exhibit, Schedule, list or other instrument furnished to Acquired Company or
Shareholder by Purchaser pursuant to the provisions hereof contains, or will
contain, any untrue statement of any material fact or omits, or will omit, to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.
5. COVENANTS OF ACQUIRED COMPANY, SHAREHOLDER AND PURCHASER.
5.1 Cooperation. The parties shall cooperate fully with each other in
-----------
preparing, filing, prosecuting and taking any other actions necessary with
respect to, any applications, requests or actions which are or may be necessary
to obtain the consent of any governmental instrumentality or any other third
party, which are or may be necessary or helpful in order to accomplish the
transactions contemplated by this Agreement.
5.2 Covenants Regarding Employment Matters.
--------------------------------------
5.2.1 With respect to the employees of Acquired Company who
remain employees of Acquired Company on the Closing Date (the "Transferred
Employees"), Shareholder shall within thirty (30) days of the Closing Date
assume and reimburse Acquired Company for the monetary amount of any vacation
and sick pay accrued by the Transferred Employees but unused as of the Closing
Date. Shareholder agrees to make full and final settlement with the Transferred
Employees, as soon as reasonably practicable after the Closing, with respect to
all other liabilities and obligations relating to such employees' employment
with Acquired Company for periods ending on or before the Closing Date
(including, without limitation, wages, salaries, any obligations under any
Employee Plan and Compensation Arrangement or other payments on account of
termination), to the extent earned or accrued through the Closing Date.
5.2.2 Purchaser shall cause Acquired Company to offer employment
to those employees of Shareholder, or any subsidiary thereof, set forth in
Schedule 5.2.2 who have devoted a substantial amount of time to the business of
Acquired Company (the "Manheim Employees"). Subject to the provisions of
subsection 5.2.6, those Manheim Employees who accept Acquired Company's offers
of employment shall be employed on the same terms and conditions of employment
as currently being provided to similarly situated employees of Purchaser.
Shareholder agrees to make full and final settlement with the Manheim Employees,
as soon as reasonably practicable after the Closing, with respect to all other
liabilities and
-27-
obligations relating to such employees' employment with Shareholder, or a
subsidiary thereof, for periods ending on or before the Closing Date (including,
without limitation, wages, salaries, any obligations under any Employee Plan and
Compensation Arrangement or other payments on account of termination), to the
extent earned or accrued through the Closing Date. Effective immediately prior
to the Closing Date, those employees of Acquired Company who currently are
receiving disability health care benefits (the "Disabled Employees") shall
become employees of Shareholder or an affiliate thereof. At such time as the
Disabled Employees' entitlement to health care benefits ceases, Purchaser shall
cause Acquired Company to offer employment to the Disabled Employees on the same
terms and conditions of employment as currently are being provided to similarly
situated employees of Purchaser. Shareholder agrees to make full and final
settlement with the Disabled Employees, as soon as reasonably practicable after
the date the Disabled Employees are no longer eligible to participate in any
Employee Plan, with respect to all other liabilities and obligations relating to
such employees' employment with Shareholder, or a subsidiary thereof (including,
without limitation, wages, salaries, any obligations under any Employee Plan and
Compensation Arrangement or other payments on account of termination), to the
extent earned or accrued through the date the Disabled Employees' participation
in any Employee Plan ceases.
5.2.3 With respect to those Transferred Employees and Manheim
Employees listed on Schedule 5.2.3 whose employment with Acquired Company is
involuntary terminated by Acquired Company without cause within a forty-five
(45) day period commencing as of the Closing, Shareholder shall reimburse
Acquired Company for the amount of any severance pay benefits paid to such
Transferred Employees and Manheim Employees; provided, that the amount of such
severance payments shall be not more than the amount represented by the formula
set forth in Schedule 5.2.3. For purposes of this Section 5.2.3, "cause" shall
mean any of the following events: (i) the commission of a criminal act
constituting a felony (ii) the commission of an act of fraud, embezzlement or
theft against Acquired Company; (iii) the willful and wanton disregard of the
rules or policies of Acquired Company; or (iv) the repeated failure of a
Transferred Employee or a Manheim Employee to perform duties consistent with his
or her position or to follow or comply with the reasonable directives of the
Board of Directors or the executive officers of Acquired Company, which failures
are not cured in all substantial respects within ten (10) days after Acquired
Company serves notice thereof to the Transferred Employee or Manheim Employee.
5.2.4 Purchaser shall indemnify and hold Shareholder and its
affiliates harmless from and against all Losses resulting from any compliance
obligation (including, without limitation, the obligation to give notice or pay
any money) that Acquired Company, Shareholder and its affiliates has under the
WARN Act arising from the termination of any Transferred Employees or Manheim
Employees on or after the Closing Date.
5.5.5 Except to the extent otherwise expressly set forth in this
Agreement, nothing in this Agreement shall be deemed or construed to require
Acquired Company to continue to employ any of Acquired Company's employees for
any period on or after Closing.
5.2.6 Purchaser shall offer, or cause Acquired Company to offer,
group health plan coverage to all of the Transferred Employees and Manheim
Employees and to the dependents of such Transferred Employees and Manheim
Employees as of the Closing Date on
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terms and conditions generally applicable to all of Purchaser's employees. For
purposes of providing such coverage, Purchaser shall waive all preexisting
condition limitations for all such Transferred Employees and Manheim Employees
covered by a health care plan of Acquired Company or of an affiliate of
Shareholder as of the Closing Date and shall provide such health care coverage
effective as of the Closing Date without the application of any eligibility
period for coverage. In addition, Purchaser shall credit all employee payments
toward deductible, out-of-pocket and co-payment obligation limits under health
care plans of Acquired Company or of an affiliate of Shareholder for the plan
year which includes the Closing Date as if such payments had been made for
similar purposes under Purchaser's health care plans during the plan year which
includes the Closing Date, with respect to the Transferred Employees and the
Manheim Employees, and to the dependents of such Transferred Employees and
Manheim Employees.
5.2.7 Subsequent to the Closing, the account balances of the
Transferred Employees and of the Manheim Employees under the 401(k) plan of
Shareholder's affiliate shall be payable to such Transferred Employees and
Manheim Employees in accordance with the terms of the plan. Purchaser shall be
obligated to accept rollovers to Purchaser's 401(k) plan of cash and of
promissory notes that relate to outstanding loans made to participants from the
401(k) plan of Shareholder's affiliate, if any, with respect to any Transferred
Employee and Manheim Employee that elects to make such a rollover. Purchaser's
401(k) plan shall be substituted as the obligee of such promissory notes, and,
except as permitted by applicable law, no other changes shall be made with
respect to the terms of the notes. Purchasers shall effect such rollovers in a
manner that will ensure that such rollovers do not result in the recognition of
taxable income by the Transferred Employees and the Manheim Employees, and shall
take, or shall cause it's 401(k) plan to take, any actions that are necessary to
effect such rollovers. Within a reasonable period of time after the Closing
Date, Purchaser or Acquired Company shall provide Shareholder with a list of
those Transferred Employees and Manheim Employees who intend to rollover
promissory notes to Purchaser's 401(k) Plan. At Shareholder's request, Purchaser
agrees to use its best faith efforts to assist Shareholder in effecting the
rollover of the account balances of the Transferred Employees to Purchaser's
401(k) plan.
5.3 Inspection. URSI shall complete an inspection of all vehicles leased
----------
to Acquired Company pursuant to the Idealease Agreement as expeditiously as
possible following the Closing Date, such inspection not to exceed sixty (60)
days following the Closing Date. URSI shall give Shareholder reasonable advance
notice thereof and the right to participate in such inspection. The criteria to
be used for such inspections shall be the inspection and maintenance criteria
set forth in the Idealease Agreement. In the event that any vehicle inspected
pursuant to this Section 5.3 is found to have damage that would cause a failure
under such inspection criteria, and it is determined by the parties after due
investigation that such damage occurred prior to the Closing Date, Shareholder,
at its option, shall either repair such damage at its own cost or remit payment
to URSI in an amount to cover the cost of repairing such damage.
5.4 Public Announcements. Except as may be required by applicable law or
--------------------
regulation (including the rules of any stock exchange, Nasdaq, or over-the-
counter market on which any of the parties or their respective affiliates are
listed or traded), no party to this Agreement shall make, or cause to be made,
any public announcement in respect of this Agreement or the transactions
contemplated herein or otherwise communicate with any news media with respect
thereto without the prior written consent of the other parties, and, in any
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event, the contents and wording of any such announcement or communication shall
be subject to the prior review and consent of the other parties and the parties
shall cooperate as to the timing of any such announcement or communication.
6. CLOSING. The Closing shall be held at the offices of Xxxxx Xxxxxxxxx
German May PC, 1010 Walnut, Xxxxx 000, Xxx Xxxxxxxxx Xxxx, Xxxxxx Xxxx,
Xxxxxxxx, 00000, concurrently with the execution and delivery of this Agreement.
Notwithstanding the actual time the deliveries set forth in Sections 7 and 8 are
made on the Closing Date, the parties hereto agree that the Closing shall be
effective and deemed for all purposes to have occurred as of 12:01 a.m. local
time on the Closing Date.
7. CLOSING DELIVERIES BY SHAREHOLDER. Prior to or on the Closing Date,
Shareholder shall deliver to Purchaser the following, in form and substance
reasonably satisfactory to Purchaser and its counsel:
7.1 Stock Certificates. All certificates representing the Shares owned
------------------
by Shareholder, duly endorsed or accompanied by instruments of transfer
reasonably satisfactory in form and substance to Purchaser and its counsel;
7.2 Good Standing Certificate. Certificate of compliance or a
-------------------------
certificate of good standing of Acquired Company, as of the most recent
practicable date, from the Secretary of State of Missouri;
7.3 Minute Book of Acquired Company. The minute book of Acquired
-------------------------------
Company;
7.4 Resignations. The resignations and releases of the directors and
------------
officers of Acquired Company as contemplated by this Agreement, effective
immediately subsequent to Closing;
7.5 Lease. The Lease, duly executed by Shareholder;
-----
7.6 Non-Competition Agreement. A Non-Competition Agreement, duly
-------------------------
executed by Manheim, Shareholder and Acquired Company;
7.7 Nonsolicitation Agreement. A Nonsolicitation Agreement, duly
-------------------------
executed by Manheim, Shareholder and Acquired Company;
7.8 Consents. An original of each Consent received by Shareholder on or
--------
before the Closing;
7.9 Shareholder Secretary's Certificate. Certificate, dated as of the
-----------------------------------
Closing Date, executed by the Secretary of Shareholder, certifying that the
resolutions authorizing and approving the execution of this Agreement and the
consummation of the transactions contemplated hereby, as attached to such
certificate, were duly adopted by the Board of Directors of Shareholder, and
that such resolutions remain in full force and effect; and
7.10 Acquired Company Secretary's Certificate. Certificate, dated as of
----------------------------------------
the Closing Date, executed by the Secretary of Acquired Company, certifying that
the resolutions authorizing
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and approving the execution of this Agreement and the consummation of the
transactions contemplated hereby, as attached to such certificate, were duly
adopted by the Board of Directors of Acquired Company and the sole shareholder
of Acquired Company, and that such resolutions remain in full force and effect.
8. CLOSING DELIVERIES BY PURCHASER. Prior to or on the Closing Date,
Purchaser shall deliver to Shareholder the following, in form and substance
reasonably satisfactory to Shareholder and its counsel:
8.1 [Intentionally Omitted].
8.2 Lease. The Lease, duly executed by Acquired Company;
-----
8.3 Non-Competition Agreement. A Non-Competition Agreement, duly
-------------------------
executed by Purchaser;
8.4 Nonsolicitation Agreement. A Nonsolicitation Agreement, duly
-------------------------
executed by Purchaser; and
8.5 Secretary's Certificate. A certificate, dated as of the Closing
-----------------------
Date, executed by the Secretary of Purchaser certifying that the resolutions
authorizing and approving the execution of this Agreement and the consummation
of the transactions contemplated hereby, as attached to such certificate, were
duly adopted by Purchaser's Board of Directors and that such resolutions remain
in full force and effect.
9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
9.1 Representations and Warranties. All representations, warranties,
------------------------------
covenants and agreements contained in this Agreement shall be deemed continuing
representations, warranties, covenants and agreements and shall survive the
Closing, which in the case of representations and warranties (other than those
set forth in Sections 3.1, 3.2, 4.1 and 4.2, which shall survive indefinitely)
shall survive the Closing for a period of one (1) year following the Closing
Date.
9.2 Indemnification of Acquired Company and Purchaser by Shareholder.
----------------------------------------------------------------
Shareholder agrees to indemnify and hold Acquired Company and Purchaser harmless
against and with respect to, and shall reimburse Acquired Company and Purchaser
for:
9.2.1 Any and all Losses resulting from any breach of a
representation or warranty by Acquired Company or Shareholder contained herein;
provided, however, that any claim for indemnification pursuant to this Section
9.2.1 for a breach of a representation or warranty set forth in Section 3 must
be brought on or before the first (1st) anniversary of the Closing Date;
provided, however, that a claim for indemnification pursuant to this Section
9.2.1 for a breach of a representation of warranty set forth in Sections 3.1 or
3.2 may be brought at any time; and provided, further that any claim for
indemnification pursuant to this Section 9.2.1 shall be subject to the terms and
conditions set forth in Section 9.5.7;
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9.2.2 Any and all Losses resulting from any nonfulfillment of
any covenant by Shareholder contained herein;
9.2.3 Any and all Losses resulting from Acquired Company's
operation of the Business or ownership of the Assets prior to the Closing Date,
and any and all liabilities arising under Acquired Company Contracts (other than
the Idealease Agreement) which relate to events occurring prior to the Closing
Date, including, without limitation, Losses resulting from (i) any and all
Encumbrances (except for Permitted Encumbrances) on any of the Assets as of the
Closing Date, (ii) any suit, action, proceeding, claim or investigation pending
or threatened against or affecting the Business, the Assets or Acquired Company
relating to any act or omission occurring prior to the Closing whether or not
disclosed on Schedule 3.10; provided, however, that a claim for indemnification
pursuant to this Section 9.2.3 shall be subject to the terms and conditions set
forth in Section 9.5.7;
9.2.4 Any and all Losses resulting from, in connection with, or
associated with (i) the matters disclosed in on Schedule 3.10 and (ii) the
matters of which Acquired Company has Knowledge on the date hereof that
following the date hereof would fit the requirements for inclusion on Schedule
3.10 had such claim been asserted prior to the date hereof;
9.2.5 Any and all Losses resulting from any Excluded Assets; and
9.2.6 Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
9.3 Indemnification of Acquired Company and Purchaser by Shareholder--
------------------------------------------------------------------
Environmental. Shareholder agrees to indemnify and hold Acquired Company and
-------------
Purchaser harmless against and with respect to, and shall reimburse Acquired
Company and Purchaser for and will pay to Purchaser and Acquired Company the
amount of, any Losses (including costs of cleanup, containment, or other
remediation) arising, directly or indirectly, from or in connection with:
9.3.1 Any Environmental, Health, and Safety Liabilities arising
out of or relating to: (i) (A) the ownership, operation, or condition at any
time on or prior to the Closing Date and after October 6, 2000 of the Facilities
or any other properties and Assets (whether real, personal, or mixed and whether
tangible or intangible) in which Shareholder or Acquired Company has or had an
interest from and after October 6, 2000, or (B) any Hazardous Substances or
other contaminants that were present on the Facilities or such other properties
and Assets at any time on or prior to the Closing Date and after October 6,
2000; or (ii) (A) any Hazardous Substances or other contaminants, wherever
located, that were, or were allegedly, generated, transported, stored, treated,
released, or otherwise handled by Shareholder or Acquired Company or by any
other Person for whose conduct they are or may be held responsible at any time
on or prior to the Closing Date and after October 6, 2000, or (B) any Hazardous
Activities that were, or were allegedly, conducted by Shareholder or Acquired
Company or by any other Person for whose conduct they are or may be held
responsible at any time on or prior to the Closing Date and after October 6,
2000; or
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9.3.2 Any bodily injury (including illness, disability, and
death, and regardless of when any such bodily injury occurred, was incurred, or
manifested itself), personal injury, property damage (including trespass,
nuisance, wrongful eviction, and deprivation of the use of real property), or
other damage of or to any Person, including any employee or former employee of
Shareholder or Acquired Company or any other Person for whose conduct they are
or may be held responsible, in any way arising from or allegedly arising from
any Hazardous Activity conducted or allegedly conducted with respect to the
Facilities or any other properties and Assets (whether real, personal, or mixed
and whether tangible or intangible) in which Shareholder or Acquired Company has
or had an interest from and after October 6, 2000, or the operation of Acquired
Company prior to the Closing Date and after October 6, 2000, or from any
Hazardous Substances that were (i) present or suspected to be present on or
before the Closing Date and after October 6, 2000 on or at the Facilities (or
present or suspected to be present on any other property, if such Hazardous
Substances emanated or allegedly emanated from any of the Facilities and was
present or suspected to be present on any of the Facilities or such other
property on or prior to the Closing Date and after October 6, 2000) or (ii)
released or allegedly released by Shareholder or Acquired Company or any other
Person for whose conduct they are or may be held responsible, at any time on or
prior to the Closing Date and after October 6, 2000.
9.4 Indemnification of Shareholder by Acquired Company and Purchaser.
----------------------------------------------------------------
Acquired Company and Purchaser jointly and severally agree to indemnify and hold
Shareholder harmless against and with respect to, and shall reimburse
Shareholder for:
9.4.1 Any and all Losses resulting from any breach of a
representation or warranty by Purchaser contained herein; provided, however,
that any claim for indemnification pursuant to this Section 9.4.1 for a breach
of a representation or warranty set forth in Section 4 must be brought on or
before the first (1st) anniversary of the Closing Date; provided, however, that
a claim for indemnification pursuant to this Section 9.4.1 for a breach of a
representation of warranty set forth in Sections 4.1. or 4.2 may be brought at
any time; and provided, further that any claim for indemnification pursuant to
this Section 9.4.1 shall be subject to the terms and conditions set forth in
Section 9.5.8;
9.4.2 Any and all Losses resulting from any nonfulfillment of
any covenant by Purchaser or, to the extent related to any period commencing on
or after the Closing Date, Acquired Company contained herein;
9.4.3 Any and all Losses arising out of the operation of the
Business or the obligations of Acquired Company arising from and after Closing;
provided, however, that a claim for indemnification pursuant to this Section
9.4.3 shall be subject to the terms and conditions set forth in Section 9.5.8;
9.4.4 Any and all Losses arising out of the obligations of
Acquired Company under the Idealease Agreement arising from and after Closing;
and
9.4.5 Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
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9.5 Procedure; Conditions of Indemnification. The procedure for
----------------------------------------
for indemnification shall be as follows:
9.5.1 The party claiming indemnification (the "Claimant") shall
give notice to the party from whom indemnification is claimed (the "Indemnifying
Party") of any claim, whether between the parties or brought by a third party,
specifying (i) the factual basis for such claim, and (ii) the amount of the
claim, if ascertainable. If the claim relates to an action, suit or proceeding
filed by a third party against Claimant, such notice shall be given promptly by
Claimant to the Indemnifying Party after written notice of such action, suit or
proceeding is received by Claimant; provided, however, that the failure of the
Claimant to give timely notice hereunder shall not relieve the Indemnifying
Party of its obligations under this Article 9 unless, and only to the extent
that, the Indemnifying Party has been materially prejudiced thereby.
9.5.2 Following receipt of notice from the Claimant of a claim,
the Indemnifying Party shall have thirty (30) days to make such investigation of
the claim as the Indemnifying Party deems necessary or desirable. For the
purposes of such investigation, the Claimant agrees to make available to the
Indemnifying Party and/or its authorized representative(s) the information
relied upon by the Claimant to substantiate the claim. If the Claimant and the
Indemnifying Party agree at or prior to the expiration of said 30-day period (or
any mutually agreed upon extension thereof) to the validity and amount of such
claim, the Indemnifying Party shall immediately pay to the Claimant the full
amount of the claim. If the Claimant and the Indemnifying Party do not agree
within said period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate legal remedy.
9.5.3 With respect to any claim by a third party as to which the
Claimant is entitled to indemnification hereunder, the Indemnifying Party shall
have the right at its own expense, to participate in or assume control of the
defense of such claim, and the Claimant shall cooperate fully with the
Indemnifying Party, subject to reimbursement for actual out-of-pocket expenses
incurred by the Claimant as the result of a request by the Indemnifying Party.
If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If the Indemnifying Party does not
elect to assume control or otherwise participate in the defense of any
third-party claim, it shall be bound by the results obtained by the Claimant
with respect to such claim.
9.5.4 In the event that the Indemnifying Party assumes control
of the defense of any claim by a third party, the Indemnifying Party shall have
the right to consent or otherwise agree to any monetary settlement up to the
remaining amount of the liability cap set forth in Section 9.5.7 or 9.5.8, to
the extent such cap is applicable, but shall not have the right to consent or
otherwise agree to any non-monetary settlement or relief, including, without
limitation, injunctive relief, without the prior written consent of the
Claimant.
9.5.5 If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
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9.5.6 The indemnification rights provided in Sections 9.2, 9.3
and 9.4 shall extend to the affiliates, shareholders, directors, officers,
employees and representatives of the Claimant and their respective successors
and assigns.
9.5.7 Notwithstanding anything contained in this Agreement to
the contrary, (i) Acquired Company and Purchaser shall not be entitled to, and
shall not, assert any claim for indemnification pursuant to Section 9.2.1 or
9.2.3 until (and then shall recover only to the extent that) the aggregate
amount of such claims, either under one of Section 9.2.1 or Section 9.2.3 or
aggregated together under both of said Sections, exceeds $75,000; and (ii) the
aggregate liability of Shareholder for indemnification under and pursuant to
Section 9.2.1 and/or 9.2.3 shall not exceed $3,000,000.
9.5.8 Notwithstanding anything contained in this Agreement to
the contrary, (i) Shareholder shall not be entitled to, and shall not, assert
any claim for indemnification pursuant to Section 9.4.1 or 9.4.3 until (and then
shall recover only to the extent that) the aggregate amount of such claims,
either under one of Section 9.4.1 or Section 9.4.3 or aggregated together under
both of said Sections, exceeds $75,000; and (ii) the aggregate liability of
Acquired Company and Purchaser for indemnification under and pursuant to Section
9.4.1 and/or 9.4.3 shall not exceed $3,000,000.
9.5.9 Other than as contemplated in Section 11.2, the sole and
exclusive remedy of any party for any misrepresentation or any breach of a
warranty or covenant under or pursuant to this Agreement shall be a claim for
indemnification under and pursuant to this Article 9. The amount of any Losses
for which a party is seeking indemnification pursuant to this Article 9 shall
not include and shall be reduced by the amount received by the party entitled to
indemnification under this Agreement as proceeds from insurance which are paid
because of the event or matter the existence or occurrence of which is the
subject of indemnification hereunder.
10. EXPENSES AND TAXES.
10.1 Taxes, Fees and Expenses. Except as otherwise expressly provided in
------------------------
this Agreement, each party to this Agreement shall pay its respective expenses
incurred in connection with the authorization, preparation, execution and
performance of this Agreement and the contemplated transactions, including all
fees and expenses of counsel, accountants, agents and other representatives.
Shareholder will be responsible for the fees and expenses of counsel for
Acquired Company incurred through Closing in connection with the authorization,
preparation, execution and performance of this Agreement and the contemplated
transactions.
10.2 Brokers. Each of the parties represents and warrants to the other
-------
that neither it nor any Person acting on its behalf has incurred any liability
for any finders' or brokers' fees or commissions in connection with the
transaction contemplated by this Agreement. Purchaser agrees to indemnify and
hold harmless Shareholder against any fee, loss or expense arising out of any
claim by any broker or finder employed or alleged to have been employed by
Purchaser, and Shareholder agrees to indemnify and hold harmless Purchaser and
Acquired Company against any fee, loss, or expense arising out of any claim by
any broker or finder employed or alleged to have been employed by Purchaser or
Acquired Company.
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11. MISCELLANEOUS PROVISIONS.
11.1 Investigation. Except with respect to the Idealease Agreement and
-------------
the vehicles, trucks, tractors and trailers included within the Assets,
including those which are the subject of Acquired Company Contracts, no
investigation by or on behalf of Purchaser shall constitute a waiver as to
enforcement of any representation of warranty contained herein, or a waiver as
to any right of indemnification hereunder.
11.2 Specific Performance. The parties recognize that in the event
--------------------
Shareholder, Acquired Company or Purchaser should refuse to perform under the
provisions of this Agreement, monetary damages alone will not be adequate.
Shareholder, Purchaser and Acquired Company shall therefore be entitled, in
addition to any other remedies which may be available, to obtain specific
performance of the terms of this Agreement. In the event of any action by one of
the parties hereto to enforce the provisions of this Agreement, the other
parties hereto shall waive the defense that there is an adequate remedy at law.
11.3 Notices. All notices and other communications hereunder shall be (i)
-------
in writing, (ii) by commercial overnight or same-day delivery service with all
delivery costs paid by sender, by facsimile (with telephonic confirmation of
receipt) or by certified mail with postage prepaid, return receipt requested,
(iii) deemed given and effective on the date and at the time (if recorded) of
delivery by the commercial delivery service, as shown in the records thereof (if
delivered by commercial overnight or same-day delivery service), on the date and
at the time of telephonic confirmation of receipt of a facsimile or on the date
shown on the return receipt (if delivered by certified mail) and (iv) addressed
to the parties at their addresses specified below (or at such other address for
a party as shall be specified by like notice):
If to Shareholder:
-----------------
Manheim Auctions, Inc.
0000 Xxxx Xxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Dow, Xxxxxx & Xxxxxxxxx PLLC
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to Purchaser:
---------------
United Road Services, Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Miller, Canfield, Paddock and Stone, P.L.C.
000 Xxxx Xxxx Xxxx Xxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11.4 Further Assurances. Each party covenants that at any time, and from
------------------
time to time after the Closing, it will execute such additional instruments and
take such actions as may be reasonably requested by the other parties to confirm
or perfect or otherwise to carry out the intent and purposes of this Agreement.
11.5 Waiver. Except as otherwise expressly set forth in this Agreement,
------
the rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or privilege, and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
11.6 Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of the parties hereto and their respective heirs, legal
representatives, executors, administrators, successors and permitted assigns.
11.7 Headings. The section and other headings in this Agreement are
--------
inserted solely as a matter of convenience and for reference and are not a part
of this Agreement.
11.8 Entire Agreement. This Agreement constitutes the entire agreement
----------------
among the parties hereto with respect to the subject matter hereof and
supersedes and cancels any prior
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agreements, representations, warranties, or communications, whether oral,
written or collateral, among the parties hereto relating to the transactions
contemplated hereby or the subject matter hereof. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated, except by an
agreement in writing signed by the party against whom or which the enforcement
of such change, waiver, discharge or termination is sought.
11.9 Assignment. None of the parties hereto may voluntarily or
----------
involuntarily assign its interest under this Agreement without the prior written
consent of the other parties. Neither party may assign any of its rights under
this Agreement without the prior consent of the other parties, which will not be
unreasonably withheld, except that Purchaser may assign any of its rights under
this Agreement to any subsidiary of Purchaser; provided, however, that Purchaser
shall continue to be bound by the terms of this Agreement. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Notwithstanding the foregoing, it shall not be a violation of this
Section 11.9 for Shareholder to assign this Agreement to a Person that controls,
is controlled by or is under common control with Shareholder; provided, however,
that Shareholder shall continue to be bound by the terms of this Agreement.
11.10 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the substantive laws of the State of Georgia which would apply
to a contract executed and to be performed entirely within the State of Georgia,
without regard to principles of conflicts of laws.
11.11 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. A signature to this
Agreement may be delivered via facsimile and any such facsimile signature shall
be deemed an original signature hereto.
11.12 Pronouns. All pronouns used herein shall be deemed to refer to the
--------
masculine, feminine or neuter gender as the context requires.
11.13 No Third Party Beneficiaries. Except as otherwise expressly provided
----------------------------
in Article 9 of this Agreement, this Agreement constitutes an agreement solely
among the parties hereto and is not intended to and will not confer any rights,
remedies, obligations or liabilities, legal or equitable, on any Person other
than the parties hereto and their respective successors and assigns, or
otherwise constitute any Person a third party beneficiary under or by reason of
this Agreement.
11.14 Schedules and Exhibits Incorporated. All Schedules and Exhibits
-----------------------------------
attached hereto are incorporated herein by reference. Disclosure of information
in any portion of the Schedules shall be deemed disclosure in any other portion
of the Schedules. In addition, the fact that any disclosure on any Schedule is
not required to be disclosed in order to render the applicable representation or
warranty to which it relates true, or that the absence of such disclosure on
Schedule would not constitute a breach of such representation or warranty, shall
not be deemed or construed to expand the scope of any representation or warranty
hereunder or to establish a standard of disclosure in respect of any
representation or warranty.
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11.15 Construction. The parties acknowledge and agree that this Agreement
------------
is the result of extensive negotiations between the parties and their respective
counsel, and that this Agreement shall not be construed against either party by
virtue of its role or its counsel's role in the drafting hereof.
11.16 Severability. If any provision of this Agreement is held invalid or
------------
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11.17 Time of Essence. Time is of the essence with respect to all
---------------
provisions of this Agreement.
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Exhibit 10.24
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
PURCHASER:
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UNITED ROAD SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
ACQUIRED COMPANY:
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AUCTION TRANSPORT, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
SHAREHOLDER:
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MANHEIM SERVICES CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
