Exhibit 2
--------------------------------------
STOCK PURCHASE AGREEMENT
--------------------------------------
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of November 15, 1999, by and among Covenant Transport, Inc., a Tennessee
corporation ("Buyer"); ▇▇▇▇▇▇ ▇▇▇▇ (the "Selling Stockholder"); ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, and the ▇▇▇▇▇ Denver
Ives Irrevocable Trust (collectively, the "Additional Stockholders"); ▇▇▇▇▇▇
▇▇▇▇ Trucking Co. (the "Trucking Company"); and Terminal Truck Broker, Inc. (the
"Brokerage Company") (together with the Trucking Company, the "Companies").
RECITALS
1. The Selling Stockholder owns a majority of the issued and outstanding
capital stock of the Trucking Company consisting of 1900 shares of the 2000
shares outstanding of the $1.00 par value common stock. The Selling Stockholder
also owns a majority of the issued and outstanding capital stock of the
Brokerage Company consisting of 51 shares of the 61 shares outstanding of the no
par value common stock.
2. ▇▇▇▇▇▇ ▇▇▇▇ owns 100 shares of the common stock of the Trucking
Company and one share of the common stock of the Brokerage Company. ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ each own one share of the common
stock of the Brokerage Company. The ▇▇▇▇▇ Denver Ives Irrevocable Trust, for the
benefit of ▇▇▇▇▇ ▇▇▇▇, owns 5 shares of the common stock of the Brokerage
Company (collectively, the stock owned by the Selling Stockholder and the
Additional Stockholders shall be the "Common Stock").
3. The Selling Stockholder and the Additional Stockholders propose to
sell and Buyer proposes to purchase the Common Stock.
4. The parties desire that the transaction be accomplished as stated
herein, in accordance with their respective representations, warranties, and
agreements, subject to the conditions contained herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the covenants, representations,
warranties, and agreements herein contained, and for other good and valuable
consideration, the parties agree as follows:
ARTICLE I
Definitions
For the purposes of this Agreement, unless otherwise provided, the
following terms, when capitalized, shall have the meanings ascribed to them
below:
1.1 "Affiliate" means any person or entity controlling, controlled by, or
under common control with another person or entity, including, but not limited
to, the following: all officers, directors, and persons owning 10% or more of
the equity interests of an entity.
1.2 "Assigned Matters" has the meaning ascribed in Section 5.13.
1.3 "Authority" means each and every federal, state, local, and foreign
judicial, governmental, quasi-governmental, or regulatory agency, official, or
department; every arbitrator, mediator, and other similar official; and every
other entity to whose jurisdiction or decision making authority a party has
submitted.
1.4 "Benefit Plans" means all contracts, plans, arrangements, policies, and
understandings providing for any compensation or benefit other than base wages
or salaries that are maintained by the Trucking Company or the Brokerage Company
or affect either of their employees or independent contractors, regardless of
whether defined as an "employee benefit plan" under ERISA or subject to any
provision of ERISA, including, without limitation: all pension, profit-sharing,
retirement, thrift, 401(K), ESOP, and other similar plans and arrangements
(defined benefit and defined contribution); all health and welfare, disability,
insurance (including self-insurance), workers' compensation, supplemental
unemployment, severance, vacation, and similar plans and arrangements; and all
bonus, stock option, incentive compensation, stock appreciation rights, phantom
stock, overtime guaranty, employment contract, employee handbook, and other
similar plans or arrangements.
1.5 "▇▇▇▇ of Sale" has the meaning ascribed in Section 2.3.
1.6 "Brokerage Company" has the meaning ascribed in the first paragraph of
this Agreement.
1.7 "Closing" and "Closing Date" have the meanings ascribed in Section 3.1.
1.8 "Closing Balance Sheets" has the meaning ascribed in Section 4.3(f)(iii).
1.9 "Code" means the Internal Revenue Code of 1986, as amended, or any
successor federal tax law.
1.10 "Common Stock" has the meaning ascribed in the Recitals.
1.11 "Companies" means the Brokerage Company and the Trucking Company together.
1.12 "Competitive Business" has the meaning ascribed in Section 5.10(c).
1.13 "Contract" means any mortgage, indenture, agreement, contract, commitment,
lease, plan, license, permit, insurance policy or binder, authorization, or
other instrument, document, or understanding, oral or written.
1.14 "DOT" has the meaning ascribed in Section 4.4(g).
1.15 "Effective Date and Time" has the meaning ascribed in Section 3.1.
1.16 "Environmental Laws" has the meaning ascribed in Section 4.4(m).
1.17 "Escrow Agent" has the meaning ascribed in Section 2.4(b).
1.18 "Escrowed Funds" has the meaning ascribed in Section 2.4(b).
1.19 "Escrow Agreement" has the meaning ascribed in Section 2.4(b).
1.20 "GAAP" means generally accepted accounting principles, consistently applied
throughout all periods, provided, that interim, unaudited financial statements
lack footnotes and other presentation items.
1.21 "Historical Financial Statements" has the meaning ascribed in Section
4.3(f).
1.22 "Judgment" means any judgment, order, writ, injunction, decree, award, or
settlement of any Proceeding.
1.23 "Knowledge" means an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the
course of conducting an investigation concerning the existence
of such fact or other matter.
The Companies and the Selling Stockholder will be deemed to have "Knowledge" of
a particular fact or other matter if ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
or ▇▇▇▇▇ ▇▇▇▇ has, or at any time had, Knowledge of such fact or other matter.
Buyer shall be deemed to have "Knowledge" of a particular fact or other matter
if ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or ▇▇▇▇▇ ▇▇▇▇▇▇ has, or at any time had, Knowledge
of such fact or other matter.
1.24 "Law" means any constitution, statute, Judgment, law, ordinance, rule,
regulation, or other pronouncement by any Authority (including, without
limitation, the following types: environmental, energy, safety, health, zoning,
antidiscrimination, antitrust, employment, transportation, Tax, and employee
benefit (including ERISA)).
1.25 "Lien" means any mortgage, lien, pledge, security interest, mechanics or
materialmens' or similar lien, conditional sale agreement, charge, claim, right,
condition, restriction, or other encumbrance or defect of title of any nature
whatsoever (including, without limitation, any assessment, charge, or other type
of notice which is levied or given by any Authority and for which a lien could
be filed).
1.26 "Loss" and "Losses" have the meanings ascribed in Section 7.1.
1.27 "Noncompete Parties" has the meaning ascribed in Section 5.10(a).
1.28 "Permits" has the meaning ascribed in Section 4.4(l).
1.29 "Proceeding" means any action, suit, litigation, arbitration,
investigation, hearing, notice of violation, order, claim, citation, charge,
demand, complaint, review, or penalty assessment, in each case whether formal or
informal, administrative, civil or criminal, at law or in equity, and whether or
not in front of any Authority.
1.30 "Real Estate" means the real estate and improvements thereon, and all
rights and appurtenances thereto, currently owned or leased by the Trucking
Company or the Brokerage Company, all as legally described on Exhibit A.
1.31 "Retained Assets" has the meaning ascribed in Section 2.3.
1.32 "Rights" means all patents, trademarks, copyrights, franchises, licenses,
permits, easements, computer software programs, rights (including, without
limitation, rights to trade secrets and proprietary information and know-how),
certificates, approvals, and other authorizations including those issued by or
filed with any Authority, and any applications for any of the foregoing.
1.33 "Schedules" has the meaning ascribed in Section 4.1.
1.34 "September 30 Balance Sheets" means the respective balance sheets of the
Trucking Company and the Brokerage Company prepared in accordance with GAAP as
of September 30, 1999; provided, that in any event, the September 30 Balance
Sheets shall: (a) be consistent with the representations contained in this
Agreement concerning Historical Financial Statements and the nature of assets
reflected thereon; (b) reflect all adjustments and accruals as are necessary to
reflect liabilities, including prorated liabilities not yet due through such
date, including liabilities that historically were not accrued until year-end,
such as Taxes, Benefit Plan contributions, claims incurred but not reported, and
the like; (c) reflect all payments and distributions made or to be made to or
for the benefit of the Selling Stockholder and Additional Stockholders (or an
accrual for such amounts if to be disbursed after September 30 or directly to a
payee on behalf of the Selling Stockholder and Additional Stockholders); and (d)
reflect all costs of the Trucking Company and the Brokerage Company (and the
Selling Stockholder, if to be paid by the Trucking Company or the Brokerage
Company) in evaluating, negotiating, preparing for, documenting, and
consummating of any transactions contemplated hereby or occurring in connection
with the transactions contemplated hereby (including any broker's or finder's
fees).
1.35 "Taxes" means all taxes, charges, fees, levies, or other assessments of
whatever kind or nature, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, estimated, severance, stamp,
occupancy, or property taxes, customs duties, fees, assessments, or charges of
any kind whatsoever (together with any interest and any penalties, additions to
tax, or additional amounts) imposed by any Authority.
ARTICLE II
Stock Purchase and Sale
2.1 Transfer of Common Stock. Subject to the terms and conditions of this
Agreement, at the Closing, the Selling Stockholder and Additional Stockholders
shall sell, convey, transfer, assign, and deliver to Buyer, and Buyer shall
acquire, 100% of the issued and outstanding Common Stock free and clear of all
Liens.
2.2 Purchase Price. In consideration for the transfer of the Common Stock, Buyer
agrees to pay the following (the "Purchase Price"):
(a) Eleven Million Eight Hundred Thousand Dollars ($11,800,000), less
(i) the net book value of Retained Assets owned by the Trucking
Company; (ii) employee payments made or accrued at Closing as listed on
a schedule to be provided by the Selling Stockholder at Closing; and
(iii) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP fees attributable to the sale of
the Trucking Company in exchange for 100% of the issued and outstanding
capital stock of the Trucking Company; plus
(b) Eleven Million Dollars ($11,000,000), less (i) the net book value
of Retained Assets owned by the Brokerage Company; (ii) employee
payments made or accrued at Closing as listed on a schedule to be
provided by the Selling Stockholder at Closing; and (iii) ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP fees attributable to the sale of the Brokerage
Company in exchange for 100% of the issued and outstanding capital
stock of the Brokerage Company.
2.3 Sale of Assets of Brokerage Company and Trucking Company. At Closing, the
Brokerage Company and Trucking Company shall sell all the Companies' respective
right, title, and interest in and to the Retained Assets (the assets listed on
Schedule 2.3) to the Selling Stockholder. The Brokerage Company and Trucking
Company shall deliver the Bills of Sale attached as Exhibit B-1 and B-2,
respectively, and such other documents as may be reasonably required to transfer
the Retained Assets to the Selling Stockholder, free and clear of all Liens,
except Liens secured by such Retained Assets.
2.4 Payment of Purchase Price. The Purchase Price shall be paid as follows:
(a) The entire Purchase Price, less the amount specified in
subparagraph (b), shall be paid to the Selling Stockholder and
Additional Stockholders at Closing based on their pro rata ownership.
(b) One Million Dollars ($1,000,000) (the "Escrowed Funds") shall be
placed in escrow at Closing with Metropolitan National Bank in Little
Rock, Bank of America in Little Rock, or other institution acceptable
to the parties (the "Escrow Agent"), under an escrow agreement in
substantially the form of attached Exhibit C to be executed and
delivered by the parties thereto at Closing (the "Escrow Agreement").
2.5 Purchase Price Adjustment. The Purchase Price shall be increased as follows:
(a) by the amount, if any, by which the claim by Zurich (including all
associated costs) is ultimately resolved for less than $456,687;
(b) by the amount, if any, by which the bad debt reserve for the
Brokerage Company is unused by ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇ being understood that
on such date all accounts receivable outstanding at the Closing Date
that have not been collected at March 31, 2000 shall be deemed bad
debts and offset against the reserve);
(c) by the amount, estimated at $210,000, equal to $7,000 multiplied by
the number of Kenworth tractors the Trucking Company had previously
contracted to purchase that the Trucking Company has canceled without
liability (it being understood that if any such liability arises, it
will be offset against the adjustment in this Section 2.5(c)); and
(d) by the amount, if any, that is collected by the Trucking Company
as a result of its lawsuit against Pro Transportation, after
deducting all costs, counterclaims, and expenses associated with the
pursuit of such lawsuit that are incurred after the Closing.
The amounts, if any, determined under Section 2.5(a), (c), and (d)
shall be adjustments to the Purchase Price portion set forth in Section
2.2(a) and the amount, if any, determined under Section 2.5(b) shall be
an adjustment to the Purchase Price portion set forth in Section
2.5(b).
ARTICLE III
Closing
3.1 Date. The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on the date
two business days following the satisfaction of all of the conditions precedent
to the obligations of the parties as set forth in Article VI or such other date
as the parties may mutually determine (the "Closing Date"). The transactions
contemplated herein shall be effective as of 12:01 a.m. on the Closing Date
which shall be the Effective Date and Time.
3.2 Delivery of Certificates. At the Closing, (i) the Trucking Company, the
Brokerage Company, the Additional Stockholders, and the Selling Stockholder
shall deliver to Buyer the various certificates, stock instruments, and
documents referred to in Section 6.1; and (ii) Buyer shall deliver to the
Selling Stockholder the various certificates, instruments, and documents
referred to in Section 6.2. The parties shall take all such other actions
necessary or advisable to implement the transactions contemplated by this
Agreement (provided that no party shall be required to waive any condition to
closing or other right, hereunder or otherwise).
3.3 Delivery of Stock. At the Closing, the Selling Stockholder and the
Additional Stockholders shall deliver to Buyer certificates representing all
shares of Common Stock, duly endorsed in blank (or accompanied by duly executed
stock powers in blank), with signatures guaranteed by a commercial bank.
3.4 Delivery of Purchase Price. At the Closing, the Buyer shall deliver the
Purchase Price to the Selling Stockholder, the Additional Stockholders, and the
Escrow Agent in the respective amounts specified in Section 2.4 by check or wire
transfer of immediately available funds.
ARTICLE IV
Representations and Warranties
4.1 General Statement. The parties hereto represent and warrant to each other
that the statements contained in this Article IV are correct and complete as of
the date of this Agreement and shall be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement). The survival of all such representations and
warranties shall be in accordance with Section 8.3 hereof. Unless otherwise
specified herein or on the Schedules, all representations and warranties of the
parties are made subject to the exceptions which are noted in the respective
schedules attached hereto (the "Schedules"). Copies of all documents referenced
in the Schedules shall be attached thereto or delivered separately.
4.2 Representations and Warranties of Buyer. Buyer represents and warrants to
the Selling Stockholder and Additional Stockholders, that:
(a) Corporate Status. Buyer is a corporation, duly organized,
validly existing, and in good standing under the laws of the State of
Tennessee, with all requisite power and authority to carry on its
business.
(b) Authority. Buyer has full right, power, and authority to
execute and deliver this Agreement and to consummate and perform the
transactions contemplated hereby. The execution and delivery of this
Agreement and every other Contract contemplated hereunder by Buyer and
the consummation and performance of the transactions contemplated
hereby and thereby have been duly and validly authorized by all
necessary corporate and other proceedings. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and
binding obligation of Buyer, enforceable against Buyer in accordance
with its terms. Anything to the contrary notwithstanding, the
representations and warranties of this Section 4.2(b) are subject to
receipt of Board approval under Section 6.1(k).
(c) Validity of Contemplated Transaction. The execution and
delivery of this Agreement by Buyer does not, and the performance of
this Agreement by Buyer will not (i) violate or conflict with any
existing Law or any Judgment which is applicable to Buyer or (ii)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any person the right to
accelerate, terminate, modify, or cancel, or require any notice under
the articles of incorporation or other charter documents, bylaws, or
any securities of Buyer or any Contract to which Buyer is a party or by
which it is otherwise bound. No authorization, approval, or consent of,
and no registration, filing, or notice to any Authority or any other
party to any Contract is required in connection with the execution,
delivery, and performance of this Agreement by Buyer.
(d) Brokers or Finders. Buyer and its officers and agents have
incurred no obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar
payment in connection with this Agreement.
(e) Buyer's Knowledge. Buyer does not have Knowledge that any
of the Companies' or Selling Stockholder's representations and
warranties are incorrect in any material respect. Buyer has Knowledge
that the Trucking Company has taken delivery on tractors and trailers,
and incurred indebtedness relating thereto, since September 30, 1999,
and acknowledges that such events were in the ordinary course of
business.
(f) Accredited Investor; Access. Buyer is an accredited
investor as that term is defined in Rule 501 of Regulation D of the
Securities Act of 1933, as amended. Buyer has had access to information
concerning the Trucking Company and the Brokerage Company and has had
the opportunity to discuss the information and any other questions
regarding the Companies with the officers and directors of the
Companies.
(g) Workers Adjustment and Retraining Notification Act. Buyer
has not requested and it will not request the Selling Stockholder, the
Additional Stockholders, or prior to Closing, the Trucking Company or
the Brokerage Company, to take any action which would require notice or
any liability under the Workers Adjustment and Retraining Notification
Act.
4.3 Representations and Warranties of the Trucking Company, the Brokerage
Company, and the Selling Stockholder. The Selling Stockholder and, prior to the
Closing, the Companies represent and warrant jointly and severally to Buyer
that:
(a) Corporate Status. The Trucking Company and the Brokerage
Company are corporations, duly organized, validly existing, and in good
standing under the laws of the State of Arkansas, each with all
requisite power, authority, and Permits to carry on its business as it
has been and is now being conducted and to own, lease, and operate its
properties used in connection therewith. Except as set forth on
Schedule 4.3(a), the Trucking Company and the Brokerage Company are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction where the character of their
properties or the nature of their businesses requires them to be so
qualified. Except as disclosed on Schedule 4.3(a), the Trucking Company
and the Brokerage Company conduct their businesses only under their own
names, except the Brokerage Company has registered ▇▇▇▇▇▇ ▇▇▇▇
Transportation as a fictitious name under which it may legally conduct
business. The Trucking Company and the Brokerage Company have no
subsidiaries and no entities affiliated through common ownership or
otherwise that conduct any business related to that which they conduct.
The Brokerage Company owns all of the issued and outstanding capital
stock of Terminal Aviation, Inc., a Delaware corporation, the business
or which is not similar in nature to the Companies' business.
(b) Capitalization. The entire authorized capital stock of the
Trucking Company consists of 10,000 shares of common stock, of which
2,000 shares are issued and outstanding and owned as set forth in the
Recitals. The entire authorized capital stock of the Brokerage Company
consists of 1,000 shares of common stock, of which 61 shares are issued
and outstanding and owned as set forth in the Recitals. Neither the
Trucking Company nor the Brokerage Company has any stockholders or
issued and outstanding stock, whether voting or non-voting, common or
preferred, other than the Selling Stockholder and the Additional
Stockholders and the aforesaid shares owned by the Selling Stockholder
and the Additional Stockholders. The Selling Stockholder and the
Additional Stockholders are the record and beneficial owners of the
Common Stock, free and clear of all Liens. All of such shares have been
duly authorized and validly issued, are fully paid and non-assessable,
and are free of all adverse claims. None of the Common Stock was issued
in violation of the Securities Act of 1933 or any other Law. Except as
set forth on Schedule 4.3(b), there are no outstanding or authorized
(i) options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other Contracts or commitments that could
require the Trucking Company or the Brokerage Company (or any
successor, parent, or acquiror of the Trucking Company or the Brokerage
Company) to issue, sell, or otherwise cause to become outstanding any
capital stock or other securities or obligations; (ii) stock
appreciation, phantom stock, profit participation, or similar rights;
or (iii) voting trusts, proxies, rights of first refusal, registration
rights, transfer restrictions, or other Contracts relating to the
capital stock or other securities or obligations of the Trucking
Company or the Brokerage Company.
(c) Officers; Directors; Bank Accounts; Powers of Attorney.
Schedule 4.3(c) lists all directors and officers of the Trucking
Company and the Brokerage Company; all bank accounts, lock boxes, safe
deposit boxes, and borrowing authority of the Trucking Company and the
Brokerage Company, specifying with respect to each, the name and
address of the bank or other financial institution and the account
number and all persons having signing authority or authority to
withdraw therefrom or thereon; and all persons having power of
attorney, authority as an agent, or other authority to act on behalf of
the Trucking Company or the Brokerage Company.
(d) Authority. The Trucking Company, the Brokerage Company,
the Additional Stockholders, and the Selling Stockholder, as
appropriate, have full right, power, and authority to execute and
deliver this Agreement and every other Contract contemplated hereunder
and to consummate and perform the transactions contemplated hereby. The
execution and delivery of this Agreement and every other Contract
contemplated hereunder by the Trucking Company, the Brokerage Company,
the Additional Stockholders, and the Selling Stockholder and the
consummation and performance of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary
corporate and other proceedings. This Agreement has been duly executed
and delivered by the Trucking Company, the Brokerage Company, the
Additional Stockholders, and the Selling Stockholder and constitutes
the legal, valid, and binding obligation of each, enforceable against
each, in accordance with its terms.
(e) Validity of Contemplated Transactions. The execution and
delivery of this Agreement and every other Contract contemplated hereby
by the Trucking Company, the Brokerage Company, the Additional
Stockholders, and the Selling Stockholder do not, and the performance
of this Agreement and every other Contract contemplated hereby by the
Trucking Company, the Brokerage Company, the Additional Stockholders,
and the Selling Stockholder will not, (i) violate or conflict with any
existing Law or any Judgment which is applicable to the Trucking
Company, the Brokerage Company, the Additional Stockholders, or the
Selling Stockholder; or (ii) conflict with, result in a breach of,
constitute a default under, result in acceleration of, create in any
person the right to accelerate, terminate, modify, or cancel, or
require any notice under the articles of incorporation or other charter
documents, bylaws, or any securities of the Trucking Company or the
Brokerage Company or to the Knowledge of the Selling Stockholder and
the Companies any Contract to which the Trucking Company, the Brokerage
Company, the Additional Stockholders, or the Selling Stockholder is a
party or by which any is otherwise bound. To the Knowledge of the
Selling Stockholder and the Companies, except under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, no authorization, approval, or consent of, and
no registration, filing, or notice to any Authority or other party to
any Contract is required in connection with the execution, delivery,
and performance of this Agreement by the Trucking Company, the
Brokerage Company, or the Selling Stockholder.
(f) Financial Information.
(i) The Trucking Company and the Brokerage Company
have delivered to Buyer the annual, audited financial
statements (including balance sheets and statements of income,
cash flows, and retained earnings) of the Trucking Company at
and for the periods ended December 31, 1996, 1997, and 1998
and of the Brokerage Company at and for the periods ended
December 31, 1997 and 1998, as well as the internal financial
statements of each Company at and for the period ended
September 30, 1999 (collectively, the "Historical Financial
Statements"). The Historical Financial Statements and all
notes thereto are true, correct, and complete, have been
prepared in accordance with GAAP, present fairly the financial
condition and results of operations, changes in stockholder's
equity and cash flows of the Trucking Company and the
Brokerage Company at and for all periods reflected therein,
and are consistent with the books and records of the Trucking
Company and the Brokerage Company, which books and records are
correct and complete. Copies of the Historical Financial
Statements are attached as Schedule 4.3(f)(i).
(ii) All accounts receivable of whatever nature of
the Trucking Company and the Brokerage Company represent valid
obligations arising from sales actually made or services
actually performed in the ordinary course of business. Except
as set forth on Schedule 4.3(f)(ii), all accounts receivable
are collectible net of the reserves shown on the Companies'
respective balance sheets. There is no contest, claim, or
right of set-off, other than returns in the ordinary course of
business, under any Contract with any obligor of an accounts
receivable relating to the amount or validity of such accounts
receivable.
(iii) The total combined stockholder equity of the
Trucking Company and the Brokerage Company reflected on their
September 30 Balance Sheets, and as of the Closing Date,
calculated on balance sheets prepared in the same manner as
the September 30 Balance Sheets, shall be not less than
$22,885,436 (before any reduction for distribution of Retained
Assets or any accrual for employee payments made at Closing or
legal fees paid at Closing). The balance sheets as of the
Closing Date for the Trucking Company and the Brokerage
Company are referred to as the "Closing Balance Sheets."
(iv) All reserves accrued for liabilities on the
September 30 Balance Sheets and the Closing Balance Sheets
are, or shall be, adequate to cover the full amount of the
associated liabilities.
(g) Absence of Undisclosed Liabilities. Except as disclosed on
Schedule 4.3(g), the Trucking Company and the Brokerage Company have no
liabilities or obligations, accrued or unaccrued, contingent or
absolute, liquidated or unliquidated, and whether due or to become due,
except for (i) liabilities that are reflected and adequately accrued on
the face of the September 30 Balance Sheet included in the Historical
Financial Statements, and (ii) liabilities arising in the ordinary
course of business since such date (none of which arises from or
relates to any breach of contract or warranty, tort, infringement, or
violation of Law, or would have to be disclosed on any Schedule to this
Agreement).
(h) Tax Matters. Except as set forth on Schedule 4.3(h), with
respect to Taxes:
(i) The Trucking Company and the Brokerage Company
have filed, within the time and in the manner prescribed by
law, all returns, declarations, reports, estimates,
information returns, and statements (the "Returns") required
to be filed under applicable Laws, and all such Returns are
true, correct, and complete. The Trucking Company and the
Brokerage Company have within the time and in the manner
prescribed by Law, paid all Taxes that are due and payable
with respect to each. The Trucking Company and the Brokerage
Company have established on the September 30 Balance Sheet
reserves, charges, and accruals that are adequate for the
payment of all Taxes not yet due and payable that are
attributable to periods ending on such date. There are no
Liens for Taxes upon the assets of the Trucking Company or the
Brokerage Company except for Liens for Taxes not yet due and
payable.
(ii) None of the Returns of the Trucking Company or
the Brokerage Company is presently under audit by any
Authority nor has a deficiency for any Taxes been proposed,
asserted, or assessed against the Trucking Company or the
Brokerage Company. There are no outstanding waivers or
comparable consents regarding the application of the statute
of limitations with respect to any Tax or Return that have
been given by or on behalf of the Trucking Company or the
Brokerage Company.
(iii) The Trucking Company and the Brokerage Company
and, if applicable, their agents and contracted service
providers, have complied in all respects with all applicable
Laws relating to the payment and withholding of Taxes and
have, within the time and in the manner prescribed by
applicable Law, withheld, collected, and paid over to the
proper governmental authorities all amounts required to be so
withheld, collected, and paid over under all applicable Laws.
(i) Brokers or Finders. The Trucking Company, the Brokerage
Company, the Selling Stockholder, the Additional Stockholders, and
their agents and Affiliates have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents
commissions or other similar payment in connection with this Agreement.
4.4 Representations and Warranties to the Knowledge of the Companies and the
Selling Stockholder. The Selling Stockholder and, prior to the Closing, the
Companies, represent and warrant jointly and severally to the Buyer that, to
their Knowledge:
(a) Absence of Changes or Events. Except as disclosed on
Schedule 4.4(a), since September 30, 1999, there has not been any
adverse change in the business, operations, results of operations, or
future prospects of the Trucking Company or the Brokerage Company.
Without limiting the generality of the foregoing, since that date,
except as disclosed on Schedule 4.4(a), neither the Trucking Company
nor the Brokerage Company has:
(i) declared, set aside, or paid any dividend or made
any other distribution or payment in respect of its capital
stock; redeemed, purchased, or otherwise acquired any of its
capital stock; issued any capital stock or other securities;
granted any stock option or right to purchase shares of
capital stock or any other securities of the Trucking Company
or the Brokerage Company; issued any security convertible into
capital stock; or granted any registration rights concerning
its securities;
(ii) discharged or satisfied any Lien or paid any
material liabilities, other than in the ordinary course of
business consistent with past practice, or failed to pay or
discharge any liabilities when due;
(iii) sold, assigned, or transferred or agreed to
sell, assign, or transfer any of its assets or any interest
therein, other than trades or disposals of assets in the
ordinary course of business for which replacement assets of
equal or greater value were purchased;
(iv) created, incurred, assumed, or guaranteed any
indebtedness for money borrowed or any other indebtedness or
obligation of any nature (absolute or contingent), or
mortgaged, pledged, or subjected to any Lien, any of its
assets;
(v) acquired any substantial assets, properties,
securities, or interests of another person;
(vi) reduced or canceled any amounts owed to it;
(vii) settled any claims against it;
(viii) except as disclosed on Schedule 4.4(a)(viii),
granted or entered into any agreement or policy with any
employee that grants severance or termination pay, increases
compensation, increases benefits under any current Benefit
Plan, or creates any continuing employment relationship;
(ix) experienced any labor unrest or union
organizing activity;
(x) suffered any adverse change in its business;
(xi) changed any of the accounting principles
which it follows or the methods of applying such principles;
(xii) amended, terminated, or entered into any
Contract other than in the ordinary course of business,
consistent with past practice;
(xiii) except as disclosed on Schedule 4.4(a)(xiii),
suffered to its assets any damage, destruction, or loss,
whether or not covered by insurance, which has not been
repaired;
(xiv) amended its articles of incorporation or bylaws
or made any changes in its authorized or issued capital stock
or other securities;
(xv) directly or indirectly engaged in any
transaction, arrangement, or Contract with any Affiliate;
(xvi) entered into any transactions outside the
ordinary course of business; or
(xvii) agreed, whether orally or in writing, to do
any of the foregoing.
(b) Asset Schedule. Schedule 4.4(b) sets forth all material
assets owned by the Trucking Company and the Brokerage Company together
with the cost, depreciated book value, and tax basis thereof. All of
such assets are reflected on the September 30 Balance Sheet of the
Trucking Company or the Brokerage Company.
(c) Title and Condition of Assets other than Tractors and
Trailers. Except as set forth on Schedule 4.4(c), all of the Trucking
Company and the Brokerage Company's owned and leased assets are in good
repair and condition and adequate for the ordinary course of operation
of the Trucking Company and the Brokerage Company's business as
presently conducted ordinary wear and tear excepted, and all leased
assets are in compliance with any applicable lease provisions. Except
as set forth on Schedule 4.4(c), all inventory is usable and not
obsolete. Neither the Trucking Company, the Brokerage Company, nor the
Selling Stockholder has received notice from any Authority of a
Proceeding in the nature of condemnation or eminent domain relating to
any of the property which the Trucking Company or the Brokerage Company
owns, leases, or utilizes in its operations, including the Real Estate.
Except as set forth on Schedule 4.4(c), each of the Trucking Company
and the Brokerage Company possesses good and marketable title to all of
its owned assets and a valid leasehold interest in all leased assets,
free and clear of all Liens, except Liens for current taxes not yet due
and payable. Except as disclosed on Schedule 4.4(c), the Trucking
Company and the Brokerage Company do not use any assets in their
businesses other than assets owned by it or assets leased under valid
and continuing leases that are identified on Schedule 4.4(g). There are
no developments affecting any of the Trucking Company or the Brokerage
Company's properties or assets, owned or leased, that might materially
detract from the value of such property or assets, interfere with any
present or intended use of such property or assets, or adversely affect
the marketability of such property or assets. All buildings, plants,
and structures owned or used by the Trucking Company or the Brokerage
Company lie wholly within the boundaries of the Real Estate and do not
encroach upon the property of, or otherwise conflict with the property
rights of, any other third party. The buildings, plants, structures,
and equipment owned or used by the Trucking Company or the Brokerage
Company are structurally sound, are in good operating condition and
repair, and are adequate for the uses to which they are being put, and
none of such buildings, plants, structures, or equipment is in need of
maintenance or repairs except for ordinary, routine maintenance and
repairs that are not material in nature or cost. The buildings, plants,
structures, and equipment owned or used by the Trucking Company or the
Brokerage Company are sufficient for the continued conduct of the
Trucking Company or the Brokerage Company's business after the Closing
Date in substantially the same manner as conducted prior to the Closing
Date. The representations and warranties in this Section 4.4(c) do not
apply to tractors and trailers, which are addressed separately in
Section 4.4(d).
(d) Warranties Concerning Tractors and Trailers. Except as set
forth on Schedule 4.4(d), all tractors and trailers operated by the
Trucking Company are in compliance with Department of Transportation
requirements, and have been maintained in material compliance with all
applicable manufacturers' specifications and warranties. The Trucking
Company does not lease any tractors except for those leased from
owner-operators as listed on Schedule 4.4(d) and does not lease any
trailers except those listed on Schedule 4.4(d). All trailers have been
operated at all times in compliance with applicable leases or other
financing documents. All leased trailers satisfy the Aturn-in@
requirements under applicable leases such that there would not be any
penalty, reconditioning fee, or other amount owed if such leased
trailers were returned at the Closing Date. Each leased trailer has
been operated within the mileage allowance, if any, of the applicable
lease, prorated for the portion of the lease period that has expired.
Except as set forth on Schedule 4.4(d), as to any specific unit, all
tractors and trailers that are owned or covered by leases without
specific return requirements have $750 or less damage and comply with
all Department of Transportation operating requirements. There are no
late fees, penalties, or other amounts owing under any tractor or
trailer lease or other financing document, other than any current month
payment that is not yet due. Except as set forth on Schedule 4.4(d),
the Trucking Company possesses good and marketable title to its owned
tractors and trailers and a valid leasehold interest in all leased
trailers. This warranty does not apply to any tractor or trailer owned
by an owner-operator, and the Companies specifically disclaim any
responsibility and control with respect thereto.
(e) Litigation. Except as set forth in Schedule 4.4(e), there
is no Proceeding pending or threatened against the Trucking Company or
the Brokerage Company. Neither the Trucking Company, the Brokerage
Company, nor the Selling Stockholder has reason to believe that any
such Proceeding may be brought or threatened against the Trucking
Company, the Brokerage Company, or the Selling Stockholder.
(f) Insurance; Bonds. Schedule 4.4(f) contains a list of, and
Buyer has been furnished true and complete copies of, all insurance
policies and fidelity bonds covering the Trucking Company and the
Brokerage Company's assets, business, properties, operations,
employees, officers, and directors, and other matters for which either
of the Trucking Company or the Brokerage Company carries insurance and
describes any self-insurance arrangement by or affecting the Trucking
Company and the Brokerage Company, including any reserves established
thereunder, covering the period since January 1, 1991. Except as set
forth in Schedule 4.4(f), there is no claim by any insured pending
under any of such policies or bonds as to which coverage has been
questioned, denied, or disputed by the underwriters of such policies or
bonds; all premiums payable under all such policies and bonds have been
paid; and the Trucking Company and the Brokerage Company are otherwise
in full compliance with the terms and conditions of all such policies
and bonds. As to all claims that might be covered by such policies or
bonds, the Trucking Company and the Brokerage Company have promptly and
within any prescribed time period notified the insuring or bonding
party in the proper manner. Such policies of insurance and bonds (or
other policies and bonds providing substantially similar insurance
coverage) have been in effect continuously since January 1, 1991, and
remain in full force and effect. Such policies of insurance and bonds
are of the type and in amounts customarily carried by persons
conducting similar businesses and, except as set forth on Schedule
4.4(f), do not exclude coverage for environmental, employment, or
punitive damages. Except as set forth in Schedule 4.4(f), neither the
Trucking Company, the Brokerage Company, nor the Selling Stockholder
has Knowledge of any threatened termination of, or premium increase
with respect to, any of such policies or bonds. Except for claims
listed on Schedule 4.4(e), neither the Trucking Company nor the
Brokerage Company has given notice to the insurer of any claims that
may be insured thereby. The Brokerage Company does not have any claims
against it made by shippers or carriers for cargo damage, overages, or
other matters that are not covered by insurance.
(g) Material Contracts. Schedule 4.4(g) contains a list of all
material Contracts to which the Trucking Company or the Brokerage
Company is a party, including but not limited to: any Contract that is
not by its terms cancelable on notice of not longer than 30 days
without liability or penalties, or which, if performed, would involve
the payment by the Trucking Company or the Brokerage Company of more
than $25,000; any Contract restricting or limiting the Trucking Company
or the Brokerage Company from carrying on its business or competing in
any line of business; any Contract involving a joint venture,
partnership, or other profit or loss sharing arrangement; any Contract
with the Selling Stockholder, or any other Affiliate; any Contract
relating to indebtedness for borrowed money, deferred purchase price of
property, or the guaranty of the obligations of any person; any
Contract concerning leased assets used by the Trucking Company or the
Brokerage Company; any Contract respecting Rights, Real Estate, or
employees; any power of attorney or similar instrument; any Contract
between the Brokerage Company and its ten largest shippers and its ten
largest carriers; any Contract between the Trucking Company and its ten
largest customers; and any other Contract not made in the ordinary
course of business. Each Contract disclosed in any Schedule or required
to be disclosed pursuant to this Section 4.4(g) is a valid and binding
agreement of the parties thereto, is in full force and effect, no party
thereto is in default thereunder (provided, that no representation is
made as to collection of accounts receivable within the pay period
specified on the Companies' freight bills or customer contracts), and
there exists no condition that with notice or lapse of time or both
would constitute a default thereunder. With respect to Contracts
between the Brokerage Company and any shipper or carrier, such
Contracts materially comply with all Department of Transportation
("DOT") requirements and require the carrier to provide legally
adequate and customary insurance coverage.
(h) Employee Benefit Plans and Arrangements. Schedule 4.4(h)
identifies each of the Trucking Company and the Brokerage Company's
Benefit Plans, copies of which, amended to date, have been furnished to
Buyer. No Benefit Plan is a defined benefit plan. Neither the Trucking
Company, the Brokerage Company, any Affiliate, nor any predecessor of
any has been a party to or sponsored a defined benefit plan. The
Trucking Company, the Brokerage Company, and all Benefit Plan
fiduciaries have fully complied with their obligations with respect to
all Benefit Plans. There has been no prohibited transaction with
respect to any Benefit Plan. Each Benefit Plan that is intended to be
qualified under Section 401(a) of the Code is so qualified and has been
since inception. Each trust created under any Benefit Plan is exempt
from tax under Section 501(a) of the Code and has been exempt from tax
from creation. The Trucking Company and the Brokerage Company have
received determination letters from the Internal Revenue Service for
each such Benefit Plan at inception and after each amendment. Each
Benefit Plan has been maintained in compliance with its terms and all
applicable Laws. There has not been any event that would threaten the
tax-qualified status of any Benefit Plan. All payments and
contributions due or accrued under each Benefit Plan, determined in
accordance with the terms of such plans and prior funding and accrual
practices, have been paid or are reflected as a liability on the
September 30 Balance Sheets, including all amounts for the portion of
1999 prorated through October 31, 1999. The "plan year" of each Benefit
Plan is the calendar year. The Trucking Company and the Brokerage
Company have no current or projected liability with respect to
post-employment or post-retirement welfare benefits for former or
retired employees.
(i) Employees; Independent Contractors. Except as set forth on
Schedule 4.4(i), neither the Trucking Company nor the Brokerage Company
is a party to any collective bargaining agreement relating to its
employees, nor does any such agreement determine the terms and
conditions of employment of any employee. There are no agreements,
plans, or policies which would give rise to any severance, termination,
change-in-control, or other similar payment to the Trucking Company or
the Brokerage Company's employees as a result of the consummation of
the transactions contemplated hereunder. Except as set forth on
Schedule 4.4(i), neither the Trucking Company nor the Brokerage Company
has any employment agreements with employees. The Trucking Company
maintains files on all employee and independent contractor truck
drivers. Each employee and independent contractor driver of the
Trucking Company meets all DOT requirements, and all driver files
contain all required materials. Except as set forth on Schedule 4.4(i),
all independent contractors providing equipment and/or services to the
Trucking Company or the Brokerage Company have been retained under
valid contracts. A copy of the form of contract used for any
independent contractor operators of rolling stock has been delivered to
Buyer. Neither of the Companies has taken action in respect of its
employees that would require notice or create liability under the
Worker Adjustment and Retraining Notification Act, neither of the
Companies has present plans to take such action at any time and neither
of the Companies has been asked by Buyer to take such action.
(j) Safety Rating. The Trucking Company has received and
maintains a "satisfactory" safety rating from the DOT. There is no
investigation, audit, or other proceeding pending or threatened by the
DOT.
(k) Rights. All Rights owned, licensed, or otherwise used by
the Trucking Company and the Brokerage Company are listed on Schedule
4.4(k). The Trucking Company and the Brokerage Company owns or uses
such Rights under valid license in the operation of their business.
Neither the Trucking Company nor the Brokerage Company has
intentionally interfered with, infringed upon, misappropriated, or
otherwise come into conflict with any Rights of third parties. Neither
the Trucking Company nor the Brokerage Company have received any
charge, complaint, demand, or notice alleging any such interference,
infringement, misappropriation, violation, or conflict (including any
claim that the Trucking Company or the Brokerage Company must license
or refrain from using any Rights of third parties).
(l) Compliance With Laws; Permits. Except as set forth on
Schedule 4.4(l), each of the Trucking Company and the Brokerage Company
has owned, leased, and used all of its properties and assets, and has
conducted its business, in compliance in all material respects with all
applicable Laws. Neither the Trucking Company, the Brokerage Company,
nor the Selling Stockholder has been charged with any violation of Law.
No Proceeding is pending or threatened by any Authority with respect to
any violation of Law by the Trucking Company, the Brokerage Company, or
the Selling Stockholder. No Judgment is unsatisfied against the
Trucking Company, the Brokerage Company, or the Selling Stockholder.
Neither the Trucking Company, the Brokerage Company, nor the Selling
Stockholder is subject to any stipulation, order, consent, or decree
arising from an action before any Authority. Each of the Trucking
Company and the Brokerage Company possesses all permits, licenses,
franchises, and other approvals of Authorities including common and
contract carrier and brokerage authority (collectively, "Permits")
required to operate its business, such Permits are in full force and
effect, any applications for renewal have been duly filed on a timely
basis, no Proceeding is pending or threatened to revoke or limit any
Permit, and each is operating in compliance with all Permits.
(m) Environment, Health, and Safety. Except as set forth on
Schedule 4.4(m):
(i) Each of the Trucking Company, the Brokerage
Company, their Affiliates, and any predecessors of each have
complied with all Laws concerning pollution or protection of
the environment, public health and safety, and employee health
and safety, including Laws relating to emissions, discharges,
releases, or threatened release of pollutants, contaminants,
or chemical, industrial, hazardous, or toxic materials or
wastes (including petroleum and any fraction or derivative
thereof) into ambient air, surface water, ground water, or
lands, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
hauling of such substances (collectively, "Environmental
Laws"). No Proceeding has been filed or commenced against the
Trucking Company, the Brokerage Company, their Affiliates, or
any predecessor of each alleging any failure to comply with
any Environmental Laws. Without limiting the generality of the
preceding sentence, each of the Trucking Company, the
Brokerage Company, their Affiliates, and any predecessors of
each has obtained and been in compliance with all of the terms
and conditions of all Permits which are required under, and
has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in,
all Environmental Laws.
(ii) Neither the Trucking Company nor the Brokerage
Company has any liability (and neither the Trucking Company,
the Brokerage Company, their Affiliates, nor any predecessor
of each has handled or disposed of any substance, arranged for
the disposal of any substance, exposed any employee or other
individual to any substance or condition, or owned, operated,
or used any property or facility in any manner that could form
the basis for any present or future Proceeding against the
Trucking Company or the Brokerage Company giving rise to any
liability) for damage to any site, location, or body of water
(surface or subsurface), for any illness of, or personal
injury to, any employee or other individual, or for any reason
under any Environmental Law.
(iii) All properties and equipment used in the
business of the Trucking Company, the Brokerage Company, their
Affiliates, and any predecessors of each have been free of
asbestos, PCB's, methylene chloride, trichloroethylene,
1,2-transdichloroethylene, dioxins, dibenzofurans, and other
extremely hazardous substances as defined by any Law.
(iv) Any fuel or other storage tanks located at
properties presently or previously owned or used by the
Trucking Company or the Brokerage Company in its business,
including the Real Estate, comply in all respects with
applicable Laws, do not leak, are registered with the
appropriate state agency (and all required actions in
connection therewith have been taken) in the manner permitting
the Trucking Company or the Brokerage Company to take
advantage of any state liability limitation, insurance, or
similar program relating to fuel storage tanks, and such tanks
are not scheduled for removal in the next five years.
(v) Both the Trucking Company and the Brokerage
Company have delivered to Buyer true and complete copies and
results of any reports, studies, analyses, tests, or
monitoring concerning the Trucking Company or the Brokerage
Company or any property owned or used by the Trucking Company
or the Brokerage Company concerning compliance with
Environmental Laws.
(n) Disclosure. The representations and warranties of the
Trucking Company, the Brokerage Company, and the Selling Stockholder
contained in this Agreement and the contents of every document
delivered in connection herewith, do not contain any untrue statement
of a material fact and do not omit to state any fact necessary to make
any statement herein or therein not misleading or necessary to a
correct presentation of all material aspects of the Trucking Company or
the Brokerage Company's business and the matters contemplated under
this Agreement.
(o) Prepayment of Indebtedness. Except as disclosed on
Schedule 4.4(o), all indebtedness and leases of the Trucking Company
and the Brokerage Company may be prepaid at any time without penalty.
(p) Financial and Operating Information. The Trucking Company
has provided to Buyer upon its request operating information and
examples of: customer lists, rates charged customers, miles per
tractor, empty miles, and other information underlying the financial
statements provided to Buyer. All of such information is accurate and
fairly depicts the operations represented by such information, but no
representation is made that all available information has been provided
as of the date hereof.
ARTICLE V
Covenants and Agreements
5.1 Conduct of Business Pending the Closing. The Trucking Company, the Brokerage
Company, and the Selling Stockholder agree that from the date hereof to the
Closing or earlier termination of this Agreement:
(a) The Trucking Company and the Brokerage Company shall carry
on their business diligently and substantially in the same manner as
heretofore and shall not make or institute any unusual or novel method
of purchase, sale, lease, management, accounting, or operation. The
Trucking Company, the Brokerage Company, and the Selling Stockholder
shall use their best efforts to preserve the assets, goodwill, and
value of the Trucking Company and the Brokerage Company's business,
including keeping the Trucking Company and the Brokerage Company's
present management intact, keeping available the Trucking Company and
the Brokerage Company's present employees, and preserving the present
relationships with suppliers, customers, landlords, creditors,
employees, agents, and others having business relations with the
Trucking Company or the Brokerage Company.
(b) The Trucking Company, the Brokerage Company, and the
Selling Stockholder shall not, without the prior written consent of
Buyer, take, or permit to be taken, any action which would render
untrue any representation or warranty contained in the sections and
subsections of 4.3 and 4.4; provided, however, that the Companies may
make their customary, annual wage increases for hourly clerical
employees so long as Buyer is informed in advance of the affected
employees and the amount of the increase.
5.2 Access. The Trucking Company, the Brokerage Company, and the Selling
Stockholder shall give the officers, employees, counsel, accountants, and other
authorized representatives of Buyer free and full access to and the right to
inspect, at a time agreeable to the Selling Stockholder upon advance notice, all
of the premises, properties, assets, records, Contracts, and other documents
relating to the Trucking Company and the Brokerage Company's businesses and
shall permit them to consult with the Selling Stockholder and, upon advance
approval of the Selling Stockholder, employees of the Trucking Company or the
Brokerage Company and other persons having business dealings with the Trucking
Company or the Brokerage Company or knowledge of their business, operations,
assets, liabilities, actual or potential litigation and claims, properties, and
prospects. Furthermore, the Trucking Company, the Brokerage Company, and the
Selling Stockholder shall promptly provide to Buyer (and its representatives)
all such reports, surveys, documents, and copies of documents and records and
information with respect to the business of the Trucking Company or the
Brokerage Company and copies of any working papers relating thereto as they
shall from time to time reasonably request.
5.3 Approval of Directors. Buyer shall submit for the required approval of its
directors all matters relating to the adoption and approval of this Agreement,
every other Contract contemplated hereby, and all related matters.
5.4 Approvals and Consents. Each party to this Agreement shall use its best
efforts to obtain (and assist the other in obtaining), as soon as reasonably
practicable, all Permits, authorizations, consents, and waivers from third
parties or Authorities necessary to consummate this Agreement and the
transactions contemplated hereby or thereby.
5.5 Release of Selling Stockholder. From and after the Closing, the Buyer shall
repay all indebtedness of the Trucking Company and the Brokerage Company to
third-parties that is reflected on the September 30 Balance Sheets or incurred
in the ordinary course of business since such date that the Selling Stockholder
has personally guaranteed and indemnify the Selling Stockholder against any
liability under such guaranties, including any attorney fees and expenses
incurred by the Selling Stockholder in responding to or defending claims made
under such guaranties.
5.6 Notification. Each party shall give prompt written notice to the others of
any development causing a breach of any of his, her, or its own representations
and warranties or that would prevent the fulfillment of any of his, her, or its
covenants or agreements contained in this Agreement or any document contemplated
hereby.
5.7 Exclusivity. Each of the Trucking Company, the Brokerage Company, the
Additional Stockholders, and the Selling Stockholder agrees that unless this
Agreement is terminated pursuant to Section 8.1, the Trucking Company, the
Brokerage Company, the Additional Stockholders, and the Selling Stockholder
shall deal exclusively with Buyer, and neither the Trucking Company, the
Brokerage Company, the Additional Stockholders, the Selling Stockholder, nor any
of their Affiliates, employees, representatives, or agents will directly or
indirectly:
(a) enter into any transaction with any person other than
Buyer relative to any disposition of the Trucking Company or the
Brokerage Company or any part thereof (whether by merger, sale or
exchange of shares, sale of assets, or otherwise);
(b) engage in any negotiations or discussions with any other
person regarding any disposition of the Trucking Company or the
Brokerage Company or any part thereof (whether by merger, sale or
exchange of shares, sale of assets, or otherwise);
(c) solicit or encourage submission of inquiries, proposals,
or offers from any other person relative to any potential disposition
of the Trucking Company or the Brokerage Company or any part thereof
(whether by merger, sale or exchange of shares, sale of assets, or
otherwise); or
(d) provide further information to any person other than Buyer
relating to any possible disposition of the Trucking Company or the
Brokerage Company or any part thereof (whether by merger, sale or
exchange of shares, sale of assets, or otherwise).
Each of the Trucking Company, the Brokerage Company, the Additional
Stockholders, and the Selling Stockholder agrees that if the Trucking Company,
the Brokerage Company, the Selling Stockholder, the Additional Shareholders, or
any Affiliate receives an offer or proposal relating to the possible acquisition
of the Trucking Company or the Brokerage Company or any part thereof (whether by
merger, sale or exchange of shares, sale of assets, or otherwise), the Trucking
Company, the Brokerage Company, the Additional Stockholders, and the Selling
Stockholder shall immediately notify Buyer of said offer or proposal, the
identity of the party making the offer or proposal, and the specific terms of
the offer or proposal.
5.8 Stockholder Liability. At the Closing, the Selling Stockholder, and his
Affiliates shall offset all amounts owed to them by the Trucking Company or the
Brokerage Company against all obligations (including interest) owed by them to
the Trucking Company or the Brokerage Company, regardless of whether such
amounts are then due under applicable documents evidencing such indebtedness or
whether evidenced in writing at all. Schedule 5.8 sets forth all such amounts as
of the date hereof, which amounts shall not change (except for regularly
accruing interest) by Closing. Any amounts remaining thereunder shall be settled
in full at the Closing. In addition, the Selling Stockholder, individually and
on behalf of all his Affiliates, shall execute a full and final waiver and
release of any and all claims against the Trucking Company and the Brokerage
Company in substantially the form attached hereto as Exhibit D (the "Release").
5.9 Best Efforts. Between the date of this Agreement and the Closing Date, the
parties shall use their best efforts to cause the conditions of Article VI to be
satisfied.
5.10 Non-Competition.
(a) The parties to this Section 5.10 include the Selling
Stockholder and the Additional Stockholders (the "Noncompete Parties").
The Noncompete Parties have negotiated the non-competition provisions
of this Agreement as an integral part of the transaction. The
Noncompete Parties acknowledge that the Buyer is willing to pay the
Purchase Price and proceed with the transaction because of the Trucking
Company and the Brokerage Company's customer relationships, growth
potential, and other prospects, and that such prospects would be
severely and irreparably harmed by competition from the Noncompete
Parties and/or their Affiliates. The Noncompete Parties further
acknowledge that the Buyer would not have entered into this Agreement
without the non-competition provisions contained herein. The Noncompete
Parties willingly agree to the non-competition provisions of Section
5.10(b) hereof and agree that the non-competition provisions are
reasonable and are necessary to induce the Buyer to enter into this
Agreement.
(b) For a period of five (5) years following the Closing, the
Noncompete Parties agree that they will not, directly or indirectly,
through any Affiliate or otherwise,
(i) except in the course of employment with Buyer or
an Affiliate of Buyer, engage or invest in, own, manage,
operate, finance, control, or participate in the ownership,
management, operation, financing, or control of, be employed
by, associated with, or in any manner connected with, lend
their name or any similar name to, lend their credit to or
render services or advice to, any Competitive Business that
engages in business in the United States; provided, however,
that any such person may purchase or otherwise acquire up to
(but not more than) 4.99% as an aggregate of all such
purchases and acquisitions of any class of securities of any
enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed
on any national or regional securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act
of 1934;
(ii) whether for their own account or for the account
of any other person, at any time after the Closing, solicit
business of the same or similar type being carried on by Buyer
or any Affiliate of Buyer, from any person that is or was a
customer of the Trucking Company, the Brokerage Company,
Buyer, or any Affiliate of the Companies or Buyer, whether or
not they had personal contact with such person during and by
reason of employment with the Trucking Company, the Brokerage
Company, Buyer, or an Affiliate of Buyer;
(iii) without the prior written consent of Buyer,
whether for their own account or the account of any other
person at any time after Closing solicit, employ, or otherwise
engage as an employee, independent contractor, or otherwise,
any person who is or was an employee or independent contractor
of the Trucking Company, the Brokerage Company, Buyer, or an
Affiliate of the Companies or Buyer, or in any manner induce
or attempt to induce any employee of the Trucking Company, the
Brokerage Company, Buyer, or an Affiliate of the Companies or
Buyer to terminate his or her employment with the Trucking
Company, the Brokerage Company, Buyer, or an Affiliate of the
Companies or Buyer; or at any time interfere with the Trucking
Company or the Brokerage Company's relationship with any
person, including any person who at any time was an employee,
contractor, supplier, or customer of the Trucking Company, the
Brokerage Company, Buyer, or an Affiliate of the Companies or
Buyer, except that the employment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇ by ▇▇▇▇▇▇ ▇▇▇▇ or his Affiliate is specifically excluded
from this Section and Buyer hereby consents to such
employment; or
(iv) at any time after Closing, disparage the
Trucking Company, the Brokerage Company, Buyer, or any
Affiliate of the Companies or Buyer, or any of their
shareholders, directors, officers, employees, or agents.
(c) For purposes of this Agreement, "Competitive Business"
shall mean the interstate and/or intrastate transportation of freight,
including truckload and less-than-truckload carriage, intermodal
service, and brokerage, logistics, agent, consolidation, or other
freight-related operations. Competitive Business shall include, but not
be limited to, dry van, temperature-controlled van, and flatbed
operations.
(d) If any covenant in Section 5.10 is held to be
unreasonable, arbitrary, or against public policy, such covenant will
be considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic area, or
all of them, as a court of competent jurisdiction may determine to be
reasonable, not arbitrary, and not against public policy, will be
effective, binding, and enforceable against the Noncompete Parties.
(e) The Noncompete Parties acknowledge that the injury that
would be suffered by Buyer as a result of a breach of the provisions of
this Section 5.10 would be irreparable and that even the award of
monetary damages for such breach would be an inadequate remedy.
Consequently, the Buyer shall have the right, in addition to any other
rights it may have, to obtain injunctive relief to restrain any breach
or threatened breach or otherwise to specifically enforce any provision
of this Agreement, and Buyer shall not be obligated to post bond or
other security in seeking such relief. Without limiting Buyer's rights
under this Section 5.10 or any other remedies of Buyer, if any of the
Noncompete Parties breaches any of the provisions of Section 5.10,
Buyer will have the right to return of all of the Escrowed Funds.
5.11 Selling Stockholder Access. From and after the Closing, Buyer shall provide
the Selling Stockholder with access to the pre-Closing books and records of the
Trucking Company and the Brokerage Company as are necessary in the preparation
of tax returns or for other valid purposes.
5.12 Consents of Noncompete Parties. The Noncompete Parties consent to the terms
of this Agreement by signing below, including the non-competition provisions of
Section 5.10, waive any marital, community property, or other beneficial
interest in the Common Stock purchased by the Buyer hereunder, irrevocably agree
to be bound by this Agreement with respect to such interest, and agree to
execute a Release at Closing.
5.13 Assigned Matters. At Closing, the Selling Stockholder shall assume all
obligations, responsibilities, and liabilities in connection with or otherwise
relating to the matters described on Schedule 5.13 (the "Assigned Matters") in a
manner satisfactory to Buyer.
5.14 No Section 338 Election. The parties agree that neither the Selling
Stockholder nor the Additional Stockholders will join in an election under Code
Section 338 to treat the transaction as an asset purchase for tax purposes.
5.15 Use of Name. Buyer consents to the use by the Selling Stockholder of the
name "▇▇▇▇▇▇ ▇▇▇▇" in connection with businesses that are unrelated to
transportation or any Competitive Business, and specifically consents to the
continued use of the name in connection with the operation of businesses and
farms existing at the time of execution of this Agreement.
ARTICLE VI
Conditions To Closing
6.1 Conditions Precedent to the Obligations of Buyer. The obligation of Buyer to
consummate this Agreement is subject to the fulfillment of all of the following
conditions precedent (any of which may be waived in writing by Buyer, in whole
or in part) at or prior to the Closing Date.
(a) Representations and Warranties True as of the Closing
Date. The representations and warranties of the Trucking Company, the
Brokerage Company, and the Selling Stockholder contained in this
Agreement or in any document delivered by such parties pursuant to the
provisions hereof shall be true in all material respects as of the date
of this Agreement and at and as of the Closing Date with the same
effect as though such representations and warranties were made as of
such date.
(b) Compliance with Agreement. The Trucking Company, the
Brokerage Company, and the Selling Stockholder shall have performed and
complied in all material respects with all agreements, covenants, and
conditions required to be performed or complied with by them under this
Agreement. Each of the documents required to be delivered hereunder and
each of the covenants and obligations hereunder of the Trucking
Company, the Brokerage Company, the Selling Stockholder, or the
Additional Stockholders must have been performed and materially
complied with in all respects.
(c) No Bar to Consummation of Transaction. To the Knowledge of
all parties, there shall not exist any Law or Judgment of any Authority
which would prevent the consummation of the transactions contemplated
hereby or adversely affect the rights of Buyer after consummation of
said transactions. To the Knowledge of all parties, there shall be no
pending or threatened Proceeding that seeks to enjoin the transactions
contemplated by this Agreement. To the Knowledge of all parties, all
consents and approvals from any Authority and any other person required
for the consummation of this Agreement shall have been obtained.
(d) Bring-Down Certificate. The Trucking Company, the
Brokerage Company, and the Selling Stockholder shall have delivered to
Buyer a duly signed certificate to the effect that each of the
conditions in Sections 6.1(a)-(c) has been satisfied in all respects.
(e) Opinion of Counsel. Counsel for the Trucking Company, the
Brokerage Company, the Selling Stockholder, and the Additional
Stockholders shall have delivered to Buyer its written opinion, dated
as of the Closing Date, in substantially the form attached as Exhibit
E.
(f) Stock Certificates; No Claim Regarding Stock Ownership or
Sale Proceeds. The Selling Stockholder and the Additional Stockholders
shall have delivered certificates representing 100% of the Trucking
Company and the Brokerage Company's outstanding Common Stock, duly
endorsed for transfer to Buyer or accompanied by stock powers duly
executed in blank. There must not have been made or threatened by any
person any claim asserting that such person (i) is the holder or the
beneficial owner of, or has the right to acquire or obtain beneficial
ownership of, the Common Stock or any ownership interest in the
Trucking Company and the Brokerage Company or (ii) is entitled to all
or any portion of the Purchase Price.
(g) Other Agreements. The Escrow Agreement, Release, and each
other document required to be executed in connection with this
Agreement shall have been duly executed and delivered by the applicable
parties thereto.
(h) Adverse Change. There shall not have been any materially
adverse change in the Trucking Company or the Brokerage Company's
business or the condition of its assets.
(i) Completion of Due Diligence. Buyer shall have completed
its due diligence investigation of the business, assets, and
liabilities of the Trucking Company and the Brokerage Company, and
shall be satisfied, in its sole discretion, with the results of such
investigation including the stockholder's equity reflected on the
September 30 Balance Sheets.
(j) Termination of Related Party Transactions. Except for the
items listed on Schedule 6.1(j), prior to Closing, the Selling
Stockholder shall have delivered to Buyer documents evidencing
termination of all transactions (including repayment of any receivables
from Selling Stockholder, or any Affiliates of Selling Stockholder)
between the Trucking Company, the Brokerage Company, any person related
to the Trucking Company, the Brokerage Company, and any Affiliates of
the foregoing in form satisfactory to counsel for Buyer.
(k) Board Approval. Buyer shall have received the approval of
the terms and conditions of this Agreement from its Board of Directors.
6.2 Conditions Precedent to the Obligations of the Selling Stockholder and the
Additional Stockholders. The obligation of the Selling Stockholder and the
Additional Stockholders to consummate this Agreement is subject to the
fulfillment of all of the following conditions precedent (any of which may be
waived in writing by the Selling Stockholder and the Additional Stockholders, in
whole or in part) at or prior to the Closing.
(a) Representations and Warranties True as of the Closing
Date. The representations and warranties of Buyer contained in this
Agreement or in any document delivered by such parties pursuant to the
provisions hereof shall be true in all material respects as of the date
of this Agreement and at and as of the Closing Date with the same
effect as though such representations and warranties were made as of
such date.
(b) Compliance with Agreement. Buyer shall have performed and
complied in all material respects with all agreements, covenants, and
conditions required to be performed or complied with by it under this
Agreement. Each of the documents required to be delivered hereunder and
each of the covenants and obligations hereunder of Buyer must have been
performed and materially complied with in all respects.
(c) No Bar to Consummation of Transaction. To the Knowledge of
all parties, there shall not exist any Law or Judgment of any Authority
which would prevent the consummation of the transactions contemplated
hereby or adversely affect the rights of the Selling Stockholder or the
Additional Stockholders after consummation of said transactions, nor
any pending or threatened litigation or other Proceeding that seeks to
enjoin the transactions contemplated by this Agreement. To the
Knowledge of all parties, all consents and approvals from any Authority
and any other person required for the consummation of this Agreement
shall have been obtained.
(d) Bring-Down Certificate. Buyer shall have delivered to the
Trucking Company, the Brokerage Company, the Additional Stockholders,
and the Selling Stockholder a duly signed certificate to the effect
that each of the conditions in Sections 6.2(a)-(c) has been satisfied
in all respects.
(e) Other Agreements. The Escrow Agreement and each other
document required to be executed in connection with this Agreement
shall have been duly executed and delivered by Buyer.
(f) Disclosure of Due Diligence Matters. Buyer shall have
notified the Selling Stockholder of any material noncompliance with the
representations and warranties contained herein.
(g) Opinion of Counsel. Counsel for the Buyer shall have
delivered to the Companies, the Selling Stockholder, and the Additional
Stockholders its written opinion, dated as of the Closing Date, in
substantially the form attached as Exhibit F.
6.3 Conditions Precedent to the Obligations of all Parties. The obligations of
the Trucking Company, the Brokerage Company, the Selling Stockholder, the
Additional Stockholders, and Buyer to consummate this Agreement are subject to
termination of the applicable waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, if
applicable.
ARTICLE VII
Indemnification
7.1 Indemnification by the Selling Stockholder. The Selling Stockholder hereby
indemnifies, defends, and holds harmless Buyer together with (as applicable) its
Affiliates, successors, heirs, assigns, employees, and agents from and against
any and all claims, causes of action, suits, Judgments, Taxes, losses,
Proceedings, damages, fines, penalties, deficiencies, obligations, costs, and
expenses, including without limitation reasonable expenses of investigation and
reasonable attorneys' and other experts' fees and expenses (individually, a
"Loss" and collectively, "Losses") arising out of or otherwise in respect of any
misrepresentation or breach of, any representation, warranty, covenant, or
agreement of the Trucking Company, the Brokerage Company, or the Selling
Stockholder contained in this Agreement or any other Contract executed in
connection herewith.
7.2 Indemnification by Buyer. Buyer hereby indemnifies, defends, and holds the
Selling Stockholder and the Additional Stockholders harmless from and against
all Losses arising out of or otherwise in respect of any misrepresentation or
breach of, any representation, warranty, covenant, or agreement of Buyer
contained in this Agreement or any other Contract executed in connection
herewith.
7.3 Indemnification by the Trucking Company and the Brokerage Company. Prior to
the Closing, the Trucking Company and the Brokerage Company, jointly and
severally, hereby indemnify, defend, and hold Buyer harmless from and against
all Losses arising out of or otherwise in respect of any misrepresentation or
breach of, any representation, warranty, covenant, or agreement of the Trucking
Company, the Brokerage Company, or the Selling Stockholder contained in this
Agreement or any other Contract executed in connection herewith. This
indemnification shall expire at Closing and afford no right of contribution or
similar right to the Selling Stockholder, or any other person.
7.4 Indemnification Procedures. A party seeking indemnification under Section
7.1, Section 7.2, or Section 7.3 (the "Indemnified Party") agrees to give prompt
written notice to the party against whom indemnification is sought (the
"Indemnifying Party") of the assertion or commencement of any third-party claim
or Proceeding in respect of which indemnification may be sought. The
Indemnifying Party, at its expense, may assume the defense of any such claim or
Proceeding and take all steps to settle or defeat any such claim or Proceeding,
and to employ counsel to contest the same. The Indemnifying Party shall
reasonably consider the advice of the Indemnified Party as to the defense of
such claims or Proceedings. The Indemnified Party shall have the right to
participate at its own expense in such defense, but the control of such claim or
Proceeding shall remain with the Indemnifying Party. The Indemnified Party shall
provide all reasonable cooperation in connection with any such defense. If an
Indemnifying Party elects not to undertake the defense of a tendered claim or
Proceeding or does not do so in a timely fashion, the Indemnified Party shall be
entitled to control the defense or settlement of such claim or Proceeding and
shall be entitled to indemnity with respect thereto.
7.5 Assigned Matters Indemnification. Anything to the contrary notwithstanding,
the Selling Stockholder hereby assumes the defense of, has absolute authority
for the settlement of, and agrees to indemnify, defend, and hold harmless Buyer,
the Trucking Company, and the Brokerage Company against, any and all Losses
arising from or in any manner connected with the Assigned Matters referenced in
Schedule 5.13. The obligations of the Selling Stockholder hereunder shall be
absolute and unconditional regardless of any disclosure or any other provision
of this Agreement, and shall not be subject to the limitations contained in
Section 7.6 hereof.
7.6 Limitations on Amount -- Selling Stockholder. Except as otherwise provided
herein, the Selling Stockholder shall have no liability (for indemnification or
otherwise) under Section 7.1 hereof (i) until the aggregate of all Losses with
respect to such matters exceeds $250,000, and then only for the amount by which
such Losses exceed $250,000; and (ii) for Losses with respect to such matters in
excess of $2,500,000; provided, that the maximum remaining liability of the
Selling Stockholder shall be reduced by the amount of any disbursement to Buyer
from the Escrowed Funds. However, this Section 7.6 will not apply to: (i) any
breach of any of the Selling Stockholder's representations and warranties which
the Selling Stockholder knew to be false at any time prior to the date on which
such representation and warranty was made; (ii) the obligations of the Selling
Stockholder under Article V and Section 6.1(f) and (j) of this Agreement; or
(iii) any breach of the representations and warranties contained in Section
4.3(f)(iii).
7.7 Escrow; Right of Set-Off. Upon compliance with the notice provisions set
forth in the Escrow Agreement, Buyer may make a claim under the Escrow Agreement
for any amount to which it may be entitled under Section 7.1. Neither the
exercise of, nor the failure to exercise, such right to give a notice of a claim
under the Escrow Agreement will constitute an election of remedies or limit
Buyer in any manner in the enforcement of any other remedies that may be
available to it.
ARTICLE VIII
Miscellaneous
8.1 The parties may terminate this Agreement as provided below:
(i) The parties may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) Buyer may terminate this Agreement by giving
written notice to the Trucking Company, the Brokerage Company,
the Additional Stockholders, and the Selling Stockholder at
any time prior to the Closing, if it is not satisfied with the
results of its continuing business, legal, and accounting due
diligence;
(iii) Buyer may terminate this Agreement by giving
written notice to the Trucking Company, the Brokerage Company,
the Additional Stockholders, and the Selling Stockholder at
any time prior to the Closing (A) if the Trucking Company, the
Brokerage Company, or the Selling Stockholder has breached any
representation, warranty, or covenant contained in this
Agreement in any material respect, and the breach has
continued after notice to the Trucking Company, the Brokerage
Company, and the Selling Stockholder by Buyer without cure for
a period of ten (10) days or (B) if the Closing shall not have
occurred on or before December 31, 1999, by reason of the
failure of any condition precedent under Section 6.1 hereof
(unless the failure results primarily from Buyer breaching any
representation, warranty, or covenant contained in this
Agreement); and
(iv) The Trucking Company, the Brokerage Company, and
the Selling Stockholder may terminate this Agreement by giving
written notice to Buyer at any time prior to the Closing (A)
in the event Buyer has breached any representation, warranty,
or covenant contained in this Agreement in any material
respect, and the breach has continued after notice to Buyer
without cure for a period of ten (10) days, or (B) if the
Closing shall not have occurred on or before December 31,
1999, by reason of the failure of any condition precedent
under Section 6.2 hereof (unless the failure results primarily
from the Trucking Company, the Brokerage Company, or the
Selling Stockholder breaching any representation, warranty, or
covenant contained in this Agreement).
8.2 Costs and Expenses; Fees. Each party shall be solely responsible for and
bear all of its own respective expenses incurred at any time in connection with
pursuing or consummating the Agreement and the transactions contemplated by the
Agreement, including, but not limited to, fees and expenses of business brokers,
legal counsel, accountants, and other facilitators and advisors. All rights to
pursue legal remedies shall survive termination.
8.3 Survival of Representations and Warranties. The representations and
warranties of the Selling Stockholder and the Buyer contained in this Agreement
or in any Contract delivered or in connection herewith shall survive the Closing
for a period of three years; provided, however, that representations and
warranties of the Selling Stockholder relating to tax, environmental, and
employee benefit plan matters shall survive until the expiration of the
applicable statutes of limitation.
8.4 Complete Agreement, etc. All exhibits and Schedules referred to herein are
intended to be and hereby are specifically made a part of this Agreement. This
Agreement sets forth the entire understanding of the parties hereto with respect
to the transactions contemplated hereby, and any and all previous agreements and
understandings between or among the parties regarding the subject matter hereof,
whether written or oral, are superseded by this Agreement. It shall not be
amended or modified except by written instrument duly executed by each of the
parties hereto.
8.5 Assignment and Binding Effect. This Agreement shall not be assigned prior to
the Closing by any party hereto without the prior written consent of the other
parties and any assignment without consent shall be void; provided, that Buyer
may assign its rights hereunder to any subsidiary so long as Buyer remains fully
liable hereunder. Subject to the foregoing, all of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the successors and assigns of any party. Nothing expressed or
referred to in this Agreement will be construed to give any person other than
the parties to this Agreement any legal or equitable right, remedy, or claim
under or with respect to this Agreement or any provision of this Agreement. This
Agreement and all of its provisions and conditions are for the sole and
exclusive benefit of the parties to this Agreement and their successors and
assigns.
8.6 Waiver. Any term or provision of this Agreement may be waived at any time by
the party entitled to the benefit thereof by a written instrument duly executed
by such party.
8.7 Time. Time is of the essence in connection with this Agreement and each and
every provision hereof. Any extension of time granted for the performance of any
duty under this Agreement shall not be considered an extension of time for the
performance of any other duty under this Agreement.
8.8 Notices. Any notice, request, demand, waiver, consent, approval, or other
communication which is required or permitted hereunder shall be in writing and
shall be deemed given only if delivered personally (including by nationally
recognized overnight courier service) or sent by telegram or by certified mail,
postage prepaid, and sent by telecopier as follows:
If to Buyer, to: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Covenant Transport, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ Telephone
(▇▇▇) ▇▇▇-▇▇▇▇ Fax
With a required copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Law Firm, P.C.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ Telephone
(▇▇▇) ▇▇▇-▇▇▇▇ Fax
If to the Trucking Company or the ▇▇▇▇▇▇ ▇▇▇▇
Brokerage Company (prior to ▇▇ ▇, ▇▇▇ ▇▇▇▇
Closing) or the Selling Stockholder, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
to: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone
With a required copy to: ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ Telephone
(▇▇▇) ▇▇▇-▇▇▇▇ Fax
or to such other address as the addressee shall have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval, or other communication shall be deemed to have been given as
of the date so personally delivered, telegraphed, or deposited in the mail and
telecopied.
8.9 Cooperation. Subject to the terms and conditions herein provided, the
parties hereto shall use their best efforts to take, or cause to be taken, such
action, to execute and deliver, or cause to be executed and delivered, such
additional documents and instruments and to do, or cause to be done, all things
necessary, proper, or advisable under the provisions of this Agreement and under
applicable law to consummate and make effective the transactions contemplated by
this Agreement.
8.10 Governing Law. This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Arkansas, without regard to
conflict-of-law principles.
8.11 Headings, Gender, and Person. All section headings contained in this
Agreement are for convenience and reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine, or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority, or any other entity.
8.12 Severability. Any provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
8.13 Counterparts. This Agreement may be executed in any number of counterparts
and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
This Agreement shall become binding when one or more counterparts taken together
shall have been executed and delivered by the parties. It shall not be necessary
in making proof of this Agreement or any counterpart hereof to produce or
account for any of the other counterparts.
8.14 Public Announcements. Except as provided by separate agreement, Buyer shall
be entitled to issue a press release announcing the execution of this Agreement
and basic information concerning the Trucking Company and the Brokerage Company
and the proposed transaction. Buyer shall submit the press release to Selling
Stockholder in advance and shall make such changes as may be reasonably
requested; provided, that Buyer shall not be required to make changes contrary
to the advice of its securities counsel.
* * * * * * * * * * * * * * *
Signature Page Follows
* * * * * * * * * * * * * * *
Signature Page to the Stock Purchase Agreement
among Covenant Transport, Inc., ▇▇▇▇▇▇ ▇▇▇▇ Trucking Co.,
the Selling Stockholder, the Additional Stockholders,
and Terminal Truck Broker, Inc.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first written.
COVENANT TRANSPORT, INC., ▇▇▇▇▇▇ ▇▇▇▇ TRUCKING CO., an
a Tennessee corporation Arkansas corporation
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------- -----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇▇ ▇▇▇▇, President
TERMINAL TRUCK BROKER, INC., an SELLING STOCKHOLDER:
Arkansas corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------- -----------------------------------
▇▇▇▇▇▇ ▇▇▇▇, President ▇▇▇▇▇▇ ▇▇▇▇, Individually
ADDITIONAL STOCKHOLDERS:
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇, Individually
/s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇, Individually
/s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇, Individually
/s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇, Individually
/s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, Individually
▇▇▇▇▇ Denver Ives Irrevocable Trust
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------
Trustee
Exhibit List to Stock Purchase Agreement
Exhibit A - Real Estate
Exhibit B-1 - ▇▇▇▇ of Sale from Terminal Truck Broker, Inc.
Exhibit B-2 - ▇▇▇▇ of Sale from ▇▇▇▇▇▇ ▇▇▇▇ Trucking Co.
Exhibit C - Escrow Agreement
Exhibit D - Release
Exhibit E - Opinion of counsel to the Companies, the Selling Stockholder,
and the Additional Stockholders
Exhibit F - Opinion of counsel to Buyer
Schedule List to Stock Purchase Agreement
Schedule 2.3 - Retained Assets
Schedule 4.3(a) - Corporate Status
Schedule 4.3(b) - Capitalization
Schedule 4.3(c) - Officers; Directors; Bank Accounts; Powers of Attorney
Schedule 4.3(f)(i) - Historical Financial Statements
Schedule 4.3(f)(ii) - Accounts Receivable
Schedule 4.3(g) - Absence of Undisclosed Liabilities
Schedule 4.3(h) Tax Matters
Schedule 4.4(a) - Absence of Changes or Events
Schedule 4.4(a)(viii) - Employee Agreement or Policy
Schedule 4.4(a)(xiii) - Damage to Assets
Schedule 4.4(b) - Asset Schedule
Schedule 4.4(c) - Title and Condition of Assets
Schedule 4.4(d) - Warranties Concerning Tractors and Trailers
Schedule 4.4(e) - Litigation
Schedule 4.4(f) - Insurance; Bonds
Schedule 4.4(g) - Material Contracts
Schedule 4.4(h) - Employee Benefit Plans and Arrangements
Schedule 4.4(i) - Employees; Independent Contractors
Schedule 4.4(k) - Rights
Schedule 4.4(l) - Compliance With Laws; Permits
Schedule 4.4(m) - Environment, Health, and Safety
Schedule 4.4(o) - Prepayment of Indebtedness
Schedule 5.8 - Stockholder Liability
Schedule 5.13 - Assigned Matters
Schedule 6.1(j) - Termination of Related Party Transactions