Exhibit 10.27
ASSET PURCHASE AGREEMENT
------------------------
THIS AGREEMENT, made by and among JTI, Inc., a Nebraska corporation,
Logistics, Inc., a Nebraska corporation, Bison Enterprises, Inc., a Nebraska
corporation, HI/PAR Systems, Inc., a Nebraska corporation, and Roadside
Enterprises, Inc., a Nebraska corporation (hereinafter the forenamed
corporations shall hereinafter be referred to collectively as "Sellers") and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a Nebraska resident ("▇▇▇▇▇▇"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇, a Nebraska
resident ("▇▇▇▇▇▇") (▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall hereinafter be referred to as
"Shareholders") and U.S. Xpress Enterprises, Inc., a Nevada corporation
(hereinafter "Buyer") (this "Agreement") is made as of the 25th day of April,
1997.
W I T N E S S E T H:
WHEREAS, Sellers are the owners and operators of assets utilized in the
business of the transportation of non-household goods and the operation of four
terminals (the "Business"); and
WHEREAS, Sellers desires to sell and Buyer desires to purchase said assets
used in the Business to the extent and pursuant to the terms and conditions of
this Agreement; and
WHEREAS, Shareholders own all the issued and outstanding shares of stock of
JTI, Inc. and will substantially benefit by the sale of said assets.
NOW THEREFORE, in consideration of the mutual promises and conditions
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Prefatory Matters
-----------------
1.1 DEFINITIONS.
-----------
Defined Term Section Where Defined Page Reference
------------ --------------------- --------------
Agreement Preamble 1
Assets 2.1 5
Assets Assignment and ▇▇▇▇ of Sale 3.1 8
Assumed Liabilities 3.2 8
Balance Sheet 2.1 5
Benefit Plans 7.24 24
Business Preamble 1
Buyer Preamble 1
Cash Portion 3.2 8
Closing Art. IV 9
Closing Date Art. IV 9
Code 7.24 22
Contracts 7.17 17
DEFRA 7.24 23
Earn Out Amount 3.2 8
Environmental Laws 7.29 27
ERISA 7.24 23
Facilities 2.1 5
Improvements 2.1 5
Initial Amount 3.2 8
Land 2.1 5
Material Adverse Change 7.14 15
Material Adverse Effect 7.18 19
Material 7.14 16
Purchase Price 3.2 8
Purchased Assets 2.1 5
REA 7.24 23
Real Estate 2.1 5
Retirement Plan 7.24 22
Sellers Preamble 1
Sellers Financial Statements 7.3 12
Spare Parts 2.1 6
Supplies and Miscellaneous Items 2.1 6
Tax or Taxes 7.7 13
Tax Returns 7.7 13
TEFRA 7.24 23
1.2 List of Schedules and Exhibits.
------------------------------
Schedules.
----------
Schedule 3.2(ii) Incremental Tax Liability 7
Schedule 7.2 Officers and Directors of each Seller 12
Schedule 7.4 Liens and Encumbrances 12
Schedule 7.6 Accounts Receivable 12
Schedule 7.7 Tax Returns and Reports 13
Schedule 7.8 Bank Accounts 14
Schedule 7.10 Undisclosed Liabilities 19
Schedule 7.16 Major Customers 17
Schedule 7.17 Material Contracts and Commitments 22
Schedule 7.20(c) Licenses and Permits 20
Schedule 7.21 Litigation 21
Schedule 7.23 Employee Contracts, Union 21
Agreements and Benefit Plans
Schedule 7.29(b) Environmental Licenses and Permits 27
Exhibits.
---------
Exhibit A 2.1 5
---------
Legal Description of Real Property
Exhibit B 2.1 6
---------
Assets
Exhibit C 2.1 7
---------
Leases and Contracts
Exhibit D 2.2 8
---------
Excluded Assets
Exhibit E 3.1 8
---------
Assets Assignment and ▇▇▇▇ of Sale
Exhibit F 3.1 8
---------
Warranty Deeds
Exhibit G
---------
Shareholders' Notes
Exhibit H 3.2 8
---------
Liabilities Assignment and ▇▇▇▇ of Sale
Exhibit I 3.2 8
---------
Assumed Liabilities
Exhibit J 3.3 9
---------
Sellers' Wire Transfer Instructions
Exhibit K 7.1 11
---------
Sellers' Resolutions
Exhibit L 8.1 29
---------
Buyer's Resolutions
Exhibit M 9.1 31
---------
Buyer's Approvals and Consents
ARTICLE II
PURCHASE AND SALE OF ASSETS
---------------------------
2.1 Sale of Assets. Upon the terms and conditions contained herein,
--------------
Sellers agree to sell to Buyer, and Buyer agrees to purchase from Sellers, all
of the assets of Sellers located at the facilities of Sellers located at
Lincoln, Nebraska, Green Bay, Wisconsin, Loudon, Tennessee, and North Sioux
City, South Dakota (the "Facilities") or used in the Business of Sellers,
whether tangible, intangible, real, personal, mixed, booked or unbooked, and
wherever located which are reflected on the balance sheet of Sellers dated
December 31, 1996, and any subsequent balance sheet reflecting pre-Closing
assets (the "Balance Sheet") hereinafter collectively referred to as the
"Purchased Assets". The Purchased Assets include, without limitation, all of
Sellers' right, title and interest in the following property used in the
Business:
(a) certain real property located in Lincoln, Nebraska, Green Bay,
Wisconsin, Loudon, Tennessee, and North Sioux City, South
Dakota, and certain other trailer drop lots, all specifically described by
Exhibit A hereto, together with all right, title and interest, if any, of
---------
Sellers in and to all (i) land lying in the bed of any street, road or
avenue opened, closed or proposed, public or private, in front of or
adjoining the land, (ii) any strips or gores in front of or adjacent to the
land, (iii) any water ways, courses, streams or ditches in front of or
adjoining the land, (iv) any reversionary rights which Sellers may have in
any easement or license granted with respect to the foregoing (the
foregoing being collectively hereinafter referred to as the "Land") and (v)
and all buildings, improvements and fixtures appurtenant thereto
(hereinafter referred to as the "Improvements") situated on such Land (the
Land and Improvements hereinafter collectively referred to as the "Real
Estate");
(b) all rolling stock, trucks, trailers and other vehicles, furniture and
furnishings used or usable in connection with the Facilities, as described
in Exhibit B hereto (the "Assets");
---------
(c) all supplies and miscellaneous items used or usable in connection with
the Facilities, including but not limited to all repair, instruction,
safety and maintenance manuals which are necessary or convenient to the
operation and utilization of the Purchased Assets (the "Supplies and
Miscellaneous Items");
(d) all spare parts, tools and accessories used or usable in connection
with the Purchased Assets (the "Spare Parts");
(e) all cash and cash equivalents;
(f) all accounts and notes receivable;
(g) all financial, business and other records relating to the Business of
Sellers, including but not limited to customer
records, personnel records, reports to any governmental or regulatory
agency (provided that Sellers may retain copies of said reports);
(h) trade secrets, contracts, licenses, production records, accounts
(including bank accounts and safe deposit boxes), prepaid expenses,
miscellaneous investments (including capital stock of others) and any other
items of intangible property, including but not limited to any and all
rights to the exclusive use of the names JTI, Inc., Logistics, Inc., Bison
Enterprises, Inc., HI/PAR Systems, Inc. and Roadside Enterprises, Inc.
d/b/a Senate Inn and all variations thereof.
(i) to the extent transferable, all product warranties that relate to the
Purchased Assets;
(j) all rights of Sellers in and to its rights and obligations under the
leases and contracts listed on Exhibit C;
---------
(k) all rights of Sellers in and to all licenses, certificates and permits
from all federal, state and other public authorities issued in connection
with the operation of the Business; and
2.2 Excluded Assets. Notwithstanding anything contained herein to the
---------------
contrary, the parties acknowledge and agree that the Purchased Assets expressly
exclude those assets listed on Exhibit D hereto.
---------
ARTICLE III
TRANSFER AND PURCHASE PRICE OF PURCHASED ASSETS
-----------------------------------------------
3.1 Transfer. Subject to the terms and conditions of this Agreement
--------
and by way of an "Assets Assignment and ▇▇▇▇ of Sale" in
substantially the form attached hereto as Exhibit E and the warranty deeds in
---------
substantially the form attached hereto as Exhibit F, Sellers shall sell,
---------
transfer and convey to Buyer, and Buyer shall purchase, receive and accept the
Purchased Assets from Sellers on the Closing Date.
3.2 Purchase Price. The purchase price for the Purchased Assets,
--------------
shall be:
(i) Two Million Dollars ($2,000,000); plus
(ii) the difference, as determined by Buyer's auditors and set forth
on Schedule 3.2(ii), between the Sellers' tax liability resulting from the
----------------
purchase of the Purchased Assets by Buyer and the Sellers' tax liability
had Buyer purchased all of the issued and outstanding shares of stock of
each Seller; ((i) and (ii) are hereafter referred to as the "Cash
Portion"); plus
(iii) Buyer shall pay to Shareholders an amount equal to 25% of the yearly
net income after income taxes produced by the Purchased Assets and addition
and replacements thereto for a period of approximately ten years, beginning
on the Closing Date and ending on March 31, 2007 (the "Earn Out Amount").
The Earn Out Amount calculation for the first such year, however, shall be
based only on the net income after income taxes for the period from the
Closing Date until March 31, 1998. For each year thereafter, the Earn Out
Amount calculation shall be based on the net income after income taxes for
the fiscal year in question. The Earn Out Amount shall be paid to Sellers
annually within 90 days after the end of Buyer's fiscal year. The payment
of the Earn Out Amount shall be equal to 12 1/2% of the yearly net income
after income taxes produced by the Purchased Assets (the "Initial Amount")
until the total of all Initial Amounts equals the aggregate amounts payable
under the Shareholders' Notes (including the interest thereon), which are
attached hereto as Exhibit G; plus
---------
(iv) the assumption by Buyer of the Assumed Liabilities pursuant to the
terms of an "Liabilities Assignment and ▇▇▇▇ of Sale" in substantially the
form attached hereto as Exhibit H. For purposes hereof, "Assumed
---------
Liabilities" means only those liabilities of Sellers incurred prior to the
Closing Date in the ordinary course of business, and which are listed on
---
Exhibit I hereto. Buyer agrees to use its best efforts to remove
---------
Shareholders from any and all obligations of Sellers for which Shareholders
are signers, co-signers and/or guarantors, and Buyer shall indemnify
Shareholders in a manner acceptable to Shareholders where their respective
names may not be removed from any such obligation of Sellers.
The Cash Portion, the Earn Out Amount and the assumption of the Assumed
Liabilities, is collectively referred to as the "Purchase Price".
3.3 Payment of Cash Portion. All of the Cash Portion shall be paid to
-----------------------
Sellers in immediately available funds at Closing pursuant to the wire transfer
instructions set forth in Exhibit J hereto.
---------
3.4 Allocation of Purchase Price. The Purchase Price shall be allocated
----------------------------
by Buyer among the Purchased Assets subsequent to Closing. The allocation shall
be delivered to Sellers. So long as such allocation is not unreasonable, each of
the parties agrees to report this transaction for state and federal tax purposes
in accordance with such allocation. The allocation shall be deemed to have been
made as of the close of business on the Closing Date.
ARTICLE IV
CLOSING
-------
4.1 Closing. The delivery of the Purchase Price pursuant to Section 3.2
-------
hereof, the sale, transfer, assignment and delivery of
the Purchased Assets pursuant to Sections 3.2 and 3.3 hereof and the delivery of
the other instruments and certificates required hereunder (the "Closing"), shall
take place on Wednesday, April 30, 1997 at a mutually agreeable time and place
(the date and time of the Closing being referred to herein as the "Closing
Date"). At the Closing, (a) Sellers shall convey the Purchased Assets to the
Buyer by delivery of warranty deeds, bills of sale and instruments of transfer
and assignment satisfactory to Buyer and its counsel, including all documents
necessary to transfer bank accounts, and shall deliver all certificates and
other instruments and documents contemplated hereby all in form and substance
reasonably satisfactory to Buyer and Buyer's counsel, and (b) Buyer shall
deliver to Sellers the Cash Portion of the Purchase Price, the instruments of
assumption pertaining to Sellers' liabilities and obligations to be assumed
hereunder and all certificates and other instruments and documents contemplated
hereby, all in form and substance reasonably satisfactory to Sellers and
Sellers' counsel.
4.2 Shipments in Transit. All shipments in transit delivered prior to
--------------------
11:59 p.m. CDT on the Closing Date shall be the responsibility of Sellers and
those in transit after 11:59 p.m. CDT on the Closing date shall be the
responsibility of the Buyer. This Section 4.3 is subject to the provisions of
Sections 2.1 and 3.2 hereof.
ARTICLE V
LIABILITIES NOT ASSUMED
-----------------------
Buyer expressly assumes no liabilities or obligations of Sellers whatsoever
except for those liabilities specifically set forth on Exhibit I hereof.
---------
Without limiting the foregoing, Buyer specifically does not assume any liability
of Sellers with respect to (i) obligations for past pension, profit-sharing or
other employee benefit programs or termination or unemployment benefits, whether
funded or unfunded, (ii) liability arising under or pursuant to any
law or regulation relating to health or the environment, or (iii) liability
which may hereinafter be asserted as the result of acts or omissions on the part
of Sellers prior to the Closing Date.
ARTICLE VI
SALES AND TRANSFER TAXES, PROPERTY TAXES,
-----------------------------------------
RECORDING FEES, AND PROFESSIONAL FEES
-------------------------------------
6.1 Sales and Transfer Taxes. Buyer shall be responsible for payment to
-------------------------
the appropriate state or local governmental authorities of all transfer taxes,
whether for personal property or real property, with respect to the sale
contemplated herein. Buyer shall be responsible for all sales taxes, if any,
with respect to the sale contemplated herein.
6.2 Recording or Filing Fees. The party receiving a conveyance by deed,
------------------------
lease, assignment or otherwise shall pay any applicable recording or filing fees
thereon.
6.3 Attorney's and Accountant's Fees, Etc. Each party shall pay its own
-------------------------------------
attorney's and accountant's fees and fees of other applicable professionals.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SELLERS AND SHAREHOLDERS
----------------------------------------------------------
As a material inducement to Buyer entering into this Agreement and
consummating the transactions contemplated hereby, Sellers and Shareholders,
jointly and severally, hereby make the following representations and warranties
to Buyer, each of which shall be continuing, shall be true at the date of
execution hereof and on the Closing Date, and shall survive the Closing and the
sale of the Purchased Assets and other transactions contemplated hereby:
7.1 Corporate Existence and Authority. Each of Sellers is a corporation
----------------------------------
duly organized, validly existing, and in good standing under the laws of the
State of Nebraska with each having full power and authority to own its
properties and conduct the Business as now being conducted. Each of Sellers has
full corporate power and authority to execute this Agreement and consummate the
transactions contemplated hereby, and each of their respective shareholders and
Board of Directors have properly approved the transactions contemplated by this
Agreement. True and correct copies of the resolutions by the Directors and
Shareholders of each of the Sellers authorizing each Seller to enter into this
transaction, properly certified by the President and Secretary of each Seller,
are attached hereto as Exhibit K. Upon execution and delivery, this Agreement,
---------
the warranty deeds, Assignment and ▇▇▇▇ of Sale, and the Assignment and
Assumption Agreement attached as exhibits hereto, shall be valid and legally
binding documents, enforceable in accordance with their terms, subject to
equitable principles of any bankruptcy, insolvency and other similar laws
generally affecting creditors' rights.
7.2 Organizational Documents. The Articles of Incorporation and By-Laws
-------------------------
of each Seller that have been furnished to Buyer are true and complete and
contain all amendments thereto to date. Schedule 7.2 contains a true and
------------
complete list of all of the current officers and directors of each Seller.
7.3 Financial Statements. Prior to the date hereof, Sellers have
--------------------
delivered to Buyer the following financial statements: the internal, unaudited
profit and loss and balance sheets for the Sellers for the years 1990, 1991,
1992, 1993, 1994, 1995 and 1996 and the audited profit and loss and balance
sheets for the Sellers for the years 1990, 1991, 1992, 1993, 1994 and 1995 (the
"Sellers Financial Statements") all of which have been prepared in accordance
with GAAP consistently applied in each of the periods indicated and respectively
present fairly the financial position of Sellers as of the respective dates of
the statements.
7.4 Liens and Good Title. Except as disclosed in Schedule 7.4, Sellers
--------------------- ------------
own, of record, the legal title and beneficial and equitable interest in and to
all of the Purchased Assets. Sellers have, and on the Closing Date will have,
good and marketable title to all of the Purchased Assets, free and clear of any
and all mortgages, deeds of trust, liens, security interests, pledges,
encumbrances, easements, leases, agreements, covenants, charges, restrictions,
options, joint ownership or adverse claims or rights whatsoever other than those
evidenced in Schedule 7.4.
------------
7.5 Authority. Neither the execution and delivery of this Agreement, nor
---------
the consummation by Sellers of the transactions contemplated hereby, will
conflict with or result in a breach of or default under any of the terms,
conditions or provisions of any loan, note, bond, mortgage, lease, indenture,
license, agreement, or other instrument or obligation to which any of Sellers is
a party or by which any of its respective properties or assets are bound.
7.6 Accounts Receivable. Except as disclosed on Schedule 7.6, all
------------------- -------- ---
accounts receivable reflected on the Sellers Financial Statements will have
arisen from transactions in the ordinary course of business, credit being
extended in a manner consistent with Sellers' regular credit practices and such
accounts will be collectible within ninety (90) days in the ordinary course of
business without resort to litigation, subject to the allowance for doubtful
accounts set forth therein.
7.7 Tax Returns and Reports. Except as set forth in Schedule 7.7:
----------------------- ------------
(a) Each Seller has filed all federal, state, local and foreign tax
returns and reports required under the laws of the United States or
any foreign country or any state or municipal or political subdivision
of any of the foregoing ("Tax Returns") to be filed by the Sellers in
respect of any Tax or Taxes. For purposes of this Agreement "Tax" or
"Taxes" shall
mean all income, gross receipt, gains, sales, use, employment,
franchise, license, school, profits, property, ad valorem, excise or
other taxes, estimated, import duties, fees, stamp, taxes and
assessments or charges of any kind whatsoever (whether payable
directly or by withholding), together with any additional charges,
interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority with respect thereto, or any charges,
interest or penalties imposed by any taxing authority as the result of
the failure to file any return.
(b) Each Seller has paid or provided for all Taxes shown on the Tax
Returns, and all deficiencies and assessments of Tax, interest or
penalties.
(c) No Seller has any penalty or other charge which is, or will
become, due with respect to late filing of any Tax Returns.
(d) No Seller has had any of the Tax Returns audited for any fiscal
year beginning after January 1, 1992. If any audits have occurred
since January 1, 1992, all material results are summarized in
Schedule 7.7.
------------
All of the Tax Returns as filed were true and correct.
7.8 Bank Accounts. Schedule 7.8 sets forth a complete and accurate
------------- ------------
list of each bank or financial institution in which any of the Sellers has an
account or safety deposit box (giving the address and account numbers) and the
names of the persons authorized to draw thereon or who have access thereto.
7.9 Occupational Safety, Health and Other Filings. Sellers have
----------------------------------------------
previously delivered to Buyer all reports and filings made or filed by each
Seller pursuant to all applicable occupational safety and health legislation,
regulations and orders since January 1, 1992.
7.10 Absence of Undisclosed Liabilities. Except as disclosed on
----------------------------------
Schedule 7.10 and all other schedules and exhibits hereto, there are no
-------------
liabilities of any nature, whether accrued, unaccrued, absolute, contingent or
otherwise, which exist presently or which may arise in the future as a result of
activities of each Sellers or the Business on or prior to the Closing Date which
would impose any transferee liability on Buyer, other than any liability
incurred in the ordinary course of business..
7.11 Compliance with Laws. None of the Sellers or the Business is in
--------------------
Material violation of any applicable federal, state or local law, statute,
ordinance, order, rule or regulation relating to or affecting the ownership of
the Purchased Assets or the operation or conduct of the Business.
7.12 No Consents. All consents necessary to consummate the
-----------
transactions contemplated herein shall be obtained prior to or at the Closing
and, except as otherwise provided herein, no consent or approval of, or
declaration, filing or registration with, any non-governmental third party or
any governmental authority is required to be obtained by Sellers (i) in
connection with the execution of this Agreement, (ii) for the consummation of
the transactions contemplated hereby or (iii) for the operation of the Business.
7.13 Condition and Use of the Assets. All of the tangible Purchased
-------------------------------
Assets are generally in good working order and condition and are fit for the
purpose for which such Purchased Assets are being used. The use of the
Purchased Assets conforms in all material respects to all applicable building,
zoning, platting, subdivision, land use, fire, health, and other laws,
ordinances, rules or regulations, and no notice of any violation with respect
thereto has been received by any of the Sellers.
7.14 Absence of Change. From December 31, 1996, and through the
-----------------
Closing Date:
(a) The Business has been conducted in the ordinary course consistent
with historical methods of operation.
(c) There has been no Material Adverse Change in the Business, and no
event or condition shall have occurred which materially affects the
Purchased Assets or the intended use thereof, or the prospects of the
Business. For purposes of this Agreement, a "Material Adverse Change"
shall mean a Material adverse change to Sellers' financial condition,
results of operations or Business, taken as a whole.
(d) Each Seller and each Shareholder has not sold, contracted to
sell, conveyed, transferred, assigned, distributed or otherwise
disposed of any of the Purchased Assets, or any rights thereto.
(e) Each Seller and each Shareholder has not mortgaged, pledged, or
granted any security interests in, and has not encumbered or otherwise
caused a lien to be placed against any of the Purchased Assets other
than as evidenced in the exhibits hereto.
(f) None of the Sellers or the Business has incurred any uninsured
Material loss, damage, liability or destruction of property which
would or might have a Material Adverse Effect on Buyer's intended use
of the Purchased Assets or operation of the Business. As used in this
Agreement, an item is "Material", if it the monetary exposure with
regard to the item could exceed One Hundred Thousand Dollars
($100,000).
(g) No Seller has granted any Material increase, in the aggregate, in
any salary, bonus, fringe benefits, incentive or other compensation
payable, or to become payable, to any employee or agent of the
Business in, or made any commitment to
adopt any bonus incentive compensation, deferred compensation, profit
sharing, pension, or other employee benefit plan.
(h) Each Seller has not made any changes in its respective business
policies in any Material respect, including, without limitation, its
advertising, purchasing, pricing and employment policies.
(i) Each Seller has not made any declaration, setting aside or
payment of any dividend or other distribution of assets (whether in
cash, stock or property) with respect to the capital stock of Sellers
or any direct or indirect redemption, purchase or other acquisition of
such capital stock.
7.15 Licenses and Permits. Each Seller and the Business possess all
--------------------
Material approvals, authorizations, consents, licenses, orders, franchises,
rights, registrations and permits from all governmental and non-governmental
agencies and authorities required to permit the operation of the Business as
presently conducted.
7.16 Major Customers. Schedule 7.16 sets forth a list of each
--------------- -------------
customer of Sellers to whom Sellers sold more than $50,000 of services during
the most recent completed fiscal year together with the amount of service sold
during such period. Sellers have no knowledge that any customer listed on
Schedule 7.16, intends to Materially diminish the amount of business which (i)
-------------
it will engage in with each Seller prior to the Closing Date, or (ii) it will
engage in with Buyer subsequent to the Closing Date other than ▇▇▇▇▇▇, which has
indicated that it does not intend to do business with Buyer but Sellers are
using and will use their best efforts to retain this business.
7.17 Material Contracts and Commitments. Schedule 7.17 contains a
---------------------------------- -------------
complete and accurate list of all contracts, agreements, commitments or
understandings, whether oral or written, to which the
Business or the Purchased Assets are subject ("Contracts"), including but not
limited to any:
(a) Contract or commitment relating to the Business outside the scope
of the ordinary course of the Business;
(b) bonus, incentive compensation, retirement agreement, deferred
compensation agreement, vacation plan, sick leave plan, group
insurance plan, or other employee benefit or welfare plan of any
nature whatsoever which could impose a transferee liability on Buyer;
(c) agreement with any labor union, group of employees or other
employee representatives, or employment contract, agreement, or
commitment to or with any individual employees or agents;
(d) agreements for the purchase of goods, materials, services,
supplies, machinery, or capital assets;
(e) agreement with any sales agent or representative;
(f) franchise agreement or agreement with any manufacturer or
supplier with respect to discounts, allowances or extended payment
terms;
(g) agreement guaranteeing, indemnifying, or otherwise causing the
Purchased Assets to be subject to or liable for the obligations or
liabilities of another;
(h) agreement, statute, rule or regulation giving any party the right
to negotiate or require a reduction in prices or the repayment of any
amount previously paid;
(i) partnership or joint venture agreement;
(j) contract or commitment requiring payment based in any manner upon
revenues, expenses, or net or gross income of Sellers;
(k) license or royalty agreement;
(l) indenture, mortgage, note or credit agreement or other contract
or obligation pertaining to the borrowing of money by any Seller which
relates to the business;
(m) leases of property, personal or real, whether as Lessor or
Lessee, other than those identified in Exhibit A;
---------
(n) other contract, agreement or lease commitment Material to he
Purchases Assets.
Each of the Contracts is valid, in full force and effect, and enforceable in
accordance with its terms, except to the extent that the same may be limited by
laws concerning insolvency, bankruptcy, or similar laws or equitable principles
affecting the enforcement of creditors' rights generally.
7.18 Change in Business. For purposes of this Agreement, a Material
------------------
Adverse Effect" shall mean a Material adverse effect on Sellers' financial
condition, results of operations or Business, taken as a whole. Sellers is
aware of no significant changes in the Business, including but not limited to,
changes with respect to its services, customers, employees, equipment needs,
markets, suppliers, or legislation to which either of the Sellers or the
Business are subject, which would or might have a Material Adverse Effect upon
any Seller, the Business or the Purchased Assets.
7.19 Business Records. All of the Sellers' respective business
----------------
records have been maintained in accordance with good and sound accounting and
business practices.
7.20 Real Estate.
-----------
(a) General. Except for the Real Estate set forth as Exhibit A,
-------- ---------
there is no real property owned or continuously occupied by any of the
Sellers and used or connected with the Business.
(b) Codes, Ordinances, Use and Notice of Condemnation. There are no
-------------------------------------------------
existing, pending, or proposed violations of any fire or health codes,
building ordinances, or rules of the Board of Fire Underwriters (or
organization exercising functions similar thereto), with respect to
the Real Estate, nor is there, any defect in the Real Estate which
would render all or any part thereof unsuitable for its proposed use
by Buyer (assuming for this purposes that Buyer will engage in a
business identical to the Business of Sellers). No Seller has received
any notice of any condemnation proceeding in process or proposed that
would affect the Real Estate. Sellers shall advise Buyer forthwith of
any notice concerning violations, condemnation proceeding, and tax or
utility rate increases that may affect the Real Estate.
(c) Licenses and Permits. Each Seller holds all licenses,
--------------------
certificates, permits, franchises and rights from all appropriate federal,
state, local and other public authorities necessary for the conduct of its
current operations at the Facilities, which licenses, certificates,
permits, franchises and rights are specified on Schedule 7.20 (c).
-----------------
(d) No Notice of Violations. Sellers' Business is in compliance
-----------------------
with all applicable laws, rules and regulations. Sellers have not
received any notice of violations of any
federal, state or local laws, ordinances, rules, regulations or orders
relating to the Business or the Purchased Assets.
(e) Utility Connections. All public utility connections located on
--------------------
the Real Estate have been completed, installed, activated, paid for
and are in operational condition and are in compliance with all
appropriate codes, rules and regulations.
(f) Taxes and Utilities. No Seller or Shareholder is aware of, nor
-------------------
has any Seller received, any notice or information of any condition
which would result in a Material increase in the assessments covering
the Real Estate or utility rates affecting the Real Estate or the
Business.
(g) Access. Each Seller presently has the unencumbered right to use
------
(and to transfer to Buyer) all accesses from the Real Estate to and
from public thoroughfares, as such accesses are presently configured
and utilized.
(h) Right to operate. Sellers have the legal right to operate all
-----------------
parts of the Real Estate in the manner in which it is currently being
operated as a terminal facility for interstate motor carriers.
7.21 Litigation. Except as set forth on Schedule 7.21, there is no
----------- -------------
governmental or private litigation, investigation, proceeding, claim, suit or
audit of any kind whatsoever pending or, to the best knowledge of each Seller
and Shareholder, threatened against any Seller, the Business, or any of the
Purchased Assets. To the best of each Seller and Shareholder's knowledge after
due and diligent inquiry, there is no private person or governmental agency who
has any basis for any cause of action, whether or not known or asserted, which
would cause any Seller, the Business or Buyer, as a transferee, to suffer any
Material loss or liability not disclosed herein.
7.22 Labor Relations. None of Sellers or the Business is, or has
---------------
been, involved in any labor discussion with any unit or group seeking to become
the bargaining unit for any of its employees, nor does any Seller or Shareholder
have any notice or knowledge that any such unit or group has announced an
intention to commence any organizational activities among the employees of the
Business. No Seller has been accused, notified or made aware of any unfair
labor or employment practice, discriminatory act or omission, nor is there any
pending or threatened strike, work stoppage, or other labor dispute affecting
any of the Sellers or the Business.
7.23 Employee Contracts, Union Agreements and Benefit Plans. Schedule
------------------------------------------------------- --------
7.23 sets forth a complete and accurate list and description of all employment,
----
consulting or collective bargaining contracts, deferred compensation, profit-
sharing, bonus, option, share purchase or other benefit or compensation
commitments, benefit plans, arrangements or plans, including all welfare plans
of or pertaining to the present or former employees of each of the Sellers, or
any of the Seller's respective predecessors in interest. Except as set forth on
Schedule 7.23, each Seller and its respective predecessors in interest have
-------------
complied with all of their respective obligations, including the payment of all
contributions, the filing of all reports, and the payment or accrual of all
expenses for the period between the end of the previous plan year and the
Closing Date, with respect to such contracts, commitments, arrangements and
plans. The plans have been maintained in compliance with all applicable laws
and regulations in all Material respects. The levels of insurance reserves and
accrued liabilities with regard to all such plans are reasonable and are
sufficient to provide for all incurred but unreported claims and any retroactive
premium adjustments.
7.24 Employee Benefit Plans.
----------------------
(a) The only employee pension benefit plan as defined in Section 3(2)
of ERISA (and including unless otherwise specified trusts executed in
connection therewith and including any
multi-employer Plan), adopted or sponsored or maintained by Sellers
with respect to which or as the result of which Sellers has had or may
have any liability (the term "Sellers" specifically includes for the
purposes of this Section 7.24, any subsidiary or predecessor in
interest of any of the Sellers) is the JTI, Inc. 401(k) Plan (the
"Retirement Plan"). The Retirement Plan has never been a Multi-
employer Plan.
(b) The Retirement Plan is a qualified plan under Section 401(a) of
the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder (the "Code"), the trust with respect to such
plan is exempt from taxation under Section 501(a) of the Code and, in
either case, is subject to a favorable determination letter which will
be in effect at the Closing Date; and all amendments made to the
Retirement Plan prior to the Closing Date have been considered in the
determination letter. No action has been taken (or failure to take
action has occurred) which would cause such determination letter to be
revoked. The determination letter is effective for those provisions
required by Tax Equity and Fiscal Responsibility Act of 1982
("TEFRA"), the Tax Reform Act of 1984 ("DEFRA") and the Retirement
Equity Act of 1984 ("REA") at the time such letter was requested. The
Retirement Plan has been administered and operated in accordance with
its terms and in a manner so as to preserve such qualification,
including those provisions required by TEFRA, DEFRA, and REA, as well
as such provisions of all subsequent laws (including the 1986 Tax
Reform Act) whose effective date is prior to the Closing Date.
(c) The Retirement Plan has not at any time been subject to Title IV
of the Employee Retirement Income Security Act of 1974 ("ERISA").
(d) Prior to the Closing Date, Sellers will take all actions necessary
to terminate the Retirement Plan and will have filed
a Form 5310 with the Internal Revenue Service with respect to
requesting a favorable determination letter with respect to such
termination. Sellers will thereafter take such actions as may be
necessary to receive such favorable determination letter and within 60
days after the receipt of such letter will distribute all assets held
in the Retirement Plan to or for the benefit of the participants or
beneficiaries, as the case may be, requiring such elections and taking
all actions and making all payments (including payment of expenses)
required by the terms of the Retirement Plan and by ERISA to maintain
the favorable determination letter.
(e) Buyer, its officers, employees, or agents will have no liability
with respect to any employer benefit plans within the meaning of
Section 3(3) of ERISA or any other employee arrangements and benefits
of any type maintained, established or contributed to by Sellers, (the
foregoing collectively referred to as "Benefit Plans"), including but
not limited to, any liability arising from any of the following:
(i) Claims of any nature by employees of any of Sellers, former
employees of any of Sellers, beneficiaries of any Benefit Plan, or the
spouses or dependents of the foregoing;
(ii) Failure to pay premiums in whole or in part in a timely manner;
(iii) Failure to file and distribute reports and notices (or to file
such reports and notices accurately) in a timely manner, including the
annual reports on the Form 5500 series, Summary Plan Description,
Summary Annual Reports, and all notices and information required by
COBRA.
(iv) Any action (or failure to act) resulting in a breach of
fiduciary responsibility;
(v) Failure to administer any Benefit Plan in accordance with its
terms and in accordance with applicable laws, including ERISA;
(vi) Termination of any Benefit Plan or benefit under any benefit
Plan by Sellers or by Buyer;
(vii) The requirement that any Benefit Plan be continued by Buyer
after Closing Date; or
(viii) Any expense relating to any Benefit Plan.
(f) With respect to each Benefit Plan:
(i) no action, suit, grievance, arbitration or other manner of
litigation, or claim with respect to the assets of the Benefit Plan
(other than routine claims for benefits made in the ordinary course of
Benefit Plan administration of which Benefit Plan administrative
review procedures have not been exhausted) are pending, and to the
best knowledge of the Sellers and Shareholders threatened or imminent
against or with respect to the Benefit Plan, Sellers or other
fiduciary (as defined in ERISA Section 3(21)) or the Benefit Plan
(including any action, suit, grievance, arbitration or other manner of
litigation, or claim regarding conduct which allegedly interferes with
the attainment of rights under the Benefit Plan; and
(ii) neither Sellers, either Shareholder nor any other fiduciary has
any knowledge of any facts which would give rise to or could give rise
to any action, suit, grievance, arbitration or other manner of
litigation, or claim.
7.25 Antitrust Matters. Each Seller and the Business is and
-----------------
throughout the applicable statutory period of limitations has been in compliance
with all laws and regulations, whether federal or state,
pertaining or relating in any way to the regulation of competition or trade
among or between business entities, including but not limited to, Section 1 and
2 of the ▇▇▇▇▇▇▇ Act, Section 3 of the ▇▇▇▇▇▇▇ Act, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Act, the
▇▇▇▇▇▇ Act, Section 5 of the Federal Trade Commission Act and applicable state
antitrust and trade laws and regulations, and the business and operations of
Sellers, or any predecessor, affiliate, parent or subsidiary thereof, have been
conducted in full and complete compliance with any and all such laws and
regulations. To the knowledge of Sellers and Shareholders, there is no grand
jury or other federal or state investigation pending with regard to the
antitrust matters involving any of the Sellers or the Business.
7.26 Absence of Certain Payments. Other than for services
---------------------------
legitimately and openly performed under applicable law and nominal non-cash
gifts (with a total per donee retail value of less than $100.00 in any year),
none of Sellers, nor, to Sellers and Shareholders' best knowledge, any agent,
employee or representative of any of Sellers have made to any present or
prospective customer, supplier, government official, insurance carrier, referral
source, employee or agent or any other person, any payment, gratuity, gift or
thing of value.
7.27 No Broker or Finder. Sellers have not had discussions with,
-------------------
negotiated with, been represented by, employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finder's fees to any
individual or entity in connection with this Agreement or any of the
transactions contemplated hereby.
7.28 No Material Omission. To the best knowledge of Sellers and each
--------------------
Shareholder after due inquiry, all facts material to the financial condition,
assets, supplies, customers, business prospects, and result of operations of the
Business have been disclosed to Buyer in writing in this Agreement or otherwise
in connection with negotiations with respect to this transaction. To the best
knowledge of Sellers and each Shareholder after due inquiry, no representation
or warranty contained in this Agreement, and no Exhibit, certificate, Schedule,
list or other information furnished by or on behalf of Sellers or Shareholders
to Buyer in connection herewith, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading.
7.29 Environmental Status.
--------------------
(a) Each Seller is in full compliance (including record keeping and
reporting requirements) with all federal, state, local and any other
applicable laws and regulations relating to pollution, environmental
protection, occupational safety, or protection of the health, safety
and welfare of persons and/or property, including but not limited to
all laws, regulations, codes, plans, orders, decrees, judgments,
notices, demand letters, consent agreements and directives
("Environmental Laws").
(b) Each Seller has obtained all material permits, licenses and other
authorizations and filed all notices which are required to be obtained
or filed by Sellers for the operation of Business by all Environmental
Laws, and a copy of all such permits is set forth in Schedule 7.29(b).
----------------
(c) Each Seller is in compliance in all Material respects with all
terms and conditions of such required permits, licenses and
authorizations.
(d) No Seller has received any communication, written or oral,
whether from a governmental authority, citizens group, lender,
employee or otherwise, that alleges that any Sellers is not in full
compliance with any Environmental Law, and there are no circumstances
or conditions presently existing relating to the Business or the Real
Estate that would prevent or interfere with such full compliance in
the future.
(e) All waste materials generated by the Business or at or on the Real
Estate has been disposed of properly and in full compliance with
Environmental Laws.
(f) The Real Estate does not contain any asbestos or PCBs in any form.
No Facility is constructed of, or does not contain as a component part
thereof, any material which (either in its present form or as such
material may reasonably be expected to change through aging and normal
use and service) releases any substance, whether gaseous, liquid or
solid, which is or may be, either in a single dose or through repeated
and prolonged exposure, injurious or hazardous to the health of
persons or animals, or otherwise harmful to the environment.
(g) There are no past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere
with or prevent continued compliance with Environmental Laws, or which
may give rise to any common-law or statutory liability, or otherwise
form the basis of any claim, action, suit, proceeding, hearing or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened release
into the environment, of any pollutant, contaminant, or hazardous or
toxic material or waste with respect to each Sellers or the Business
whether or not occurring on the Real Estate.
(h) All underground storage tank systems located on the Real Estate
are free from leaks required by Applicable Law to be reported to any
governmental authority and there has been no contamination of either
the surrounding soil or ground water either from any existing
underground storage tank systems or any underground storage tank
system previously removed from, abandoned or closed in place on the
Real Estate.
VIII
BUYER'S REPRESENTATIONS AND WARRANTIES
--------------------------------------
Buyer hereby makes the following representations and warranties to Sellers,
each of which shall be continuing, shall be true at the date of execution hereof
and on the Closing Date, and shall survive the Closing and the sale of Purchased
Assets and other transactions contemplated hereby.
8.1. Incorporation, Good Standing and Power. Buyer is a corporation duly
--------------------------------------
organized, validly existing, and in good standing under the laws of the State of
Nevada, with full power and authority to execute this Agreement and consummate
the transactions contemplated hereby. Buyer's Board of Directors has properly
approved the execution of this Agreement and the consummation of the
transactions contemplated hereby and a copy of the resolutions of Buyer's
Directors authorizing Buyer to execute this Agreement and consummate the
transactions contemplated hereby, properly certified by the Secretary is
attached hereto as Exhibit L. Upon execution, this Agreement shall be valid,
---------
legal and binding, enforceable in accordance with its terms, subject to
equitable principles of any bankruptcy, insolvency, and other similar laws
generally affecting creditors' rights.
8.2. Effect of Agreement. The execution, delivery and performance of
-------------------
this Agreement and the consummation of the transactions contemplated hereby will
not violate any law or regulation to which Buyer is subject, or conflict with or
cause a default under the terms of any agreement to which the Buyer is a party,
or by which it or any of its assets may be bound.
IX
COVENANTS OF SELLERS
--------------------
Sellers covenant and agree with Buyer as follows:
9.1 Conduct of Business Through the Closing Date. From the date hereof
---------------------------------------------
and through the Closing Date:
(a) Sellers shall operate the Business only in the usual, ordinary
and customary manner and use its best efforts to preserve its present
business organizations intact so as to keep available the services of its
present employees and agents, and to preserve its present business
relationships with customers, suppliers, and others having business
dealings with Sellers.
(b) Sellers shall maintain all properties necessary for the conduct of
the Business, whether owned or leased, real or personal;
(c) Sellers shall maintain their respective books, records, and accounts
in the usual manner on a basis consistent with prior periods utilizing
historical bookkeeping practices.
(d) Sellers shall duly comply with all laws Material to the conduct of
the Business.
(e) Sellers shall not enter into any contract, commitment, lease or
sublease relating to or affecting the Business, other than in the ordinary
course of business, without the prior written approval of Buyer.
(f) Sellers shall use their best efforts to preserve for Buyer the
relationships existing with Sellers' respective suppliers, customers,
employees and others having business relationships with Sellers.
(g) Sellers shall maintain insurance upon the Purchased Assets until
Closing, and, unless this transaction is not closed, Sellers shall pay to
Buyer all amounts received under such insurance for an insured loss.
(i) Sellers shall take all action necessary to maintain the utility
services being provided to the Real Estate.
9.2 Representations and Warranties. Sellers and each Shareholder shall
------------------------------
cause the representations and warranties of Article VII to be true and correct
at all times in every material respect.
9.3 Completion of Transactions. Sellers and each Shareholder shall use
--------------------------
its respective best efforts to assure that the conditions set forth in
Article XI hereof are satisfied on or prior to the Closing Date.
9.4 Approvals, Consents. Sellers shall obtain in writing prior to
-------------------
Closing all approvals and consents, if any, required to be obtained in order to
effectuate the transactions contemplated hereby, and shall deliver to Buyer
copies, satisfactory in form and substance to Buyer's counsel, of such approvals
and consents. All such approvals and consents shall be attached hereto as
Exhibit M.
---------
9.5 Access to Properties and Records. Sellers shall have given to Buyer
--------------------------------
and to its counsel, accountants, and other representatives reasonable access
during normal business hours to all of the properties and records of the
Business as Buyer or its representatives may reasonably request and as shall be
necessary to effectuate full disclosure to Buyer of all Material facts affecting
the financial condition, business operations and assets of the Business. No
investigation by Buyer shall, however, diminish or limit in any way the
representations or warranties of Sellers and each Shareholder as set forth in
Article VII hereof. In the event
that Buyer discovers facts or circumstances that leads it to believe, in its
sole discretion, that the transactions contemplated by this Agreement would be
uneconomical to Buyer, then Buyer shall have the absolute right to terminate
this Agreement without liability or obligation to Sellers.
9.6 Advise of Changes. From date hereof through the Closing Date,
-----------------
Sellers shall advise Buyer promptly in writing of any Material damage to or
diminution in value of the Purchased Assets or the Business, any condition or
event that would cause any representation or warranty of Sellers and each
Shareholder to be untrue in any respect, or any other fact that, if obtained or
known on the date hereof, would have been required to be set forth or disclosed
pursuant to this Agreement.
9.7 Refrain From Negotiations With Others. Sellers and Shareholders
-------------------------------------
shall refrain from negotiations or discussions with others on the subject of the
sale of the Purchased Assets.
9.8 Nonpublicity and Nondisclosure of Terms. Sellers and Shareholders
---------------------------------------
shall take all reasonable steps to minimize any publicity regarding this
transaction to third parties without prior approval of Buyer, and Sellers and
each Shareholder shall not, without the prior written consent of Buyer, disclose
the Purchase Price or any other terms of this Agreement or the transactions
contemplated hereby to any third party.
9.9 Termination of Employees. On the Closing Date, Sellers shall
-------------------------
terminate the employment of all employees of the Business so as to make the
services of such person available to Buyer. Buyer may, at its sole discretion,
employ such persons under arrangements which are terminable at will. Buyer
expressly reserves the right to terminate the employment of any such employee at
any time.
9.10 Name Change of Sellers. Within a reasonable time after the Closing
-----------------------
Date, Sellers shall file with the Nebraska Secretary of
State to (i)amend their respective Articles of Incorporation and change their
respective names to ones dissimilar to any of the names constituting part of the
Purchased Assets under Section 2.1(h) or (ii) Articles of Dissolution or other
relevant filings to effect the dissolution and liquidation of each Seller.
X
COVENANTS OF BUYER
------------------
Buyer hereby covenants and agrees as follows:
10.1 Representations and Warranties. Buyer shall cause the representa-
-------------------------------
tions and warranties of Article VIII to be true and correct at all times in
every material respect.
10.2 Completion of Transactions. Buyer shall use its best efforts to
--------------------------
assure that the conditions set forth in Article XI hereof are satisfied on or
before the Closing Date.
10.3 Nondisclosure of Proprietary Information. All proprietary and
-----------------------------------------
confidential information of Sellers or the Business made available to Buyer
shall remain the property of Sellers pending Closing. Other than in connection
with the transactions contemplated by this Agreement, Buyer and its agents shall
not reproduce, use, or disclose to others any proprietary information of Sellers
or the Business without the prior written consent of Sellers. Nevertheless,
Buyer may make such proprietary information available to its Board of Directors,
officers, counsel, accountants and other advisors who may use such information
as necessary in the performance of their functions in this transaction.
XI
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
---------------------------------------------------
The obligations of Buyer to complete the Closing are subject to the
satisfaction on or before the Closing Date of each of the following conditions
precedent; provided, however, that the election of Buyer to complete the
Closing, notwithstanding that any such condition is not fulfilled by such time,
shall not preclude Buyer from seeking redress from Sellers for breach of the
terms of this Agreement:
11.1 Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of Sellers and Shareholders set forth in Article VII shall have
been true and correct in all material respects on the date made and shall be
true and correct on the Closing Date. Buyer shall have received a certificate
to that effect signed by each Shareholder and a duly authorized officer of each
Seller.
11.2 Performance of Covenants. Sellers and Shareholders shall have
-------------------------
performed and complied with all the covenants, obligations, and conditions
required to be performed or complied with by Sellers on or before the Closing
Date pursuant to this Agreement. Buyer shall have received a certificate to that
effect signed by each Shareholder and a duly authorized officer of Sellers.
11.3 Certified Copy of Authorizing Resolutions. Buyer shall have
-----------------------------------------
received a copy of each Seller's respective board of director and shareholder
resolutions approving this transaction, duly certified by the respective
Secretary of each Seller.
11.4 No Damage to Purchased Assets. None of the Purchased Assets or the
-----------------------------
Business shall have been adversely affected in any Material respect as the
result of any fire, accident, act of war, casualty, labor disturbance,
legislation, regulation, or any other adverse circumstance.
11.5 Approval of Counsel for Buyer. All of the actions, proceedings,
-----------------------------
consents, instruments, and documents delivered by
Sellers and each Shareholder hereunder or incident to the performance hereof,
and all other related matters shall, in the reasonable judgment thereof, be
satisfactory to ▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., counsel for Buyer.
11.6 Licenses and Permits Necessary For Buyer to Conduct Business.
------------------------------------------------------------
Buyer shall have received all licenses and permits necessary for it to conduct
its business and affairs utilizing the Purchased Assets subsequent to the
Closing; provided that Buyer shall use its best efforts to obtain such items.
11.7 Results of Due Diligence Investigation. Buyer shall have
--------------------------------------
completed its due diligence investigation. Nothing shall have been revealed by
Buyer's due diligence investigation that would give Buyer grounds to terminate
this Agreement pursuant to the provisions of Section 9.5.
XII
CONDITIONS PRECEDENT TO SELLERS' OBLIGATION TO CLOSE
----------------------------------------------------
The obligations of Sellers to complete the Closing are subject to the
satisfaction on or before the Closing Date of each of the following conditions
precedent; provided, however, that the election by Sellers to complete the
Closing notwithstanding that any such condition is not fulfilled by such time
shall not preclude Sellers from seeking redress from Buyer for breach of the
terms of this Agreement:
12.1 Accuracy of Representations and Warranties. The representations and
------------------------------------------
warranties of Buyer set forth in Article VIII shall have been true and correct
in all material respects on the date made, and shall be true and correct on the
Closing Date. Sellers shall have received a certificate to that effect signed by
a duly authorized officer of Buyer.
12.2 Performance of Covenants. Buyer shall have performed and complied
------------------------
with all covenants, obligations, and conditions required to be performed or
complied with by Buyer on or before the Closing Date pursuant to this Agreement.
Sellers shall have received a certificate to that effect signed by a duly
authorized officer of Buyer.
12.3 Approval of Counsel to Sellers. All actions, proceeding, consents,
-------------------------------
instruments, and documents delivered by Buyer hereunder or incident to the
performance hereof and all other related matters shall, in the reasonable
judgment thereof, be satisfactory to counsel for Sellers.
XIII
INDEMNIFICATION
---------------
13.1 Indemnification by Sellers and Shareholders. Sellers and
-------------------------------------------
Shareholders, jointly and severally, shall indemnify and hold Buyer harmless
from and against, and reimburse and promptly pay to Buyer the full amount of,
any and all loss, damage, liability, cost, obligation or expense (including
reasonable expenses and fees of counsel) incurred by Buyer, directly or
indirectly, as a result of:
(a) a breach of any representation or warranty or inaccuracy of any
representation of Sellers and each Shareholder contained in this Agreement
or in any certificate or document delivered to Buyer by Sellers or
Shareholders in connection with this transaction;
(b) a failure of Sellers or Shareholders to perform or comply with
any covenant, agreement or obligation required by this Agreement to be
performed or complied with by Sellers or Shareholders; or
(c) any event or circumstance arising out of or relating to the
conduct of the Business on or prior to the Closing Date.
13.2 Indemnification by Buyer. Buyer shall indemnify and hold
------------------------
Sellers harmless from and against, and reimburse and promptly pay to Sellers the
full amount of, any and all loss, damage, liability, cost, obligation or expense
(including reasonable expenses and fees of counsel) incurred by Sellers,
directly or indirectly, as a result of:
(a) a breach of any representation or warranty of Buyer contained in
this Agreement or in any certificate or document delivered to Sellers by
Buyer in connection with this transaction;
(b) a failure of Buyer to perform or comply with any covenant,
agreement or obligation required by this Agreement to be performed or
complied with by the Buyer; or
(c) an event or circumstance arising out of or relating to the
conduct of the Business subsequent to the Closing Date.
13.3 Notice of Potential Claims and Opportunity to Participate in
------------------------------------------------------------
Defense. Promptly after either Buyer or Sellers becomes aware of any claim
--------
whatsoever which would be subject to indemnification set forth in Sections 13.1
or 13.2 above, such party shall provide the other party with prompt written
notice of such claim stating all information regarding the claim that the party
possesses. The potential indemnifying party shall have the opportunity to
participate (at its own expense) in the defense of any such claims.
Nothing herein shall be deemed to prevent either party from making a claim for
indemnification hereunder for potential or contingent claims or demands provided
the notice sets forth the specific basis for any such potential or contingent
claim or demand to the extent then feasible and that such party has reasonable
grounds to believe that such a claim or demand may be made. All claims shall
bear interest at the prime rate of interest announced from time to time by The
---
Wall Street Journal from the date on which notice of claim is given to the other
-------------------
party until the date the claim is paid.
XIV
MISCELLANEOUS
-------------
14.1 Risk Of Loss. The risk of loss or damage to the Purchased Assets
-------------
from fire, strike, war, act of God or other casualty shall be borne by Sellers
through the Closing Date.
14.2 Simultaneous Closing. All transactions at Closing including
---------------------
execution of collateral documents referenced herein shall be deemed to take
place simultaneously and none shall be deemed to take place until all shall have
taken place.
14.3 Survival of Representations and Warranties. The respective
-------------------------------------------
representations, warranties, obligations, covenants and agreements contained
herein shall survive the Closing.
14.4 Counterparts. This Agreement may be executed in any number of
-------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
14.5 Captions. The captions and subject headings are for convenience of
---------
reference only, and shall not affect the meaning or construction to be given
any of the provisions hereof.
14.6 Gender. All pronouns and any variations thereof shall be deemed to
-------
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the parties and context may require.
14.7 Notices. Any notice, demand, request, consent, approval or other
--------
communications required or permitted to be given hereunder shall be in writing
and shall be delivered personally or sent either by facsimile transmission, or
nationally recognized overnight courier (utilizing guaranteed next business
morning or day delivery), addressed to the party to be notified at the following
address, or to such other address as such party shall specify by like notice:
If to Sellers and Shareholders, then to:
JTI, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇/▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Courier Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Buyer, then to:
U.S. Xpress Enterprises, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇)▇▇▇-▇▇▇▇
With copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notices given as provided above shall be deemed given on the day of transmission
if by facsimile, or if by recognized overnight courier, on the business day
following the dispatch thereof.
14.8 Entire Agreement, Modification. This instrument contains the entire
-------------------------------
agreement of the parties with respect to the subject matter hereof; all previous
agreements and discussions relating to the same or similar subject matter being
merged herein. The parties acknowledge and agree that neither of them has made
any representation with respect to the subject matter of this Agreement or any
representations inducing the execution and delivery hereof except as
specifically set forth herein. Each of the parties hereto acknowledges that it
has relied on its own judgment in entering into this Agreement. This Agreement
may not be changed, amended, or modified including specifically the provisions
-------------------------------------
of this paragraph, except by a writing signed by both parties hereto. The
-----------------
provisions of this paragraph may not be changed, amended, modified, terminated,
or waived as a result of any failure to enforce any provision or the waiver of
any specific breach or breaches thereof or any course of conduct of the parties.
14.9 Assignment. This Agreement and the rights, obligations and duties of
-----------
the parties hereto shall not be assignable or otherwise transferable to any
party other than to a related party of Buyer.
14.10 Binding Effect and Benefit. This Agreement shall inure to the
---------------------------
benefit of, and shall be binding upon, the parties, their heirs, executors and
administrators, successors and permitted assigns.
14.11 Further Assurances. Sellers shall on the Closing Date, and from
------------------
time to time thereafter promptly at Buyer's request and without further
consideration, execute and deliver to Buyer such instruments of transfer,
conveyance and assignment as Buyer shall reasonably request to transfer, convey
and assign more effectively the Purchased Assets to Buyer.
14.12 Partial Invalidation. If any portion of this Agreement is held
---------------------
invalid, illegal or unenforceable, such determination shall not impair the
enforceability of the remaining terms and provisions contained herein. In such
event, this Agreement shall be construed and interpreted as if such invalid,
illegal or unenforceable terms were limited to the minimum extent whereby such
terms would be valid, legal and enforceable. If such limitation is not
possible, this Agreement shall be construed and interpreted as if such invalid,
illegal or unenforceable terms were severed and not included herein.
14.13 Waiver. No waiver of a breach or violation of any provision of
-------
this Agreement shall operate or be construed as a waiver of any subsequent
breach.
14.14 Exhibits and Schedules. All Exhibits, Schedules and documents
-----------------------
referred to in this Agreement shall be deemed to be incorporated herein by any
reference thereto as if fully set out, yet no matter disclosed in one Schedule
or Exhibit shall be deemed disclosed in another Schedule or Exhibit in the
absence of an express cross-reference.
14.15 No Third Party Beneficiaries. This Agreement shall not create any
-----------------------------
rights for the benefit of any third party.
14.16 Governing Law. This Agreement shall be interpreted and construed
--------------
in accordance with the laws of the State of Tennessee.
*******************************************
this space intentionally left blank
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year
aforesaid.
SELLERS:
-------
JTI, Inc.
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
Logistics, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
Bison Enterprises, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
HI/PAR Systems, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
Road Enterprises, Inc.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ Attest:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
SHAREHOLDERS:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
BUYER:
------
U.S. Xpress Enterprises, Inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Attest:/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇
President Secretary