Exhibit 10.3
STOCK AND ASSET PURCHASE AGREEMENT
THIS STOCK AND ASSET PURCHASE AGREEMENT ("Agreement") is made as of
December 20,1999, by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an Indiana resident, ▇▇▇▇▇.
▇▇▇▇▇▇▇▇▇, an Indiana resident, DW LEASING COMPANY, LLC, a Mississippi limited
liability company, ▇▇▇▇▇ ▇▇▇▇▇▇▇, a Mississippi resident, ▇▇▇▇ ▇▇▇▇▇▇▇, a
Mississippi resident ▇▇▇▇▇ ▇▇▇▇▇▇▇, a Mississippi resident, ▇▇▇▇▇ ▇▇▇▇▇▇▇, a
Mississippi resident, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, a Tennessee resident, PYRAMID COACH,
INC., a Tennessee corporation, PRECISION COACH, INC., a Mississippi corporation,
AMERICAN COACH WORKS, INC., a Tennessee corporation, TRANSPORT TRAILER SERVICE,
INC., a Mississippi corporation, RENT-A-BOX, INC., a Mississippi corporation,
and LBJ, LLC, a Mississippi limited liability company.
Recitals
WHEREAS, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and Precision collectively own all of the issued
and -outstanding shares of Pyramid;
WHEREAS ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ collectively own all
of the issued and outstanding shares of Precision;
WHEREAS, Precision owns all of the issued and outstanding shares of
American Coach;
WHEREAS, Transport Trailer Service, Inc. owns all of the issued and
outstanding shares of LAB;
WHEREAS, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ are the owners of
all the membership interests of LBJ;
WHEREAS, RAB owns twenty (20) motor bus coaches that it leases to Pyramid;
WHEREAS, LBJ owns two (2) motor bus coaches that it leases to Pyramid;
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ have agreed to purchase all
of the stock of Pyramid, American Coach and Precision and DW Leasing Company has
agreed to purchase nineteen (19) motor bus coaches owned by RAB and the two
owned by LBJ upon the terms and conditions stated herein;
NOW THEREFORE, in consideration of the above premises, the mutual promises
contained herein and for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
Section 1. Purchase and Sale of Assets and Stock.
(a) Purchase and Sale. At the Closing (as defined below) and subject to the
terms and subject to the satisfaction or waiver of the conditions set forth
herein, the Sellers shall deliver:
(i) to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ share certificates,
duly endorsed for transfer with all requisite transfer stamps (if
any) affixed thereto accompanied by duly executed stock powers,
representing all of the issued and outstanding shares of capital
stock of Pyramid, American Coach, and Precision as at the Closing
(the "PAP Stock");
(ii) to DW Leasing Company a title and ▇▇▇▇ of Sale for each of
the Coaches free and clear of all Liens, for an aggregate
purchase price as determined pursuant to Section I (b) below,
(b) Purchase Price. At Closing, Buyers shall deliver to the Sellers in
payment for the sale of the PAP Stock and the Coaches the following:
(i) a certified check or wire transfer for Five Million Eight
Hundred Ten Thousand and 00/ 100 Dollars ($5,810,000.00),
(ii) a letter directed to Mr. ▇▇▇▇▇▇ 0. ▇▇▇▇▇▇, Sellers' counsel,
authorizing him to release to Sellers the Ninety Thousand and
00/100 Dollars ($90,000.00) currently being held in escrow by ▇▇.
▇▇▇▇▇▇ pursuant to the Letter of Intent, and
(iii)a promissory note from DW Leasing Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to ▇▇▇▇▇ ▇▇▇▇▇▇▇ in the principal amount of
One Hundred Thousand and 00/100 Dollars ($100,000.00), a
promissory note from DW Leasing Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ made jointly to ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇
in the principal sum of Seven Hundred Twenty Seven Thousand Five
Hundred ($727,500.00) and a promissory note from DW Leasing
Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
in the principal sum of One Hundred Thousand and 00/100 Dollars
($100,000.00) (collectively "the Notes"). Each of the Notes shall
be for a three (3) year term with interest accruing at the rate
of nine per cent (9%) per annum and monthly payments that shall
be interest only payable on the first of each month and the
entire principal balance then remaining becoming due and payable
on the first day of the 37th month. The sales price includes an
amount agreed to by the parties to be the Net Purchase Price
Adjustment (as it is set forth on Schedule l(b)(iii)). The Note
payable to ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be secured by DW
Leasing Company granting a security interest in one motor coach,
the accounts receivable of DW Leasing Company and Pyramid, and a
pledge of the common stock of Pyramid held by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as more fully described in certain Security
Agreements of even date herewith. In addition, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ agree to provide life insurance to secure
the Notes in an amount equal to the principal balance of the
Notes. The amount of life insurance securing the Notes shall be
reduced as the balance of the Notes are reduced.
(c) Allocation of Purchase Price. The purchase price shall be allocated to
the purchase of the stock and the Coaches as described in Schedule I (c).
Section 2. Covenants of the Sellers.
---------------
(a) Affirmative Covenants of the Sellers and the Corm)any. From December
31, 1998 to the Closing, unless Buyers otherwise agree in writing, each
of the Sellers and each of the Companies, jointly and severally, covenant
and agree as follows:
(i) The Sellers have caused the Companies to, and the Companies
will have, conducted their business in the ordinary course of
business. Without limiting the generality of the foregoing, the
Sellers will have caused the Companies to maintain their books
and records, pay expenses and payables, ▇▇▇▇ customers, collect
receivables, purchase inventory, perform all maintenance and
repairs necessary to maintain their facilities, equipment, and
the Coaches in good operating condition (normal wear and tear
excepted), replaced inoperable, worn out or obsolete assets
with assets of comparable quality, maintained an appropriate
level of insurance and continue to make capital expenditures in
accordance with their fiscal 1999 capital expenditure budget,
in each case, in the ordinary course of business in accordance
with past custom and practice;
(ii) The Sellers have caused the Companies to, use reasonable
best efforts to preserve present business relationships with
all material customers, suppliers and distributors of the
Companies, to the extent such relationships are beneficial to
the Companies and their business, and except as otherwise
directed by Buyers, to encourage the Companies' employees to
continue their employment with the Companies both before and
after the Closing;
(iii) The Sellers will, and have caused the Companies to, and
the Companies have, made all registrations, filings and
applications, and obtained all Consents (as defined in Section
5(as necessary for the consummation of the transactions
contemplated by the Transaction Documents and to cause the
other conditions to Buyers' obligation to close to be satisfied
(including the execution and delivery of all Contracts
contemplated hereunder to be so executed and delivered and
taking any such additional action as Buyer may reasonably
request to effect, confirm or evidence the transactions
contemplated by this Agreement); provided, that,
notwithstanding the foregoing, the Sellers will provide copies
of all, documentation necessary to comply with this Section
2(a) to Buyers for their review and approval prior to
submitting such documentation to the appropriate Persons; and
(iv) The Sellers will cause the Company to have terminated
(without any Liability to any of the Companies) all related
party loans or other related party contracts with owners or
their family members including the Contracts designated with an
asterisk on Schedule 5(Q).
(b) Negative Covenants of the Sellers and the Companies. From December
31, 1998 to the Closing, without Buyers' prior written consent, each of
the Sellers and each of the Companies covenant, jointly and severally,
that they have not and will not cause any of the Companies to:
(i) except as expressly contemplated by this Agreement, take
or omit to take any action which, individually or in the
aggregate could be reasonably anticipated to have a material
adverse effect upon the business, financial condition,
operating results, employee relations, customer relations,
assets, operations, rights or business prospects of the
Companies;
(ii) pay any dividend or bonus or make any other similar
distribution or except as expressly contemplated by this
Agreement, redeem purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock or make any loan
or enter into any transaction with or distribute any assets or
property to any of its officers, directors, shareholders,
Affiliates or other Insiders;
(iii) sell, lease, license or otherwise dispose of any
interest in any of the Companies' tangible or intangible
assets or permit any of the Companies' assets or property to
be subjected to any Lien; or
(iv) except as expressly contemplated by this Agreement,
terminate, modify or amend any material Contract or any
Consent of, with or to any Governmental Entity or enter .into
any new material Contract, or amend any Companies' charter
documents or bylaws.
Section 3. Conditions to Obligation of Buyer.
The obligation of a Buyer to consummate the transactions to be
performed by it in connection with the Closing is subject to the
satisfaction of the following conditions as of the Closing:
(a) Representations and Warranties. The representations and warranties
set forth in Section 5 shall be true and correct at and as of the
Closing as though then made.
(b) Performance of Covenants. Each of the Sellers and each of the
Companies shall have performed in all respects all of their covenants
and agreements required to be performed by them pursuant to the
Transaction Documents prior to the Closing Date.
(c) Compliance with Legal Requirements. The consummation of the
transactions contemplated by the Transaction Documents will not be
prohibited by any Legal Requirement or subject Buyers or the Companies
to any penalty or liability or other onerous condition arising under
any Legal Requirement or imposed by any Governmental Entity.
(d) Consents. All filings, notices, approvals and other Consents of,
to or with, any Governmental Entity, any financing party doing
business with a Company, or any other Person that are required for:
(i) the consummation of the transactions contemplated by the
Transaction Documents; (ii) Buyers to be able to prepay on the Closing
Date the Company's outstanding Indebtedness in full without any
premium or penalty; (iii) the maintenance of any lending relationship
with the Company's or Buyer's direct or indirect financiers; or (iv)
the conduct of the business of the Companies as heretofore conducted,
will have been duly made or obtained by the Sellers.
(e) Opinion of Counsel to Sellers. Buyers shall have received from
counsel for the Sellers, an opinion in substantially the same form and
terms as set forth in Schedule 3(e) attached hereto, which shall be
addressed to Buyers and dated the Closing Date.
(f) Proceedings, etc. All proceedings to be taken by any of the
Sellers and the Company in connection with the consummation of the
transactions contemplated by the Transaction Documents and all
certificates, opinions, Contracts and other documents received by
Buyers in connection therewith (including pursuant to this Section 3)
will be satisfactory in form and heir sole discretion. substance to
Buyers in their sole discretion.
A Buyer may waive any condition specified in this Section 3 if it
executes a writing so stating at or prior to the Closing.
Section 4. Conditions to Obligation of Sellers.
The obligation of the Sellers to consummate the transactions to be
performed by them in connection with the Closing is subject to satisfaction of
the following conditions as of the Closing:
(a) Representations and Warranties. The representations and warranties
set forth in Section 6 shall be true and correct at and as of the
Closing Date.
(b) Performance of Covenants. Buyers shall have performed in all
material respects all of the covenants and agreements required to be
performed by them under this Agreement on or prior to the Closing
Date.
The Sellers may waive any condition specified in this Section 4 if they
execute a writing so stating at or prior to the Closing.
Section 5. Representations and Warranties of the Sellers.
As a material inducement to Buyers to enter into and perform their,
obligations under this Agreement each Company and each Seller, jointly and
severally, represents and warrants to Buyers that each statement contained in
this Section 5 is true and correct as of the date hereof and will be true and
correct as of the Closing Date.
(a) Organization. Con)orate Power and Licenses of Company. Pyramid
Coach, Inc. and American Coach Works, Inc. are corporations duly
organized, validly existing and in good standing under the laws of the
State of Tennessee, which is the only jurisdiction in which their
ownership of property or conduct of business requires them to be
qualified. Transport Trailer Service, Inc., Rent-A-Box, Inc., and
Precision Coach, Inc. are corporations duly organized, validly existing
and in good standing under the laws of the State of Mississippi, which
is the only jurisdiction in which their ownership of property or
conduct of business requires them to be qualified. LBJ, LLC is a
limited liability company duly organized, validly existing and in good
standing under the laws of the State of Mississippi, which is the only
jurisdiction in which its ownership of property or conduct of business
requires it to be qualified. The Companies possess all requisite
corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate their properties, to carry
on their businesses as now conducted and as presently proposed to be
conducted and to carry out the transactions contemplated by this
Agreement. Copies of the Companies' charter documents and bylaws
provided to Buyers and Buyer's counsel reflect all amendments made
thereto at any time prior to the Closing Date and are correct and
complete.
(b) Capital Stock and Related Matters. As of the Closing, each
Company's capital stock shall consist of the number of authorized
shares of common stock, and the number of issued and Outstanding
common stock held beneficially and of record as set forth on Schedule
5(b) hereto. As of the Closing, except the shares set forth on
Schedule 5(b), the Companies shall not have outstanding any stock or
securities convertible or exchangeable for any shares of their capital
stock or containing any profit participation features, nor shall they
have outstanding any rights or options to subscribe for or to purchase
their capital stock or any stock or securities convertible into or
exchangeable for their capital stock or any stock appreciation rights
or phantom stock plans. As of the Closing, all of the PAP Stock shall
be validly issued, fully paid and nonassessable. Immediately after the
Closing, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall own 100% of the
issued and outstanding capital stock of PAP free and clear of any
Liens. There are no statutory or contractual stockholders, preemptive
rights or rights of refusal with respect to the PAP Stock. The
Companies have not violated any applicable federal or state securities
laws in connection with the offer, sale or issuance of any of their
capital stock. There are no agreements with respect to the voting or
transfer of the PAP Stock or with respect to any other aspect of PAP's
affairs. No former shareholder of PAP (including but not limited to
April ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ Trucking, Inc. or
its officers, shareholders or directors) has any claim or fights
against PAP, the PAP Stock or PAP's officers, directors or
shareholders.
(c) Subsidiaries: Investments. American Coach and Pyramid Coach do not
control, directly or indirectly, any other corporation, or any limited
liability company, partnership, joint venture, association or any
other business entity, and they do not own any shares of capital stock
or any other securities of, and have not at any time made any other
investment in, any other Person. Except for Precision's ownership of
5,000 shares of common stock of Pyramid and 10 shares of common stock
of American Coach, it does not now control, directly or indirectly,
any other corporation, or any limited liability company, partnership,
joint venture, association or any other business entity, and it does
not own any shares of capital stock or any other securities of, and
has not at any time made any other investment in, any other Person.
(d) Authorization: No Breach. The execution, delivery and performance
of the Transaction Documents to which any of the Companies or any of
the Sellers are a party, have been duly authorized by the Companies
and/or the Sellers, as the case may be. Each Transaction Document to
which a Seller or a Company is a party constitutes a valid and binding
obligation of such Person, enforceable in accordance with its terms.
The execution and delivery by the Sellers and by the Companies of this
Agreement, and all other Transaction Documents to which a Company
and/or a Seller (as appropriate) is a party and the fulfillment of and
compliance with the respective terms hereof and thereof, do not and
shall not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any Lien upon a Company's stock or any asset
or property of any Company, any Seller, or any Affiliate pursuant to,
(iv) give any third party the right to modify, terminate or accelerate
any obligation under, (v) result in a violation of or (vi) require any
exemption or other action by or notice or declaration to, or filing
with or other Consent from, any Governmental Entity pursuant to, the
charter or bylaws of a Company, or any Legal Requirement to which a
Company, a Seller or any Affiliate or any of their assets or
properties is subject, or any Contract, order, judgment or decree to
which a Company, a Seller or any Affiliate or any of their assets or
properties is subject..
(e) Financial Statements. Attached hereto as Schedule 5(e) are the
following financial statements:
Company Year-end Nine months ended
Pyramid December 31, 1998 September 30, 1999
Precision 1998 Tax Return September 30, 1999
American December 3l,1998 September 30, 1999
LBJ 1998 Tax return September 30, 1999
RAB December 31, 1998 September 30, 1999
Each of the Financial Statements are consistent with the books and records
of the respective Company (which, in turn, are accurate and complete in all
material respects) and presents fairly the financial condition and results of
operations of the Companies in accordance with filing tax returns with the
Internal Revenue Service on a consistent basis as of the dates and for the
periods set forth therein. Since the date of the Financial Statements dated
September 30, 1999, there has not been any adverse change in the business,
assets, Net Worth, financial condition, operating results, employee relations,
customer or manager relations or business prospects of the Companies.
(f) Absence of Undisclosed Liabilities. The Companies have no
Liability and, to the knowledge of the Companies and the Sellers,
there is no basis for any proceeding, hearing, investigation, charge,
complaint or claim with respect to any Liability, except for (i)
Liabilities reflected on the Financial Statements, and (ii)
Liabilities which have arisen since the date of the Balance Sheet
dated September 30, 1999 in the ordinary course of business (none of
which relates to breach of contract, breach of warranty, tort,
infringement, violation of or liability under any Legal Requirements,
or any action, suit or proceeding and none of which is material
individually or in the aggregate),
(g) Assets. Set forth on the attached Schedule 5(g)(i) is a complete
list of all vehicles, inventory, equipment and other assets of PAP.
PAP have good and marketable title to, or a valid leasehold interest
in, the properties and assets listed in Schedule 5(g)(i), used by
them, located on their premises, shown on the Financial Statements
dated September 30, 1999, or acquired thereafter, free and clear of
all Liens, except for properties and assets disposed of in the
ordinary course of business since the date of the Financial Statements
dated September 30, 1999 for fair value and except for Liens disclosed
on the Financial Statements dated September 30, 1999 (including any
notes thereto) and Liens for current property taxes not yet due and
payable. Except as described on the attached Schedule 5(g)(ii), PAP's
vehicles, buildings, equipment and other tangible assets and the
Coaches are in good and safe operating condition, are fit for use in
the ordinary course of business. At Closing, the Coaches and all other
vehicles shall bear current licenses and valid and current inspection
certificates and comply with all applicable statutes, rules and
regulations including but not limited to those promulgated by the
United States Department of Transportation and corresponding state
Departments of Transportation. Except for the liens and encumbrances
listed on the attached Schedule 5(g)(iii), PAP owns, or has a valid
leasehold interest in, all Properties and assets necessary or
desirable for the conduct of their businesses as presently conducted.
Schedule 5(g)(iv) is a complete list of all Liens on the Coaches as of
October 4,1999 and the Coaches have not been subject to any additional
Liens since October 4, 1999 to Closing,
(h) Tax Matters.
(i) The Companies and each member of their Affiliated Group has
timely filed all Tax Returns required to be filed by it, each
such Tax Return has been prepared in compliance with all Legal
Requirements, and all such Tax Returns are true and accurate in
all respects. All Taxes due and payable by a Company and each
member of its Affiliated Group have been paid. With respect to
all Taxes for 1999 and the liabilities thereon, the Companies and
each member of its Affiliated Group has accrued or prepaid
sufficient amounts to pay all state and federal income taxes
through September 30, 1999 and is reflected in the Net Purchase
Price Adjustment.
(ii) Except as set forth in Schedule 5(h) attached hereto:
(A) neither the Companies nor any member of their
Affiliated Group has consented to extend to a date
later than the date hereof the time in which any Tax
may be assessed or collected by any taxing authority;
(B) no deficiency or proposed adjustment which has
not been settled or otherwise resolved for any amount
of Tax has been proposed, asserted or assessed by any
taxing authority against the Companies or any member
of their Affiliated Group:
(C) there is no action, suit, taxing authority
proceeding or audit now in progress, pending or, to
each of the Companies' or the Sellers' knowledge,
threatened against or with respect to the Companies
against or with respect to any Affiliated Group;
(D) the Companies have no liability for the payment
of Taxes of any other Person, including a Liability
of the Company for the payment of any Tax arising (A)
as a result of being (or ceasing to be) a member of
any Affiliated Group (or being included (or required
to be included) in any Tax Return relating thereto),
(B) as a result of any expressed or implied
obligation to indemnify another Person, and (C) as a
result of the Companies assuming or succeeding to the
Tax Liability of any other Person as a successor,
transferee or otherwise;
(E) there are no Liens for Taxes (other than for
current Taxes not yet due and payable) upon any of
the assets of any Company;
(F) no Seller or Company reasonably expects any
taxing authority to claim or assess any amount of
additional Taxes against a Company or any member of
their Affiliated Group;
(G) no claim has ever been made by a taxing authority
in a jurisdiction where the Companies or any member
of their Affiliated Group does not file Tax Returns
that the Companies are or may be subject to Taxes
assessed by such jurisdiction; and
(H) neither the Companies nor any member of their
Affiliated Group has made any payment, or is or will
become obligated (under any contract entered into on
or before the Closing Date) to make any payment, that
will be non-deductible under Section 280G of the Code
(or any corresponding provision of state, local or
foreign income Tax law).
(i) Contracts and Commitments
(i) Except as expressly contemplated by this Agreement or as
set forth on the attached Schedule 5(i) or the attached
Schedule 5(o), none of the Companies are a party to or are
bound by any written or oral:
(A) pension, profit sharing, stock option, employee
stock purchase or other plan or arrangement providing
for deferred or other compensation to employees or
any other employee benefit plan or arrangement, or
any collective bargaining agreement or any other
Contract with any labor union, or severance
agreements, programs, policies or arrangements;
(B) Contract for the employment of any officer,
individual employee or other Person on a full-time,
part-time, consulting or other basis providing annual
compensation in excess of $30,000 (or providing for
the payment of any cash or other compensation upon a
change in control of a Company) or Contract relating
to loans to officers, directors, shareholders or
Affiliates;
(C) Contract under which a Company has advanced or
loaned any other Person amounts in the aggregate
exceeding $10,000;
(D) Contract relating to borrowed money) or other
Indebtedness (including any letter of credit
arrangements) or the mortgaging, pledging or
otherwise placing a Lien on any asset of the
Companies;
(E) guarantee of any obligation in excess of $10,000;
(F) Contract under which a Company is lessee of or
holds or operates any property, real or personal,
owned by any other party, except for any lease of
real or personal property under which the aggregate
annual rental payments do not exceed $10,000;
(G) Contract under which a Company is lessor of or
permits any third party to hold or operate any
property, real or personal, owned or controlled by a
Company that involves consideration in excess of $
10,000;
(H) Contract or group of related Contracts with the
same party or group of affiliated parties the
performance of which involves consideration in excess
of $ 10,000;
(I) assignment, license, indemnification or other
Contract with respect to any intangible property
(including any Intellectual Property);
(J) warranty Contract with respect to its services
rendered which contains terms and conditions that
differ in any material respect from Company's
standard warranty terms and conditions, if any;
(K) Contract under which it has granted any Person any
registration rights (including demand or Piggyback
registration rights); or.
(L) any other Contract which is material to its
operations and business prospects or involves a
consideration in excess of $10,000 annually.
(ii) With respect to the Companies' obligations thereunder and, with
respect to the obligations of the other parties thereto, all of the
Contracts set forth or required to be set forth on the attached
Schedule 5(l) or any other Schedule hereto are valid, binding and
enforceable in accordance with their respective terms. The Companies
have performed all material obligations required to be. performed by
them, under such Contracts and are not in default under or in breach of
nor in receipt of any claim of default or breach under any such
Contract; no event has occurred which with the passage of time or the
giving of notice or both would result in a default, breach or event of
noncompliance by a Company under any such Contract;
(iii) A true, correct and complete copy of each of the written
Contracts, and an accurate description of each of the oral Contracts
which are referred to on the attached Schedule 5(i). have been made
available to Buyer.
(j) Intellectual Property Rights. The Companies own and possess all right,
title and interest in and to or has valid and enforceable licenses to use,
all of the Intellectual Property necessary or desirable for the conduct of
their respective businesses as now conducted and as proposed to be
conducted, without any conflict or infringement of the rights of others and
free and clear of all Liens. The attached Schedule 5(j) sets forth all
registered Intellectual Property (or applications for registration thereof)
owned an used or held for use by the Companies and also contains details of
all material unregistered Intellectual Property (including software). The
Companies have taken reasonable measures to maintain the confidentiality of
the processes and formulae, research and development results and other
know-how or trade secrets of the Companies, the value of which to the
Companies is contingent upon maintenance of the confidentiality thereof
Except as set forth on Schedule 5(j), none of the Companies have received
any communication that it has violated, or, by conducting its business as
proposed, would infringe or conflict with, any Intellectual Property of any
other Person. Except as set forth on Schedule 5(j) neither the Companies
nor the Sellers are aware of any third party that is infringing or
violating any of the Companies' Intellectual Property. Except as set forth
on the Schedule 5(j), the Companies have not granted any license or option
or entered into any agreement of any kind with respect to the use of its
Intellectual Property.
(k) Litigation. Except as set forth on the attached Schedule 5(k), and
except for such matters that are fully covered by each Companies' insurance
policies, there are no actions, suits, Proceedings, orders, investigations
or claims pending or threatened against or affecting the Sellers or any of
the Companies (or pending or threatened against or affecting any of the
officers, directors or employees of the Companies with respect to the
Companies' businesses or proposed business activities), or pending or
threatened by the Companies or the Sellers against any third party, at law
or in equity, or before or by any Governmental Entity (including any
actions, suits. proceedings or investigations with respect to the
transactions contemplated by the Transaction Documents); neither the
Sellers nor the Companies are subject to any arbitration proceedings under
collective bargaining Contracts or otherwise or any governmental
investigations or inquiries; and, there is no valid basis for any of the
foregoing. Neither the Sellers nor the Companies are subject to any
judgment order or decree of any court or other Governmental Entity, and
neither the Sellers nor the Companies have received any opinion or
memorandum or legal advice from legal counsel to the effect that it is
exposed, from a legal standpoint, to any liability or disadvantage which
may be material to its business.
(l) Brokerage. There are no claims for brokerage commissions, finders' fees
or similar compensation in connection with the transactions contemplated by
this Agreement based on any Contract binding upon any of the Companies or
the Sellers. The Sellers shall pay and hold the Buyers and the Companies
harmless against, any Liability (including reasonable attorneys fees and
out-of-pocket expenses) arising in connection with any such claim.
(m) Insurance. The attached Schedule 5(m) lists and describes each
insurance policy maintained for or on half of the Companies with respect to
their properties, assets and business. All of such insurance policies are
in full force and effect, and no default exists with respect to the
obligations of the Companies or the Sellers under any such insurance
policies and neither the Sellers nor the Companies have received any
notification of cancellation of any of such insurance policies. The
insurance coverage of each Company is of a type and amount customary for
entities of similar size engaged in similar lines of business. Except as
set forth on Schedule 5(m), the Companies do not have any self-insurance or
co-insurance programs, or liability for retrospective insurance premiums
for any period prior to Closing. No cancellation fee or penalty and no
short rating or claw back of premium, will be suffered by the Companies
should the Companies' insurance policies be cancelled at, or within 30 days
after Closing. Such a cancellation would trigger a full, pro rata, refund
of prepaid insurance premiums. Pursuant to Section 8(g), Companies shall
maintain all insurance policies that were in effect just prior to Closing
until such time that the risk of loss for a Coach has transferred to DW
Leasing Company.
(n) Employees. Neither the Companies nor the Sellers are aware that any
executive or key employee of the Companies or any group of employees of the
Companies has any plans to terminate employment with the Companies. Neither
the Companies nor, to the Company's and the Sellers' knowledge, none of the
Company's employees is subject to any non-compete, nondisclosure,
confidentiality, employment, consulting or similar Contracts relating to,
affecting or in conflict with the present or proposed business activities
of the Company.
(o) ERISA.
(i) Except as disclosed on the attached Schedule 5(o), the Companies
do not maintain, contribute to or have any actual or potential
liability with respect to any Employee Benefit Plan.
(ii) The Companies do not maintain, contribute to or have any actual
or potential liability with respect to any active or terminated,
funded or unfunded (x) multiemployer plan (as defined in Section 3(37)
of ERISA). (y) defined benefit plan (as defined in Section 3(35) of
ERISA) or (z) plan or arrangement to provide medical, health, life
insurance or other welfare-type benefits for current or future retired
or terminated employees (except for limited continued health benefit
coverage required to be provided under Section 4980B of the Code or
similar state law), where such plan described in (x), (y) or (z) was
or is maintained or contributed to by the Companies or any member of
its Controlled Group (within the meaning of Code Section 414).
(iii) Each of the Companies' Employee Benefit Plans and all related
funding arrangements comply in form and operation with its terms and
the applicable requirements of ERISA, the Code and any other Legal
Requirements. Each Employee Benefit Plan that is intended to be
qualified under Section 401(a) of the Code, and each trust, if any,
forming a part thereof, has received a favorable determination letter
that it qualifies under the Code (and that its trust is exempt from
tax under the Code) and such favorable letter includes changes
required by the 1986 Tax Reform Act. Nothing has occurred since the
date of such favorable determination letter that could adversely
affect the qualified status of such Plan or the tax-exempt status of
the trust.
(iv) None of the Companies, any trustee or administrator of any
Employee Benefit Plan or other Person has engaged in any transaction
with respect to any Employee Benefit Plan that could subject the
Company or any of its employees to any tax or penalty or other
Liability imposed by ERISA or the Code or any other Legal Requirement.
No actions, suits, investigations or claims with respect to any of the
Employee Benefit Plans (other than routine claims for benefits) are
pending or, to the knowledge of the Company or the Sellers threatened,
and neither the Companies nor the Sellers are aware of any facts or
circumstances which could give rise to or be expected to give rise to
any such actions, suits, investigations or claims. All contributions
which are due under each Company's Employee Benefit Plans has been
made and all other contributions have been properly accrued. There is
no unfunded liability that is not accurately and properly reflected in
the Financial Statements and no such liability has accrued prior to
Closing. The Companies have complied with all reporting and disclosure
obligations applicable to the Employee Benefit Plans.
(v) With respect to each Company's Employee Benefit Plan, the Sellers
have provided Buyers with true, complete and correct copies, to the
extent applicable of (i) all documents pursuant to which the Employee
Benefit Plans are maintained, funded and administered, (ii) the two
most recent annual reports (Form 5500 series) filed with the Internal
Revenue Service (with attachments), (iii) the two most recent
actuarial reports, (iv) the two most recent financial statements, (v)
all governmental rulings, determinations and opinions (and pending
requests for governmental rulings, determinations and opinions), and
(vi) the most recent valuation (but in any case at least one that has
been completed within the last calendar year) of the present and
future benefit obligations under each Company's Employee Benefit Plan
that provides post-retirement or post-employment, health, life
insurance, accident or other "welfare-type" benefits .
(p) Compliance with Laws. The Companies have complied with and are
currently in Compliance with all applicable laws, ordinances, codes, rules,
requirements, regulations and other Legal Requirements of all Governmental
Entities relating to the operation and conduct Of their businesses or any
of their properties or facilities, including all Legal Requirements
relating to employment of labor and all Environmental and Safety
Requirements, and neither the Company nor any Seller has received notice of
any violation of any of the foregoing (whether material or not).
(q) Affiliated Transactions. Except as set forth on the attached Schedule
5(q), no officer, director, employee, shareholder or Affiliate of a Company
or any individual related by blood, marriage or adoption to any such
individual or any entity in which any such Person or individual owns any
beneficial interest (an "Insider"), is a party to any Contract with a
Company or has any interest in any property, asset or right used by a
Company or necessary or desirable for its business or has received any
payment since the Latest Balance Sheet. All such Insider Contracts shall be
terminated as at Closing, except for the Transaction Documents. Any
payables owing by a Company to any Affiliate of a Company shall be funded
and paid out of the Closing proceeds due to Sellers.
(r) Customers and Suppliers.
(i) Sellers have supplied a list of the ten largest customers of
Pyramid (on a consolidated basis) for each of the two most recent
fiscal years. Such list was true and accurate as of the date provided
by Sellers.
(ii) December 31, 1998, no material supplier of a Company has
indicated that it shall stop, or materially decrease the rate of,
supplying materials, products or services to a Company and no customer
listed on the list of ten largest customers has indicated that it
shall stop, or materially decrease the rate of, purchasing/leasing bus
services from Pyramid.
(s) Real Property. The Companies do not own any Real Property. The attached
Schedule 5(s) lists all real property leased by the Companies (such
property is referred to herein as the " Leased Premises"). The Leased
Premises are the only real estate leased by a Company. The leases under
which a Company leases the Leased Premises are in full force and effect.
With respect to each Leased Premises: (i) such leases are at market value
rental rates, and are legal, valid, binding and enforceable in accordance
with their terms, and (ii) no party thereto is in breach or default, and no
event has occurred (including the consummation of the transactions
contemplated hereby) which, with or without the lapse of time or the giving
of notice, would constitute such a breach or default or permit termination,
modification, or acceleration under such leases.
(t) Environment- Health and Safety.
(i) Neither the Sellers nor the Companies have received any written or
oral notice, report or other information regarding any Liabilities,
including any investigatory, remedial or corrective obligations,
relating to the business of a Company or relating to the facilities
owned or leased by a Company and arising under Environmental and
Safety Requirements.
(ii) None of the following exists at any property or facility owned or
operated by a Company: (A) underground storage tanks; (B)
asbestos-containing material in any form or condition; (C) materials
or equipment containing polychlorinated biphenyls; or (D) landfills
surface impoundments or other disposal areas.
(iii) The Companies have not treated, stored, disposed of, arranged
for or permitted the disposal of transported, handled, or released any
substance, including any hazardous substance, or owned or operated any
property or facility (and no such property or facility is contaminated
by any such substance) in a manner that has given or could give rise
to liabilities of a Company, including any liability for response
costs, corrective action costs, personal injury, property damage,
natural resources damages or attorney fees, pursuant to the
Comprehensive Environmental Response. Compensation and Liability Act
of 1980, as amended ("CERCLA") or the Solid Waste Disposal Act. as
amended ("SWDA") or any other Environmental and Safety Requirements.
(iv) No facts, events or conditions relating to the past or present
facilities, properties or operations of a Company will prevent hinder
or limit continued compliance with Environmental and Safety
Requirements, give rise to any investigatory, remedial or corrective
obligations pursuant to Environmental and Safety Requirements, or give
rise to any other Liabilities pursuant to Environmental and Safety
Requirements, including any relating to onsite or off site releases or
threatened releases of hazardous materials, substances or wastes,
personal injury, property damage or natural resources damage.
(v) Neither this Agreement nor the consummation of the transactions
contemplated by the Transaction Documents will result in any
obligations to a Company for site investigation or cleanup, or
notification to or consent of any Governmental Entity or third party,
pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental and Safety Requirements.
(vi) The Companies have not, either expressly or by operation of law,
assumed or undertaken any Liability, including any obligation for
corrective or remedial action, of any other Person relating to
Environmental and Safety Requirements.
(u) Disclosure. Neither this Agreement nor any of the exhibits, schedules,
attachments, written statements, documents, certificates or other items
prepared and supplied to Buyers, by or on behalf of the Sellers or the
Companies, with respect to the transactions contemplated by the Transaction
Documents, when taken together, contain any untrue statement of a material
fact or omit a material fact necessary to make each statement contained
herein or therein not misleading; There is no fact which has not been
disclosed to Buyers in writing of which any Company's officers, directors
shareholders or executive employees is aware, and which has had or would
reasonably be expected to have a material adverse effect on a Company or
its business, financial condition, operating results, employee relations,
customer relations, assets, rights or business prospects. Schedule 5(u)
contains the written responses prepared by Sellers and provided to Buyers
in response to Buyers' written due diligence request; which responses were
complete and accurate at the time provided to Buyers and continue to be
complete and accurate through the Closing Date.
(v) Licenses and Consents. The items listed on Schedule 5(v) constitute all
of the permits, authorities, licenses, consents, authorizations,
accreditations, and the like (the "Licenses") currently granted by any
Governmental Entity or any other Person to the Companies; and such Schedule
5(v) also lists all filings, notices, approvals or waivers (collectively,
the "Consents") which are required for the consummation of the transactions
contemplated by the Transaction Documents.
(w) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of a Company.
(x) Absence of Certain Developments. Except as set forth in Schedule 5(x)
attached hereto, since December 31, 1998, no Company has:
(i) redeemed or repurchased, directly or indirectly, any shares of
capital stock or declared, set aside or paid any dividends or made any
other distributions with respect to any shares of its capital stock;
(ii) issued, sold or transferred any notes, bonds or other debt
securities or any equity securities, securities convertible,
exchangeable or exercisable into equity securities, or warrants,
options or other rights to acquire equity securities, of the Company;
(iii) borrowed any amount or incurred or become subject to any
Indebtedness or other Liabilities, except trade payables and accrued
liabilities incurred in the ordinary course of business;
(iv) mortgaged, pledged or subjected to any Lien any portion of its
properties or assets; or
(v) sold, leased, licensed (as licensor), assigned, disposed of or
transferred (including transfers to the Sellers or any employees or
Affiliates of a Company) any of its assets (whether tangible or
intangible), except for sales of inventory in the ordinary course of
business and sales of other assets not in excess of $10,000 in the
aggregate;
(vi) disclosed any proprietary confidential information to any Person;
(vii) suffered any extraordinary losses or waived any rights of value,
whether or not in the ordinary course of business;
(viii) suffered any theft, damage, destruction or casualty loss in
excess of $10,000, to its assets, whether or not covered by insurance;
(ix) entered into, amended, accelerated or terminated any Contract,
taken any other action or entered into any other transaction involving
more than $ 10,000 or otherwise the ordinary course of business, or
entered into any transaction with any director, officer, employee or
other Insider (as defined in Section 5(q);
(x) (A) made or granted any bonus or increase in the compensation or
benefits of any employee or officer of a Company (other than in the
ordinary course of business. upon notice to (and approval by) Buyers,
and not in contemplation of this transaction or other similar
transaction) or (B) entered into, amended, modified or terminated any
Employee Benefit Plan, other than in the ordinary course of business;
(xi) conducted its billing and collection of receivables (including its
pre-billing practices for its customers) inventory purchases other than
in the ordinary course of business or changed its pricing structure;
(xii) made any capital expenditures or commitments in excess of $10,000
therefore (other than in the ordinary course of business and in amounts
sufficient to support a Company's ongoing business operations)
(xiii) delayed or postponed the repair and maintenance of its
properties or the payment of accounts payable, accrued liabilities and
other obligations and liabilities;
(xiv) made loans and or advances to, guarantees for the benefit of, or
any investments in, any Persons in excess of $10,000 in the aggregate;
(xv) instituted or settled any claim or lawsuit involving equitable or
injunctive relief,
(xvi) accelerated the collection of its accounts or notes receivable or
delayed or postponed the payment of accounts payable and other
liabilities and obligations;
(xvii) granted any performance guarantees to its customers other than
in the ordinary course of business and consistent with the policies and
practices disclosed to Buyer;
(xviii) instituted or permitted any material change in the conduct of
its business, or; any change in its method of purchase, sale, lease,
management, marketing, promotion or operation;
(xix) acquire any other business or entity (or any significant portion
or division thereof), whether by merger, consolidation or
reorganization or by the purchase of its assets or stock; or
(xx) committed to do any of the foregoing.
(y) No acceleration of Rights or Benefits. A Company has not made, and is
not obligated to make, any payment to any Person in connection with the
transactions contemplated by the Transaction Documents. No rights or
benefits of any Person have been (or will be) accelerated or increased as a
result of the consummation of the transactions contemplated by the
Transaction Documents.
(z) Net Trading Assets/Inventory. At Closing, each Company's Net Worth will
be at a level consistent with the level as at September 30, 1999. The
inventory of each Company shown on the Financial Statements dated September
30, 1999 and the inventory of each Company as of the Closing Date, net of
the reserves applicable thereto, consists of a quantity and quality usable
and saleable in the ordinary course of business, is not slow-moving,
obsolete or damaged, is fit for its intended use, and is not defective.
(aa) Accounts Receivable.
(i) Except as set forth on Schedule 5(aa) attached hereto, all of the
accounts and commissions receivable reflected on each Company's Balance
Sheet dated September '30, 1999 are, and all of the accounts and
commissions receivable to be reflected in the calculation of Net Worth
at Closing will be, good and valid receivables (subject to no
counterclaims or offset) and will be collected within 60 days after the
Closing Date at the aggregate amount therefore as shown. Except as set
forth on Schedule 5(aa), the Company does not have individual accounts
or commissions which are over 60 days past due.
(ii) As of the date hereof, no Person has, and as of the Closing Date,
no Person will
have, any Lien on such receivables or any part thereof, and no
agreement for deduction, free services or goods, discount or other
deferred price or quantity adjustment will have been made with respect
to any such receivables.
(bb) Indebtedness. Schedule 5(bb) attached hereto describes Indebtedness of
each Company as of the date of the Agreement and sets forth the principal
amounts, scheduled amortizations, and interest accruals necessary to
calculate Indebtedness as of the Closing Date.
(cc) Net Purchase Price Adjustment. Schedule I (b)(i) attached hereto
accurately describes the Net Purchase Price Adjustment, an amount agreed to
by the parties based on the Financial Statements, that reflects Pyramid's
categorized assets less all accrued expenses, unpaid expenses, note payable
on automobile and other liabilities of Pyramid as of September 30, 1999.
Section 6. Representations and Warranties of Buyers.
As a material inducement to the Sellers to enter into and perform their
respective obligations under this Agreement, Buyers represent and warrant that
the statements contained in this Section 6 are true and correct as of the date
hereof and will be true and correct of the Closing Date.
(a) DW Leasing Company, LLC is a limited liability company duly organized,
validly existing, and in good standing under the laws of the State of
Mississippi;
(b) Buyers have full corporate power and authority to execute and deliver
this Agreement and to perform their obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of Buyers, enforceable
in accordance with its terms and conditions.
(c) The execution, delivery and performance of the Transaction Documents to
which Buyers are a party do not and will not (i) conflict with or result in
a breach of the terms, conditions or provisions of (ii) constitute a
default under, (iii) result in a violation of, or (iv) require any
authorization, consent, approval, exemption or other action by or
declaration or notice to any Governmental Entity pursuant to, the charter
or bylaws of Buyers or any material agreement, instrument or other
document, or any material Legal Requirement, to which Buyers or their
assets are subject.
Section 7. Additional Agreements,
(a) Press Releases. Except as may otherwise be required by Legal
Requirements, the timing and content of all press releases and other public
announcements and all announcements to each Company's customers, licensors
or employees relating to the transactions contemplated by this Agreement
and the other Transaction Documents shall be determined by Buyers prior to
the Closing Date and thereafter.
(b) Expenses. Except as otherwise provided herein or therein, Buyers shall
pay their own, and the Sellers shall pay their own and each Company's
expenses (including fees and expenses of legal counsel, investment bankers,
brokers or other representatives and consultants and appraisal fees and
expenses) incurred in connection with or related to the
sales process, the negotiation of this Agreement and the other Transaction
Documents, the performance of its (and in the case of the Sellers, each
Company's) obligations hereunder and thereunder, and the consummation of
transactions contemplated hereby and thereby,
(c) Certain Taxes. To the extent any transfer, documentary, sales, use,
stamp, registration and other Taxes and fees (including any penalties and
interest) arise from or relate to the transactions provided for in this
Agreement, Sellers shall pay such Taxes when due, and the Companies shall,
at Sellers' expense, file all necessary Tax Returns and other documentation
with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees (including any penalties and
interest), and, if required by applicable Legal Requirements, Buyers shall
join in the execution of any such Tax Returns and other documentation. This
section 7(c) does not relate to 1999 income taxes referred to in section
5(h).
(d) Further Assurances. Following Closing, each of the Parties shall
execute and deliver such further instruments of conveyance and transfer and
take such additional actions as Buyers' counsel may reasonably request to
effectively vest good title to the Coaches in DW Leasing Company and the
PAP Stock in ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ free and clear of any
liens, mortgages, encumbrances, equities or claims of every nature and kind
effect, including but not limited to any and all other necessary bills of
sale, assurances, transfers, assignments and consents and to execute such
other documents which are necessary or desirable in the opinion of Buyers'
attorneys to consummate, confirm or evidence the transactions contemplated
pursuant to this Agreement. After Closing, Sellers and Companies appoint
Buyers their collective attorney for transference of any vehicle titles or
similar documents in regard to vehicles or other assets or securities
forming part of this transaction.
(e) Confidentiality. Each party and each of its shareholders, partners,
officers, directors and Affiliates shall keep confidential all information
and materials regarding all other Parties as is reasonably designated by
such Parties as confidential at the time of disclosure thereof. If the
transactions contemplated by this Agreement are consummated, however, the
Sellers will maintain, the confidentiality of all proprietary and other
non-public information regarding each Company, except as necessary to file
Tax Returns and other reports to Governmental Entities (in which case
disclosure of such confidential information shall be to the minimum extent
necessary to comply with the requirement of such Governmental Entities),
and to turn over to Buyers at the Closing all such materials they have in
their possession.
(f) Litigation Support, In the event that, and for so long as, any Party is
actively contesting or defending against any charge, complaint, action,
suit, proceeding. hearing, investigation, claim, or demand in connection
with (i) any transaction contemplated by any of the Transaction Documents
or (ii) any fact, situation, circumstance, status, condition, activity,
Practice, Plan, occurrence, event, incident, action, failure to act, or
transaction on or prior to 'he Closing Date involving the Company, each of
the other Parties will cooperate with such contesting or defending Party
and its counsel in the contest or defense, make available their Personnel.
provide such testimony and access to their books and records as shall be
necessary in connection with the contest or defense, all at the sole cost
and expense of the contesting or defending party (unless the contesting or
defending Party is entitled to indemnification therefore under the
provisions of this Agreement).
(g) Transition Services. The Sellers will not in any manner take any action
which is designed, intended or might reasonably be anticipated to have the
effect of discouraging custom; suppliers, vendors, employees (other than as
contemplated hereby), service providers, lessors, licensors and other
business associates from maintaining the same business relationships with
the Companies after the date of this Agreement.
(h) Non-Compete: Non-Solicitation. In further consideration for the payment
of the Purchase price hereunder, and in order to protect the value of the
PAP Stock and Coaches purchased by Buyers (including the goodwill inherent
in PAP as of the Closing Date), Sellers each agree that during the period
from the Closing Date to and including the fifth (5th) anniversary of the
Closing Date (the "Non-Compete Period"), they shall not have any
affiliation (as defined below) with any corporation, partnership or other
business entity, enterprise or other Person having any location within the
United States of America which engages in the management and/or operation
of any entity that engages in any business the same as or substantially
similar to the businesses of the Companies as presently conducted, (which
would include, but not be limited to owning a motor coach bus and then
leasing or renting it to any other entity); provided that nothing contained
herein shall be construed to prohibit them from purchasing up to an
aggregate of 5% of any class of the outstanding voting securities of any
other Person whose securities are listed on a national securities exchange
or traded on the NASDAQ national market system (a "Public Company"). For
purposes of this subsection (h), the term "affiliation", shall mean any
direct or indirect interest in such entity, enterprise or other Person,
whether as an officer, director, employee, investor, partner, shareholder,
sole proprietor, trustee, consultant, agent, representative broker, finder,
promoter, Affiliate or otherwise; and (i) During the Non-compete Period,
Sellers shall not (A) intentionally induce or intentionally attempt to
induce any employee of Buyers or of the Companies, or in any way
intentionally interfere with the relationship between Buyers and the
Companies and any employee thereof, (B) hire directly or through an
Affiliate any person who, to his knowledge, was an employee of Buyers or
the Companies within 180 days prior to first date hereof (unless such
person's name is listed on Schedule 7(k) hereto or such person's employment
was terminated by Buyers or a Company, as the case may be and, in each
case, is not subject to a non-compete agreement with a Company) or (C)
induce or attempt to induce any customer, supplier, license or other
business relation of Buyers or a Company to cease doing business with any
such Person or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation of Buyers or the
Companies. Each Seller acknowledges that, in the course of their employment
and their ownership f stock of PAP and RAB and interest in LBJ, they have
become familiar with the trade secrets and other proprietary information of
the Companies and their Affiliates, and further acknowledge that the scope
of the Companies' business is nationwide, that the nature of the Companies'
business is independent of location (such that it is not practical to limit
the r estrictions contained in Section 7(h) to a specified county, city or
part thereof) and that, therefore, the geographical restriction contained
in this Section 7(h) is reasonable in all respects and necessary to protect
the goodwill and proprietary information of the Companies and that without
such protection a Company's customer relations and competitive advantage
would be materially adversely effected. Sellers further acknowledge that
the restrictions contained in this Section 7(h) do not impose an undue
hardship on them and, since they have obtained general business skills
which may be used in industries other than that in which the ,Companies
conduct their business, do not deprive them of their livelihood.
Notwithstanding anything in this Section 7(h) to the contrary, if at
any time, in any judicial proceeding, any of the restrictions stated in this
Section 7(h) are found by a final order of a court of competent jurisdiction
to be unreasonable or otherwise unenforceable under circumstances then
existing, Sellers agree that the period, scope or geographical area, as the c
may be, shall be reduced to the extent necessary to enable the court to
enforce the restrictions to the extent such provisions are allowable under
applicable Legal Requirements, giving effect to the Agreement and intent of
the parties that the restrictions contained herein shall be effective to the
fullest extent permissible. In the event of an alleged breach or violation by
Sellers of any of the provisions of this Section 7(h), the Non-compete Period
will be tolled until such alleged breach or violation is resolved: provided
that if they are found to have not violated the provisions of this Section
7(h), then the Non-compete Period will not be deemed to have been tolled. In
addition, in the event of any breach of this Section 7(h) Sellers acknowledge
that the damages sustained by Buyers would be impossible to ascertain" and
Buyers would have no adequate remedy at law. Buyers shall therefore be
entitled to enjoin any such breach or threatened breach by a Seller; provided,
however, that nothing contained in this Section 7(h) shall operate to preclude
Buyers from pursuing any other lawful remedies available in the event of any
actual or threatened breach of any provision of this Section 7(h). The costs,
expenses and attorney's fees incurred by Buyers in enforcing the provisions of
this Section 7(h) including any injunctive relief, shall be assessed against
Sellers.
The terms of this Section 7(h) are independent of any other agreements and
thereby do not amend or modify any other Non-Compete/Non-Solicitation
covenants contained in any other agreements between a Seller and a Buyer.
Notwithstanding the above, in the event that Buyers fail to make the
requisite payments for a period of thirty (30) days as required under the
Notes, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be released from
the Covenants contained in his Section 7(h).
Notwithstanding the terms contained in this Section 7(h), Buyers
hereby consent to a limited exception to the provisions of this Section 7(h)
by allowing ▇▇▇▇▇ ▇▇▇▇▇▇▇ to lease the motor bus coach known as "Risky
Business" (serial number ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇) for up to five (5) days a month
without being in violation of this Section 7(h).
Section 8. Remedies for Breaches of this Agreement.
(a) Survival of Representations and Warrants. All of the representations
and warranties of the Parties and Companies contained in this Agreement
shall survive the Closing and continue in full force and effect thereafter
(subject to any applicable statutes of limitations (including any
extensions or waivers thereof) and shall in no event be affected by any
Investigation, inquiry or examination made for or on behalf of any Party
hereto and irrespective of the knowledge of any of its or a Company's
officers, directors, shareholders, employees or agents, or the acceptance
of any certificate or opinion.
(b) Indemnification Provisions for Benefit of the Buyer Group In addition
to any other right or remedy available to the Buyer Group (as defined
below) at law or in equity, Sellers shall, jointly and severally, indemnify
Buyers and their officers, directors, shareholders, members, employees and
Affiliates (including, after the Closing, the Companies) (collectively,
"Buyer Group", against and hold them harmless from, and pay on behalf of or
reimburse them as and when incurred for, any Adverse Consequences, which
they may suffer, sustain or become subject to as the result of, arising out
of or relating to, in the nature of or caused by: (i) any matter pertaining
to a Company or any of its properties or assets or employees, arising or
relating to the period up to and including the Closing, including any
disputes among a Company's shareholders; (ii) any obligation or liability
(whether accrued, absolute, contingent, unliquidated or otherwise) of a
Company not reflected in the calculation of Net Worth at Closing and
arising out of or relating to periods ending on or prior to the Closing
Date, including any environmental matters (including, without limitation,
violations of, or liabilities arising under Environmental and Safety
Requirements) relating to or arising out of any period ending on or prior
to the Closing Date and any liabilities accrued or allocable to pre-closing
employment with a Company under any Company's Employee Benefit Plans,
including, all liabilities relating to post-retirement benefits; (iii) any
obligation or liability of a Company for Taxes (including any unpaid Taxes
of any Person for which a Company is liable) arising out of or relating to
taxable periods or portions thereof ending on or before the Closing Date
not prepaid or accrued or (iv) the breach or non-fulfillment by a Seller or
a Company of (or, in the event any third party alleges facts, if true,
would mean the Sellers have breached or non-fulfilled) any representation,
warranty, covenant or agreement contained in this Agreement (without giving
effect to any materiality or knowledge qualifiers or disclosures made on
the Schedules hereto) or any other instrument or document furnished to
Buyers by Sellers pursuant to this Agreement.
(c) Indemnification Provisions for Benefit of Sellers. Buyers shall
indemnify the Sellers and hold them harmless against, and pay on behalf of
or reimburse them as and when incurred for, any Adverse Consequences (other
than Adverse Consequences in their capacity as, or as a result of being, an
employee, officer, director or shareholder of Buyers or any Affiliate
thereof (including a Company after the Closing) that they may suffer,
sustain or become subject to as the result of arising out of relating to,
in the nature of or caused by a breach or non-fulfillment by Buyers of (or,
in the event any third party alleges facts that, if true, would mean that a
Buyer has breached or non-fulfilled) any representation, warranty or
covenant contained in this Agreement or any certificate delivered to
Sellers pursuant to any Transaction Documents to which Buyers are a party.
(d) Matters Involving Third Parties.
(i) If any Seller or any member of Buyer Group seeks indemnification
under this Section 8, such Person ( the "Indemnified Party") shall
give written notice to the other Person (the "Indemnifying Party")
specifying in reasonable detail the basis for the claim. In that
regard, if any Liability shall be brought or asserted by any third
party which, if adversely determined, may entitle the Indemnified
Party to indemnity Pursuant to this Section 8 (a "Third Party Claim"),
the Indemnified Party shall promptly notify the Indemnifying Party of
the same in writing, specifying in detail the basis of such Liability
and the facts pertaining thereto; provided, however, that no delay on
the part of the Indemnified Party in notifying any Indemnifying Party
shall relieve the Indemnifying Party from any Liability or Adverse
Consequences hereunder.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notifies the Indemnified Party in writing
within 15 days after the Indemnifying Party has given notice of the
Third Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party
Claim, (B) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations
hereunder, (C) the Third Party Claim involves only money damages and
does not seek an injunction or other equitable relief, (D) settlement
of or an adverse judgment with respect to, the Third Parry Claim is
not, in the good faith judgment of the Indemnified Party, likely to
establish a precedent, custom or practice materially adverse to the
continuing business interests of the indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 8(d)(ii) above: (A) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Parry Claim, (B) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (which consent shall not
be withheld unreasonably) and (C) the Indemnifying Party will not
consent to the entry or any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party (which consent shall not be withheld
unreasonably).
(iv) In the event that any of the conditions in Section 8(d)(ii) above
is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim in any manner it may
deem appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection
therewith), (B) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the costs of defending the
Third-Party Claim )including attorney's fees and expenses), and (C) the
Indemnifying Party will remain responsible for any Adverse Consequences
the Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third-Party Claim to the
fullest extent provided in this Section 8.
(e) Manner of Payment. Any indemnification pursuant to this Section 8 shall
be effected by cashier's or certified check or by wire transfer of
immediately available funds to an account designated by Sellers or the
Buyers, as the case may be, within 10 days after the determination of
indemnification amounts. Any such indemnification payments shall include
interest at the rate of eight percent (8%) per annum from the date any such
Adverse Consequence is suffered or sustained to the date of such payment is
due Pursuant to this Section 8.2(e) and interest at a rate of 10%
thereafter until such Adverse Consequences are fully paid. Interest on any
such unpaid amount shall be compounded Semi-annually, computed on the basis
of a 360-day year. Any indemnification payments made pursuant to this
Agreement shall be deemed to be adjustments to the Purchase Price of the
PAP Stock for tax purposes.
(f)Offset. The Adverse Consequences which Buyers or any member of Buyer
Group suffers, sustains or becomes subject to and with respect to which
such entity is entitled to indemnification from a Seller pursuant to this
Section 8 may, at the option of such entity, may be satisfied by setting
off all or any portion of such Adverse Consequences against any amount,
including but not limited to any amounts due under any of the Notes, which
any Buyer or any member of Buyer Group owes to any Seller or any of
Sellers' Affiliates at such time.
(g) Risk of Loss. Following Closing and the transfer of title of the
Coaches to DW Leasing Company, all risk of loss with respect to each of the
Coaches shall remain with LBJ or RAB, the prior owner, and such risk of
loss shall not transfer to DW Leasing Company until the former owner
returns the Coach to the State of Mississippi and DW Leasing Company has
performed a final inspection of the Coach in the State of Mississippi. Once
DW Leasing Company completes the final inspection of a Coach in the State
of Mississippi, all risk of loss thereafter for that Coach shall
immediately and automatically transfer to DW Leasing Company.
Section 9. Definitions.
"Adverse Consequences" means, with respect to any Person, any
diminution in value, consequential or other damage, Liability, demand,
claim, action, cause of action, cost, damage, deficiency, Tax, penalty,
fine or other loss or expense, whether or not arising out of a third party
claim, including all interest, penalties, reasonable attorneys' fees and
expenses and all amounts paid or incurred in connection with any action,
demand, proceeding, investigation or claim by any third party (including
any Governmental Entity) against or affecting such Person or which, if
determined adversely by such Person, would give rise to, evidence the
existence of, or relate to, any other Adverse Consequences and the
investigation. defense or settlement of any of the foregoing.
"Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such Person.
"Affiliated. Group" means an affiliated group as defined in Section
1504 of the Code (or any analogous combined or consolidated or unitary
group defined under state, local or foreign income Tax law) of which the
Company is or has been a member.
"American Coach" means American Coach Works, Inc., a Tennessee
corporation.
"Buyer" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and DW Leasing
Company, LLC, individually.
"Buyers" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and DW Leasing
Company, LLC, collectively.
"Closing" means the purchase and sale of the PAP Stock and the Coaches
and the fulfillment of the other transactions contemplated by the
Agreement.
"Closing Date" means December 20,1999.
"Coaches" means the motor bus coaches owned by LBJ and Rent-A-Box
described in Schedule ___
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Company" means Pyramid Coach, Inc., American Coach Works, Inc.,
Precision Coach, Inc., Rent-A-Box, Inc. and LBJ, LLC individually.
"Companies" means Pyramid Coach, Inc., American Coach Works, Inc.,
Precision Coach, Inc., Rent-A-Box, Inc. and LBJ, LLC collectively.
"Contract" means any agreement, contract, instrument, commitment,
lease, guaranty, indenture, license, or other arrangement or understanding
between parties or by one party in favor of another Party, whether written
or oral.
"DW Leasing Company" means DW Leasing Company, LLC, a Mississippi
limited liability company.
"Emplovee Benefit Plan" means any Employee Pension Benefit Plan
(including any Multiemployer Plan), Employee Welfare Benefit Plan, fringe
benefit, bonus, deferred compensation, retirement, vacation, sick leave,
severance, incentive or other plan, program policy or arrangement, whether
or not subject to ERISA.
"Employee Pension Benefit Plan" shall have the meaning set forth in
Section 3(2) of ERISA.
"Employee Welfare Benefit Plan" shall have the meaning set forth in
Section 3(l) of USA.
"Environmental and Safety Requirements" means all federal, state,
local and foreign statutes, regulations. ordinances, guidelines and similar
provisions, whether or not having the force or effect of law, all judicial
and administrative orders and determinations, all contractual obligations
and all common law concerning public health and safety, worker health and
safety (which would include but not be limited to United States Department
of Transportation and corresponding state Departments of Transportation
rules and regulations), and Pollution or protection of the environment,
including all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened release,
control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants,
toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Financial Statements" means the financial statements included in
Schedule 5(e).
"Governmental Entity" means the United States of America or any other
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, "Closing, Date" means December
20, 1999.
"Coaches" means the motor bus coaches owned by LBJ and Rent-A-Box
described in Schedule 1(c).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Company" means Pyramid Coach, Inc., American Coach Works, Inc.,
Precision Coach, Inc., Rent-A-Box, Inc. and LBJ, LLC individually.
"Companies" means Pyramid CoaCh, Inc., American Coach Works, Inc.,
Precision Coach, Inc., Rent-A-Box, Inc. and LBJ, LLC collectively.
"Contract" means any agreement, contract, instrument, commitment,
lease, guaranty, indenture, license, or other arrangement or understanding
between parties or by one party in favor of another Party, whether written
or oral.
"DW Leasing Company" means DW Leasing Company, LLC, a Mississippi
limited liability company.
"Employee Benefit Plan" means any Employee Pension Benefit Plan
(including any Multiemployer Plan), Employee Welfare Benefit Plan, fringe
benefit, bonus, deferred compensation, retirement, vacation, sick leave,
severance, incentive or other plan, program policy or arrangement, whether
or not subject to ERISA.
"Employee Pension Benefit Plan" shall have the meaning set forth in
Section 3(2) of ERISA.
"Employee Welfare Benefit Plan" shall have the meaning set forth in
Section 3(1) of USA.
"Environmental and Safety Requirements" means all federal, state,
local and foreign statutes, regulations, ordinances, guidelines and similar
provisions, whether or not having the force or effect of law, all judicial
and administrative orders and determinations, all contractual obligations
and all common law concerning public health and safety, worker health and
safety (which would include but not be limited to United States Department
of Transportation and corresponding state Departments of Transportation
rules and regulations), and Pollution or protection of the environment,
including all those relating to the presence, use, production, generation,
handling, transportation, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened release,
control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, Pesticides, pollutants, contaminants,
toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Financial Statements" means the financial statements included in
Schedule 5(e).
"Governmental Entity" means the United States of America or any other
nation, any state or regulatory or administrative functions of government.
"Indebtedness" means (x) all liabilities of a Company with respect to
the outstanding principal amount of indebtedness for borrowed money
(including for the deferred purchase price of property or services,
indebtedness secured by a Lien on property, contingent liabilities or
otherwise), all accrued interest thereon, and all fees, expenses,
prepayment penalties and other charges which would be payable with respect
thereto if fully paid out, plus (y) that portion of the obligations of a
Company with respect to capital leases that are properly classified as a
liability on a balance sheet prepared in accordance with GAAP, and all
fees, expenses, prepayment penalties and other charges which would be
payable in relation thereto if fully paid out.
"Intellectual Property" means patents, patent applications, patent
disclosures and inventions and any reissues, continuations,
continuations-in-part, divisions, extensions or reexaminations, thereof;
trademarks, service marks, trade dress, logos, domain names, trade names
and corporate names, together with all goodwill associated therewith and
all translations, adaptations, derivations and combinations of the
foregoing; copyrights and copyrightable works; registrations, applications
and renewals for any of the foregoing; trade secrets and confidential
business information; know-how; computer software; specifications;
formulae; research and development; manufacturing; printing and production
process; other intellectual property rights; development; manufacturing;
printing and production processes; other intellectual property rights; and
all copies and tangible embodiments of the foregoing (in whatever form or
medium); in each case including the items set forth on Schedule 5(i)
hereto; all income, royalties, damages, and payments due or payable at the
Closing or thereafter with respect to the foregoing (including damages and
payments for past or future infringements or misappropriations thereof),
the right to ▇▇▇ and recover for past infringements or misappropriations
thereof and any and all corresponding rights that, now or hereafter, may be
secured throughout the world.
"LBJ" means LBJ, LLC that is a Mississippi limited liability company.
"Liability" means any liability, debt, obligation, deficiency, Tax
penalty, fine, claim, cause of action or other loss, cost or expense of any
kind or nature whatsoever, whether asserted or unasserted. absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, and whether
due or becomes due and regardless of when asserted,
"Legal Requirement" means any requirement arising under any law, rule
or regulation or any determination or direction of any arbitrator or any
Governmental Entity, including any Environmental and Safety Requirements.
"Letter of Intent" means a certain letter dated September 3, 1999
addressed to ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ sent by Durham ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and Company, LLC which sets forth the terms under which Durham
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Company, LLC, or its nominee, would acquire the
stock of Pyramid and certain assets, and includes all amendments thereto.
"Lien" means any security interest, pledge, bailment (in the nature of
a pledge or for purposes of security), mortgage deed of trust, the grant of
a power to confess judgment, conditional sales and title retention
agreement (including any lease in the nature thereof charge, encumbrance or
other similar arrangement or interest in real or personal property.
"Multiemployer Plan" shall have the meaning set forth in Section 3(37)
of ERISA.
"Net Purchase Price Adjustment" means Pyramid's categorized assets as
of September 30, 1999 less all accrued expenses, unpaid expenses, note
payable on automobile and other liabilities as of September 30, 1999 as set
forth on Schedule 1(b)(iii).
"Net Worth" means the total assets of a company minus the total
liabilities of a Company regardless of materiality.
"ordinary course of business" means the ordinary course of a Company's
business consistent with past custom practice, including as to frequency
and amount.
"PAP" means Precision Coach, Inc., American Coach Works, Inc. and
Pyramid Coach, Inc.
"PAP Stock" means all of the outstanding and issued shares of stock of
Precision Coach, Inc., American Coach Works, Inc. and Pyramid Coach, Inc.
as at Closing as referred to in Section 1(a)(i).
"Parties' means ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Transport Trailer, Inc., Rent-A-Box, Inc., LBJ,
LLC, DW Leasing Company, LLC, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
collectively.
"Party" means ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Transport Trailer, Inc., Rent-A-Box, Inc., LBJ,
LLC, DW Leasing Company, LLC, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
individually.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a Governmental Entity.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Precision" means Precision Coach, Inc. that is a Mississippi
corporation.
"Pyramid" means Pyramid Coach, Inc. that is a Tennessee corporation.
"RAB" means Rent-A-Box, Inc., that is a Mississippi corporation.
"Seller" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, Transport Trailer, Inc., Rent-A-Box, Inc. and LBJ,
LLC, individually.
"Sellers" means ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, Transport Trailer, Inc., Rent-A-Box, Inc. and LBJ,
LLC collectively.
"Subsidiary" means, with respect to any Person or, any corporation, a
majority of the total voting Power of shares of stock of which is entitled,
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or any
partnership, association or business entity a majority of the partnership
or other similar ownership interest of which is at the time owned or
controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes of this
definition, a Person is deemed to have a majority ownership interest in a
partnership, association or other business entity if such Person is
allocated a majority of the gains or losses of such partnership,
association or other business entity or is or controls the managing
director or general partner of such partnership, association or other
business entity.
"Tax" means any federal, state, local income, gross receipts, license,
payroll, employment, excise, fuel, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not and including any obligation to indemnify or otherwise
assume or succeed to the Tax liability of any other Person.
"Tax Return" means any return, declaration, report, claim for refund
or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Transaction Documents" means this Agreement and the Contracts and
other documents contemplated hereby or executed in connection herewith.
10. Miscellaneous.
(a) No Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.
(b) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements or representations by or between the Parties,
written or oral, that may have related in any way to the subject matter hereof.
(c) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights or
obligations hereunder may be assigned (whether by Operation of law, through a
change in control or otherwise) by a Company or the Sellers without the prior
written consent of Buyers, or by Buyers (except as otherwise provided in, this
Agreement) without the prior written consent of the Sellers, Buyers may (at any
time prior to the Closing), at its sole discretion, assign, in whole or in part,
its rights and obligations pursuant to this Agreement to one or more of its
Affiliates. For purposes hereof, Buyer's "Affiliates" include Affiliates which
may be organized subsequent to the date hereof, a Buyer may assign all or any
portion of this Agreement and the other agreements contemplated hereby
(including rights hereunder and thereunder), including its rights to
indemnification, to any of its or its or its Affiliates' (whether prior to or
subsequent to the Closing) lenders as collateral security. After the Closing,
Buyer may assign this Agreement and its rights and obligations hereunder in
connection with a (i) merger or consolidation involving Buyer or any of its
Affiliates, (ii) a sale of stock or assets of Buyers or any of their Affiliates
or (iii) dispositions of the business of a Company or any part thereof.
(d) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
(e) Headings. The section headings contained in this Agreement are intended for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other
communication hereunder shall be deemed duly given when delivered personally
to the recipient or sent to the recipient by telecopy (receipt confirmed) or
by reputable express courier service (charges prepaid), and addressed to the
intended recipient as set forth below:
If to Sellers:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyers:
DW Leasing Company, LLC
Bank One/Tower
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means, but no such notice, request, demand, claim or other communication
shall be deemed to have been duly given unless and until it actually is received
by the intended recipient. Any Party may change the address to which notices,
requests. Demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State Of Tennessee without giving
effect to any choice of law or conflict of law provision or rule that would
cause the application of the laws of any jurisdiction other than the State of
Tennessee. Subject to Section 10(k) below, to the extent legal proceedings are
permitted under this Agreement, all legal proceedings arising out of or relating
to this Agreement or any other transactions contemplated hereby shall be brought
either in the United States District Court or in any Tennessee state court
sitting in Nashville, Tennessee and in no other forum. The Parties irrevocably
waive, to the fullest extent permitted by law, any objection which they may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum and as to a lack of personal jurisdiction.
(h) Amendment and Waivers. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by the Parties hereto.
No waiver by any Party of any default, misrepresentation, or breach of warranty
or covenant hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.
(i) Incorporation of Schedules. The schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
(j) Construction. Where specific language is used to clarify by example a
general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement shall be
deemed to be the language chosen by the Parties to express their mutual intent,
and no rule of strict construction shall be applied against any party. Whenever
required by the context, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns, pronouns or verbs shall include the plural and vice versa. Nothing in the
Schedules hereto shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Schedule identifies the
exception with reasonable particularity and describes the relevant facts in
reasonable detail. Without limiting the generality of the foregoing, the mere
listing (or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a representation or warranty made herein
(unless the representation or warranty has to do with the existence of the
document or other item itself). The Parties intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty, or covenant contained
herein in any respect, the fact that there exists another representation,
warranty, or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the Party has not breached shall not
detract from or mitigate the fact that the Party is in breach of the first
representation, warranty, or covenant.
(k) Remedies. The Sellers acknowledge that the Company's businesses are unique
and recognize and affirm that in the event of a breach of this Agreement by the
Sellers money damages may he inadequate and Buyer may have no adequate remedy
at law. Accordingly, the Sellers agree that Buyer shall have the right, in
addition to any other rights and remedies existing in its favor, to enforce its
rights and the Sellers' obligations hereunder not only by an action or actions
for damages but also by an action or actions for specific performance,
injunctive and/or other equitable relief (without the requirement of posting
any bonds or additional security whatsoever).
(l) Time is of the Essence. Time shall be of the essence in all respects in this
Agreement.
(m) Severability of Provisions. If any covenant, agreement, provision or term of
this Agreement is held to be invalid for any reason whatsoever, then such
covenant, agreement, provision or term will be deemed severable from the
remaining covenants, agreements, provisions and terms of this Agreement and will
in no way affect the validity or enforceability of any other provision of this
Agreement.
(n) Successor Laws. Any reference to any particular Code section or any other
Legal requirement will be interpreted to include any revision of or successor to
that section regardless of how it is numbered or classified.
(o) Release of the Companies. Effective upon the Closing, each Seller hereby
irrevocably waives, releases and discharges forever the Companies from any and
all (x) Liabilities and (y) Contracts entered into prior to the date hereof with
such Seller whether in its capacity as a Seller hereunder, as an employee or
shareholder of a Company or otherwise, including in respect of rights of
contribution or indemnification, in each case whether arising hereunder or under
any other Contract or otherwise at law or equity, and each Seller hereby
covenants and agrees that it will not seek to recover any amounts in connection
therewith or thereunder from a Company.
(p) Delivery by Facsimile. This Agreement and any signed Contract entered in
connection herewith or contemplated hereby, and any amendments hereto or
thereto, to the extent signed and delivered by means of a facsimile machine,
shall be treated in all manner and respects as an original Contract and shall be
considered to have the same binding legal effects as if it were the original
signed version thereof delivered in person. At the request of any party hereto
or to any such Contract, each other party hereto or to any such Contract shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or contract was transmitted or communicated through the use of
facsimile as a defense to the formation of a contract and each such party
forever waives any such defense.
IN WITNESS WHEREOF, the Parties have executed this Stock and Asset Purchase
Agreement of the date first above written.
"Sellers and Companies"
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, individually ▇▇▇▇▇ ▇▇▇▇▇▇▇, individually
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, individually ▇▇▇▇▇ ▇▇▇▇▇▇▇, individually
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, individually
Transport Trailer, Inc. Pyramid Coach, Inc.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President By: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Rent-A-Box, Inc. Precision Coach, Inc.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, President ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
LBJ, LLC American Coach Works, Inc.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, Member By: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇▇▇▇ ▇▇▇▇▇▇▇, Member
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Member
"Buyers"
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually
DW Leasing Company, LLC
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Member
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Member
