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Exhibit 10.27
ASSET PURCHASE AGREEMENT
BY AND AMONG
TRUCK CITY PARTS, INC.
AND
SOUTHWEST VIRGINIA TRUCKS PARTS, INC.
AND
THE SHAREHOLDERS OF SOUTHWEST VIRGINIA TRUCKS PARTS, INC.
NOVEMBER 19, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE I...................................................................1
1.1. Estimated Purchase Price..........................................1
1.2. Post-Closing Purchase Price Adjustment............................1
(a) Closing Balance Sheet..........................................1
(b) Closing Balance Sheet Notice...................................2
(c) Post-Closing Adjustment........................................2
1.3. Transfer of Assets................................................3
1.4. Assumption of Liabilities.........................................3
1.5. Excluded Liabilities..............................................3
1.6. Allocation of Purchase Price......................................4
ARTICLE II..................................................................5
2.1. Closing...........................................................5
2.2. Conveyances at Closing............................................5
(a) Instruments and Possession........................................5
(b) Assumption Document............................................6
(c) Form of Instruments............................................6
(d) Consents.......................................................6
2.3. Payment of Estimated Purchase Price...............................6
ARTICLE III.................................................................6
3.1. Corporate Organization and Standing...............................6
3.2. Authorization.....................................................6
3.3. No Conflict or Violation..........................................7
3.4. Facilities........................................................7
(a) Actions........................................................7
(b) Leases or Other Agreements.....................................7
(c) Facility Leases and Leased Real Property.......................7
(d) Certificate of Occupancy.......................................8
(e) Utilities......................................................8
(f) Improvements, Fixtures and Equipment...........................8
(g) Flood Risk.....................................................8
(h) No Special Assessment..........................................8
3.5. Assets............................................................9
3.6. Financial Statements..............................................9
3.7. Books and Records.................................................9
3.8. Litigation........................................................9
3.9. Licenses and Permits; Compliance with Laws........................9
3.10. Tax Matters...................................................10
3.11. Brokers, Finders..............................................10
3.12. Absence of Certain Changes....................................11
3.13. Material Contracts............................................12
3.14. Proprietary Rights............................................14
3.15. Labor Matters.................................................14
3.16. Consents......................................................15
3.17. Employee Benefit Plans; Employment Agreements.................15
(a) Plans.........................................................15
(b) Pension and Welfare Benefit Plans.............................15
3.18. Compliance with Environmental Laws............................17
(a) Definitions...................................................17
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(b) Notice of Violation............................................19
(c) Environmental Conditions.......................................19
(d) Environmental Audits or Assessments............................19
(e) Indemnification Agreements.....................................19
(f) Releases or Waivers............................................19
(g) Notices, Warnings and Records..................................19
(h) Compliance.....................................................19
(i) Hazardous Substances...........................................19
(j) Underground Storage Tanks......................................20
(k) Asbestos Containing Material...................................20
(l) Liens..........................................................20
3.19. Certain Business Relationships with the Company................20
3.20. Undisclosed Liabilities........................................20
3.21. Insurance......................................................20
3.22. Accounts Receivable............................................20
3.23. Inventory......................................................21
3.24. Payments.......................................................21
3.25. Customers, Distributors and Suppliers..........................21
3.26. Material Misstatements Or Omissions............................21
ARTICLE IV..................................................................22
4.1. Corporate Organization and Standing...............................22
4.2. Authorization.....................................................22
4.3. No Conflict or Violation..........................................22
ARTICLE V...................................................................23
5.1. Further Assurances................................................23
5.2. Employee-Related Matters..........................................23
ARTICLE VI..................................................................24
6.1. No Injunctive Proceedings.........................................24
6.2. Representations and Warranties....................................24
6.3. Performance of Agreements; Instruments of Transfer................24
6.4. Compliance Certificate............................................24
6.5. Opinion of Counsel................................................24
6.6. Ancillary Agreements..............................................24
6.7. Consents, Etc.....................................................24
6.8. Nonforeign Affidavit..............................................25
ARTICLE VII.................................................................25
7.1. No Injunctive Proceedings.........................................25
7.2. Representations and Warranties....................................25
7.3. Performance of Agreements; Instruments of Transfer................25
7.4. Compliance Certificate............................................25
7.5. Ancillary Agreements..............................................25
7.6. Consents; Etc.....................................................25
ARTICLE VIII................................................................26
8.1. Collection of Accounts Receivable and Letters of Credit...........26
8.2. Assignability and Consents........................................26
8.3. Trade Names.......................................................26
8.4. Indemnification by the Company and the Existing Shareholders......26
8.5. Indemnification by Truck City.....................................27
8.6. Survival of Representations, Warranties and Covenants.............27
8.7. Threshold.........................................................27
8.8. Notice and Opportunity to Defend..................................28
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8.9. Indemnification Payments..........................................28
ARTICLE IX..................................................................28
9.1. Expenses..........................................................28
9.2. Notices...........................................................28
9.3. Counterparts......................................................30
9.4. Entire Agreement..................................................30
9.5. Headings..........................................................30
9.6. Assignment; Amendment of Agreement................................30
9.7. Governing Law.....................................................30
9.8. Further Assurances................................................30
9.9. No Third Party Rights.............................................30
9.10. NonWaiver......................................................30
9.11. Severability...................................................30
9.12. Incorporation of Exhibits and Schedules........................31
9.13. Knowledge......................................................31
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
November 19, 1999, is entered into by and among Truck City Parts, Inc., a
Delaware corporation ("Truck City"), Southwest Virginia Truck Parts, Inc., a
Virginia corporation (the "Company"), and C. Xxxxx Xxxxxx ("Xxxxxx"), Xxxx X.
Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx the shareholders of the Company
(each individually an "Existing Shareholder" and collectively, the "Existing
Shareholders"). Truck City, the Company and the Existing Shareholders are
referred to herein as each a "Party" and collectively, the "Parties."
RECITALS
WHEREAS, the Company and Xxxxxx own certain Assets (as defined
in Annex A) that are used or held for use in its business of distributing
aftermarket parts and ancillary services to the domestic heavy duty vehicle
market (the "Business");
WHEREAS, the Existing Shareholders collectively own
all of the issued and outstanding voting capital stock of the Company;
WHEREAS, Truck City desires to acquire and the Company and
Xxxxxx desire to sell, the Assets, other than the Excluded Assets (as defined in
Annex A); and
WHEREAS, the Existing Shareholders have determined that the
transactions set forth in this Agreement are in the best interests of the
Company and such transactions will benefit, directly and indirectly, the
Existing Shareholders;
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, the Parties hereby agree as
follows:
ARTICLE I.
PURCHASE AND SALE
1.1. Estimated Purchase Price. Upon the terms
and subject to the conditions set forth herein, Truck City will
purchase from the Company and Xxxxxx the Assets for an aggregate
purchase price (the "Estimated Purchase Price") of $1,200,000.
1.2. Post-Closing Purchase Price Adjustment.
(a) Closing Balance Sheet. The Company will prepare at its
expense a balance sheet of the Company dated the Closing Date (the "Closing
Balance Sheet"), prepared from its books and records and prepared in accordance
with generally accepted accounting principles ("GAAP"). The Company will also
prepare a calculation, as of the Closing Date based on the Closing Balance
Sheet, of Net Asset Value ("Closing Net Asset Value"), which
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calculation will be prepared in accordance with GAAP and on a basis consistent
with the Net Asset Value calculation reflected on Schedule 1.2 hereto. For such
purpose, Truck City shall afford the Company and the Company's agents and
representatives reasonable access to all books, records and work papers
necessary to prepare the Closing Balance Sheet that are in Truck City's
possession or control. The Company will deliver such Closing Balance Sheet and
such calculation to Truck City within 30 days after the Closing.
(b) Closing Balance Sheet Notice.
(i) Within 15 days of the receipt of the Closing
Balance Sheet and the calculation of Closing Net Asset Value, Truck
City will deliver to the Company a written notice certifying that
either (A) it agrees with such Closing Balance Sheet and calculation or
(B) it disagrees with such Closing Balance Sheet and calculation, in
which case Truck City will also provide therewith a reasonably detailed
written report stating the basis for disagreement with such Closing
Balance Sheet and such calculation (the "Closing Balance Sheet
Notice").
(ii) If the Closing Balance Sheet Notice is not
timely given as described in Section 1.2(b)(i), the Closing Balance
Sheet and the calculation of Closing Net Asset Value shall be final,
binding and conclusive upon the Parties. If the Closing Balance Sheet
Notice is properly given and the Company disagrees with such Closing
Balance Sheet Notice, and if the disagreement is not resolved by mutual
agreement among the Parties within 30 days following delivery of the
Closing Balance Sheet Notice, such dispute will be resolved by a "Big
5" accounting firm ("BFAF"), other than PricewaterhouseCoopers LLP,
selected by mutual agreement of Truck City and the Company. The costs
of resolving such a dispute shall be borne equally by Truck City and
the Company.
(iii) Upon appointment of a BFAF, such BFAF in
consultation with the Parties shall establish a schedule for resolution
of the dispute that is reasonably calculated to result in a resolution
as expeditiously as practicable, and in any event, no later than six
months after the Closing Date. In resolving such dispute, the BFAF
shall revise the Closing Balance Sheet and the calculation of Closing
Net Asset Value only with respect to the issues raised in the Closing
Balance Sheet Notice and only to the extent necessary to make it
conform to the practices, procedures and methods described in Section
1.2(a) above. The decision of the BFAF shall be final and binding on
the Parties in the absence of manifest error.
(c) Post-Closing Adjustment. Within two business days after a
final resolution by the BFAF of such disagreements as may arise out of the
review of the Closing Balance Sheet in accordance with Section 1.2(b) above, and
an appropriate adjustment to the Closing Balance Sheet and the calculation of
Closing Net Asset Value to reflect such resolution, or, if Section 1.2(b)(i)(A)
or the first sentence of Section 1.2(b)(ii) applies, two business days after
delivery of, or expiration of the period for delivering, the Closing Balance
Sheet Notice (as applicable), the Estimated Purchase Price will be adjusted (as
so adjusted, the "Purchase Price"). If Closing Net Asset Value is less than
$700,000, the difference and interest thereon will be due and payable to Truck
City by the Company; however, to the extent Closing Net Asset Value is
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more than $700,000, the excess and interest thereon will be due and payable to
the Company by Truck City. Any amounts payable pursuant to this paragraph shall
bear interest from the Closing Date through the date of payment at an annual
rate equal to LIBOR as reported in The Wall Street Journal on the Closing Date.
1.3. Transfer of Assets. Upon the terms and subject to the
conditions set forth herein, at the Closing, the Company will sell to Truck
City, and Truck City will purchase from the Company, the Assets, free and clear
of all encumbrances other than Permitted Encumbrances (as defined in Section
3.5).
1.4. Assumption of Liabilities. Upon the terms and subject to
the conditions contained herein, at the Closing, Truck City shall assume and
shall thereafter pay, perform and discharge as and when due the liabilities and
obligations of the Business arising out of accounts payable of the Business
outstanding as of the Closing Date and calculated in a manner consistent with
Schedule 1.2 hereto (including those liabilities listed on Exhibit A to Schedule
1.2), and only those liabilities and obligations (the "Assumed Liabilities").
1.5. Excluded Liabilities. Notwithstanding any other provision
of this Agreement, except for the Assumed Liabilities expressly referred to in
Section 1.4, Truck City shall not assume, or otherwise be responsible for, the
Company's liabilities or obligations, whether actual or contingent, matured or
unmatured, liquidated or unliquidated, known or unknown, or related or unrelated
to the Business or the Assets, whether arising out of occurrences prior to, at
or after the date hereof (collectively, the "Excluded Liabilities"), which
Excluded Liabilities include, without limitation:
(a) All liabilities and obligations of the
Company arising out of or related to any of the Excluded Assets;
(b) All liabilities and obligations of the Company in respect
of any costs arising out of or related to the sale and transfer of the Assets,
including without limitation, all broker's or finder's fees and expenses and all
fees and expenses of any attorneys and accountants of the Company;
(c) All liabilities and obligations of the
Company in respect of any Tax (as defined in Section 3.10)
attributable to any period ending on or before the Closing Date;
(d) All liabilities and obligations to or in respect of any
employees or former employees, agents or independent contractors of, or other
persons providing services to, the Company, including, without limitation, (i)
any employment, incentive or severance agreement, whether or not written,
between the Company and any person, (ii) all liabilities under any Employee
Benefit Plan (as defined in Section 3.17(a)) at any time maintained, contributed
to or required to be contributed to by or with respect to the Company or under
which the Company may incur liability, or any contributions, benefits or
liabilities therefor, or any liability with respect to the Company's withdrawal
or partial withdrawal from or termination of any Employee Benefit Plan and (iii)
all claims of an unfair labor practice, or any claim under any state
unemployment compensation or worker's compensation law or regulation or under
any federal or
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state employment discrimination law or regulation, which shall have been
asserted on or prior to the Closing Date or is based on acts or omissions that
occurred on or prior to the Closing Date;
(e) All liabilities and obligations of the Company relating to
any claim, suit, litigation, proceeding or investigation pending on the date
hereof, or instituted hereafter, that is based in whole or in part on events or
conditions occurring or existing in connection with, arising out of, resulting
from or relating to, directly or indirectly, the operation of the Business prior
to the Closing Date, or the ownership, possession, use or sale of the Assets
prior to the Closing Date;
(f) All liabilities and obligations of the Company arising out
of or related to any indebtedness for borrowed money owing to the Company or any
of its affiliates;
(g) All claims, liabilities or obligations (including, without
limitation, fines, penalties, punitive damages, legal fees and expenses and all
other damages and losses), irrespective of the actual or alleged basis therefor,
that is based in whole or in part on events or conditions occurring or existing
prior to the Closing in connection with, arising out of, resulting from or
relating to, directly or indirectly, (i) any applicable laws regulating or
establishing quality criteria or standards for air, water, land, noise or
industrial safety and health, providing for remediation of environmental
conditions or otherwise relating to the environment, whether existing as of the
date hereof or subsequently amended, enacted or promulgated, (ii) employee
health and safety or (iii) compliance with any laws or regulations relating to
any of the foregoing;
(h) All liabilities and obligations arising from or relating
to any injury to or death of any person or damage to or destruction of any
property, whether based on negligence, breach of warranty, strict liability,
enterprise liability or any other legal or equitable theory arising, in whole or
in part, from defects in products sold or services performed by or on behalf of
the Company or any other person or entity on or prior to the Closing Date, or
arising from any other cause, irrespective of the act and/or alleged basis
therefor, that is based in whole or in part on events or conditions occurring or
existing on or prior to the Closing Date, including without limitation any
liabilities arising (on a date of occurrence basis or otherwise) relating to the
use or misuse of equipment or to traffic accidents; and
(i) Without limitation by the specific enumeration of the
foregoing, any liabilities not expressly assumed by, or subject to
indemnification obligations of, Truck City.
1.6. Allocation of Purchase Price. The sum of (a) the Purchase
Price (as adjusted pursuant to Section 1.2 hereof) plus (b) the Assumed
Liabilities (collectively, the "Allocable Amount") represents the amount agreed
upon by the Parties to be the aggregate consideration paid for the Assets, and
shall be allocated among the Assets in accordance with a schedule (the
"Allocation Schedule") to be agreed after the Closing Date by Truck City and the
Company. Truck City shall prepare and deliver the Allocation Schedule to the
Company for its review and approval within 45 days after the period for making
any adjustment to the Purchase Price expires (as provided in Section 1.2
hereof), and the Company shall deliver to Truck City any proposed adjustment
thereto within 30 days of its receipt of the Allocation Schedule. If the Company
does not deliver to Truck City proposed adjustments to the Allocation Schedule
within
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such time, it shall be deemed to agree with the Allocation Schedule as prepared
by Truck City. In the event of any disagreement, Truck City and the Company
shall negotiate in good faith for a resolution of the allocation. The Allocation
Schedule shall comply with the requirements of Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder. Truck City and the Company shall (i) report for all Tax purposes the
purchase of the Assets in a manner consistent with the Allocation Schedule and
in a manner consistent with all applicable rules and regulations; (ii) timely
file a Form 8594 in accordance with the requirements of Section 1060 of the Code
and this Section 1.6; (iii) not assert, in connection with any Tax Return, Tax
audit or similar proceedings, any allocation of the Allocable Amount that
differs from that agreed to herein; and (iv) notify the other in the event any
taxing authority is taking or proposing to take a position inconsistent with
such allocation.
ARTICLE II.
CLOSING
2.1. Closing. The Closing of the transactions contemplated
herein (the "Closing") shall be held at 10:00 a.m. local time on November 19,
1999 (the "Closing Date") at the offices of Xxxxx, Day, Xxxxxx & Xxxxx, 00 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. The place of the Closing and the Closing Date
may be varied by agreement among the Parties.
2.2. Conveyances at Closing.
(a) Instruments and Possession. To effect the sale and
transfer of Assets referred to in Section 1.3 hereof, the Company will, at the
Closing, execute and deliver to Truck City:
(i) one or more Bills of Sale, in the form
attached hereto as Exhibit A, conveying in the aggregate all of the
personal property owned by the Company included in the Assets;
(ii) subject to Section 8.2, Assignments of Lease
in the form attached hereto as Exhibit B with respect to those leases
that Truck City will assume;
(iii) subject to Section 8.2, Assignments of
Contract Rights in the form attached hereto as Exhibit C with respect
to those contracts that Truck City will assume;
(iv) subject to Section 8.2, Assignments of
Patents and Trademarks and other Proprietary Rights (including an
assignment of all rights, title and interest of the Company to the name
"Southwest Virginia Truck Parts" and all variations thereof) each in
the form attached hereto as Exhibit D, in recordable form to the extent
necessary to assign such rights; and
(v) such other instruments as shall be requested
by Truck City to vest in Truck City title in and to the Assets in
accordance with the provisions hereof.
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(b) Assumption Document. Upon the terms and subject to the
conditions set forth herein, at the Closing, Truck City shall deliver to the
Company an instrument of assumption substantially in the form attached hereto as
Exhibit E, evidencing Truck City's assumption of the Assumed Liabilities (the
"Assumption Document").
(c) Form of Instruments. To the extent that a form of any
document to be delivered hereunder is not attached as an Exhibit hereto, such
documents shall be in form and substance, and shall be executed and delivered in
a manner reasonably satisfactory to Truck City and the Company.
(d) Consents. The Company shall deliver all Licenses and
Permits (as defined herein) and any other third party consents required for the
valid transfer of the Assets as contemplated by this Agreement.
2.3. Payment of Estimated Purchase Price. Truck City shall
wire transfer at the Closing, $1,200,000 in immediately available funds in the
amount or amounts and to the bank account or accounts designated by the Company
in writing (less 5% of the Purchase Price to be delivered to the Escrow Agent
(as defined in Section 6.6) pursuant to Section 8.9 hereof).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE EXISTING SHAREHOLDERS
The Company and each Existing Shareholder jointly and
severally represent and warrant to Truck City as follows, except as set forth in
a disclosure schedule ("Schedule") attached hereto and made a part hereof, the
number of each Schedule corresponding to the Section number to which it refers:
3.1. Corporate Organization and Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Virginia and has all requisite corporate power and authority to
own or lease its properties and to carry on its business as presently conducted.
The Company has delivered to Truck City or its representatives complete and
correct copies of its Articles of Incorporation and Bylaws and all amendments
thereto. The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the nature of its business
as now being conducted by it or the property owned or leased by it makes such
qualification necessary, all of which are listed on Schedule 3.1. Schedule 3.1
contains a list entitled "Existing Shareholders" which sets forth a true,
correct and complete list of each of the shareholders of the Company and each of
their respective holdings of the Company and no other person or entity owns any
equity interest in the Company. The Company has no subsidiaries.
3.2. Authorization. This Agreement, the Ancillary Agreements
(as defined) to which the Company is a party and the transactions contemplated
hereby and thereby have been duly authorized by the Company. This Agreement and
the Ancillary Agreements have been duly executed and delivered by the Company
and the Existing Shareholders, who own 100% of the voting capital stock of the
Company, party thereto and are the legal, valid and binding
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obligations of the Company and the Existing Shareholders, enforceable against
the Company and the Existing Shareholders in accordance with their terms.
3.3. No Conflict or Violation. Neither the execution and
delivery of this Agreement or the Ancillary Agreements by the Company nor the
consummation of the transactions contemplated hereby or thereby by the Company
or the Existing Shareholders will (a) violate, conflict with or result in or
constitute a default under or result in the termination or the acceleration of,
or the creation in any party of any right (whether or not with notice or lapse
of time or both) to declare a default, accelerate, terminate, modify or cancel
any indenture, contract, lease, sublease, loan agreement, note or other
obligation or liability ("Contractual Obligation") to which the Company or any
Existing Shareholder is a party or by which it is bound or to which its assets
are subject or result in the creation of any lien or encumbrance upon any of
said assets, (b) violate, conflict with or result in a breach of or constitute a
default under any provision of the Articles of Incorporation or Bylaws of the
Company, (c) violate, conflict with or result in a breach of or constitute a
default under any judgment, order, decree, rule or regulation of any court or
governmental agency to which the Company or any Existing Shareholder is subject
or (d) violate, conflict with or result in a breach of any applicable federal or
state rule or regulation.
3.4. Facilities. Schedule 3.4 contains a complete and accurate
list of all real property used in connection with the Business of the Company
("Real Property"), all of which is leased ("Leased Real Property").
(a) Actions. There are no pending or, to the best knowledge of
the Company, threatened, condemnation proceedings or other actions, claims,
suits, litigation, proceedings, notices of violation, inquiry or investigations
(collectively, "Actions") relating to any facility ("Facility") used in
connection with the Business.
(b) Leases or Other Agreements. There are no leases,
subleases, licenses, occupancy agreements, options, rights, disputes,
concessions or other agreements or arrangements, written or oral, granting to
any person the right to purchase, use or occupy any Facility or any Real
Property or any portion thereof, or interest in any such Facility or Real
Property.
(c) Facility Leases and Leased Real Property. With respect to
each Facility lease, the Company is the sole lessee and has an unencumbered
interest in the leasehold estate related thereto. The Company enjoys peaceful
and undisturbed possession of all of the Leased Real Property. Each Facility
lease is valid, binding and enforceable in accordance with its terms. The
Company is not in default under any Facility lease or sublease, and no event or
condition exists that with notice or lapse of time or both would constitute a
default by the Company under any Facility lease or sublease.
(d) Certificate of Occupancy. All Facilities have received all
required approvals of governmental authorities (including, without limitation,
permits and a certificate of occupancy or similar certificate permitting lawful
occupancy of the Facilities) required in connection with the operation thereof
and are and have been operated and maintained in accordance with applicable
regulations.
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(e) Utilities. All Facilities are supplied with utilities
(including, without limitation, water, sewage, disposal, electricity, gas and
telephone) and other services necessary for the operation of such Facilities as
currently operated, and there is no condition that would reasonably be expected
to result in the termination of the present access from any Facility to such
utility services.
(f) Improvements, Fixtures and Equipment. The improvements
constructed on the Facilities, including, without limitation, all leasehold
improvements, and all fixtures and equipment and other tangible assets owned,
leased or used by the Company at the Facilities are (i) insured to the extent
and in a manner customary in the industry, (ii) structurally sound with no known
material defects, (iii) in good operating condition and repair, subject to
ordinary wear and tear, (iv) not in need of maintenance, repair or correction
except for ordinary routine maintenance and repair, the cost of which would not
be material, (v) necessary, desirable and appropriate for the operation of the
Business as presently conducted and (vi) in conformity with all applicable
regulations.
(g) Flood Risk. None of the Facilities is located in either a
special service district or an area for which federal flood risk insurance is
necessary.
(h) No Special Assessment. The Company has not received notice
of any special assessment relating to any Facility or any portion thereof, and
there is no pending or threatened special assessment.
3.5. Assets. The Company and Xxxxxx have and will transfer to
Truck City good and marketable title to the Assets, free and clear of any
encumbrances, except for minor liens that in the aggregate are not substantial
in amount, do not materially detract from the value or transferability of the
Assets subject thereto or interfere in any material respect with the present use
and have not arisen other than in the ordinary course of business ("Permitted
Encumbrances"). The delivery to Truck City of the instruments of transfer
contemplated hereby will vest good, marketable and exclusive title to the Assets
in Truck City, free and clear of all encumbrances of any kind other than
Permitted Encumbrances. The Assets constitute all of the assets necessary to
conduct the Business in substantially the manner conducted by the Company as of
the date of this Agreement. All tangible assets and properties that are part of
the Assets are in good operating condition and repair, ordinary wear and tear
excepted, and are usable in the ordinary course of business and conform in all
material respects to all applicable regulations (including Environmental Laws
(as defined in Section 3.18(a)(iv))) relating to their use and operation.
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3.6. Financial Statements.
(a) The unaudited balance sheet and income statement of the
Company at and for the year ended December 31, 1998, were prepared in accordance
with GAAP consistently applied and fairly present the financial condition and
results of operations of the Company as of its date and for such period. The
Company has no liabilities of any nature, whether absolute, accrued, asserted or
unasserted or contingent or whether due or to become due that should have been
recorded or reserved for on such balance sheet and were not so recorded or
reserved.
(b) The unaudited balance sheet and income statement of the
Company at and for the nine months ended September 30, 1999, were prepared in
accordance with GAAP consistently applied and fairly present the financial
condition and results of operations of the Company as of its date and for such
period and are consistent with the financial statements described in Section
3.6(a). All unaudited balance sheets and income statements of the Company for
periods ending after September 30, 1999, will be prepared in accordance with
GAAP consistently applied and will fairly present the financial conditions and
results of operations of the Company as of their date or dates and as of such
period or periods and will be consistent with the financial statements described
in Section 3.6(a).
(c) Copies of the financial statements described in Sections
3.6(a) and (b) have been or will be provided to Truck City or its
representatives.
3.7. Books and Records. The Company has made and kept and
given Truck City and its representatives access to books and records and
accounts, which, in reasonable detail, accurately and fairly reflect the
activities of the Company. The minute books of the Company accurately and
adequately reflect all action taken by the shareholders, board of directors and
committees of the board of directors of the Company. The copies of the stock
book records of the Company are true, correct and complete, and accurately
reflect all transactions effected in the Company's stock interests through and
including the date hereof. The Company has not engaged in any transaction,
maintained any bank account or used any corporate funds except for the
transactions, bank accounts and funds that have been and are reflected in the
normally maintained books and records of the Company.
3.8. Litigation. There is no claim, action, suit, proceeding,
or investigation pending or, to the best knowledge of the Company, threatened
against the Company or its directors, officers, agents or employees (in their
capacity as such) or any properties or rights of the Company. There are no
orders, writs, injunctions or decrees currently in force against the Company or
its directors, officers, agents or employees (in their capacity as such) with
respect to the conduct of the Business.
3.9. Licenses and Permits; Compliance with Laws. Schedule 3.9
sets forth a complete list of all licenses, franchises, permits, approvals and
other governmental authorizations (collectively, "Licenses and Permits") and all
pending applications therefor issued to the Company and currently used by the
Company in the conduct of the Business. The Company owns, holds or possesses all
Licenses and Permits necessary to entitle it to use the name "the Company," to
own or lease, operate and use the Assets and properties and to carry on and
permit the continued lawful conduct of the Business. The Business is not being
conducted in a manner
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that violates any of the terms or conditions under which any of the Licenses and
Permits was granted. The Company has performed all obligations and satisfied all
conditions required to be performed or satisfied by it to date under, and is not
in default in respect of, any of the Licenses and Permits and no event has
occurred that, with due notice or lapse of time or both, would constitute such a
default or permit the revocation or cancellation of any of the Licenses and
Permits. There is no administrative or judicial proceeding to revoke, cancel or
declare any of the Licenses and Permits invalid in any respect pending or, to
the best knowledge of the Company, threatened. The Company has provided Truck
City with a true, correct and complete copy of each of the Licenses and Permits.
3.10. Tax Matters. The Company has duly and timely filed, or
caused to be duly and timely filed, all Tax Returns required to be filed by it
with the appropriate governmental authorities, or requests for extensions to
file such Tax Returns have been timely filed and granted and have not expired.
All such Tax Returns were at the time of filing and are as of the date hereof
true, correct and complete in all respects. All Taxes owed by the Company
(whether or not shown on any Tax Return) have been paid within the time and in
the manner prescribed by law. The financial statements referred to in Section
3.6 hereof reflect adequate reserves for all Taxes payable by the Company for
all Taxable periods and portions thereof accrued through the dates of such
financial statements. All deficiencies for any Taxes that have been proposed,
asserted or assessed against the Company have been fully paid, or are fully
reflected as a liability in such financial statements, or are being contested
and an adequate reserve therefor has been established and is fully reflected in
such financial statements. The Company is not a party to any pending audit,
action or proceeding, nor to the best of the Company's knowledge, is any such
audit, action or proceeding contemplated or threatened, by any governmental
authority for the assessment or collection of any Taxes of the Company. No claim
has ever been made by any governmental authority in a jurisdiction where the
Company has never filed a Tax Return that the Company is or may be subject to
taxation by that jurisdiction. There are no liens for Taxes (other than for
current Taxes not yet due and payable) on the Assets. Schedule 3.10 sets forth
each state, local and foreign jurisdiction in which the Company (a) filed an
income or franchise Tax Return, whether on a consolidated, combined or separate
return basis, during the five-year period ended December 31, 1998, and (b)
collected or remitted any sales and/or use Taxes during the five-year period
ended December 31, 1998. All Taxes that the Company is required by law to
withhold or to collect have been withheld or collected and paid over to the
proper governmental authorities or segregated and set aside for such payment.
For the purposes of this Agreement, "Tax" or "Taxes" (including, with
correlative meaning, the term "Taxable") means all federal, state, local and
foreign income, profits, franchise, gross receipts, payroll, sales, employment,
use, property, withholding, excise, alternative minimum, gains, transfer,
documentary, stamp and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts, and the term "Tax Returns" means all returns, reports,
declarations, statements, elections, forms or other documents or information
required to be filed with any governmental authority with respect to any Taxes.
3.11. Brokers, Finders. The Company has not retained any
broker or finder in connection with the transactions contemplated herein, and
the Company is not obligated and has not agreed to pay any brokerage or finder's
commission, fee or similar compensation.
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3.12. Absence of Certain Changes.
(a) Since December 31, 1998, the Company has conducted the
Business in the ordinary course, and there has not occurred with respect to the
Company:
(i) any material adverse effect on the business,
operations, assets, results of operations, financial condition or
prospects of the Company, taken as a whole ("Material Adverse Effect");
(ii) any revaluation of the Assets, including,
without limitation, writing down the value of inventory or writing off
notes or accounts receivable;
(iii) any payment, discharge or satisfaction of any
liabilities or obligations, other than in the ordinary course of
business;
(iv) any incurrence of liabilities, except
liabilities incurred in the ordinary course of business, or increase or
change in any assumptions underlying or methods of calculating, any
doubtful account contingency or other reserves;
(v) any capital expenditure exceeding $2,000, the
execution of any lease or the incurring of any obligation to make any
capital expenditure or execute any lease other than in the ordinary
course of business;
(vi) the failure to pay or satisfy when due any
liability, except where the failure would not have a Material Adverse
Effect;
(vii) any Assets (whether real, personal or mixed,
tangible or intangible) becoming subject to any mortgage, pledge, lien,
security interest, encumbrance, restriction or charge of any kind;
(viii) the failure to carry on diligently the
Business in the ordinary course so as to preserve for Truck City the
Assets, the Business and the goodwill of the suppliers, customers,
distributors of the Business and others having business relations with
the Business;
(ix) the disposition or lapsing of any Proprietary
Rights (as defined in Section 3.14) or any disposition or disclosure to
any person of any Proprietary Rights not theretofore a matter of public
knowledge;
(x) any cancellation or waiver of any material claims
or rights of value, or any sale, lease, transfer, assignment,
distribution or other disposition of any Assets, except for sales of
finished goods inventory in the ordinary course of business, or any
disposal of any material Assets for any amount, including, without
limitation, transactions between the Company and any of its affiliates;
(xi) an amendment, modifications, cancellation or
termination of any contract, commitment, agreement, lease, transaction
or Permit relating to the Assets or
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the Business or entry into any contract, commitment, agreement, lease,
transaction or Permit that is not in the ordinary course of business,
including, without limitation, any employment or consulting
agreements;
(xii) any bonus or distribution paid or promised, any
increase in the base compensation, or other payment or loan to any
officer or employee of the Company, whether now or hereafter payable or
granted, or entry into or variation of the terms of any employment,
incentive or severance agreement with, or employee benefit plan, policy
or arrangement covering, any such person;
(xiii) an adverse change in employee relations that
has or is reasonably likely to have an adverse effect on the
productivity, financial condition, results of operations or the
Business or the relationships between the employees of the Company and
its management;
(xiv) any change in any method of accounting or
keeping books of account or accounting practices;
(xv) any material damage, destruction or loss of any
Asset, whether or not covered by insurance;
(xvi) the issuance, delivery or sale of any equity
securities by the Company, or alteration in terms of any outstanding
securities issued by the Company or any increase in the indebtedness
for borrowed money of the Company;
(xvii) the adoption of any plan of liquidation or
resolutions providing for the liquidation, dissolution, merger,
consolidation or other reorganization of the Company;
(xviii) the existence of any other event or condition
that, in any one case or in the aggregate, has been or might reasonably
be expected to have a Material Adverse Effect; or
(xix) an agreement to do any of the things described
in the preceding clauses (i) - (xviii) other than as expressly provided
for herein.
3.13. Material Contracts. Schedule 3.13 attached hereto sets
forth a complete and correct list of all the Material Contracts to
which the Company is a party. As used in this Agreement, "Material
Contracts" means:
(a) all contracts not made in the ordinary course of business;
(b) all leases or other agreements under which the Company is
a lessor or lessee of any Real Property or any machinery, equipment, vehicle or
other tangible personal property owned by a third party and used in the
Business, which entail annual payments, in the case of any such lease or
agreement, in excess of $2,000;
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(c) all options with respect to any property, real or
personal, whether the Company is the grantor or grantee thereunder;
(d) all distribution, franchise, license, technical
assistance, sales, commission, consulting, agency or advertising contracts
related to the Assets or the Business and that are not cancelable, without
payment of any kind, on 30 calendar days' notice;
(e) all mortgages, indentures, security agreements, pledges,
notes, loan agreements or guaranties in a principal amount (or with maximum
availability) in excess of $2,000;
(f) all contracts and agreements to which the Company is a
party and that are (i) outstanding contracts with officers, employees, agents,
consultants, advisors, sales personnel, sales representatives, distributors,
sales agents or dealers other than contracts that by their terms are cancelable
by the Company with notice of not more than 30 days and without cancellation
penalties or severance payments, in the case of any such contract, in excess of
$2,500, (ii) all collective bargaining agreements of the Company and (iii) all
pension, profit-sharing, bonus, retirement, stock option or employee benefit
plans or other similar plans or arrangements of the Company;
(g) any covenant not to compete or similar restriction on the
Company;
(h) any contract with the United States, state or local
government or any agency or department thereof, involving expenditures or
liabilities in excess of $2,000; or
(i) any contract or agreement providing for the receipt or
payment (whether the obligations are fixed or contingent) of $2,000 or more
after the date of this Agreement, including, without limitation, agreements
calling for penalties or payments upon voluntary termination or withdrawal by
the Company.
The Company has furnished or will furnish to Truck City or its representatives
true and correct copies of all Material Contracts prior to the Closing,
including all amendments and supplements thereto.
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3.14. Proprietary Rights.
(a) Schedule 3.14 lists the material patents, trademarks
(whether registered or unregistered), service marks, trade names, service names,
brand names, logos and copyrights (collectively, the "Proprietary Rights") for
the Company. Schedule 3.14 also sets forth: (i) for each patent, the number,
normal expiration date and subject matter for each country in which such patent
has been issued, or, if applicable, the application number, date of filing and
subject matter for each country, (ii) for each trademark, the application serial
number or registration number, the class of goods covered and the expiration
date for each country in which a trademark has been registered and (iii) for
each copyright, the number and date of filing for each country in which a
copyright has been filed. The Proprietary Rights listed in Schedule 3.14 are all
those used by the Company in connection with the Business or the Assets. True
and correct copies of all patents (including all pending applications) owned,
controlled, created or used by or on behalf of the Company or in which the
Company has any interest whatsoever have been provided to Truck City or its
representatives.
(b) the Company does not have any obligation to compensate any
person for the use of any such Proprietary Rights. the Company has not granted
to any person any license, option or other rights to use in any manner any of
Proprietary Rights, whether requiring the payment of royalties or not.
(c) the Company owns or has a valid right to use each of the
Proprietary Rights, and the Proprietary Rights will not cease to be valid rights
by reason of the execution, delivery and performance of this Agreement, the
Ancillary Agreements or the consummation of the transactions contemplated hereby
and thereby. All of the pending patent applications have been duly filed. The
Company has not received any notice of invalidity or infringement of any rights
of others with respect to such trademarks. The Company has taken all reasonable
and prudent steps to protect the Proprietary Rights from infringement by any
other person. No other person (i) has the right to use any trademarks of the
Company on the goods on which they are now being used either in identical form
or in such near resemblance thereto as to be likely, when applied to the goods
of any such person, to cause confusion with such trademarks or to cause a
mistake or to deceive, (ii) has notified the Company that it is claiming any
ownership of or right to use such Proprietary Rights, or (iii) to the best
knowledge of the Company, is infringing upon any such Proprietary Rights in
anyway. The Company's use of any Proprietary Rights does not conflict with,
infringe upon or otherwise violate the valid rights of any third party in or to
such Proprietary Rights, and no Action has been instituted against or notices
received by the Company that are presently outstanding, alleging that the
Company's use of the Proprietary Rights infringes upon or otherwise violates any
rights of a third party in or to such Proprietary Rights. There are not, and it
is reasonably expected that after the Closing there will not be, any
restrictions on the Company's right to sell products manufactured in connection
with the operation of the Business.
3.15. Labor Matters. The Company is not a party to any labor
agreement with respect to its employees with any labor organization, union,
group or association, and there are no employee unions (or any other similar
labor or employee organizations) under local statutes, custom or practice. The
Company has not experienced any attempt by organized labor or its
representatives to make it conform to demands of organized labor relating to its
employees or to
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enter into a binding agreement with organized labor that would cover the
employees of the Company. There is no labor strike or labor disturbance pending
or, to the best knowledge of the Company, threatened against the Company, nor is
any grievance currently being asserted, and the Company has not experienced a
work stoppage or other labor difficulty, and is not and has not engaged in any
unfair labor practice. Without limiting the foregoing, the Company is in
compliance with the Immigration Reform and Control Act of 1986 and maintains a
current Form I-9 as required by such Act, in the personnel file of each employee
hired after November 9, 1986.
3.16. Consents. No consent, approval, authorization, order,
filing, registration or qualification of or with any court, governmental
authority or third person is required to be made or obtained by the Company in
connection with the execution and delivery of this Agreement, the Ancillary
Agreements or the consummation by the Company of the transactions contemplated
herein and therein.
3.17. Employee Benefit Plans; Employment Agreements.
(a) Plans. Schedule 3.17 sets forth a true, complete and
accurate list of: (i) any and all severance or employment agreements with any
current or former member of management or other employee providing services to
or employed by the Company; (ii) any and all severance programs or policies
applicable to any such personnel; (iii) any and all plans or arrangements
relating to any current or former member of management or other employee
providing services to or employed by the Company containing change in control
provisions; (iv) any agreements, plans, policies or arrangements (including,
without limitation, collective bargaining agreements or consulting agreements)
established, maintained or contributed to by the Company for the benefit of any
current or former employee providing services to or employed by the Company,
including bonus, incentive compensation, stock ownership, stock option, stock
appreciation, stock purchase, phantom stock, vacation, retirement, insurance,
severance, supplemental unemployment, disability, death benefit,
hospitalization, medical, workers compensation, pension, profit-sharing or
deferred compensation plans; or any employee welfare and employee pension
benefit plans (as such terms are defined in Sections 3(1) and 3(2), respectively
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(singularly, "Employee Benefit Plan" and collectively, "Employee Benefit
Plans"); and (v) all plans that would be Employee Benefit Plans, except that
they have been terminated on or before the date hereof ("Terminated Employee
Benefit Plans").
(b) Pension and Welfare Benefit Plans. With respect to the
Employee Benefit Plans and Terminated Employee Benefit Plans, each as described
on Schedule 3.17:
(i) each Employee Benefit Plan is in compliance with the
requirements provided by any and all statutes, orders or
governmental rules or regulations currently in effect and
applicable to such Employee Benefit Plans, including but not
limited to ERISA and the Code, and each Employee Benefit Plan
has been administered in accordance with its terms;
(ii) each Employee Benefit Plan that is intended to be
qualified pursuant to Code Section 401(a) and Code Section
501(a) is so qualified and has received a
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favorable determination letter from the IRS covering the Tax
Reform Act of 1986, as amended, that such ERISA Plans are so
qualified and each trust established in connection with any
such plan is exempt from federal income taxation and nothing
(either in form or operation) has since occurred from the
date of the last favorable determination letter to cause the
loss of such qualification;
(iii) all required reports and disclosures (including
without limitation the IRS Form 5500 Annual Return/Report,
summary annual report and summary plan description) with
respect to each Employee Benefit Plan has been timely filed
and distributed;
(iv) all required contributions for all periods ending
prior to Closing (including periods from the first day of the
current plan year to Closing) will be made to such Employee
Benefit Plans prior to the Closing Date by the Company;
(v) all insurance premiums have been paid in full, subject
only to normal retrospective adjustments in the ordinary
course, with regard to such Employee Benefit Plan for policy
years or other applicable policy periods ending on or before
Closing;
(vi) the Company has not taken any action directly or
indirectly that obligates the Company to institute, modify or
change any Employee Benefit Plan, any change in the manner in
which contributions are made or the basis on which such
contributions are determined;
(vii) with respect to each Employee Benefit Plan, no
action, suit, grievance, arbitration, investigation, audit or
other manner of litigation, or claim (other than routine
claims for benefits made in the ordinary course of plan
administration for which plan administrative review procedures
have not been exhausted) is pending, threatened or imminent
against or with respect to such Employee Benefit Plans;
(viii) with respect to each such Employee Benefit Plan,
neither the Company, its affiliates, nor any fiduciary (as
defined in ERISA Section 3(21)) of any Employee Benefit Plan
have engaged in any prohibited transactions (as defined in
ERISA Section 406 or Code Section 4975); no penalty, fine,
tax, action, suit, grievance, arbitration, investigation,
audit, litigation or claim (other than routine claims for
benefits made in the ordinary course of plan administration
for which plan administrative review procedures have not been
exhausted) are pending, threatened or imminent against or with
respect to any Employee Benefit Plans, the Company, or any
fiduciary (as defined in ERISA Section 3(21)) of any such
Employee Benefit Plan (including without limitation any
action, suit, grievance, arbitration or other manner of
litigation, or claim regarding conduct which allegedly
interferes with the attainment of rights under such plans);
neither the Company, nor any fiduciary with respect to any
Employee Benefit Plan has any knowledge of any facts that
would give rise to or could give rise to any penalty, fine,
tax, action, suit, grievance, arbitration or other manner of
litigation, or claim; and the
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Company has not incurred any lien under Section 401(a)(29)
or any liability for any tax or civil penalty imposed by
Section 4971 or 4976 of the Code or Section 502 of ERISA and
no condition or set of circumstances exists that presents a
risk to the Company of incurring any such lien or liability;
(ix) no Employee Benefit Plan is (A) a "defined benefit"
plan (as defined in Section 3(35) of ERISA, nor was any
Terminated Employee Benefit Plan such a "defined benefit"
plan, (B) a "multiemployer plan" within the meaning of Section
3(37) of ERISA, (C) a "multiple employer" or a "multiple
employer welfare arrangement" within the meaning of Section
413(c) of the Code or Section 3(40) of ERISA, respectively, or
(D) a "welfare benefit fund" as defined in Section 419(e) of
the Code;
(x) except as set forth herein and on Schedule 3.17, none
of the Employee Benefit Plans has been completely or partially
terminated. Effective prior to the Closing Date, the Company
terminated the Southwest Virginia Truck Parts Retirement
Savings Plan and the Integrated Money Purchase Pension Plan
and Trust, and such terminations were in all respects in
compliance with applicable law;
(xi) no current or former employee of the Company will be
entitled to any payment, additional benefits or any
acceleration of the time of payment or vesting of any benefits
under any Employee Benefit Plan as a result of the
transactions contemplated by this Agreement (either alone or
in conjunction with any other event such as a termination of
employment) and no trustee under any "rabbi trust" or similar
arrangement in connection with any Employee Benefit Plan will
be entitled to payment as a result of the transactions
contemplated by this Agreement; and
(xii) no Employee Benefit Plan provides medical, life or
other welfare benefits (whether or not insured), with respect
to current or former employees after retirement or other
termination of service (other than coverage mandated by
applicable law). With respect to any contract or arrangement
with an insurance company providing funding under any Employee
Benefit Plan, there is no material liability for any
retroactive rate adjustment. Each Employee Benefit Plan that
is a "group health plan," as defined in Section 5000 of the
Code has been operated in accordance with Section 4980B of the
Code, Section 9801 and the secondary payor requirements of
Section 1862(b) of the Social Security Act.
3.18. Compliance with Environmental Laws.
(a) Definitions. The following terms, when used in this
Section 3.18, shall have the following meanings. Any of these terms may, unless
the context otherwise requires, used in the singular or the plural depending on
the reference.
(i) "The Company" for the purposes of this Section
3.18, shall include (A) the Company, (B) all partnerships, joint
ventures and other entities or
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organizations in which the Company was at any time or is a partner,
joint venturer, member or participant and (C) all predecessor or former
corporations, partnerships, joint ventures, organizations, businesses
or other entities, whether in existence as of the date hereof or at any
time prior to the date hereof, the assets or obligations of which have
been acquired or assumed by the Company or to which the Company has
succeeded.
(ii) "Release" shall mean and include any existing or
previously existing spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment or the workplace of any Hazardous
Substance or otherwise as defined in any Environmental Law.
(iii) "Hazardous Substance" shall mean any pollutant,
contaminant, chemical, waste and any toxic, infectious, carcinogenic,
reactive, corrosive, ignitable or flammable chemical or chemical
compound or hazardous substance, material or waste, whether solid,
liquid or gas, including, without limitation, any quantity of asbestos
in any form, urea formaldehyde, PCB's, radon gas, crude oil or any
fraction thereof, all forms of natural gas, petroleum products or
by-products or derivatives, radioactive substance or material,
pesticide waste waters, sludges, slag and any other substance, material
or waste that is subject to regulation, control or remediation under
any Environmental Laws.
(iv) "Environmental Laws" shall mean all laws,
statutes, regulations, rules, ordinances, by-laws, orders or
determinations of any governmental or judicial authority at the
federal, state or local level, whether existing as of the date hereof,
previously enforced, or subsequently enacted which regulate or relate
to the protection or clean-up of the environment, the use, treatment,
storage, transportation, generation, manufacture, processing,
distribution, handling or disposal of, or emission, discharge or other
release or threatened release of Hazardous Substances or otherwise
dangerous substances, wastes, pollution or materials (whether, gas,
liquid or solid), the preservation or protection of waterways,
groundwater, drinking water, air, wildlife, plants or other natural
resources, or the health and safety of persons or property, including,
without limitation, protection of the health and safety of employees.
Environmental Laws shall include, without limitation, the Federal
Insecticide, Fungicide and Rodenticide Act, Resource Conservation &
Recovery Act, Clean Water Act, Safe Drinking Water Act, Atomic Energy
Act, Occupational Safety and Health Act, Toxic Substances Control Act,
Clean Air Act, Comprehensive Environmental Response, Compensation and
Liability Act, Emergency Planning and Community Right-to-Know Act and
the Hazardous Materials Transportation Act.
(v) "Environmental Conditions" means the introduction
into the environment, whether or not yet discovered, of any Hazardous
Substance (whether or not upon any Facility or other property and
whether or not such pollution constituted at the time thereof a
violation of any Environmental Law as a result of any Release of any
kind whatsoever of any Hazardous Substance) as a result of which the
Company has or may become liable to any person or by reason of which
any Facility may suffer or be subjected to any lien or as a result of
which the Company or Truck City could incur any damage, loss, cost,
expense, claim, demand, order or liability to a third party (including,
without limitation, any governmental authority).
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(b) Notice of Violation. The Company has not received any
notice of alleged, actual or potential responsibility for, or any inquiry
concerning, and knows of no investigation regarding, (i) any Release or
threatened Release of any Hazardous Substance at the Facilities or (ii) an
alleged violation of or non-compliance with the conditions of any Permit
required under any Environmental Law or the provisions of any Environmental Law
at the Facilities. The Company has not received written notice of any other
claim, demand or Action by any individual or entity alleging any actual or
threatened injury or damage to any person, property, natural resource or the
environment arising from or relating to any Release or threatened Release of any
Hazardous Substances at, on, under, in, to or from any of the Facilities.
(c) Environmental Conditions. There are no present or past
Environmental Conditions.
(d) Environmental Audits or Assessments. True, complete and
correct copies of the written reports, and all parts thereof, including any
drafts of such reports that are in the possession or control of the Company, of
all environmental audits or assessments which have been conducted at any
Facility within the past five years, either by the Company or any attorney,
environmental consultant or engineer engaged for such purpose, have been
delivered to Truck City or its representatives and a list of all such reports,
audits and assessments and any other similar report, audit or assessment of
which the Company and the Existing Shareholders have knowledge is included in
Schedule 3.18 hereto.
(e) Indemnification Agreements. The Company is not a party,
whether as a direct signatory or as successor, assign or third party
beneficiary, or otherwise bound, to any lease or other contract (excluding
insurance policies disclosed on Schedule 3.21) under which the owner or lessee
of any Facility is obligated by or entitled to the benefits of directly or
indirectly, any representation, warranty, indemnification, covenant, restriction
or other undertaking concerning Environmental Conditions.
(f) Releases or Waivers. The Company has not released any
other person from any claim under any Environmental Law with respect to any
Facility or waived any rights concerning any Environmental Condition with
respect to any Facility.
(g) Notices, Warnings and Records. The Company has given all
notices and warnings, made all reports, and has kept and maintained all records
required by and in compliance with all Environmental Laws with respect to each
Facility.
(h) Compliance. The Company has not ever violated and is
presently in compliance with all Environmental Laws at each Facility.
(i) Hazardous Substances. The Company has not generated,
manufactured, refined, transported, treated, disposed, stored, handled,
transferred, produced or processed any Hazardous Substance at any Facility in
violation of Environmental Laws.
(j) Underground Storage Tanks. There are no underground
storage tanks at any Facility.
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(k) Asbestos Containing Material. There is no asbestos
containing material at any Facility that is in a condition that would require
abatement.
(l) Liens. No lien has been imposed on any Facility pursuant
to any Environmental Law.
3.19. Certain Business Relationships with the Company. No
beneficial owner of more than 5% of the Company's outstanding voting securities
has been involved in any business arrangement or relationship with the Company
within the past 12 months, and none of such shareholders owns any assets,
tangible or intangible, that are used in the Business.
3.20. Undisclosed Liabilities. The Company has no liabilities
or obligations, whether accrued, absolute, contingent or otherwise except (a) to
the extent reflected or reserved for on the unaudited balance sheet of the
Company at December 31, 1998, (b) liabilities or obligations incurred in the
normal and ordinary course of business of the Company since December 31, 1998,
(c) liabilities or obligations disclosed in Schedule 3.20 hereto and in the
other Schedules attached hereto or (d) liabilities or obligations disclosed
elsewhere in this Agreement.
3.21. Insurance. Schedule 3.21 contains a complete and
accurate list of all policies or binders of fire, liability, title, worker's
compensation, product liability and other forms of insurance (showing as to each
policy or binder the carrier, policy number, coverage limits, expiration dates,
annual premiums, a general description of the type of coverage provided, loss
experience history by line of coverage) maintained by the Company on (a) the
Business, (b) the Assets or (c) officers, consultants or employees providing
services to or employed by the Company at any time since December 31, 1993. All
insurance coverage applicable to the Company and to the Business and the Assets
is in full force and effect, insures the Company in reasonably sufficient
amounts against all risks usually insured against by persons operating similar
businesses or properties of similar size in the localities where such businesses
or properties are located, provides coverage as may be required by applicable
regulation and by any and all contracts to which the Company is a party and has
been issued by insurers of recognized responsibility. There is no default under
any such coverage nor has there been any failure to give notice or present any
claim under any such coverage in a due and timely fashion. There are no
outstanding unpaid premiums except in the ordinary course of business and no
notice of cancellation or nonrenewal of any such coverage has been received.
There are no provisions in such insurance policies for retroactive or
retrospective premium adjustments. All products liability, general liability and
workers' compensation insurance policies maintained by the Company have been
occurrence policies and not claims made policies. There are no outstanding
performance bonds covering or issued for the benefit of the Company. There are
no facts upon which an insurer might be justified in reducing coverage or
increasing premiums on existing policies or binders. No insurer has advised the
Company that it intends to reduce coverage, increase premiums or fail to renew
existing policy or binder.
3.22. Accounts Receivable. The accounts receivable set forth
on the unaudited balance sheet of the Company at December 31, 1998, and all
accounts receivable arising since the date of such balance sheet, represent bona
fide claims of the Company against debtors for
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sales, services performed or other charges arising on or before the date hereof,
and all the goods delivered and services performed which gave rise to said
accounts were delivered or performed in accordance with the applicable orders,
contracts or customer requirements. Said accounts receivable are subject to no
defenses, counterclaims or rights of setoff and are fully collectible in the
ordinary course of business without cost in collection efforts therefor, except
to the extent of the appropriate reserves for bad debts on accounts receivable
as set forth on the unaudited balance sheet of the Company at December 31, 1998
and, in the case of accounts receivable arising since the date of such balance
sheet, to the extent of a reasonable reserve rate for bad debts on accounts
receivable which is not greater than the rate reflected by the reserve for bad
debts on such balance sheet.
3.23. Inventory. Schedule 3.23 contains a complete and
accurate list of the addresses at which all inventory set forth on the unaudited
balance sheet of the Company at December 31, 1998 or arising since such date is
located. The inventory as set forth on the Balance Sheets or arising since the
date of such balance sheet was acquired and has been maintained in accordance
with the regular business practices of the Company, consists of new and unused
items of a quality and quantity usable or salable in the ordinary course of
business, and is valued at the lower of cost or market on a FIFO basis using
replacement cost. None of such inventory is obsolete, unusable, damaged or
unsalable in the ordinary course of business, except for such items of inventory
which have been written down to realizable market value, or for which adequate
reserves have been provided in such balance sheet.
3.24. Payments. Neither the Company nor any Existing
Stockholder has, directly or indirectly, paid or delivered any fee, commission
or other sum of money or item or property, however characterized, to any finder,
agent, client, customer, supplier, government official or other party, in the
United States or any other country, which is in any manner related to the
Business, Assets, or operations of the Company, which is, or may be with the
passage of time or discovery, illegal under any federal, state or local laws of
the United States (including, without limitation, the U.S. Foreign Corrupt
Practices' Act) or any other country having jurisdiction. The Company has not
participated, directly or indirectly, in any boycotts or other similar practices
affecting any of the actual or potential customers of the Company.
3.25. Customers, Distributors and Suppliers. Schedule 3.25
sets forth a complete and accurate list of the names and addresses of the ten
largest (in terms of dollar volume) (a) customers, distributors and other agents
and representatives of the Company during the year ended December 31, 1998,
showing the approximate total sales in dollars by the Company to such customer
during such fiscal year; and (b) suppliers to the Company during the year ended
December 31, 1998, showing the approximate total purchases in dollars by the
Company from such supplier during such fiscal year. Since December 31, 1998,
there has been no adverse change in the business relationship of the Company
with any customer, distributor or supplier named on Schedule 3.25. The Company
has not received any communication from any customer, distributor or supplier
named on Schedule 3.25 of any intention to terminate or materially reduce
purchases from or supplies to the Company.
3.26. Material Misstatements Or Omissions. No representations
or warranties by any Existing Shareholder in this Agreement, nor any document,
exhibit, statement, certificate or Schedule heretofore or hereinafter furnished
to Truck City or its representatives pursuant
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hereto, or in connection with the transactions contemplated hereby, including,
without limitation, the Schedules, contains or will contain any untrue statement
of a material fact, or omits or will omit to state any material fact necessary
to make the statements or facts contained therein not misleading.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF TRUCK CITY
Truck City represents and warrants to the Company and the
Existing Shareholders as follows:
4.1. Corporate Organization and Standing. Truck City is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
execute and deliver this Agreement and the Ancillary Agreements and to
consummate the transactions contemplated hereby and thereby.
4.2. Authorization. This Agreement has been, and the Ancillary
Agreements will be, duly authorized, executed and delivered by Truck City, and
this Agreement is, and the Ancillary Agreements will be, the legal, valid and
binding obligation of Truck City, enforceable against Truck City in accordance
with their terms.
4.3. No Conflict or Violation. Neither the execution and
delivery of this Agreement or the Ancillary Agreements nor the consummation of
the transactions contemplated hereby or thereby will (a) violate, conflict with
or result in or constitute a default under or result in the termination or the
acceleration of, or the creation in any party of any right (whether or not with
notice or lapse of time or both) to declare a default, accelerate, terminate,
modify or cancel any Contractual Obligation to which Truck City is a party or by
which it is bound or to which its assets are subject or result in the creation
of any lien or encumbrance upon any of said assets, (b) violate, conflict with
or result in a breach of or constitute a default under any provision of its
Certificate of Incorporation or Bylaws, (c) violate, conflict with or result in
a breach of or constitute a default under any judgment, order, decree, rule or
regulation of any court or governmental agency to which Truck City is subject or
(d) violate, conflict with or result in a breach of any applicable federal or
state rule or regulation.
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ARTICLE V.
POST-CLOSING COVENANTS
The Company, the Existing Shareholders and Truck City each
covenant with the other as follows:
5.1. Further Assurances. Upon the terms set forth herein, the
Parties agree, after the Closing, to (a) execute any documents, instruments or
conveyances of any kind that may be reasonably necessary or advisable to carry
out any of the transactions contemplated hereunder and (b) cooperate with each
other in connection with the foregoing (including, without limitation, any
document necessary to convey title to Truck City in and to any tangible
properties, real property improvements and personal property that are defined as
Excluded Assets in Annex A to this Agreement but that Truck City can demonstrate
are material to and used in the Business and are not primarily used by the
Company in businesses other than the Business).
5.2. Employee-Related Matters. Nothing herein is intended to
confer upon any employee of the Company any rights of any kind whatsoever under
or by reason of this Agreement, including, without limitation, any rights to or
of employment for a specified period or any other form of employment security.
Truck City shall not assume any obligation or liability for employment practices
or policies maintained by the Company with respect to the Company's employees.
Except as otherwise provided herein, Truck City shall have no obligation or
liability nor incur any cost or expense with respect to any claims, whether
arising before or after the Closing, by any employee or former employee of the
Company arising by reason of the sale or purchase of the Assets pursuant to this
Agreement or by reason of such employee or former employee's employment, or the
termination of his or her employment, by Truck City. Without limiting the
foregoing, any severance obligation arising by reason of the sale of the Assets
by the Company pursuant to this Agreement shall remain the sole liability of the
Company.
The Company shall (a) offer to all employees at the time of
the Closing the right to continue their coverage under the Company's group
health plan(s) (as defined in Section 5000(b)(1) of the Code), such offers to be
made in accordance with the continuation coverage requirements of Part 6 of
Subtitle B of Title I of ERISA and Section 4980B of the Code ("COBRA
continuation coverage"), and (b) provide COBRA continuation coverage to any
former employee of the Company (or eligible spouse or dependent of such person)
who became eligible for such COBRA continuation coverage as of or at any time
prior to Closing. The Company agrees that it shall continue in effect on and
after Closing for the maximum required period under ERISA Section 602(2) (but
without regard to ERISA Section 602(2)(B)) a group health plan or individual
medical insurance, plan, policy or arrangement for the purpose of providing
medical benefits to any employee (or eligible spouse or dependent of such
employee) who is eligible to elect or has elected COBRA continuation coverage
pursuant to the preceding sentence.
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ARTICLE VI.
CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS BY TRUCK CITY
The obligations of Truck City under this Agreement are subject
to the fulfillment prior to or at the Closing of each of the following
conditions, any one or more of which may be waived by Truck City:
6.1. No Injunctive Proceedings. No preliminary or permanent
injunction or other order (including a temporary restraining order) of any state
or federal court or other governmental agency that prevents the consummation of
the transactions that are the subject of this Agreement shall have been issued
and remain in effect (provided that Truck City has acted in accordance with the
requirements of Section 5.1 hereof).
6.2. Representations and Warranties. Except as otherwise
contemplated by this Agreement, all representations and warranties of the
Company and the Existing Shareholders contained in this Agreement shall be true
and correct in all material respects as of the Closing Date.
6.3. Performance of Agreements; Instruments of Transfer. The
Company and the Existing Shareholders shall have fully performed in all material
respects all obligations, agreements, conditions and commitments required to be
fulfilled by it pursuant to the terms hereof on or prior to the Closing Date and
shall have tendered to Truck City the documents, instruments and certificates
required by Articles II and VI hereof.
6.4. Compliance Certificate. The Company and the Existing
Shareholders each shall have delivered to Truck City or its representatives a
certificate, dated the Closing Date, executed on the Company's behalf by its
President or a Vice President, as to the fulfillment of the conditions set forth
in Sections 6.2 and 6.3 hereof.
6.5. Opinion of Counsel. Truck City shall have received the
opinion of Xxxxxxxxx, Xxxxx & Xxxxxx, counsel for the Company and the Existing
Shareholders, in the form set forth in Schedule 6.5 hereto.
6.6. Ancillary Agreements. The following agreements (the
"Ancillary Agreements") shall have been executed and delivered by all parties
thereto other than Truck City: (a) an escrow agreement (the "Escrow Agreement")
by and among Truck City, the Company and Chase Manhattan Bank and Trust Company,
National Association, as "Escrow Agent," substantially in the form attached
hereto as Exhibit F; and (b) a noncompetition agreement between Truck City and
the Company and Truck City and each of the Existing Shareholders, substantially
in the form attached hereto as Exhibit G.
6.7. Consents, Etc. All authorizations, consents or approvals
of any and all third parties and governmental regulatory authorities necessary
to be obtained prior to the Closing in connection with the consummation of the
Closing shall have been obtained and be in full force and effect, except where a
failure to obtain an authorization, consent or approval is a result of a breach
by Truck City. The waiting period applicable to the transactions contemplated
hereby under the HSR Act shall have terminated or expired.
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6.8. Nonforeign Affidavit. The Company shall furnish to Truck
City an affidavit, stating, under penalty of perjury, its United States taxpayer
identification number and that it is not a foreign person, pursuant to Section
1445(b)(2) of the Code.
ARTICLE VII.
CONDITIONS TO CONSUMMATION OF THE
TRANSACTIONS BY THE COMPANY AND
THE EXISTING SHAREHOLDERS
The obligations of the Company and the Existing Shareholders
under this Agreement are subject to the fulfillment prior to the Closing of each
of the following conditions, any one or more of which may be waived by the
Company and the Existing Shareholders:
7.1. No Injunctive Proceedings. No preliminary or permanent
injunction or other order (including a temporary restraining order) of any state
or federal court or other governmental agency that prevents the consummation of
the transactions that are the subject of this Agreement shall have been issued
and remain in effect (provided that the Company and the Existing Shareholders
shall have acted in accordance with the requirements of Section 5.1 hereof).
7.2. Representations and Warranties. Except as otherwise
contemplated by this Agreement, all representations and warranties of Truck City
contained in this Agreement shall be true and correct in all material respects
as of the Closing Date.
7.3. Performance of Agreements; Instruments of Transfer. Truck
City shall have fully performed in all material respects all obligations,
agreements, conditions and commitments required to be fulfilled by it pursuant
to the terms hereof on or prior to the Closing Date and shall have tendered to
the Company and the Existing Shareholders the documents, instruments and
certificates required by Articles II and VII hereof.
7.4. Compliance Certificate. Truck City shall have delivered
to the Company and the Existing Shareholders or their representatives a
certificate, dated the Closing Date, executed on its behalf by its President or
a Vice President, as to the fulfillment of the conditions set forth in Sections
7.2 and 7.3 hereof.
7.5. Ancillary Agreements. The Ancillary Agreements shall have
been duly executed and delivered by Truck City.
7.6. Consents; Etc. All authorizations, consents or approvals
of any and all third parties and governmental regulatory authorities necessary
to be obtained prior to the Closing in connection with the consummation of the
Closing shall have been obtained and be in full force and effect, except where a
failure to obtain an authorization, consent or approval is a result of a breach
by the Company or the Existing Shareholders.
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ARTICLE VIII.
ACTIONS BY THE PARTIES AFTER THE CLOSING; INDEMNIFICATION
8.1. Collection of Accounts Receivable and Letters of Credit.
At the Closing, Truck City will acquire hereunder the right and authority to
collect all receivables, letters of credit and other items that constitute a
part of the Assets, and the Company shall within 48 hours after receipt of any
payment in respect of any of the foregoing, properly endorse and deliver to
Truck City any letters of credit, documents, cash or checks or other
consideration received on account of or otherwise relating to any such
receivables, letters of credit or other items.
8.2. Assignability and Consents. Notwithstanding anything to
the contrary in this Agreement, this Agreement shall not constitute an agreement
to assign any order, contract, agreement, lease, commitment, license, franchise,
permit, authorization or concession (collectively, the "Assigned Agreements") if
an attempted assignment thereof, without the consent of another party thereto or
any governmental authority, would constitute a breach of any such Assigned
Agreement or in any way affect the rights of the Company thereunder. The Company
shall use its best efforts to obtain all consents, novations and waivers and to
resolve all impracticalities of assignments, novations or transfers necessary to
convey the Assigned Agreements to Truck City at the earliest practicable date.
If such consents, novations or waivers are not obtained, or if an attempted
assignment would be ineffective, the Company shall use its best efforts to
provide to Truck City the benefits of any such Assigned Agreement, shall
enforce, at Truck City's request and for Truck City's account, any rights of the
Company under such Assigned Agreement (including the right to elect, renew,
extend or terminate) and shall promptly pay to Truck City when received all
monies received by the Company under such Assigned Agreement. To the extent
Truck City is provided the benefit of any such Assigned Agreement, Truck City
shall perform or discharge, on behalf of the Company, the Company's obligations
and liabilities under each such Assigned Agreement in accordance with the
provisions thereof. This Section 8.2 shall not be construed to require Truck
City to assume any additional liability hereunder or to perform under or assume
any obligations with respect to the Assigned Agreements in excess of those
currently required by such Assigned Agreements. The Company shall use its best
efforts to ensure that all contracts entered into by the Company after the date
hereof are assignable to Truck City without the consent of the other party
thereto.
8.3. Trade Names. The Company shall, and shall cause its
affiliates to, as soon as reasonably practicable following the Closing Date,
cease to use any trade names, trademarks, services marks, logos, designs or
similar rights and interests included in the Assets, including the name
"Southwest Virginia Truck Parts" or any abbreviation or variation thereof (the
"Acquired Name"), in the operation of their business, including on any plant,
building or equipment or any stationery, business form, packaging, container,
sign or other property (real or personal) included in the Excluded Assets;
provided however, that the Company shall, within 14 days following the Closing,
prepare, execute and file appropriate documents with the Secretary of State of
the State of Virginia and all appropriate authorities where the Company is
qualified to do business to change the corporate names of the Company so that
they do not include any Acquired Name or any name confusingly similar thereto.
8.4. Indemnification by the Company and the Existing
Shareholders. Subject to the provisions of this Article VIII, the Company and
the Existing Shareholders will jointly and
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severally indemnify, defend and hold harmless Truck City and its controlling
persons, subsidiaries, officers, directors, employees, agents, successors and
assigns (such indemnified persons are collectively hereinafter referred to as
"Truck City's Indemnified Persons") from and against any and all loss,
liability, damage (excluding consequential, indirect special, exemplary and
punitive damages) or deficiency (including interest, penalties, judgments, costs
of preparation and investigation, and reasonable attorneys' fees) (collectively,
"Losses") that Truck City's Indemnified Persons suffer, sustain, incur or become
subject to arising out of or due to: (a) the Excluded Liabilities or the
Excluded Assets; (b) the nonfulfillment of any covenant, undertaking, agreement
or other obligation of the Company or the Existing Shareholders under this
Agreement, any Schedule hereto or any Ancillary Agreement, not otherwise waived
by Truck City; (c) any inaccuracy of any representation of the Company or any
Existing Shareholder in this Agreement, any Schedule hereto or any Ancillary
Agreement; or (d) the breach of any warranty of the Company or any Existing
Shareholder in this Agreement, any Schedule hereto or any Ancillary Agreement;
provided however, that the maximum aggregate liability of each of Xxxxxx X.
Xxxxxxxx and Xxxxxx X. Xxxxxx to indemnify Truck City's Indemnified Persons
shall not exceed, in either case, the pro rata portion of the Purchase Price
received by that Existing Shareholder. "Losses" as used herein is not limited to
matters asserted by third parties, but includes Losses incurred or sustained in
the absence of third party claims.
8.5. Indemnification by Truck City. Subject to the provisions
of this Article VIII, Truck City agrees to indemnify, defend and hold the
Company and the Existing Shareholders and their respective controlling persons,
stockholders, subsidiaries, officers, directors, employees, agents, successors
and assigns (such persons are hereinafter collectively referred to as "the
Company's Indemnified Persons"), harmless from and against any and all Losses
that the Company's Indemnified Persons may suffer, sustain, incur or become
subject to arising out of or due to: (a) the Assumed Liabilities or the Assets;
(b) the nonfulfillment of any covenant, undertaking, agreement or other
obligation of Truck City under this Agreement, any Schedule hereto or any
Ancillary Agreement, not otherwise waived by the Company or the Existing
Shareholders; (c) any inaccuracy of any representation of Truck City in this
Agreement, in any Schedule hereto or any Ancillary Agreement; or (d) the breach
of any warranty of Truck City in this Agreement or any Schedule hereto. Payment
is not a condition precedent to recovery of indemnification for Losses.
8.6. Survival of Representations, Warranties and Covenants.
The several representations, warranties and covenants of the Parties contained
in this Agreement or in any document delivered pursuant hereto and the Parties'
right to indemnity in accordance with this Article VIII shall survive the
Closing Date and shall remain in full force and effect for 18 months thereafter;
provided, however, that the representations and warranties set forth in Section
3.10 relating to tax matters, Section 3.17 relating to employee benefits matters
and Section 3.18 relating to environmental matters shall survive for the length
of the applicable statute of limitations.
8.7. Threshold. No Truck City's Indemnified Person or the
Company's Indemnified Person shall be entitled to any recovery in accordance
with this Article VIII unless and until the amount of such Losses suffered,
sustained or incurred by such party, or to which such party becomes subject, by
reason of such inaccuracy, breach or nonfulfillment exceeds $10,000 and then
only to the extent of such excess.
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8.8. Notice and Opportunity to Defend. If a claim for Losses
(a "Claim") is to be made by a party seeking indemnification hereunder, such
party seeking indemnification (the "Indemnitee") shall notify the party
obligated to provide indemnification (the "Indemnitor") promptly. If such event
involves (a) any claim or (b) the commencement of any action or proceeding by a
third person, the Indemnitee shall give the Indemnitor written notice of such
claim or the commencement of such action or proceeding. Delay or failure to so
notify the Indemnitor shall only relieve the Indemnitor of its obligations to
the extent, if at all, that it is prejudiced by reasons of such delay or
failure. The Indemnitor shall have a period of 30 days within which to respond
thereto. If the Indemnitor accepts responsibility or does not respond within
such 30-day period, then the Indemnitor shall be obligated to compromise or
defend, at its own expense and by counsel chosen by the Indemnitor, such matter,
and the Indemnitor shall provide the Indemnitee with such assurances as may be
reasonably required by the Indemnitee to assure that the Indemnitor will assume
and be responsible for the entire liability at issue, subject to the limitations
set forth in Sections 8.6 and 8.7 hereof. If the Indemnitor fails to assume the
defense of such matter within said 30-day period, the Indemnitee against which
such matter has been asserted will (upon delivering notice to such effect to the
Indemnitor) have the right to undertake, at the Indemnitor's cost and expense,
the defense, compromise or settlement of such matter on behalf of the
Indemnitee. The Indemnitee agrees to cooperate fully with the Indemnitor and its
counsel in the defense against any such asserted liability. In any event, the
Indemnitee shall have the right to participate at its own expense in the defense
of such asserted liability. Any compromise of such asserted liability by the
Indemnitor shall require the prior written consent of the Indemnitee, which
consent will not be unreasonably withheld and in the event the Indemnitee
defends any such asserted liability, then any compromise of such asserted
liability by the Indemnitee shall require the prior written consent of the
Indemnitor, which consent shall not be unreasonably withheld.
8.9. Indemnification Payments. At the Closing, Truck City will
deliver by wire transfer of immediately available funds 5% of the Estimated
Purchase Price to the Escrow Agent to be held by the Escrow Agent for 12 months
pursuant to the terms of the Escrow Agreement and to serve as partial security
for the indemnification obligations of the Existing Shareholders under this
Agreement. Any indemnification obligations of the Company and the Existing
Shareholders under this Article VIII shall be first satisfied by amounts held by
the Escrow Agent pursuant to the terms of the Escrow Agreement.
ARTICLE IX.
MISCELLANEOUS
9.1. Expenses. Except as otherwise set forth in this
Agreement, Truck City shall pay all costs and expenses incurred by it on its
behalf, and the Company shall pay all costs and expenses incurred by it or the
Existing Shareholders or on its or the Existing Shareholders' behalf, in
connection with this Agreement and the transactions contemplated hereby,
including fees and expenses of their financial consultants, accountants and
legal counsel.
9.2. Notices. All notices, requests, demands and other
communications given hereunder (collectively, "Notices") shall be in writing and
delivered personally or by overnight
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courier to the Parties at the following addresses or sent by telecopier or
telex, with confirmation received, to the telecopy specified below (except that
any notice to be provided to any Existing Shareholder shall be so provided at
the address and telecopy number as set forth on Annex B hereto):
If to the Company, at
Southwest Virginia Truck Parts, Inc.
U.S. 000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn.: C. Xxxxx Xxxxxx
Telecopy No.: (000) 000-0000
With a Copy to:
Xxxxxxxxx, Xxxxx & Xxxxxx
000 Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
If to Truck City:
c/o HDA Parts System, Inc.
000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
With a Copy to:
Brentwood Associates
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
And:
Xxxxx, Day, Xxxxxx & Xxxxx
00 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
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All Notices shall be deemed delivered when actually received
if delivered personally or by overnight courier, sent by telecopier or telex
(promptly confirmed in writing), addressed as set forth above. Each of the
Parties shall hereafter notify the other in accordance with this Section 9.2 of
any change of address or telecopy number to which notice is required to be
mailed.
9.3. Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, and by different parties hereto in
separate counterparts, each of which when executed shall be deemed an original,
but all of which taken together shall constitute one and the same instrument.
9.4. Entire Agreement. This Agreement and the Ancillary
Agreements constitute the entire agreement of the Parties with respect to the
subject matter hereof and supersede all prior negotiations, agreements and
understandings, whether written or oral, of the Parties.
9.5. Headings. The headings contained in this Agreement and in
the Schedules and Exhibits hereto are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
9.6. Assignment; Amendment of Agreement. This Agreement shall
be binding upon the respective successors and assigns of the Parties hereto.
This Agreement may not be assigned by any Party hereto without the prior written
consent of the other Party hereto. This Agreement may be amended only by written
agreement of the Parties hereto, duly executed and delivered by an authorized
representative of each of the Parties hereto.
9.7. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Illinois applicable to contracts made in that State, without giving effect to
the conflicts of laws principles thereof.
9.8. Further Assurances. Each Party agrees that it will
execute and deliver, or cause to be executed and delivered, on or after the date
of this Agreement, all such other instruments and will take all reasonable
actions as may be necessary in order to consummate the transactions contemplated
hereby, and to effectuate the provisions and purposes hereof.
9.9. No Third-Party Rights. This Agreement is not intended,
and shall not be construed, to create any rights in any parties other than Truck
City, the Company and the Existing Shareholders, and no person shall assert any
rights as third-party beneficiary hereunder.
9.10. Non-Waiver. The failure in any one or more instances of
a Party hereto to insist upon performance of any of the terms, covenants or
conditions of this Agreement, to exercise any right or privilege in this
Agreement conferred, or the waiver by said Party of any breach of any of the
terms, covenants or conditions of this Agreement shall not be construed as a
subsequent waiver of any such terms, covenants, conditions, rights or
privileges, but the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred.
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9.11. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Agreement so as to affect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
9.12. Incorporation of Exhibits and Schedules. The Exhibits
and Schedules hereto are incorporated into this Agreement and shall be deemed a
part hereof as if set forth herein in full. References herein to "this
Agreement" and the words "herein," "hereof" and words of similar import refer to
this Agreement (including its Exhibits and Schedules) as an entirety. In the
event of any conflict between the provisions of this Agreement and any such
Exhibit or Schedule, the provisions of this Agreement shall control.
9.13. Knowledge. As used herein, to the "knowledge" or "best
knowledge" or similar phrase includes (a) actual knowledge, after reasonable
inquiry, of any officer, director or shareholder of the Company and any employee
of the Company whose job duties include the supervision of the subject matter in
question and (b) such knowledge as would have been obtained by any of the
foregoing individuals after inquiring of the appropriate personnel and after
conducting, or having had conducted by such appropriate personnel, a diligent
search of files, computer records and other available data.
(signature page follows)
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IN WITNESS WHEREOF, the Parties have duly executed and
delivered this Agreement as of the day and year first above written.
TRUCK CITY PARTS, INC.
By: /s/ XXXX X. XXXXXX
----------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------------
Title: Vice President, Treasurer & Secretary
-------------------------------------
SOUTHWEST VIRGINIA TRUCK PARTS, INC.
By: /s/ C. XXXXX XXXXXX
----------------------------------------
Name: C. Xxxxx Xxxxxx
--------------------------------------
Title: Secretary/Treasurer
-------------------------------------
/s/ C. XXXXX XXXXXX
-------------------------------------------
C. Xxxxx Xxxxxx
/s/ XXXX X. XXXXXX
-------------------------------------------
Xxxx X. Xxxxxx
/s/ XXXXXX X. XXXXXX
-------------------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXXX X. XXXXXXXX
-------------------------------------------
Xxxxxx X. Xxxxxxxx
S-1
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ANNEX A
"Assets" shall mean all of the right, title and interest in and to the
business, properties, assets and rights of any kind, whether tangible or
intangible, real or personal and constituting, or used or useful in connection
with, or related to, the Business and in which the Company has any interest on
the Closing Date and reflected on the Closing Balance Sheet including the value
of the Company's investment in stock of HD America and including the rights,
titles and interests of Xxxxxx set forth on Schedule I to this Annex A;
provided, however, that the following rights, titles and interests of the
Company shall be excluded from the definition of Assets (the "Excluded Assets"):
(a) all cash, other than cash on hand at the Closing;
(b) all insurance policies and proceeds and rights arising out
of such policies relating to the Excluded Assets;
(c) all records prepared in connection with the sale of the
Business (including bids from third parties);
(d) all rights (including Tax and other refunds and claims
thereto) relating to the Excluded Liabilities;
(e) all nonassignable Licenses and Permits; and
(f) all amounts due to the Company under the shareholder loan
reflected on the balance sheet as a related-party receivable.
A-1
38
ANNEX B
Xxxx X. Xxxxxx X. Xxxxx Xxxxxx
00000 Xxxxxxxxxx Xxxx 00000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 Xxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxx
00000 Xxxxxxxxxx Xxxx 00000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000 Xxxxxxxx, Xxxxxxxx 00000
B-1