Exhibit 10.1

 

EXECUTION VERSION

 

 

 

 

 

 

 

 

PURCHASE AGREEMENT

 

dated as of May 25, 2017

 

by and among

 

ESTENSON LOGISTICS, LLC,

 

a Nevada limited liability company,

 

ESTENSON LOGISTICS, LLC,

 

a Delaware limited liability company,

 

TRULINE CORPORATION,

 

a Nevada corporation (solely for purposes of Sections 3.2, 5.5(a), 15.5 and
15.6),

 

THE EQUITYHOLDERS NAMED HEREIN

 

and

 

HUB GROUP TRUCKING, INC.

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I Definitions 1 1.1   Previously Defined Terms 1 1.2   Definitions 1
1.3   Interpretation 16 ARTICLE II Purchase and Sale, Purchase Price, Allocation
and Other Related Matters 17 2.1   Purchase and Sale 17 2.2   Purchase Price 17
2.3   Estimated Purchase Price 18 2.4   Payment of the Purchase Price 18
2.5   Earnout 19 2.6   Closing Balance Sheet 24 2.7   Purchase Price Settlement
25 2.8   Indemnification Escrow Funds 25 2.9   Transfer Taxes and Vehicle
Registration Fees 25 2.10   Allocation 26 2.11   Withholding 26 ARTICLE III
Closing and Closing Date Deliveries 26 3.1   Closing 26 3.2   Closing Deliveries
by Seller 26 3.3   Closing Deliveries by Purchaser 28 3.4   Cooperation 29
ARTICLE IV Pre-Closing Filings 29 4.1   Government Filings 29 ARTICLE V
Pre-Closing Covenants 31 5.1   Due Diligence Review 31 5.2   Maintenance of
Business and Notice of Changes 31 5.3   Pending Closing 31 5.4   Consents 33
5.5   Commercially Reasonable Efforts to Close 33 ARTICLE VI Financial
Statements; Disclosure Schedule 34 6.1   Pre-Signing Deliveries 34 ARTICLE VII
Representations and Warranties of Seller 34 7.1   Due Organization; Equity
Interests 34 7.2   Authority 35

 

 i

 

7.3   No Violations and Consents 35 7.4   Brokers 36 7.5   Required Assets 36
7.6   Related Party Transactions 36 7.7   Title to Purchased Assets 36
7.8   Condition of Assets 37 7.9   Real Estate 37 7.10   Litigation and
Compliance with Laws 39 7.11   Intellectual Property 39 7.12   Contracts 40
7.13   Financial Statements and Related Matters 42 7.14   Changes Since the Most
Recent Annual Balance Sheet Date 43 7.15   Insurance 43 7.16   Licenses and
Permits 43 7.17   Environmental Matters 44 7.18   Employee Benefit Plans 45
7.19   Taxes 48 7.20   Suppliers; Customers 49 7.21   No Illegal Payments 50
7.22   Solvency 51 7.23   Owner-Operators 51 ARTICLE VIII Representations and
Warranties of Purchaser 51 8.1   Due Incorporation 51 8.2   Authority 51
8.3   No Violations 52 8.4   Brokers 52 8.5   Funds Available 52 ARTICLE IX
Conditions to Closing Applicable to Purchaser 52 9.1   No Termination 52
9.2   Bring-Down of Seller’s Warranties and Covenants 52 9.3   No Material
Adverse Change 52 9.4   Pending Actions 52 9.5   Required Contract Consents 53
9.6   No Order; HSR Act 53 9.7   Required Permits 53 9.8   All Necessary
Documents 53 ARTICLE X Conditions to Closing Applicable to Seller 53 10.1   No
Termination 53 10.2   Bring-Down of Purchaser Warranties and Covenants 53
10.3   Pending Actions 54 10.4   No Order; HSR Act 54

 

 ii

 

10.5   All Necessary Documents 54 ARTICLE XI Termination 54 11.1   Termination
54 11.2   Effect of Termination 54 ARTICLE XII Indemnification 55
12.1   Indemnification by Seller 55 12.2   Indemnification by Purchaser 55
12.3   Claim Procedure/Notice of Claim 56 12.4   Survival of Representations,
Warranties and Covenants; Determination of Adverse Consequences 58
12.5   Limitations on Indemnification Obligations 59 12.6   Right of Set-Off 60
12.7   Source of Recovery 60 12.8   Exclusive Remedy. 60 ARTICLE XIII
Confidentiality 61 13.1   Confidentiality of Materials 61 13.2   Remedy 61
ARTICLE XIV Employee Matters 62 14.1   Transferred Employees 62 14.2   Workers’
Compensation 62 14.3   Benefit Plans and Claims 62 14.4   401(k) Plan 64
14.5   Adoption of Collective Bargaining Agreements 64 14.6   ERISA Section 4204
64 14.8   No Third Party Beneficiaries 65 ARTICLE XV Certain Other Agreements 66
15.1   Post-Closing Access to Records 66 15.2   Consents Not Obtained at Closing
66 15.3   Avoidance of Double Withholding Taxes 67 15.4   Bulk Sale Waiver and
Indemnity 67 15.5   Non-Competition; Non-Solicitation 67 15.6   Use of Estenson
Logistics Name 68 15.7   Equityholders’ Guarantee 68 15.8   Taxes 68
15.9   Seller’s Existence 69 15.10   Guarantees 70 ARTICLE XVI Miscellaneous 70
16.1   Cost and Expenses 70 16.2   Entire Agreement 70

 

 iii

 

16.3   Counterparts 70 16.4   Assignment, Successors and Assigns 70
16.5   Savings Clause 71 16.6   Headings 71 16.7   Risk of Loss 71
16.8   Governing Law 71 16.9   Press Releases and Public Announcements 71
16.10   U.S. Dollars 71 16.11   Notices 71 16.12   SUBMISSION TO JURISDICTION;
VENUE 73 16.13   WAIVER OF JURY TRIAL 73 16.14   No Third-Party Beneficiary 73
16.15   Disclosures 73 16.16   Fees and Expenses 73 16.17   Equityholders’
Obligations 74

 iv

 

Exhibit Index

 

Exhibit Description Section
Reference A Earnout Payments 2.5 B Form of Employment and Non-Compete Agreement
3.2(n) C Purchase Price Allocation 2.10 D Form of Bill of Sale 3.2(a) E Form of
Landlord Consent and Estoppel Certificate 3.2(k) F Form of Equityholder-Owned
Facility Lease 3.2(l) G Form of Non-Disturbance Agreement 3.2(m) H Form of
Assumption Agreement 3.2(b) I Form of Escrow Agreement Definitions J Form of
Transition Services Agreement Definitions K Form of Consent to Assignment of
Truline Carrier/Broker Agreement 3.2(u)

 v

 

Disclosure Schedule Index

 

 

 

Section 5.3 -  Pending Closing Section 7.1(a) -  Foreign Qualifications Section
7.1(c) - Equityholders Section 7.1(d) - Company Equity Interests Section 7.1(e)
-  Subsidiaries Section 7.3 - Required Consents and Approvals  Section 7.6 -
Related Party Transactions Section 7.7 - Personal Property Section 7.8 -
Condition of Assets Section 7.9 - Leased Real Property and Licensed Real
Property Section 7.10(a) - Litigation and Compliance with Laws Section 7.10(c) -
Labor Section 7.10(e) - Cargo Losses Section 7.11 - Intellectual Property
Section 7.11(c) - Intellectual Property Infringement Section 7.12 - Contracts
Section 7.13(a) Financial Statements and Related Matters Section 7.13(e) -
Indebtedness Section 7.14 - Changes Since the Most Recent Annual Balance Sheet
Date Section 7.15 - Insurance Section 7.16 -  Licenses and Permits Section
7.17(a) - Environmental Matters Section 7.17(d) - Storage Tanks Section 7.17(e)
- Environmental Reports Section 7.17(h) - Environmental Compliance Section 7.18
-  Employee Benefits Section 7.18(c) - Multiemployer Plans Section 7.20(a) -
Suppliers Section 7.20(b) - Customers

 

 

 

 

 

Schedule Index

 

 

Schedule 1.2(a) - Equipment Notes Schedule 1.2(b) - Equipment Note Permitted
Liens Schedule 1.2(c) - Employee Incentive Agreements Schedule 2.1 - Certain
Retained Assets Schedule 2.3(b) - Adjustment Principles Schedule 2.5(f) - Loss
Rate Methodologies Schedule 3.2(k) - Landlord Consent and Estoppel Certificate
Leases Schedule 4.1 - Government Permit Filings

 

 

 vi

 

Schedule 8.3 - Purchaser No Violations Schedule 9.5 -  Certain Required Consents
and Approvals Schedule 14.3(a) - Assumed Benefit Plans Schedule 14.2 - Workers’
Compensation Schedule 14.5 - Assumed CBAs Schedule 15.5 - Truline Operations
Schedule 15.10 - Guarantees

 

 

 vii

 

PURCHASE AGREEMENT

 

This Purchase Agreement is made and entered into as of May 25, 2017 (this
“Agreement”) by and among HUB GROUP TRUCKING, INC., a Delaware corporation
(“Purchaser”), ESTENSON LOGISTICS, LLC, a Nevada limited liability company
(“Seller”), ESTENSON LOGISTICS, LLC, a Delaware limited liability company (the
“Company” and together with Seller, the “Company Entities”), TIMOTHY J.
ESTENSON, an individual (“Mr. Estenson”), TIMOTHY J. ESTENSON AND TRACI M.
ESTENSON, TRUSTEES OF THE Timothy J. Estenson and Traci M. Estenson Trust, dated
February 25, 2003 (“Estenson Trust”), PAUL A. TRUMAN, an individual (“Mr.
Truman”), The Paul A. and Kristen Truman Living Trust 2009, dated August 6, 2009
(“Truman Trust” and together with Mr. Estenson, Estenson Trust and Mr. Truman,
the “Equityholders”), and solely for purposes of Sections 3.2, 5.5(a), 15.5 and
15.6, Truline Corporation, a Nevada corporation (“Truline”).

 

RECITALS:

 

A.       Seller is engaged in the transportation of goods in interstate and
intrastate commerce as a common carrier and contract carrier (the “Business”).

 

B.       The Equityholders own, beneficially and of record, all of the
outstanding limited liability membership interests of Seller.

 

C.       Prior to the execution of this Agreement and in preparation for the
Closing, Seller formed the Company and Seller received 100% of the outstanding
limited liability membership interests of the Company (the “Equity Interests”),
resulting in the Company becoming a wholly-owned subsidiary of Seller.

 

NOW, THEREFORE, in consideration of the foregoing recitals, the representations,
warranties and covenants set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

ARTICLE I
Definitions

 

1.1        Previously Defined Terms. Each term defined in the first paragraph or
Recitals shall have the meaning set forth above whenever used herein, unless
otherwise expressly provided or unless the context clearly requires otherwise.

 

1.2        Definitions. Whenever used herein, the following terms shall have the
meanings set forth below unless otherwise expressly provided or unless the
context clearly requires otherwise:

 

“Accounts Receivable” - As defined in clause (i) of the definition of Purchased
Assets.

 

“Adjustment Principles” - As defined in Section 2.3(b).

 

 

 

“Adjustment Report” - As defined in Section 2.6(b).

 

“Adverse Consequences” means all actions, suits, proceedings, hearings,
investigations, claims, demands, Orders, damages, dues, penalties, fines, costs,
amounts paid in settlement, Liabilities, Taxes, interest, losses, expenses and
fees, including all reasonable accounting, consultant and attorneys’ fees and
court costs, costs of expert witnesses and other expenses of litigation;
provided, however, “Adverse Consequences” shall not include any punitive damages
(other than any such damages sought from an Indemnified Party by a third party).

 

“Affiliate” means a Person which, directly or indirectly, is controlled by,
controls, or is under common control with, another Person. As used in the
preceding sentence, “control” shall mean and include (i) the ownership of more
than 50% of the voting securities or other voting interest of any Person, or
(ii) the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. With respect to any
individual, the immediate family members thereof shall be deemed Affiliates of
such individual.

 

“Affiliate Receivables” - As defined in clause (iii) of the definition of
Retained Assets.

 

“Alternative Proposal” - As defined in Section 5.3(n).

 

“Annual Earnout Payment” means, for any Earnout Period, an amount equal to the
Annual Earnout Payment indicated on Exhibit A for such Earnout Period, subject
to the provisions of Section 2.5(a)(iii) regarding “Catch-Up Payments”.

 

“Annual Financial Statements” - As defined in Section 6.1(a).

 

“Assumed Benefit Plans” – As defined in Section 14.3(a).

 

“Assumed Equipment Note Debt” - As defined in Section 2.4(f).

 

“Assumed Liabilities” means only the following obligations and liabilities of
Seller relating to the Business:

 

(a)                Seller’s trade and other normal operating payables and
accrued expenses incurred in the Ordinary Course (including payroll expenses for
the Transferred Employees), but only to the extent reflected or reserved for on
the Final Closing Balance Sheet as Current Liabilities and only to the extent of
the monetary amount of such payables so reflected;

 

(b)               the Assumed Equipment Note Debt, but only to the extent
included in the calculation of the Final Assumed Equipment Note Debt;

 

(c)                the obligations and liabilities of Seller arising after the
Closing Date under the Contracts and Permits included in the Purchased Assets;
provided, however, the Company is not assuming any Liabilities of Seller in
respect of a breach of or default under any such Contracts or Permits; and

 

2 

 

(d)               any liability for Assumed Taxes.

 

“Assumed Taxes” means, to the extent such Tax was included as a Current
Liability in the computation of the Final Net Working Capital, any Liability (i)
for real or personal property Taxes with respect to the Purchased Assets that
are due and payable by the Company after the Closing Date (without penalty or
interest) and which are attributable to a Pre-Closing Tax Period; and (ii) for
the employer’s portion of any employment Taxes that are due and payable after
the Closing Date by the Company and which are attributable to wages to a
Transferred Employee for services performed on or prior to the Closing Date. For
avoidance of doubt, no Transfer Tax shall be an Assumed Tax and Transfer Taxes
shall be governed by Section 2.9.

 

“Assumption Agreement” - As defined in Section 3.2(b).

 

“Base Purchase Price” - As defined in Section 2.2(a).

 

“Benefit Plans” - As defined in Section 7.18(b).

 

“Bill of Sale” - As defined in Section 3.2(a).

 

“Business” – As defined in Recital A.

 

“Business Day” means any day other than a Saturday or Sunday or other day on
which banks in Chicago, Illinois or Phoenix, Arizona are authorized or required
to be closed.

 

“Business EBITDA” means, for any Earnout Period, the Pre-Adjusted Business
EBITDA after giving effect to the Corporate Administrative Charge Adjustment.

 

“Business EBITDA Shortfall” - As defined in Section 2.5(b)(ii).

 

“Cap” - As defined in Section 12.5(b).

 

“Catch-up Payment” - As defined Section 2.5(a)(iii)(A).

 

“Claim Notice” - As defined in Section 12.3(a).

 

“Claimed Amount” - As defined in Section 12.3(a).

 

“Closing” - As defined in Section 3.1.

 

“Closing Date” - As defined in Section 3.1.

 

“Closing Statement” - As defined in Section 2.6(a).

 

“COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Code Section 4980B.

 

“Code” means the Internal Revenue Code of 1986 and the rules and regulations
promulgated thereunder.

 

3 

 

“Company Benefit Plans” – As defined in Section 14.3(b).

 

“Contract” means, with respect to any Person, any contract, agreement, deed,
mortgage, lease, license, commitment, arrangement or undertaking, written or
oral, or other document or instrument to which or by which such Person is a
party or otherwise subject or bound or to which or by which any asset, property
or right of such Person is subject or bound.

 

“Contribution Period” - As defined in Section 14.6(b).

 

“Controlling Party” - As defined in Section 12.3(d).

 

“Corporate Administrative Charge Adjustment” means, for any Earnout Period, a
charge for services previously provided by third parties to the Business prior
to the Closing and which following the Closing are provided to the Business by
Purchaser or any of Purchaser’s Affiliates, including legal services, accounting
services, information technology services and telecommunications services; it
being agreed that, for any Earnout Period, the Corporate Administrative Charge
Adjustment shall be deducted from Pre-Adjusted Business EBITDA for purposes of
determining Business EBITDA.

 

“Current Assets” means Seller’s Accounts Receivable, Inventory, Prepaids and
Payroll Assets; provided, that Current Assets does not include any of the
following: (a) interest receivable, (b) prepaid insurance, (c) any Retained
Assets or (d) any claims for Tax refunds or other assets relating to Taxes (or
any prepaids relating to Taxes (other than Prepaids relating to permits,
authority, plates and licenses, which are included)).

 

“Current Liabilities” means those liabilities of Seller that constitute trade
and normal operating payables and expenses incurred in the Ordinary Course,
including payroll expenses for the Transferred Employees, drivers’ escrow,
drivers’ savings and accrued vacation pay; provided, that Current Liabilities
does not include any claims payable or other Retained Liabilities or any
liability relating to income Taxes (including deferred income Tax items).

 

“Darigold Indemnifications” - As defined in Section 14.6(e).

 

“Disclosure Schedule” - As defined in Section 6.1(c).

 

“DOJ” means the Antitrust Division of the U.S. Department of Justice.

 

“Drop-Down Transaction” - As defined in Section 2.1(a).

 

“Earnout Adjustment Report” - As defined in Section 2.5(c).

 

“Earnout Payment” - As defined in Section 2.5(a)(i).

 

“Earnout Period” - As defined in Section 2.5(a)(i).

 

“Earnout Statement” - As defined in Section 2.5(b).

 

4 

 

“Employee Incentive Agreements” means, collectively, the Employee Incentive
Agreements to be entered into prior to the Closing between Seller and each of
the individuals identified on Schedule 1.2(c), in form and substance
satisfactory to Purchaser.

 

“Employment and Non-Compete Agreement” means an employment agreement to be
entered into in connection with the Closing between the Company and Mr.
Estenson, substantially in the form of Exhibit B.

 

“Environmental Claim” means any and all Adverse Consequences (including
expenditures for investigation and remediation) incurred by reason of the
presence, Release, threatened Release, handling or transportation of Hazardous
Materials or otherwise related to a violation or alleged violation of
Environmental Laws.

 

“Environmental Laws” means any and all Laws relating to: (i) emissions,
discharges, spills, Releases or threatened Releases of Hazardous Materials; (ii)
the use, generation, treatment, storage, disposal, handling, manufacturing,
transportation or shipment of Hazardous Materials; (iii) the regulation of
storage tanks; or (iv) otherwise relating to pollution or the protection of
human health, safety or the environment, including the following statutes as now
written and amended, and as amended hereafter, including any and all regulations
promulgated thereunder and any and all state and local counterparts: the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., the Federal Water Pollution Control Act, 33 U.S.C. §1251
et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Toxic Substances
Control Act, 15 U.S.C. §2601 et seq., the Solid Waste Disposal Act, 42 U.S.C.
§6901 et seq., the Emergency Planning and Community Right-to-Know Act of 1986,
42 U.S.C. §11001 et seq., the Safe Drinking Water Act, 42 U.S.C. §300f et seq.,
the California Health and Safety Code, Division 26 and Public Resources Code,
Divisions 13, 13.5, and 34, and California Code of Regulations Title 13,
Division 3 and Title 17, Division 3.

 

“Equipment Note Debt” means the Indebtedness of Seller, as of the Closing, under
the promissory notes identified on Schedule 1.2(a).

 

“Equityholder-Owned Facilities” means the facility identified on Exhibit F,
which is owned by an Equityholder (or an Affiliate thereof (other than Seller or
the Company)) and leased to Seller.

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and the rules
and regulations promulgated thereunder.

 

“ERISA Affiliate” means, with respect to any Person, each corporation, trade or
business that is, along with such Person, part of the controlled group of
corporations, trades or businesses under common control within the meaning of
sections 414(b), (c), (m) or (o) of the Code.

 

“Escrow Agent” means Bank of America, N.A.

 

5 

 

“Escrow Agreement” means the Escrow Agreement to be entered into on the Closing
Date among the Escrow Agent, Purchaser and Seller, substantially in the form of
Exhibit I.

 

“Estimated Assumed Equipment Note Debt” - As defined in Section 2.3(a).

 

“Estimated Closing Cash Purchase Price” means an amount equal to (i) the Base
Purchase Price, (ii) plus the amount, if any, by which the Estimated Net Working
Capital exceeds the Target Net Working Capital or minus the amount, if any, by
which the Estimated Net Working Capital is less than the Target Net Working
Capital, (iii) plus the Estimated Net Capital Expenditure Amount, (iv) minus the
Estimated Assumed Equipment Note Debt.

 

“Estimated Net Capital Expenditure Amount” - As defined in Section 2.3(a).

 

“Estimated Net Working Capital” - As defined in Section 2.3(a).

 

“Excess Business EBITDA” - As defined in Section 2.5(a)(iii).

 

“Facility Lease” - As defined in Section 3.2(l).

 

“FCPA” – As defined in Section 7.21.

 

“Final Assumed Equipment Note Debt” - As defined in Section 2.6(a).

 

“Final Closing Balance Sheet” - As defined in Section 2.6(d).

 

“Final Closing Cash Purchase Price” - As defined in Section 2.2(a).

 

“Final Net Capital Expenditure Amount” means the Net Capital Expenditure Amount,
as finally determined pursuant to Section 2.6.

 

“Final Net Capital Expenditure Amount Calculation” - As defined in Section
2.6(a).

 

“Final Net Working Capital” means the Net Working Capital, as finally determined
pursuant to Section 2.6.

 

“Final Net Working Capital Calculation” - As defined in Section 2.6(a).

 

“Financial Statements” means the Annual Financial Statements, the Interim
Financial Statements and any and all other financial statements delivered to
Purchaser pursuant to Section 5.3(m).

 

“First Earnout Period” - As defined in Section 2.5(a).

 

“FTC” means the U.S. Federal Trade Commission.

 

“GAAP” means United States generally accepted accounting principles as in effect
from time to time.

 

6 

 

“Governmental Authority” means the government of the United States or any
foreign country or any state or political subdivision thereof and any entity,
body or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including
quasi-governmental entities established to perform such functions, or any
arbitrator.

 

“Guarantees” - As defined in Section 15.10.

 

“Hazardous Material” means (i) all substances, wastes, pollutants, contaminants
and materials (collectively, “Substances”) regulated, or defined or designated
as hazardous, extremely or imminently hazardous, dangerous or toxic, under
Environmental Laws; (ii) all Substances with respect to which any Governmental
Authority otherwise requires environmental investigation, monitoring, reporting,
or remediation; (iii) petroleum and petroleum products and by products,
including crude oil and any fractions thereof; (iv) natural gas, synthetic gas,
and any mixtures thereof; and (v) radon, radioactive substances, asbestos, urea
formaldehyde and polychlorinated biphenyls (“PCBs”).

 

“Indebtedness” means all obligations and/or indebtedness of Seller, as of the
time of determination: (i) for borrowed money or issued in substitution for, or
exchange of, borrowed money (including the Equipment Note Debt (whether Assumed
Equipment Note Debt or Unassumed Equipment Note Debt)); (ii) evidenced by a
note, bond, debenture or other debt security; (iii) secured by a Lien on any
Purchased Assets or the Equity Interests; (iv) with respect to any capital
leases; (v) under letters of credit, bankers’ acceptances or similar
instruments; (vi) for deferred purchase price (whether for property or
services); (vii) under any derivative, swap or hedging agreements; (viii) under
pension plans for the underfunding thereof; (ix) for deferred compensation; (x)
for severance and any related compensation and payroll expenses; (xi) for unpaid
litigation or settlement obligations or related expenses; (xii) owed to any
Equityholder or any Affiliate of any Equityholder; (xiii) under guarantees of
the types of obligations and/or indebtedness referred to above; and/or (xiv) for
accrued interest, prepayment premiums or penalties or expenses related to any of
the foregoing. “Indebtedness” shall also include all obligations and/or
indebtedness of any Equityholder, as of the time of determination, secured by a
Lien on any Purchased Assets, the Equity Interests or the equity interests of
Seller.

 

“Indemnification Escrow Account” means the account established by the Escrow
Agent pursuant to the Escrow Agreement to hold the Indemnification Escrow
Amount.

 

“Indemnification Escrow Amount” means Four Million Dollars ($4,000,000).

 

“Indemnification Escrow Fund Release Date” means the second (2nd) Business Day
after the eighteen (18) month anniversary of the Closing Date.

 

“Indemnification Escrow Funds” means the balance of funds held in the
Indemnification Escrow Account at any time by the Escrow Agent pursuant to the
Escrow Agreement.

 

“Indemnified Party” - As defined in Section 12.3(a).

 

7 

 

“Indemnifying Party” - As defined in Section 12.3(a).

 

“Independent Auditors” means KPMG or, if KPMG is unavailable or unwilling to
serve as Independent Auditors, such other nationally recognized accounting or
financial services firm that is mutually acceptable to Purchaser and Mr.
Estenson and Mr. Truman.

 

“Information” - As defined in Section 13.1.

 

“Insurance Provider” means Ambridge Partners, LLC.

 

“Intellectual Property” means any of the following worldwide: (a) patents,
utility models and industrial design registrations and applications for any of
the foregoing, including all provisionals, divisionals, continuations,
continuations-in-part, reissues, reexaminations, renewals and extensions of any
of the foregoing; (b) registered and unregistered trademarks, service marks,
trade dress and trade names, applications for and renewals and extensions of any
registrations of the foregoing and goodwill associated with any of the
foregoing; (c) registered and unregistered copyrights and applications for
registration of copyrights; (d) internet domain names; (e) trade secrets,
intellectual property rights in know-how and other proprietary rights, including
intellectual property rights in inventions, invention disclosures, methods,
processes, algorithms, customer lists and supplier lists; (f) intellectual
property rights in computer software and databases; and (g) other similar
intellectual property rights.

 

“Interim Balance Sheet Date” means March 31, 2017.

 

“Interim Financial Statements” - As defined in Section 6.1(b).

 

“Inventory” - As defined in clause (iii) of the definition of Purchased Assets.

 

“IRS” means the Internal Revenue Service.

 

“Landlord Consent and Estoppel Certificates” - As defined in Section 3.2(k).

 

“Law” means any law, statute, code, regulation, ordinance, rule, or governmental
requirement enacted, promulgated, entered into, agreed, imposed or enforced by
any Governmental Authority or any Order or any Permit.

 

“Lease” - As defined in Section 7.9(b).

 

“Leased Real Property” - As defined in Section 7.9(b).

 

“Liabilities” means any obligation or liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated and whether due or to become
due), including any liability for Taxes.

 

“License” - As defined in Section 7.9(b).

 

“Licensed Real Property” - As defined in Section 7.9(b).

 

8 

 

“Lien” means any mortgage, lien, charge, restriction, pledge, security interest,
option, lease or sublease, license, claim, right of any third party, easement,
encroachment or encumbrance or other charges or rights of others of any kind or
nature.

 

“Long-Term Disability” means total long-term disability under the Federal Social
Security Act or under a policy of private insurance in which a person is
receiving benefits, but excluding any person currently receiving workers
compensation benefits who Seller is required by statute to offer reemployment.

 

“Material Adverse Change” or “Material Adverse Effect” means a change that is or
could reasonably be expected to be materially adverse to (a) the results of
operations, financial condition, business, rights, properties, assets or
liabilities of Seller, (b) Seller’s relations with its management, employees,
drivers, contractors, creditors, suppliers, customers, regulators, insurers or
others having business relationships with Seller, or (c) the ability of Seller
or the Company to consummate the transactions contemplated hereby or perform its
obligations hereunder; provided, that none of the following shall be deemed to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Material Adverse Change: (i) any adverse change or
development relating to the United States financial, banking or securities
markets, (ii) conditions resulting from the announcement of the transactions
contemplated hereby in accordance with the terms of this Agreement, (iii)
national or international political or social conditions or (iv) any adverse
change or development impacting the United States truckload motor carrier
industry generally; provided, that with respect to a matter described in any of
the foregoing clauses (i), (iii) or (iv), such matter shall only be excluded so
long as such matter does not have a disproportionate adverse effect on the
Business, taken as a whole, relative to other comparable businesses operating in
the industry in which the Business operates.

 

“Material Contract” - As defined in Section 7.12(a).

 

“Material Customers” - As defined in Section 7.20(b).

 

“Material Suppliers” - As defined in Section 7.20(a).

 

“Maximum Aggregate Earnout Payments” means the “Maximum Aggregate Earnout
Payments” set forth on Exhibit A hereto.

 

“Maximum Annual Earnout Payment” means, for either Earnout Period, an amount
equal to the Maximum Annual Earnout Payment indicated on Exhibit A for such
Earnout Period.

 

“Minimum Target Business EBITDA” means an amount equal to (i) the Target
Business EBITDA for the applicable Earnout Period multiplied by (ii) eighty
percent (80%).

 

“Most Recent Annual Balance Sheet” means Seller’s balance sheet as of the Most
Recent Annual Balance Sheet Date.

 

“Most Recent Annual Balance Sheet Date” means December 31, 2016.

 

9 

 

“Most Recent Annual Financial Statements” means Seller’s financial statements as
of the Most Recent Annual Balance Sheet Date.

 

“Multiemployer Plan” means the Western Conference of Teamsters Pension Plan.

 

“Net Capital Expenditure Amount” means the amount of net capital expenditures
that are incurred by Seller between December 31, 2016 and the last Business Day
preceding the Closing Date that are related to the purchase of tractors and
trailers associated with (i) new, incremental customer operations; (ii) normal
replacements procured in connection with a Contract renewal or amendment that
includes an extension of the termination date thereof and a price increase; and
(iii) casualty replacements.

 

“Net Working Capital” means the Current Assets minus the Current Liabilities
determined as of the close of business on the day immediately prior to the
Closing Date, which shall be calculated in accordance with the Adjustment
Principles.

 

“Non-controlling Party” - As defined in Section 12.3(d).

 

“NWC Escrow Account” means the account established by the Escrow Agent pursuant
to the Escrow Agreement to hold the NWC Escrow Amount.

 

“NWC Escrow Amount” means an amount equal to One Million Five Hundred Thousand
Dollars ($1,500,000).

 

“NWC Escrow Funds” means the balance of funds held in the NWC Escrow Account at
any time by the Escrow Agent pursuant to the Escrow Agreement.

 

“Objection Notice” - As defined in Section 12.3(b).

 

“Operating Agreement” means that certain Amended and Restated Operating
Agreement of Seller dated as of February 2, 2007 by and between the Estenson
Trust and the Truman Trust (as amended, restated or otherwise modified from time
to time).

 

“Order” means any decree, order, judgment, writ, award, injunction, stipulation
or consent of or by, or settlement agreement with, a Governmental Authority.

 

“Ordinary Course” means the ordinary course of business of Seller, consistent
with past practice and custom (including with respect to quantity and
frequency).

 

“Payroll Assets” - As defined in clause (iv) of the definition of Purchased
Assets.

 

“PCBs” - As defined in clause (v) of the definition of Hazardous Material.

 

“Pending Claims” - As defined in Section 15.9.

 

“Permits” - As defined in Section 7.16.

 

10 

 

“Permitted Liens” means (i) liens for Taxes not yet due and payable, (ii)
landlord and lessor liens existing under the terms and conditions of leases of
real or personal property disclosed in Section 7.12(a) of the Disclosure
Schedule, but not any such lien that has arisen or exists as a result of a
default or breach by Seller of any obligation thereunder or the failure of any
condition thereunder to be satisfied, (iii) Liens in connection with the
Equipment Note Debt set forth on Schedule 1.2(b), (iv) liens on Retained Assets,
and (v) with respect to the Leased Real Property, any minor imperfection of
title, easements of public record or similar Liens that do not, individually or
in the aggregate, interfere in any material respect with the present use or
materially impair the value of the Leased Real Property.

 

“Person” means any natural person, corporation, partnership, limited liability
company, joint venture, trust, association or unincorporated entity of any kind
(including any Governmental Authority).

 

“Post-Closing Tax Period” means any Tax period (or portion of a Straddle Period)
beginning on or after the day after the Closing Date.

 

“Pre-Adjusted Business EBITDA” means, for any Earnout Period, the income of the
Business before interest (whether paid or accrued, including the interest
component of capitalized leases and other fees and charges owed with respect to
letters of credit), income (or equivalent) Taxes, corporate administrative
charge, depreciation and amortization, for such Earnout Period, calculated in
accordance with GAAP and based on the same accounting principles and procedures
applied in the preparation of Seller’s Most Recent Annual Financial Statements.
The parties hereto acknowledge and agree that Pre-Adjusted Business EBITDA shall
not include (a) any extraordinary items of gain or loss (other than from the
Ordinary Course sale of equipment) or (b) any income from any business of
Purchaser or its Affiliates, including any business acquired by Purchaser or its
Affiliates after the Closing (even if integrated with the Business).

 

“Pre-Closing Tax Period” means any Tax period (or portion of a Straddle Period)
that ends on or prior to the Closing Date.

 

“Prepaids” - As defined in clause (ii) of the definition of Purchased Assets.

 

“Purchase Price” - As defined in Section 2.2.

 

“Purchase Price Allocation Schedule” - As defined in Section 2.10.

 

“Purchased Assets” means the Business and, except for the Retained Assets, all
assets, rights and properties owned by Seller on the Closing Date, whether or
not carried and reflected on the books of Seller, including the following:

 

(i)                 All accounts, notes, contract or other receivables of
Seller, other than any Affiliate Receivables (collectively, “Accounts
Receivable”);

 

(ii)               All deposits, including Lease deposits, and advances, prepaid
expenses and other prepaid items of Seller (including any prepaid Taxes), to the
extent the foregoing are transferable to the Company, but not including any
prepaid insurance (collectively, “Prepaids”);

 

11 

 

(iii)             All inventories of Seller, including all inventories of parts,
supplies, tires and merchandise (collectively, “Inventory”);

 

(iv)             All receivables and prepaids of Seller in respect of payroll
for the Transferred Employees (collectively, “Payroll Assets”);

 

(v)               All tangible assets, including vehicles, trucks, tractors,
trailers and other transportation equipment, machinery, equipment, tools,
strapping, pallets, spare parts, operating supplies, fuel, furniture and office
equipment, fixtures, construction-in-progress, telephone systems, telecopiers,
photocopiers and computer hardware, of Seller, including all tangible assets
listed in Section 7.7 of the Disclosure Schedule;

 

(vi)             All of Seller’s right, title and interest in and to the Leased
Real Property and Licensed Real Property;

 

(vii)           All of Seller’s right, title and interest in, to or under (A)
the Contracts described in Section 7.12(a) of the Disclosure Schedule, (B) any
executory Contracts of Seller which relate to the Business and are not required
to be listed in the Disclosure Schedule pursuant to Section 7.12(a); and (C) any
executory Contracts entered into by Seller relating to the Business after the
date hereof in the Ordinary Course and in compliance with the terms and
provisions of this Agreement;

 

(viii)         All of Seller’s right, title and interest in and to Intellectual
Property, including any Intellectual Property described in the Disclosure
Schedule;

 

(ix)             All permits and licenses of Seller to the extent transferable
or assignable to the Company;

 

(x)               All of Seller’s right, title and interest in choses in action,
claims and causes of action or rights of recovery or set-off of every kind and
character, including under warranties, guarantees and indemnitees;

 

(xi)             All of Seller’s files, papers, documents and records, including
credit, sales and accounting records, price sheets, catalogues and sales
literature, books, processes, advertising material, stationery, office supplies,
forms, catalogues, manuals, correspondence, logs, employment records and any
other information reduced to writing; excluding any books or records to the
extent relating to corporate governance, the Retained Assets or the Retained
Liabilities.

 

(xii)           A copy of Seller’s general ledgers and books of original entry;

 

(xiii)         All other assets of Seller relating to the Business wherever
located; and

 

(xiv)         The Business of Seller as a going concern.

 

“Purchaser Indemnitees” - As defined in Section 12.1.

 

12 

 

“Purchaser’s 401(k) Plan” – As defined in Section 14.4.

 

“Release” means releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping.

 

“Representation and Warranty Insurance Policy” means the representation and
warranty insurance policy issued to Purchaser by the Insurance Provider with
respect to this Agreement.

 

“Response” - As defined in Section 12.3(b).

 

“Restricted Party” means Seller, Truline and each Equityholder.

 

“Retained Assets” means the following:

 

(i)                 all cash and cash equivalents and marketable securities of
Seller;

 

(ii)               Seller’s company seal, minute books and equity record books,
the general ledgers and books of original entry, all Tax Returns and other Tax
records, reports, data, files and documents;

 

(iii)             all accounts, notes, contract or other receivables of Seller
that are owed to it by either Equityholder or any Affiliate thereof (other than
Truline) or any equityholder, director, manager, officer or employee of any
thereof (collectively, “Affiliate Receivables”);

 

(iv)             (A) all Contracts of Seller that do not constitute Purchased
Assets, (B) all Contracts of Seller between Seller, on the one hand, and either
Equityholder or any Affiliate thereof, on the other hand and (C) the Operating
Agreement;

 

(v)               Seller’s rights under this Agreement;

 

(vi)             all of Seller’s right, title and interest in any insurance
policies, including those identified in Section 7.15 of the Disclosure Schedule
but not including the Assumed Benefit Plans, together with the right to make
claims thereunder and to seek refunds of premiums paid on account thereof; and

 

(vii)           all of Seller’s right, title and interest in, to and under the
assets identified on Schedule 2.1.

 

“Retained Liabilities” means any and all Liabilities of Seller whether or not
relating to the Business, not expressly assumed by the Company pursuant to
Section 2.1(a)(ii). Specifically, without limiting the foregoing, the Retained
Liabilities shall include the following:

 

(a)                all Indebtedness (other than the Assumed Equipment Note Debt
included in the calculation of the Final Assumed Equipment Note Debt) and
Transaction Expenses;

 

13 

 

(b)               any claim, action, suit or proceeding pending, including
Environmental Claims, as of the Closing Date, notwithstanding the disclosure
thereof in the Disclosure Schedule, or any subsequent claim, action, suit or
proceeding arising out of or relating to (i) such pending matters, (ii) any
other event occurring on or prior to the Closing Date, or (iii) resulting from
Seller’s conduct of the Business;

 

(c)                any Liability arising out of or relating to the Retained
Assets;

 

(d)               any Retained Taxes;

 

(e)                any Liability arising from claims, proceedings or causes of
action resulting from property damage (including cargo claims) or personal
injuries (including death) caused by services rendered by Seller,
notwithstanding the disclosure thereof in the Disclosure Schedule, including in
Sections 7.10(a) and 7.10(e) of the Disclosure Schedule;

 

(f)                any Liability arising from guarantees, warranty claims or
other Contract terms with respect to services rendered by Seller;

 

(g)               any accrued insurance charges or insurance claims, retroactive
insurance rate adjustments or insurance premiums payable for pre-Closing
periods;

 

(h)               any amounts payable to either Equityholder or any Affiliate
thereof (other than amounts payable to Truline to the extent included as a
liability in the calculation of Final Net Working Capital) or any equityholder,
manager, director, officer or employee of any thereof;

 

(i)                 any Liability relating to or arising out of the employment,
or termination of employment, of any employee of Seller on the Closing Date but
prior to or at the Closing or prior to the Closing Date (other than amounts
described in clause (a) of the definition of “Assumed Liabilities” or clause
(ii) of the definition of “Assumed Taxes”), including, without limitation, (i)
bonuses, (ii) workers’ compensation or (ii) claims of any employee of Seller
which relate to events occurring on the Closing Date but prior to or at the
Closing or prior to the Closing Date or to terminations of employment occurring
on or prior to the Closing Date;

 

(j)                 any Liability for which Seller has agreed to be responsible
pursuant to Article XIV;

 

(k)               any Liability relating to or arising out of any formerly owned
or leased facility;

 

(l)                 any Liability arising out of or resulting from Seller’s
non-compliance with any Law; and

 

(m)             any Liability of Seller under this Agreement and any other
agreement, document or instrument entered into in connection with the
transactions contemplated by this Agreement.

 

“Retained Tax” means any Liability for the following Taxes (whether such
Liability is direct or as a result of transferee or successor liability, joint
and/or several liability, pursuant to a Contract or other agreement, pursuant to
the filing of a Tax return, pursuant to an adjustment by a Governmental
Authority, by means of withholding, or otherwise, and, in each case, whether
disputed or not): (i) Taxes of Seller and of any Equityholder (including
all income Taxes of Seller and of any Equityholder); (ii) Taxes that relate to
the Company, the Purchased Assets, the Business, or any Transferred Employee for
any Pre-Closing Tax Period that are not Assumed Taxes; and (iii) any Taxes of
another Person payable pursuant to any Contracts for any Pre-Closing Tax Period.
For avoidance of doubt, no Transfer Tax shall be a Retained Tax and Transfer
Taxes shall be governed by Section 2.9.

 

14 

 

“Sale Transactions” - As defined in Section 2.1(b).

 

“Second Earnout Period” - As defined in Section 2.5(a).

 

“Seller Indemnitees” - As defined in Section 12.2.

 

“Seller’s 401(k) Plan” means the Truline/Estenson 401(k) Plan.

 

“Seller’s Knowledge” means the actual knowledge after due inquiry and reasonable
investigation of either Equityholder or any of Roger Silva, Cevin Case or
Michelle Alexander.

 

“Set-Off Notice” - As defined in Section 12.6.

 

“Settlement Date” - As defined in Section 2.6(d).

 

“Statute of Limitations Representations” means the representations and
warranties of Seller contained in Section 7.11 (Intellectual Property), Section
7.17 (Environmental Matters), Section 7.18 (Employee Benefit Plans) and Section
7.19 (Taxes).

 

“Straddle Period” means any period that begins on or before the Closing Date and
ends after the Closing Date.

 

“Substances” - As defined in clause (i) of the definition of Hazardous Material.

 

“Target Business EBITDA” means, for an Earnout Period, the “Target Business
EBITDA” indicated on Exhibit A for such Earnout Period.

 

“Target Net Working Capital” means $19,900,000.

 

“Tax Return” means any report, return, claims for refund, estimates, information
returns, elections, notices, statements or other information required to be
supplied to (or actually supplied to) a Governmental Authority in connection
with any Taxes, including any schedule, or attachment thereto and including any
amendment thereof, or any extension of time to file or pay any of the foregoing.

 

“Taxes” means all taxes, charges, fees, duties (including custom duties), levies
or other assessments, including net income, gross income, capital gains, gross
receipts, net receipts, gross proceeds, net proceeds, ad valorem, profits, real
and personal property (tangible and intangible), unclaimed or abandoned
property, gaming, sales, use, franchise, capital, excise, value added, stamp,
leasing, lease, user, transfer, fuel, excess profits, occupational, interest
equalization, windfall profits, license, payroll, employment, environmental,
equity, disability, severance, employee’s income withholding, other withholding,
unemployment and Social Security taxes, which are imposed by any Governmental
Authority, and other taxes, charges or fees assessed by any Governmental
Authority, including any interest, penalties or additions to tax attributable
thereto, in each case, whether disputed or not.

 

15 

 

“Transaction Document” means any document or certificate expressly required to
be delivered by Seller, either Equityholder or any of their Affiliates pursuant
hereto.

 

“Transaction Expenses” means (i) the fees, costs and expenses (including the
fees, costs and expenses of legal counsel, investment bankers, brokers and other
advisors) incurred by or on behalf of either Company Entity or either
Equityholder in connection with or related to the sales process, the negotiation
of this Agreement and the other agreements contemplated hereby, the performance
of each such party’s obligations hereunder and thereunder and the consummation
of the transactions contemplated hereby and thereby, in each case whenever due
and payable; (ii) the aggregate amount of any change in control, success,
closing, transaction, retention, severance, termination or other similar bonuses
or amounts payable by, or liabilities of, either Company Entity arising from or
that otherwise may be triggered by the transactions contemplated by this
Agreement (including the employer portion of any employment or payroll Taxes
related thereto), including any amounts payable by Seller to Truline under the
Operating Agreement; (iii) fifty percent (50%) of the fees, costs and expenses
payable to the Escrow Agent; (iv) fifty percent (50%) of the fees, costs and
expenses of obtaining the Representation and Warranty Insurance Policy,
including the premium with respect thereto, but the amount included in
Transaction Expenses pursuant to this clause (iv) shall not exceed $300,000; and
(v) fifty percent (50%) of the aggregate amount of all filing fees (but not
legal fees) under the HSR Act and any required filings under any other antitrust
or competition laws of any applicable jurisdiction.

 

“Transfer Taxes” - As defined in Section 2.9.

 

“Transferred Employees” - As defined in Section 14.1(a).

 

“Transition Services Agreement” means the Transition Services Agreement to be
entered into on the Closing Date between Estenson and the Company, substantially
in the form of Exhibit J.

 

“Truline Carrier/Broker Agreement” means the Carrier/Broker Agreement dated as
of January 1, 2016 between Truline and Seller.

 

“Unassumed Equipment Note Debt.” As defined in Section 2.4(f).

 

“Unlimited Representations” - As defined in Section 12.4(b).

 

1.3        Interpretation. Unless the context of this Agreement otherwise
requires, (i) words of any gender shall be deemed to include each other gender,
(ii) words using the singular or plural number shall also include the plural or
singular number, respectively, (iii) references to “hereof”, “herein”, “hereby”
and similar terms shall refer to this entire Agreement, (iv) all references in
this Agreement to Articles, Sections and Exhibits shall mean and refer to
Articles, Sections and Exhibits of this Agreement, (v) all references to
statutes and related regulations shall include all amendments of the same and
any successor or replacement statutes and regulations, (vi) references to any
Person shall be deemed to mean and include the successors and permitted assigns
of such Person (or, in the case of a Governmental Authority, Persons succeeding
to the relevant functions of such Person), (vii) “including” shall mean
“including without limitation” and (viii) the term “Seller” shall be deemed to
include the “Company” for the period commencing upon the consummation of the
Drop-Down Transaction and ending immediately prior to Purchaser’s acquisition of
the Equity Interests.

 

16 

 

ARTICLE II
Purchase and Sale, Purchase Price,
Allocation and Other Related Matters

 

2.1        Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, at the Closing on the Closing Date:

 

(a)                First, (i) Seller shall contribute, assign, convey, transfer
and deliver to the Company, and the Company shall acquire from Seller, the
Purchased Assets, free and clear of any Liens, other than Permitted Liens, and
(ii) the Company shall assume, agree to perform, and in due course pay and
discharge, the Assumed Liabilities (collectively, the “Drop-Down Transaction”).
Notwithstanding anything herein to the contrary, (A) the Retained Assets will be
retained by Seller and not contributed, assigned, conveyed, transferred or
delivered to the Company hereunder, and (B) the Company shall not assume or pay
any, and Seller shall continue to be responsible for each, Retained Liability.

 

(b)               Second, Seller shall sell, assign, convey, transfer and
deliver to Purchaser, and Purchaser shall acquire from Seller, the Equity
Interests, free and clear of any Liens (such transactions described in this
Section 2.1 are collectively referred to herein as the “Sale Transactions”).

 

2.2        Purchase Price. The aggregate purchase price (the “Purchase Price”)
payable by Purchaser to Seller for the Equity Interests shall be the following:

 

(a)                an amount equal to (i) Two Hundred Eighty-eight Million Five
Hundred Thousand Dollars ($288,500,000) (the “Base Purchase Price”), (ii) plus
the amount, if any, by which the Final Net Working Capital exceeds the Target
Net Working Capital or minus the amount, if any, by which the Final Net Working
Capital is less than the Target Net Working Capital, (iii) plus the Final Net
Capital Expenditure Amount, (iv) minus the Final Assumed Equipment Note Debt
(such amount, the “Final Closing Cash Purchase Price”); and

 

(b)               the aggregate amount of the Earnout Payments (if any).

 

17 

 

2.3        Estimated Purchase Price.

 

(a)                Not less than three (3) Business Days and not more than five
(5) Business Days prior to the Closing Date, Seller shall deliver to Purchaser a
statement setting forth Seller’s good faith estimate of (i) Net Working Capital
(the “Estimated Net Working Capital”), (ii) the Net Capital Expenditure Amount
(the “Estimated Net Capital Expenditure Amount”), (iii) the Assumed Equipment
Note Debt (the “Estimated Assumed Equipment Note Debt”) and (iv) the Estimated
Closing Cash Purchase Price based thereon, in each case, with reasonable
supporting documentation, which statement, estimates, calculation and supporting
documentation shall be reasonably acceptable to Purchaser.

 

(b)               The calculations of the Estimated Net Working Capital, Net
Capital Expenditure Amount and Estimated Assumed Equipment Note Debt shall be
based upon the books and records of Seller and shall be prepared in accordance
with GAAP applied on a basis consistent with the methodologies and principles
used in the preparation of the Annual Financial Statements and the
methodologies, principles and exceptions set forth in Schedule 2.3(b) (the
“Adjustment Principles”).

 

2.4        Payment of the Purchase Price. At the Closing, Purchaser shall pay an
amount equal to the Estimated Closing Cash Purchase Price as follows:

 

(a)                on behalf of Seller, to the holders of Indebtedness (other
than any Assumed Equipment Note Debt) such amounts as directed in writing by
such holders necessary to repay the Indebtedness (other than any Assumed
Equipment Note Debt) up to and including the Closing Date;

 

(b)               on behalf of Seller, to the applicable payees such amounts
necessary to pay the Transaction Expenses not paid prior to the Closing, which
payees and amounts shall be set forth on a schedule that Seller shall deliver to
Purchaser not less than three (3) Business Days prior to the Closing Date;

 

(c)                the Indemnification Escrow Amount and the NWC Escrow Amount
shall each be deposited by Purchaser with the Escrow Agent into the
Indemnification Escrow Account and the NWC Escrow Account, respectively, to be
disbursed in accordance with the Escrow Agreement and Sections 2.8 (in the case
of the Indemnification Escrow Amount) and Sections 2.7(a) and 2.7(b) (in the
case of the NWC Escrow Amount); and

 

(d)               the remaining amount of the Estimated Closing Cash Purchase
Price shall be paid to Seller by the wire transfer of immediately available
funds to an account designated by Seller in writing at least three (3) Business
Days prior to the Closing Date.

 

(e)                For the avoidance of doubt, Purchaser shall be responsible
for and shall pay: (i) fifty percent (50%) of the fees, costs and expenses
payable to the Escrow Agent; (ii) fifty percent (50%) of the fees, costs and
expenses of obtaining the Representation and Warranty Insurance Policy, provided
that to the extent the aggregate fees, costs and expenses of obtaining the
Representation and Warranty Insurance Policy exceed $600,000, Purchaser shall be
responsible for and shall pay one hundred percent (100%) of the fees, costs and
expenses of obtaining the Representation and Warranty Insurance Policy exceeding
such amount; and (iii) fifty percent (50%) of the aggregate amount of all filing
fees under the HSR Act and any required filings under any other antitrust or
competition laws of any applicable jurisdiction.

 

18 

 

(f)                Notwithstanding anything to the contrary contained in this
Agreement, it is the intention of the parties that Purchaser or the Company will
attempt to refinance the Equipment Note Debt on terms reasonably acceptable to
Purchaser and/or obtain the consent of the holders of the Equipment Note Debt to
the assumption thereof by the Company, if applicable, provided that such consent
shall not be a condition to Closing and if any of the lenders under the
Equipment Note Debt do not consent to the assumption of all or a portion of the
Equipment Note Debt by the Company (such portion of the Equipment Note Debt that
is not assumed by the Company hereunder is referred to herein as the “Unassumed
Equipment Note Debt” and that portion of the Equipment Note Debt that is assumed
by the Company hereunder is referred to herein as the “Assumed Equipment Note
Debt”), the Closing shall not be delayed or terminated on account thereof and
Purchaser shall pay off such Unassumed Equipment Note Debt at Closing in the
same manner as Purchaser is required to pay the holders of other Indebtedness
under Section 2.4(a) of this Agreement in accordance with the payoff letters
delivered by Seller to Purchaser pursuant to Section 3.2(s).

 

2.5        Earnout.

 

(a)                Purchaser shall pay to Seller an aggregate amount not to
exceed the Maximum Aggregate Earnout Payments on the following terms and
conditions:

 

(i)     for each of (A) the period constituting the first twelve full months
following the Closing Date (the “First Earnout Period”), and (B) the period
beginning the day after the end of the First Earnout Period and ending on the
twelve month anniversary thereof (the “Second Earnout Period” and together with
the First Earnout Period, each, an “Earnout Period”), Purchaser shall make a
cash payment (each, an “Earnout Payment”) to Seller based on the Business EBITDA
for that Earnout Period;

 

(ii)   for each Earnout Period, (A) if the Business EBITDA for that Earnout
Period is equal to or exceeds the Target Business EBITDA for such Earnout
Period, the Earnout Payment shall be an amount equal to the Maximum Annual
Earnout Payment for such Earnout Period, (B) if the Business EBITDA for that
Earnout Period is greater than the Minimum Target Business EBITDA for that
Earnout Period but less than the Target Business EBITDA for that Earnout Period,
the Earnout Payment shall be an amount equal to (I) the Maximum Annual Earnout
Payment for that Earnout Period multiplied by (II) a fraction, the numerator of
which is the Business EBITDA for that Earnout Period in excess of the Minimum
Target Business EBITDA for that Earnout Period and the denominator of which is
the aggregate difference between the Target Business EBITDA for that Earnout
Period and the Minimum Target Business EBITDA for that Earnout Period or (C) if
the Business EBITDA for that Earnout Period is equal to or less than the Minimum
Target Business EBITDA for that Earnout Period, the Earnout Payment shall equal
zero (in the event that the Business EBITDA for an Earnout Period is less than
the Target Business EBITDA for that Earnout Period, it is referred to herein as
a “Business EBITDA Shortfall”);

 

19 

 

(iii) if in either Earnout Period, the Business EBITDA for such Earnout Period
exceeds the Target Business EBITDA for the Earnout Period, such excess (“Excess
Business EBITDA”) may be applied to the previous or subsequent Earnout Period in
which there was a Business EBITDA Shortfall in the following manner:

 

(A)             if the Excess Business EBITDA is applied to the previous Earnout
Period and if the sum of the Business EBITDA for that previous Earnout Period
plus the Excess Business EBITDA would have resulted in an Earnout Payment
greater than the Earnout Payment actually earned in the previous Earnout Period
as calculated under Section 2.5(a)(ii), Purchaser shall make a “catch-up”
payment (a “Catch-Up Payment”) to Seller in an amount equal to (x) the Earnout
Payment that Seller would have earned in the previous Earnout Period if the
Excess Business EBITDA had applied to such Earnout Period less (y) the Earnout
Payment actually earned in the previous Earnout Period; and

 

(B)              if the Excess Business EBITDA is applied to the future Earnout
Period in which a Business EBITDA Shortfall exists, such excess shall be added
to the Business EBITDA for the later Earnout Period to determine the amount of
the Earnout Payment, if any, payable under Section 2.5(a)(ii);

 

(iv) notwithstanding anything in this Agreement to the contrary, in no event
shall Purchaser be obligated to pay to Seller aggregate Earnout Payments
(including any Catch-Up Payment) in excess of the Maximum Aggregate Earnout
Payments; and

 

(v)   the Earnout Payments and Catch-Up Payment, if any, are subject to set-off
in accordance with Sections 2.5(f) and 12.6.

 

(b)               Within ninety (90) days after the end of each Earnout Period,
Purchaser shall provide to Seller a statement, including work papers and
schedules supporting such statement certified by Purchaser’s Chief Financial
Officer (each an “Earnout Statement”), setting forth Purchaser’s calculation of
(i) the Business EBITDA for that Earnout Period; and (ii) the Earnout Payment
(and any Catch-Up Payment) for that Earnout Period based thereon.

 

(c)                Within thirty (30) days after an Earnout Statement is
delivered to Seller pursuant to Section 2.5(b), Seller shall complete its
examination thereof and shall deliver to Purchaser either (i) a written
acknowledgement accepting such Earnout Statement; or (ii) a written report
setting forth in reasonable detail any proposed adjustments to the such Earnout
Statement (each an “Earnout Adjustment Report”). If Seller fails to respond to
Purchaser within such thirty (30) day period, Seller shall be deemed to have
accepted and agreed to such Earnout Statement (and the calculations thereon) as
delivered pursuant to Section 2.5(b). During such thirty (30) day period,
Purchaser shall provide to Seller reasonable access to the appropriate
personnel, accountants, financial books and records of Purchaser and the
Company, as well as any additional relevant information and work papers as it
may reasonably request, to enable it to properly evaluate each Earnout
Statement.

 

20 

 

(d)               In the event Seller and Purchaser fail to agree on any of
Seller’s proposed adjustments contained in an Earnout Adjustment Report within
thirty (30) days after Purchaser receives such Earnout Adjustment Report, then
Seller and Purchaser agree that the Independent Auditors shall make the final
determination with respect to the correctness of the proposed adjustments in
such Earnout Adjustment Report in light of the terms and provisions of this
Agreement. Purchaser and Seller shall use their commercially reasonable efforts
to cause the Independent Auditors to resolve all disagreements as soon as
practicable, but in any event within sixty (60) days after submission of the
dispute to the Independent Auditors. The decision of the Independent Auditors
shall be final and binding on Seller and Purchaser. The fees and expenses of the
Independent Auditors incurred in connection with the determination of the
disputed items by the Independent Auditors shall be borne by Purchaser, on the
one hand, and Seller, on the other hand, based upon the percentage that the
portion of the contested amount not awarded to each party bears to the amount
actually contested by such party, as determined by the Independent Auditors.

 

(e)                All payments to be made pursuant to this Section 2.5 with
respect to any Earnout Period shall be by the wire transfer of immediately
available funds within fifteen (15) Business Days following the final
determination of the Earnout Payment (and any Catch-Up Payment) for such Earnout
Period to an account designated by Seller to Purchaser in writing in advance of
the payment thereof; provided that (i) with respect to the Earnout Payment, if
any, for the First Earnout Period, said Earnout Payment shall not be paid until
determination of the Insurance Deficiency, if any, pursuant to Section 2.5(f)
for the Seller policy years 2015/2016 and 2016/2017, and (ii) respect to the
Earnout Payment, if any, for the Second Earnout Period, said Earnout Payment
(including any Catch-Up Payment) shall be subject to set off by the amount, if
any, by which the Deficiency Offset Amount, if any, exceeds the amount
determined to be the Earnout Payment for the First Earnout Period

 

(f)                Seller and Purchaser agree that Purchaser shall have the
right to set off against any Earnout Payment (including the Catch-Up Payment)
the Deficiency Offset Amount. Seller shall prepare and deliver to Purchaser on
or about August 1, 2018 a written report (together with all supporting
documentation) setting forth a calculation for the 2015/2016 policy year of the
Business (but excluding claims prior to January 1, 2016) and the 2016/2017
policy year of the Business (but excluding claims after December 31, 2016) of
any Deficiency Offset Amount. The “Deficiency Offset Amount” shall be (i) zero
if the Insurance Deficiency is less than zero, or (ii) if the Insurance
Deficiency is greater than zero, the product of 6.75 multiplied by the Insurance
Deficiency, but (iii) in no event greater than $5,400,000. Truline losses shall
be excluded from the determination. Any dispute as to the determination of an
Insurance Deficiency shall be submitted to the Independent Auditor to be
resolved as provided in Section 2.5(d).

 

(g)               Seller hereby acknowledges and agrees that Seller’s right to
receive the Earnout Payments pursuant to this Section 2.5 is solely an unsecured
contractual right and is not a security for purposes of any federal or state
securities Laws, (ii) will not be represented by any form of certificate or
instrument, (iii) does not give Seller any distribution rights, voting rights,
liquidation rights, preemptive rights, anti-dilution rights or other rights
common to holders of equity securities, (iv) is not redeemable and (v) may not
be sold, assigned, pledged, mortgaged, hypothecated, gifted, conveyed,
transferred or otherwise disposed of, except by operation of law (and any such
action in violation of this Section 2.5(g) shall be null and void ab initio). In
connection with the payment to Seller of the Earnout Payments, if any, Seller
will execute and deliver to Purchaser a customary payoff letter and upon receipt
by Seller of an Earnout Payment, a release of claims solely with respect to the
calculation of such Earnout Payment, in favor of Purchaser and its Affiliates.

 

21 

 

(h)               Notwithstanding anything in this Agreement to the contrary,
this Agreement shall impose no restrictions on, or require Purchaser or any of
its Affiliates to take any action with respect to, the operations, business or
activities of Purchaser or the Company after the Closing. The Equityholders and
Seller acknowledge and agree that (i) the Company, Purchaser and its Affiliates
may make from time to time such business decisions and take such actions as they
deem appropriate in respect of the conduct of the business of the Company
following the Closing, including decisions or actions that may have an impact on
the Business EBITDA and Seller and the Equityholders shall have no right to
claim any lost Earnout Payment or other Adverse Consequences as a result of such
decisions or actions so long as the decisions or actions were not taken by the
Company, Purchaser or its Affiliates in bad faith a significant purpose of which
is to frustrate the provisions of this Section 2.5 or to reduce the amount or
likelihood of payment of any Earnout Payments and (ii) Purchaser shall have no
duty or obligation to make any capital contribution to the Company. Without
limiting the generality of the foregoing, the Equityholders and Seller further
acknowledge and agree that at such time following the Closing as may be
reasonably determined by Purchaser, provided that Purchaser maintains the
ability to separately track Business EBITDA for purposes of this Section 2.5,
(A) all financial statements, billing matters, payment of accounts payable,
collections of accounts receivable, bank accounts, credit facilities and other
financial operations or activities of the Company may be consolidated with other
operations of Purchaser and its Affiliates; (B) the Company’s business may
transition to using Purchaser’s operational and financial technology, and (C)
Purchaser may dissolve or terminate the Company and operate the Company’s
business as a division of Purchaser or an Affiliate of Purchaser, in each case,
provided that such actions are not taken by the Company, Purchaser or its
Affiliates in bad faith a significant purpose of which is to frustrate the
provisions of this Section 2.5 or to reduce the amount or likelihood of payment
of any Earnout Payments.

 

(i)                 Seller’s right to receive the Earnout Payments shall be
terminated in the event of the breach in any material respect by any Restricted
Party of its or his obligations under Section 15.5 or 15.6, which breach is not
cured by such breaching party within ten (10) days following delivery by
Purchaser to such breaching party of written notice informing such breaching
party of such breach.

 

(j)                 Notwithstanding anything herein to the contrary, the Earnout
Payments (and any Catch-Up Payment) shall be reduced by an aggregate amount
equal to the sum of (i) any and all amounts payable by the Company under the
Employee Incentive Agreements (before reduction for withholding Taxes) and (ii)
all employer Taxes with respect to the amounts payable under the Employee
Incentive Agreements.

 

22 

 

(k)               As used in this Section 2.5, the following terms shall have
the meanings set forth below:

 

“Allocated Loss Adjustment Expense” means expenses attributed to the processing
of a specific insurance claim.

 

“Applicable ALAE” means the amount of Allocated Loss Adjustment Expense paid for
a related claim in addition to paid losses.

 

“Deducted Losses” means $5,868,940.

 

“Deductible” means the dollar amount of an auto liability claim or a workers
compensation claim that was retained by Seller, which amount was $500,000 per
claim for both policy years.

 

“Deficiency Offset Amount” – As defined in Section 2.5(f).

 

“Insurance Deficiency” means Redetermined Losses minus Deducted Losses.

 

“LDF” means the loss development factor taken from the below schedule applied
from inception of the XL Insurance Policies:

 

  Months After Policy Inception Workers Compensation Auto Liability   22 months
1.563 1.161   34 months 1.260 1.055

 

“Open Claim” means any claim that is reported as open in the loss run as of May
1, 2018, to be provided by Gallagher Basset under Seller’s XL insurance
policies.

 

“Paid Portion” means the paid portion of an Open Claim up to the amount of the
Deductible, as of May 1, 2018, to be provided by Gallagher Basset under Seller’s
XL insurance policies.

 

“Reserved Portion” means the unpaid portion of an Open Claim, as reported in the
loss run, as of May 1, 2018, to be provided by Gallagher Basset under Seller’s
XL insurance policies.

 

“Redetermined Losses” means, for each auto liability and workers compensation
claim incurred during the period from January 1, 2016 to December 31, 2016, a
dollar amount derived pursuant to the following formula:

 

1.For those claims that have been closed in the loss run as of May 1, 2018, to
be provided by Gallagher Basset under Seller’s XL insurance policies, the amount
of losses incurred in the settlement of such claim, plus

 

2.For all Open Claims, an amount equal to the following formula: Paid Portion +
[(Reserved Portion + Applicable ALAE) x applicable LDF]

 

23 

 

2.6        Closing Balance Sheet.

 

(a)                Within ninety (90) days after the Closing, Purchaser shall
provide to Seller (i) a balance sheet of the Business based upon the Purchased
Assets and Assumed Liabilities as of the Closing Date (the “Final Closing
Balance Sheet”); and (ii) a statement (the “Closing Statement”) setting forth
Purchaser’s calculation of (A) the Net Working Capital as reflected on the Final
Closing Balance Sheet (the “Final Net Working Capital Calculation”); (B) the Net
Capital Expenditure Amount (the “Final Net Capital Expenditure Amount
Calculation”); (C) the Assumed Equipment Note Debt reflected on the Final
Closing Balance Sheet (the “Final Assumed Equipment Note Debt”) and (D) the
Final Closing Cash Purchase Price based thereon.

 

(b)               Within thirty (30) days after the Final Closing Balance Sheet
and the Closing Statement are delivered to Seller pursuant to Section 2.6(a),
Seller shall complete its examination thereof and shall deliver to Purchaser
either (i) a written acknowledgement accepting the Final Closing Balance Sheet
and the Closing Statement; or (ii) a written report setting forth in reasonable
detail any proposed adjustments to the Final Closing Balance Sheet and the
Closing Statement (“Adjustment Report”). If Seller fails to respond to Purchaser
within such thirty (30) day period, Seller shall be deemed to have accepted and
agreed to the Final Closing Balance Sheet and the Closing Statement (and the
calculations thereon) as delivered pursuant to Section 2.6(a). During such
thirty (30) day period, Purchaser shall provide to Seller reasonable access to
the appropriate personnel, accountants, financial books and records of Purchaser
and the Company, as well as any additional relevant information and work papers
as it may reasonably request, to enable it to properly evaluate the Final
Closing Balance Sheet and Closing Statement.

 

(c)                In the event Seller and Purchaser fail to agree on any of
Seller’s proposed adjustments contained in the Adjustment Report within thirty
(30) days after Purchaser receives the Adjustment Report, then Seller and
Purchaser agree that the Independent Auditors shall make the final determination
with respect to the correctness of the proposed adjustments in the Adjustment
Report in light of the terms and provisions of this Agreement. Purchaser and
Seller shall use their commercially reasonable efforts to cause the Independent
Auditors to resolve all disagreements as soon as practicable, but in any event
within sixty (60) days after submission of the dispute to the Independent
Auditors. The decision of the Independent Auditors shall be final and binding on
Seller and Purchaser. The fees and expenses of the Independent Auditors incurred
in connection with the determination of the disputed items by the Independent
Auditors shall be borne by Purchaser, on the one hand, and Seller, on the other
hand, based upon the percentage that the portion of the contested amount not
awarded to each party bears to the amount actually contested by such party, as
determined by the Independent Auditors.

 

(d)               The term “Final Closing Balance Sheet” as that term has been
hereinbefore and will be hereinafter used, shall mean the Final Closing Balance
Sheet delivered pursuant to Section 2.6(a), as adjusted, if at all, pursuant to
this Section 2.6. The date on which the Final Closing Balance Sheet, Final Net
Working Capital Calculation, Final Net Capital Expenditure Amount Calculation
and Final Assumed Equipment Note Debt are finally determined pursuant to this
Section 2.6 shall hereinafter be referred to as the “Settlement Date.”

 

24 

 

2.7        Purchase Price Settlement.

 

(a)                In the event the Final Closing Cash Purchase Price is less
than the Estimated Closing Cash Purchase Price, then Seller shall pay to
Purchaser within five (5) days after the Settlement Date an amount equal to such
deficiency. Any payment required pursuant to this Section 2.7(a) shall be made
as follows: (i) first, such amount shall be paid out of the NWC Escrow Funds and
(ii) second, to the extent the amount of such deficiency exceeds the NWC Escrow
Funds, such excess shall be paid, at Purchaser’s sole election, either out of
the Indemnification Escrow Funds or jointly and severally from Seller and the
Equityholders or any combination of the foregoing. To the extent such deficiency
is less than the amount in the NWC Escrow Funds, any amounts remaining in the
NWC Escrow Funds shall be released to Seller (and Purchaser and Seller shall
instruct the Escrow Agent to do so in writing) within five (5) days after the
Settlement Date.

 

(b)               In the event the Final Closing Cash Purchase Price is more
than the Estimated Closing Cash Purchase Price, then, within five (5) days after
the Settlement Date, Purchaser shall pay to Seller an amount equal to such
excess. Any payment required pursuant to this Section 2.7(b) shall be made by
the transfer of immediately available funds for credit to Seller at a bank
account designated by Seller in writing to Purchaser. In addition, any amounts
remaining in the NWC Escrow Funds shall be released to Seller (and Purchaser and
Seller shall instruct the Escrow Agent to do so in writing) within five (5) days
after the Settlement Date.

 

2.8        Indemnification Escrow Funds. On the Indemnification Escrow Fund
Release Date, an amount equal to the Indemnification Escrow Funds less the
amount of any then pending indemnification claims by the Purchaser Indemnitees
pursuant to Article XII shall be paid to Seller. Seller and Purchaser shall
execute and deliver to the Escrow Agent in accordance with the terms of the
Escrow Agreement all necessary instructions to effect the disbursements
contemplated by this Agreement.

 

2.9        Transfer Taxes and Vehicle Registration Fees. Any and all transfer,
sales, use, purchase, value added, excise, real property, personal property,
intangible stamp, or similar Taxes (collectively, “Transfer Taxes”) imposed on,
or resulting from, the transactions contemplated by this Agreement (including
those Transfer Taxes imposed on Purchaser or the Purchased Assets) shall be paid
equally by Purchaser and Seller. To the extent Purchaser or Seller is required
to pay any Transfer Taxes, or incurs any out-of-pocket expenses in transferring
title of any (or all) of the Purchased Assets or the Equity Interests, Seller or
Purchaser, as applicable, shall promptly reimburse such party for 50% of such
Transfer Tax or out-of-pocket expense following receipt of a request for payment
from the other party. Purchaser shall file all necessary Tax Returns and other
documentation with respect to all such Transfer Taxes, fees and charges, and, if
required by applicable Law, Seller will join in the execution of any such Tax
Returns and other documentation. The parties agree to provide certificates or
forms, and timely execute any Tax Return, that are necessary or appropriate to
establish an exemption from (or reduction in) any Transfer Tax. After the
Closing, Purchaser shall cause the Company to reimburse Seller promptly
following receipt of a request for payment for any vehicle registration fees,
out of pocket costs and taxes incurred by Seller in connection with the
registration of the Company’s vehicles through the UTAH IRP program maintained
by the Utah Department of Transportation (or the IRP program of another state
designated by Purchaser), but only to the extent such fees, costs and taxes are
for the period after the Closing and have not otherwise been included as a
Current Asset.

 

25 

 

2.10    Allocation. Within sixty (60) days of the determination of the Final
Closing Balance Sheet, Purchaser shall provide to Seller a schedule allocating
the Purchase Price (including those Assumed Liabilities that are liabilities for
Tax purposes) among the Purchased Assets (the “Purchase Price Allocation
Schedule”). The Purchase Price Allocation Schedule will be prepared in
accordance with the applicable provisions of the Code and the methodologies set
forth on Exhibit C. The parties hereto shall make appropriate adjustments to the
Purchase Price Allocation Schedule to reflect changes in the Purchase Price. The
parties hereto agree for all Tax reporting purposes to report the transactions
in accordance with the Purchase Price Allocation Schedule, as adjusted pursuant
to the preceding sentence, and to not take any position during the course of any
audit or other proceeding inconsistent with such schedule unless required by a
determination of the applicable Governmental Authority that is final.

 

2.11    Withholding. Purchaser (or any Affiliate thereof) shall be entitled to
deduct and withhold from any amounts payable under this Agreement amounts that
Purchaser (or any Affiliate thereof) is required to deduct and withhold under
any provision of any applicable Law; provided, however, at least five (5) days
prior to deducting and withholding from any amounts payable under this
Agreement, Purchaser shall give Seller notice of its intent to so deduct and
withhold and work in good faith with Seller to reduce or avoid such deduction
and withholding. All amounts withheld shall be treated for all purposes of this
Agreement as being timely paid.

 

ARTICLE III
Closing and Closing Date Deliveries

 

3.1        Closing. The term “Closing” as used herein shall refer to the actual
consummation of the Sale Transactions in exchange for the payment delivered to
Seller pursuant to Section 2.4. The Closing shall take place by conference call
and by exchange and release of signature pages by email or fax on the third
Business Day following the date upon which all of the conditions precedent set
forth in Articles IX and X are satisfied or waived by the appropriate party
hereto, subject to Article XI, or at such other place and time or on such other
date as is mutually agreed to in writing by Seller and Purchaser (“Closing
Date”); provided, however, in no event shall the Closing occur prior to July 1,
2017 without the prior written consent of Purchaser. The Closing shall be deemed
to take effect at 12:01 a.m. Chicago time on the Closing Date or at such other
time or on such other date as is mutually agreed to in writing by Seller and
Purchaser.

 

3.2        Closing Deliveries by Seller. At the Closing, Seller shall deliver to
Purchaser (and, with respect to Section 3.2(u), Truline shall deliver to
Purchaser):

 

(a)                A Bill of Sale and Assignment Agreement, substantially in the
form of Exhibit D (the “Bill of Sale”), as executed by Seller and the Company;
and all such other bills of sale, lease assignments, trademark assignments,
copyright assignments, patent assignments, employee work product assignments,
contract assignments, vehicle titles and other documents and instruments of
sale, assignment, conveyance and transfer, as Purchaser may deem reasonably
necessary or desirable;

 

26 

 

(b)               An Assumption Agreement, substantially in the form of Exhibit
H (the “Assumption Agreement”), executed by the Company in favor of Seller
reflecting the assumption of the Assumed Liabilities;

 

(c)                All certificates representing the Equity Interests, together
with duly executed equity powers or instruments of transfer therefor in favor of
Purchaser;

 

(d)               Original limited liability company record books and equity
record books of the Company to the extent not in the possession of the Company
as of the Closing;

 

(e)                A certificate of a Manager of Seller certifying as to: (i)
the articles of organization of Seller, as certified by the Secretary of State
of the State of Nevada not earlier than ten (10) days prior to the Closing Date;
(ii) the operating agreement, as amended, of Seller; (iii) resolutions of the
Mangers (or similar governing body) and equityholders of Seller authorizing and
approving the execution, delivery and performance by Seller of this Agreement
and any agreements, instruments, certificates or other documents executed by
Seller pursuant to this Agreement; and (iv) the incumbency and signatures of the
officers of Seller;

 

(f)                A certificate of the Secretary or an Assistant Secretary of
the Company certifying as to: (i) the certificate of formation of the Company,
as certified by the Secretary of State of the State of Delaware not earlier than
ten (10) days prior to the Closing Date; (ii) the limited liability company
agreement, as amended, of the Company; (iii) resolutions of the Board of
Directors (or similar governing body) of the Company and Seller, as the
equityholder of the Company, authorizing and approving the execution, delivery
and performance by the Company of this Agreement and any agreements,
instruments, certificates or other documents executed by the Company pursuant to
this Agreement; and (iv) the incumbency and signatures of the officers of the
Company;

 

(g)               A certificate of the Secretary of State of the State of Nevada
and of each other state set forth in Section 7.1(a) of the Disclosure Schedule,
in each case as of a date not earlier than ten (10) days prior to the Closing
Date, as to the good standing and foreign qualification of Seller in such
states;

 

(h)               A certificate of the Secretary of State of the State of
Delaware and of each other state set forth in Section 7.1(a) of the Disclosure
Schedule, in each case as of a date not earlier than ten (10) days prior to the
Closing Date, as to the good standing and foreign qualification of the Company
in such states;

 

(i)                 A certificate, dated the Closing Date, executed by an
officer of Seller, required by Section 9.2;

 

(j)                 The consents, authorizations and approvals of the
Governmental Authorities and other Persons set forth in Schedule 9.5, together
with any and all other consents, authorizations and approvals of other Persons
under additional Contracts identified in Section 7.3 of the Disclosure Schedule
that have been obtained by Seller as of the Closing;

 

27 

 

(k)               With respect to each Lease being contributed to the Company as
part of the Purchased Assets and set forth on Schedule 3.2(k), a Landlord
Consent and Estoppel Certificate substantially in the form of Exhibit E executed
by the landlord thereunder (collectively, the “Landlord Consent and Estoppel
Certificates”);

 

(l)                 For the Equityholder-Owned Facility located in Mesa,
Arizona, a lease substantially in the form of Exhibit F (the “Facility Lease”),
in each case, as executed by the landlord thereunder;

 

(m)             A non-disturbance agreement from the applicable mortgagee (if
any) which holds a lien on the fee interest of the Equityholder-Owned Facility
in the form of Exhibit G or such other form as may be reasonably acceptable to
Purchaser;

 

(n)               The Employment and Non-Compete Agreement as executed by Mr.
Estenson;

 

(o)               All documents necessary to amend Seller’s and any of its
Affiliate’s name to not include “Estenson Logistics” or any derivative thereof
or any other similar name, which shall be duly executed and in a form that
Purchaser may file in the State of Nevada and in each other state in which
Seller or such Affiliate is qualified to transact business;

 

(p)               (i) A certificate, duly completed and executed by Seller
pursuant to Section 1.1445-2(b)(2) of the Treasury Regulations, certifying that
Seller is not a “foreign person” within the meaning of Section 1445 of the Code
and (ii) a duly completed and executed IRS Form W-9 establishing that Seller is
exempt from U.S. back-up withholding;

 

(q)               Written resignations of all of the directors, managers and
officers of the Company as requested by Purchaser prior to the Closing;

 

(r)                 The Escrow Agreement as executed by Seller;

 

(s)                Payoff letters and Lien releases in form and substance
reasonably satisfactory to Purchaser from the holders of Indebtedness as
contemplated by Section 2.4(a);

 

(t)                 The Transition Services Agreement as executed by Seller;

 

(u)               A Consent to Assignment of the Truline Carrier/Broker
Agreement, substantially in the form of Exhibit K attached hereto, as executed
by Seller and Truline;

 

(v)               A CD containing each document, instrument, list and report
that was included in the ShareFile virtual data room established by or on behalf
of Seller for the transactions contemplated hereby; and

 

(w)             Such other documents as Purchaser may reasonably request to
carry out the purposes of this Agreement, including the documents to be
delivered pursuant to Article IX.

 

3.3        Closing Deliveries by Purchaser. At the Closing, Purchaser shall
deliver to Seller:

 

28 

 

(a)                The payments to be delivered by Purchaser pursuant to Section
2.4;

 

(b)               A certificate of the Secretary or an Assistant Secretary of
Purchaser certifying as to: (i) the certificate of incorporation of Purchaser
(or similar organizational document), as certified by the Secretary of State of
the state of organization of Purchaser not earlier than ten (10) days prior to
the Closing Date; (ii) the by-laws (or similar governing document), as amended,
of Purchaser; (iii) resolutions of the Board of Directors (or similar governing
body) of Purchaser authorizing and approving the execution, delivery and
performance by Purchaser of this Agreement and any agreements, instruments,
certificates or other documents executed by Purchaser pursuant to this
Agreement; and (iv) the incumbency and signatures of the officers of Purchaser;

 

(c)                A certificate of the Secretary of State of the state of
organization of Purchaser, as of a date not earlier than ten (10) days prior to
the Closing Date, as to the good standing of Purchaser in such state;

 

(d)               The certificate, dated the Closing Date, executed by an
officer of Purchaser, required by Section 10.2;

 

(e)                The Employment and Non-Compete Agreement as executed by the
Company;

 

(f)                The Escrow Agreement as executed by Purchaser;

 

(g)               The Transition Services Agreement as executed by the Company;

 

(h)               The Facility Lease as executed by the Company; and

 

(i)                 Such other documents as Seller may reasonably request to
carry out the purposes of this Agreement, including the documents to be
delivered pursuant to Article X.

 

3.4        Cooperation. Seller, the Company and Purchaser shall, on request, on
and after the Closing Date, cooperate with one another by furnishing any
additional information, executing and delivering any additional documents and/or
instruments and doing any and all such other things as may be reasonably
required by the parties to consummate or otherwise implement the transactions
contemplated by this Agreement.

 

ARTICLE IV
Pre-Closing Filings

 

4.1        Government Filings.

 

(a)                Each party covenants and agrees with each other to (i)
promptly file, or cause to be promptly filed, with any Governmental Authorities
all such notices, applications or other documents as may be necessary to
consummate the transactions contemplated hereby and (ii) thereafter diligently
pursue all consents or approvals from any such Governmental Authorities as may
be necessary to consummate the transactions contemplated hereby.

 

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(b)               Without limiting the generality of the foregoing, following
the date hereof, each of Seller and the Company shall (i) promptly file, or
cause to be promptly filed, with any Governmental Authorities all such notices,
applications or other documents set forth on Schedule 4.1(b) as are necessary
for Seller to contribute, assign, convey, transfer and deliver to the Company
all Permits held by Seller that are necessary for the Company to operate the
Business in substantially the same manner as operated by Seller on the date
hereof and prior to the Closing in form and substance reasonably satisfactory to
Purchaser, and (ii) thereafter diligently pursue all consents or approvals from
any such Governmental Authorities as may be necessary in connection therewith. 
After obtaining any such consents or approvals, Seller shall contribute, assign,
convey, transfer and deliver to the Company, and the Company shall accept, all
such Permits, free and clear of all Liens, pursuant to agreements in form and
substance reasonably satisfactory to Purchaser either (A) promptly following
receipt of such consents or approvals or (B) as of the Closing (in each case, as
mutually and reasonably determined by the parties in good faith). If necessary
with respect to any such Permits (as mutually and reasonably determined by the
parties in good faith), from the date of the contribution by Seller of such
Permits to the Company until the Closing, the Company shall lease such Permits
to Seller pursuant to a lease agreement in form and substance reasonably
acceptable to Purchaser and Seller. At the Closing, without any action required
by any Person, such lease shall terminate in all respects without any continuing
obligation or liability by a party thereunder.

 

(c)                Without limiting the generality of Section 4.1(a), each of
the parties will within five (5) Business Days following the date hereof, file
any Notification and Report Forms and related material that it may be required
to file (or cause to be filed) with the FTC and the DOJ under the HSR Act and
request early termination thereunder. Each of Seller and Purchaser shall be
responsible for fifty percent (50%) of the aggregate amount of all filing fees
under the HSR Act and any required filings under any other antitrust or
competition laws of any applicable jurisdiction, but both shall be responsible
for their respective legal fees regarding such filings. The parties further
agree to comply at the earliest practicable date with any formal or informal
request for additional information or documentation received from the FTC, DOJ
or any foreign competition authority in connection with the transactions
contemplated by this Agreement. Each party further agrees to cooperate with the
other parties in order to resolve any investigation or other inquiry concerning
the transactions contemplated hereby initiated by the FTC, DOJ or any foreign
competition authority. The parties agree to promptly inform the other party of
any material communication made to or received from the FTC, DOJ or any foreign
competition authority. The parties will use their respective commercially
reasonable efforts to offer to take, or cause to be taken, all other actions and
do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including taking all such further action as reasonably may be necessary to
resolve such objections, if any, as the FTC, DOJ or any other Governmental
Authority may assert under the HSR Act or any other Law with respect to the
transactions contemplated hereby, and to avoid or eliminate each and every
impediment under any Law that may be asserted by any Governmental Authority with
respect to the transactions contemplated hereby so as to enable the Closing to
occur as soon as expeditiously possible; provided, that Purchaser shall control
any response with respect to any such investigation or other inquiry; and
provided further, that nothing in this Section 4.1(c) shall require or be
construed to require (i) Purchaser, the Company or their Affiliates to propose,
negotiate, commit to or effect, by consent decree, hold separate order or
otherwise, the sale, divestiture, licensing or disposition of any Purchased
Assets or any assets or businesses of the Business or Purchaser, the Company or
any of their Affiliates, or (ii) Purchaser, the Company or their Affiliates to
take or commit to take actions that after the Closing Date would limit the
freedom of Purchaser, the Company or their Affiliates with respect to, or their
ability to retain, one or more of their respective businesses or assets
(including the Business and the Purchased Assets), in each case, as may be
required in order to avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order or other order in any suit or proceeding
which would otherwise have the effect of preventing or materially delaying the
Closing.

 

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ARTICLE V
Pre-Closing Covenants

 

5.1        Due Diligence Review. Seller and Equityholders shall at all
reasonable times prior to the Closing make the properties, assets, books and
records, including financial statements, work sheets and related documentation,
supplier and customer lists, receivables records, equipment lists, accountants’
work papers and reports, real estate and environmental records and reports,
personnel records and all agreements, pertaining to the Business and the
Purchased Assets available for examination, inspection and review by Purchaser
and its representatives, with such restrictions and limitations as may be
reasonably required by Seller in order to maintain confidentiality and so as not
to unreasonably disrupt the operation of the Business. As part of Purchaser’s
due diligence examination, Purchaser may make such inquiries of such Persons
having business relationships with Seller, including customers, suppliers and
employees, as Purchaser shall reasonably determine, upon reasonable notice to
and with the prior consent of Seller, which consent shall not be unreasonably
withheld.

 

5.2        Maintenance of Business and Notice of Changes.

 

(a)                Pending the Closing, Seller shall use commercially reasonable
efforts to preserve and protect the goodwill, rights, properties and assets of
its Business to keep available to the Business and the Company the services of
its employees and contractors, and to preserve and protect Seller’s
relationships with its employees, creditors, suppliers, customers and others
having business relationships with it, provided that Seller shall not be
restricted from operating the Business in a manner consistent with historical
practices (except as otherwise set forth herein (including in Section 5.3)).

 

(b)               Seller shall give Purchaser prompt notice of any Material
Adverse Change which may occur between the date hereof and the Closing Date.

 

(c)                Pending the Closing, neither Seller nor the Company shall
obtain any assets or properties, enter into any Contract, incur any Liability or
undertake any business operations, except as otherwise expressly contemplated
hereby.

 

5.3        Pending Closing. Without limiting the generality of Section 5.2,
pending the Closing, Seller shall, and with respect to clause (n) below,
Equityholders shall, except as set forth in Section 5.3 of the Disclosure
Schedule:

 

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(a)                conduct and carry on its Business only in the Ordinary
Course;

 

(b)               not purchase, sell, lease, mortgage, pledge or otherwise
acquire or dispose of any properties or assets with a value in excess of
$100,000, except for equipment dispositions or trade ins, inventory and supplies
purchased, sold or otherwise disposed of in the Ordinary Course;

 

(c)                not waive, release or cancel any claims against third parties
or debt owing to it having a value in excess of $10,000;

 

(d)               not increase or otherwise change the rate or nature of the
compensation (including wages, salaries, bonuses, and benefits under pension,
profit sharing, deferred compensation and similar plans or programs) which is
paid or payable to any employee of Seller, other than (i) in the Ordinary Course
pursuant to a compensation review normally scheduled to occur during this period
or (ii) retention or signing bonuses, if necessary to incent employees to
continue in the employ of the Company subsequent to the Closing or discretionary
bonuses to be paid upon Closing that constitute Transaction Expenses and are
included on the schedule delivered by Seller to Purchaser contemplated by
Section 2.4(b);

 

(e)                keep the tangible personal property used in the operation of
the Business in good working order and repair, reasonable wear and tear
excepted, and replace any of it which shall be worn out, lost, stolen or
destroyed if doing so would be commercially reasonable without regard to the
transactions contemplated hereby or consistent with past practices;

 

(f)                not enter into, or become obligated under, any Contract that
would constitute a Material Contract if in effect on the date hereof;

 

(g)               not terminate or materially change, amend or otherwise modify
any Material Contract to which a Seller is a party;

 

(h)               except as disclosed in Section 7.18(a) of the Disclosure
Schedule, not make, or commit to make, any payment, contribution or award under
or into any bonus, pension, profit sharing, deferred compensation or similar
plan, program or trust;

 

(i)                 not make any material changes in its accounting systems,
policies, principles or practices;

 

(j)                 (i) not make any loans or advances to any other Person,
other than any loan or advance made in the Ordinary Course to any employee or
owner-operator of Seller, in excess of $50,000 and (ii) not make any capital
contributions to, or investments in, any other Person in excess of $50,000;

 

(k)               not authorize or make any capital expenditures, other than in
the Ordinary Course consistent with the capital expenditures budget for fiscal
year 2017 provided by Seller to Purchaser prior to the date hereof;

 

(l)                 not change its historical practice with respect to the
payment of current liabilities or the collection of Accounts Receivable;

 

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(m)             furnish to Purchaser promptly after the end of each fiscal
month, beginning with the month ending April 30, 2017 an unaudited balance sheet
as of such month end and statement of income of Seller for the portion of the
fiscal year then ended;

 

(n)               (i) not directly, or indirectly through any of Seller’s, the
Company’s or Equityholder’s Affiliates, directors, managers, officers,
employees, agents or advisors, solicit, initiate, pursue or encourage (by way of
furnishing information or otherwise) any inquiries or proposals, or enter into
any discussions, negotiations or agreements (whether preliminary or definitive)
with any Person, contemplating or providing for any merger, acquisition,
purchase or sale of equity or all or any material part of the assets or any
business combination or change in control of Seller, the Company or the Business
(any thereof, an “Alternative Proposal”); (ii) deal exclusively with Purchaser
with respect to the sale of the Company, the Business and the Purchased Assets;
and (iii) notify Purchaser promptly upon receipt by Seller, the Company, either
Equityholder or any Affiliate, director, manager, officer, employee or agent
thereof of any Alternative Proposal;

 

(o)               (i) not enter into any agreement with any taxing authority
with respect to any Tax or Tax Returns with respect to the Business, the
Purchased Assets, or the Transferred Employees (or otherwise with respect to the
Company); (ii) not change an accounting period with respect to any Tax with
respect to the Business, the Purchased Assets, or the Transferred Employees (or
otherwise with respect to the Company); (iii) not file an amended Tax Return
with respect to the Business, the Purchased Assets, or the Transferred Employees
(or otherwise with respect to the Company); (iv) not make a Tax election
inconsistent with past practices; (v) not change or revoke any election with
respect to Taxes or Tax Return with respect to the Business, the Purchased
Assets, or the Transferred Employees (or otherwise with respect to the Company);
(vi) not extend the applicable statute of limitations with respect to any Tax
with respect to the Business, the Purchased Assets, or the Transferred Employees
(or otherwise with respect to the Company); or (vii) not take any action that
could result in the Company ceasing to be a “disregarded entity”; or

 

(p)               not agree to do any of the items prohibited by Section 5.3(b),
(c), (d), (f), (g), (h), (i), (j), (k), (l), (n) or (o).

 

5.4        Consents. Pending the Closing Date, the parties shall proceed with
all reasonable diligence and use commercially reasonable efforts to obtain the
written consent, authorization or approval to the consummation of this Agreement
from all necessary Persons, including all consents, authorizations and approvals
under the Contracts identified in Section 7.3(a) of the Disclosure Schedule.

 

5.5        Commercially Reasonable Efforts to Close. (a) Subject to the terms
and conditions hereof, each party hereto (including Truline) covenants and
agrees to use commercially reasonable efforts to consummate the transactions
contemplated hereby and will fully cooperate with the other parties hereto for
such purpose.

 

(b)               Seller agrees to promptly notify Purchaser, and Purchaser
agrees to promptly notify Seller, of any event, fact or circumstance of which
the parties become aware that could reasonably be expected to result in the
failure of a condition set forth in Article IX or X to be satisfied and, if such
condition is curable, to allow Purchaser or Seller a reasonable opportunity to
satisfy such condition.

 

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ARTICLE VI
Financial Statements; Disclosure Schedule

 

6.1        Pre-Signing Deliveries. On or prior to the date hereof, Seller has
delivered to Purchaser:

 

(a)                (i) True and complete copies of the audited balance sheets of
Seller as of December 31, 2014, 2015 and 2016 and the related statements of
income, members’ equity and cash flows for the years then ended (collectively,
the “Annual Financial Statements”);

 

(b)               True and complete copies of the unaudited balance sheet of
Seller as of the Interim Balance Sheet Date and the related statement of income
for the applicable portion of the fiscal year then ended (the “Interim Financial
Statements”); and

 

(c)                A disclosure schedule (the “Disclosure Schedule”) dated even
date herewith, preceded by a copy of each Contract or plan or other document or
instrument referred to in the Disclosure Schedule.

 

ARTICLE VII
Representations and Warranties of Seller

 

Seller represents and warrants to Purchaser as follows:

 

7.1        Due Organization; Equity Interests. (a) Seller is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Nevada. Seller is not required to be qualified as a foreign company
in any jurisdiction, other than in the States set forth in Section 7.1(a) of the
Disclosure Schedule or in such State where failure to be so qualified would not
have Material Adverse Effect. Seller is in good standing in all jurisdictions
set forth in Section 7.1(a) of the Disclosure Schedule. Seller has all requisite
limited liability company power and authority to carry on the Business and to
own and use the assets and properties owned and used by it. The Company is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware. As of the Closing, the Company is not
required to be qualified as a foreign company in any jurisdiction, other than in
the States set forth in Section 7.1(a) of the Disclosure Schedule or in such
State where failure to be so qualified would not have a Material Adverse Effect.
The Company is in good standing in all jurisdictions set forth in Section 7.1(a)
of the Disclosure Schedule. The Company has all requisite limited liability
company power and authority to carry on the Business and to own and use the
assets and properties owned and used by it.

 

(b)               The Company has (i) no assets or properties and no Liabilities
other than as expressly contemplated by this Agreement, (ii) engaged in no
business activities or operations, other than activities incident to its
formation as a wholly-owned subsidiary of Seller or as otherwise contemplated by
this Agreement, (iii) complied with all Laws since its formation and (iv)
complied with its organizational documents since its formation.

 

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(c)                Mr. Estenson, through the Estenson Trust, and Mr. Truman,
through the Truman Trust, together own, beneficially and of record, all of the
issued and outstanding equity interests of Seller as set forth on Section 7.1(c)
of the Disclosure Schedule.

 

(d)               Section 7.1(d) of the Disclosure Schedule sets forth all of
the authorized, issued and outstanding equity interests of the Company. The
Equity Interests constitute all of the issued and outstanding equity interests
of the Company. All of the Equity Interests are validly issued, fully paid and
nonassessable, and no Equity Interest was issued in violation of any preemptive
rights or Laws. Seller has valid, good and marketable title to, and owns,
beneficially and of record, all of the Equity Interests, free and clear of all
Liens (except set forth on Section 7.1(d) of the Disclosure Schedule). At the
Closing, Purchaser will acquire valid, good and marketable title to all of the
Equity Interests, free and clear of all Liens. Except for the Equity Interests,
there are no other issued and outstanding equity securities of the Company, or
securities convertible into or exchangeable or exercisable for equity
securities, outstanding, and there are no outstanding options, warrants, rights,
Contracts, commitments, understandings or arrangements by which the Company is
bound to issue, repurchase, redeem, exchange or otherwise acquire or retire any
equity securities of the Company. Except set forth on Section 7.1(d) of the
Disclosure Schedule, there are no voting trusts, proxies or any other Contracts
with respect to the voting of the equity interests of the Company.

 

(e)                Except as set forth in Section 7.1(e) of the Disclosure
Schedule, Seller does not own or hold, directly or indirectly, any capital stock
of, or other equity interests in, any corporation, partnership, limited
liability company, joint venture or other entity. The Company does not own or
hold, directly or indirectly, any capital stock of, or other equity interests
in, any corporation, partnership, limited liability company, joint venture or
other entity.

 

7.2        Authority. Each Company Entity has the limited liability company
right, power and authority to enter into, and perform its obligations under this
Agreement and each other Transaction Document delivered in connection herewith
to which it is a party; and has taken all requisite limited liability company
action to authorize the execution, delivery and performance of this Agreement
and each such other Transaction Document and the consummation of the Sale
Transactions and other transactions contemplated by this Agreement; and this
Agreement has been duly authorized, executed and delivered by each Company
Entity and is binding upon, and enforceable against, each Company Entity in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of creditors’ rights generally and by general principles
of equity (whether applied in a proceeding at law or in equity).

 

7.3        No Violations and Consents. (a) Neither the execution, delivery and
performance of this Agreement by either Company Entity nor the consummation of
the Sale Transactions or any other transaction contemplated by this Agreement,
does or will, after the giving of notice, or the lapse of time, or otherwise,
(i) conflict with, result in a breach of, or constitute a default under, the
articles of organization or operating agreement (or similar documents) of either
Company Entity, or any Law, Permit or Order, or any Contract or plan to which
either Company Entity is a party or by which either Company Entity or any of the
Purchased Assets is subject or bound; (ii) result in the creation of any Lien
upon any of the Purchased Assets or the Equity Interests; (iii) except as set
forth in Section 7.3(a) of the Disclosure Schedule, terminate, amend or modify,
or give any party the right to terminate, amend, modify, abandon, or refuse to
perform, any Contract or plan to which either Company Entity is a party; or (iv)
accelerate or modify, or give any party the right to accelerate or modify, the
time within which, or the terms under which, any duties or obligations are to be
performed, or any rights or benefits are to be received, under any Contract or
plan to which either Company Entity is a party.

 

35 

 

(b)               Except as set forth in Section 7.3(b) of the Disclosure
Schedule and as required by the HSR Act, no consent, authorization or approval
of, filing or registration with or giving of notice to, any Governmental
Authority is necessary in connection with the execution, delivery and
performance by either Company Entity of this Agreement or the consummation of
the Sale Transactions or the other transactions contemplated hereby.

 

7.4        Brokers. Neither this Agreement nor the Sale Transactions or any
other transaction contemplated by this Agreement was induced or procured through
any Person acting on behalf of, or representing either Company Entity, either
Equityholder or any of their Affiliates as broker, finder, investment banker,
financial advisor or in any similar capacity.

 

7.5        Required Assets. All of the rights, properties and assets utilized or
required by Seller in connection with owning and operating the Business are (a)
either owned by Seller or the Company or licensed or leased to Seller under one
of the Contracts conveyed to the Company under this Agreement; and (b) included
in the Purchased Assets (other than the Retained Assets). Immediately after the
Closing, all of the rights, properties and assets utilized or required by Seller
in connection with owning and operating the Business as of immediately prior to
the Closing are either owned by the Company or licensed or leased to the
Company.

 

7.6        Related Party Transactions. Except as set forth in Section 7.6 of the
Disclosure Schedule, none of Seller, either Equityholder or any of their
Affiliates (including Truline) or any of their respective equityholders,
managers, directors, officers, or to Seller’s Knowledge, any employee (a) owns
five percent (5%) or more of any class of securities of, or has an equity
interest of five percent (5%) or more in, any Person which has any business
relationship (as lessor, supplier, customer, consultant or otherwise) with the
Business; (b) owns, or has any interest in, any right, property or asset which
is utilized or required by a Seller in connection with owning or operating the
Business; or (c) has any other business relationship (as lessor, supplier,
customer, consultant or otherwise) with the Business. Without limiting the
foregoing, Section 7.6 of the Disclosure Schedule sets forth a complete and
accurate list of (i) each parcel of real property that Seller leases from an
Equityholder or any Affiliate thereof (including Truline) and (ii) each Contract
between Seller, on the one hand, and an Equityholder or an Affiliate of a
Equityholder (including Truline) or any of their respective equityholders,
stockholders, managers, directors, officers or employees, on the other hand.

 

7.7        Title to Purchased Assets. (a) On the Most Recent Annual Balance
Sheet Date, Seller had, and on the date hereof Seller has, good and marketable
title to, or a valid leasehold interest in, all of the Purchased Assets existing
on such date, except for any Purchased Assets disposed of in the Ordinary Course
since the Most Recent Annual Balance Sheet Date, free and clear of any Liens,
other than Permitted Liens and Liens contemplated by this Agreement to be
released upon the Closing.

 

(b)               At the Closing, Seller shall, subject to the receipt of
payment pursuant to Section 2.4(d) and satisfaction of the other conditions to
the Closing set out in this Agreement, contribute, assign, convey, transfer and
deliver to the Company good and marketable title to all of the Purchased Assets
free and clear of any Liens, other than Permitted Liens.

 

36 

 

(c)                Set forth as Section 7.7 of the Disclosure Schedule is a true
and complete list of all of Seller’s (i) trucks, tractors and trailers, and (ii)
other tangible personal property, utilized or required by Seller in connection
with owning or operating the Business as of the date hereof other than any item
of such personal property in clause (ii) having a cost basis of less than
$50,000.

 

7.8        Condition of Assets. Except as set forth in Section 7.8 of the
Disclosure Schedule, all of the vehicles, trucks, tractors, trailers and other
transportation equipment, machinery, equipment, tools and other tangible
personal property included in the Purchased Assets have been maintained in
accordance with industry practice and are in good operating condition and
repair, ordinary wear and tear excepted.

 

7.9        Real Estate. (a) Seller does not own and has never owned any real
property or interests in real property, and Seller does not have any outstanding
option or right of first refusal to purchase any real property or interest
therein.

 

(b)               Section 7.9(b) of the Disclosure Schedule sets forth a true
and complete list of all real property leased or subleased by Seller (the
“Leased Real Property”) and a true and complete list of all real property
licensed to Seller, or otherwise used or occupied by Seller for the operation of
the Business (the “Licensed Real Property”), together with a true and complete
list of (x) all leases (including the parties thereto, annual rent, expiration
date and location of the real property covered thereby), lease guaranties and
subleases with respect to the Leased Real Property, including all amendments,
terminations and modifications thereof (each, a “Lease”), and (y) licenses and
agreements for the leasing, use or occupancy of, or otherwise granting a right
in or relating Licensed Real Property, including all amendments, terminations
and modifications thereof (each, a “License”). Seller has provided to Purchaser
a true and complete copy of each Lease and each License. With respect to each
such Lease or License: (i) Seller has a valid and assignable (subject to any
required lessor or other consent requirements set forth on Section 7.3(a) of the
Disclosure Schedule) interest or estate in such Lease or License, free and clear
of all Liens, other than Permitted Liens; (ii) such Lease or License is in full
force and effect, valid and enforceable against Seller in accordance with its
terms; (iii) such Lease or License, as the case may be, constitutes the entire
agreement to which Seller is a party with respect to the subject Leased Real
Property or Licensed Real Property; (iv) Seller has not assigned, sublet,
transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in
the interest or estate created thereby; (v) the Leased Real Property and all
facilities located thereon have received all material Permits required in
connection with the operation thereof and are in compliance in all material
respects with and have been operated and maintained in all material respects in
accordance with all applicable Laws, including any zoning Laws; (vi) Seller is
not in receipt of any notice of default pursuant to such Lease or License, no
rentals are past due and no condition exists that is or could be a default by
Seller under such Lease or License; (vii) provided all applicable Landlord
Consent and Estoppel Certificates have been obtained as contemplated in Section
3.2(f) and all consents to assignment of Licenses contained in the top 10
Customer Contracts set forth on Schedule 9.5 have been obtained, the Closing
will not affect the enforceability against any Person of such Lease or License
or the rights of the Company to the continued use and possession of the Leased
Real Property or Licensed Real Property for the conduct of business as currently
conducted; and (viii) other than Seller, there are no other parties occupying,
or with a right to occupy granted by Seller, the Leased Real Property.

 

37 

 

(c)                All of the Leased Real Property, and all components of all
improvements included within each Leased Real Property, including the roofs,
foundations, walls and other structural elements thereof and the sprinkler and
fire protection, if any, heating, ventilation, air conditioning, plumbing,
electrical, mechanical, sewer, waste water, storm water, paving and parking
equipment, systems and facilities included therein, are in good condition,
working order and repair sufficient to serve their intended purposes, including
use and operation consistent with their present use and operation, except for
scheduled maintenance, repairs and replacements conducted or required in the
Ordinary Course with respect to the operation of the Leased Real Property.

 

(d)               Each parcel of Leased Real Property abuts on at least one side
a public street or road in a manner so as to permit reasonable, customary and
adequate commercial and non-commercial vehicular and pedestrian ingress, egress
and access to such parcel, or has adequate easements across intervening property
to permit reasonable, customary and adequate commercial and non-commercial
vehicular and pedestrian ingress, egress and access to such parcel from a public
street or road.

 

(e)                To Seller’s Knowledge, there are no claims, governmental
investigations, litigation or proceedings which are pending or threatened
against the Leased Real Property. There are no claims, governmental
investigations, litigation or proceedings which are pending or, to Seller’s
Knowledge, threatened against Seller with respect to the Leased Real Property or
Licensed Real Property.

 

(f)                No condemnation or eminent domain proceedings have been
initiated by service of process on Seller which relate to the Leased Real
Property or Licensed Real Property, and no such proceedings are, to Seller’s
Knowledge, threatened or have been filed by any Governmental Authority with
respect to the Leased Real Property.

 

(g)               No improvements on the Leased Real Property encroach onto (i)
a parcel of land not owned or leased by Seller or (ii) any part of the Leased
Real Property which is subject to or encumbered by a right-of-way, easement or
similar agreement. No improvements on any parcel of property not owned or leased
by Seller encroaches onto the Leased Real Property.

 

(h)               Seller is not in default in any material respect under and has
not breached in any material respect, and the Leased Real Property is not in
violation in any material respect of, and no event has occurred or is continuing
which with notice or the passage of time, or both, would constitute a default in
any material respect by Seller under any Contract affecting title to or relating
to the use of the Leased Real Property, and no such Contract has impaired in any
material way the right of Seller to operate the Business at the Leased Real
Property, nor has Seller received any notice of or, to Seller’s Knowledge, is
there any fence dispute, boundary dispute, boundary line question, water dispute
or drainage dispute concerning or affecting the Leased Real Property.

 

38 

 

7.10    Litigation and Compliance with Laws. (a) Except as set forth in
Section 7.10(a) of the Disclosure Schedule, there is no, and in the past two (2)
years there has been no, action at law or in equity, no arbitration proceeding,
and no action, proceeding, complaint or, to Seller’s Knowledge, investigation
before or by any Governmental Authority, pending or, to Seller’s Knowledge,
threatened against or by or affecting either Company Entity or the Business, or
any of the Purchased Assets or either Company Entity’s right to own the
Purchased Assets or operate the Business. Neither Company Entity nor any of the
Purchased Assets is subject to any Order.

 

(b)               There are no claims, actions, suits, proceedings or
investigations pending or, to Seller’s Knowledge, threatened against either
Company Entity with respect to this Agreement, or in connection with the
transactions contemplated hereby.

 

(c)                There is no labor trouble, dispute, grievance, controversy or
strike pending or, to Seller’s Knowledge, threatened against Seller or affecting
the Business. Except as set forth in Section 7.10(c) of the Disclosure Schedule,
Seller is not a party to or bound by any collective bargaining agreement or
otherwise required to bargain with any union, nor has Seller experienced within
the last five (5) years any strikes or other actions, grievances, claims of
unfair labor practices, or other collective bargaining disputes or trade
disputes. Except as set forth in Section 7.10(c) of the Disclosure Schedule, no
organizational effort has been made or threatened by any employee or by or on
behalf of any labor union (which includes any application or request for
recognition) within the last five (5) years with respect to employees of Seller.
To Seller’s Knowledge, there has been no card signing by any employee of Seller
within the last five (5) years. Seller has not committed any unfair labor
practice or violated any applicable Laws within the last five (5) years relating
to employment or employment practices or termination of employment, including
those relating to wages and hours, discrimination in employment, occupational
health and safety, and collective bargaining. Except as set forth in Section
7.10(c) of the Disclosure Schedule, there is no, and in the past five (5) years
there has been no, pending or, to Seller’s Knowledge, threatened charge or
complaint against Seller involving any employment matter, including any charge
or complaint before the National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable state, local, or foreign agency.

 

(d)               Seller does not own or operate, and has not within the last
(5) years owned or operated, the Business or the Purchased Assets in violation
in any material respect of any applicable Law.

 

(e)                Section 7.10(e) of the Disclosure Schedule sets forth a
complete and correct list of all cargo losses or other damage or loss with
respect to the goods of others suffered by Seller during the past five (5)
years, in each case where the amount of such loss or damage was in excess of
$100,000 per claim or judgment.

 

7.11    Intellectual Property. (a) Section 7.11(a) of the Disclosure Schedule
sets forth the true and complete schedule of all registered Intellectual
Property (including issued patents, applications, divisions, continuations and
continuations-in-part, reissues, patents of addition, utility models and
inventors’ certificates) and material unregistered Intellectual Property and any
licenses or sublicenses with respect to the foregoing which are utilized or
required in the conduct of the Business as presently operated, other than
click-wrap, shrink-wrap and off-the-shelf software licenses, and any other
software licenses that are commercially available on reasonable terms to the
public generally with one-time or annual license, maintenance, support and other
fees less than $25,000 per year. All registrations listed in the Disclosure
Schedule are in good standing, valid, subsisting and in full force and effect in
accordance with their terms. Except as set forth in Section 7.11 of the
Disclosure Schedule, no licenses, sublicenses, covenants or agreements have been
granted or entered into by Seller in respect of any of such Intellectual
Property.

 

39 

 

(b)               There is no Intellectual Property necessary for the conduct of
the Business as presently operated, except those included in the Purchased
Assets.

 

(c)                Except as set forth on Section 7.11(c) of the Disclosure
Schedule, there is not now and has not been during the past five (5) years any
infringement, misuse or misappropriation by Seller of any Intellectual Property
which is owned or licensed by any third party, and there is not now any existing
or, to Seller’s Knowledge, threatened claim against Seller of infringement,
misuse or misappropriation of any Intellectual Property, and there has been no
such claim in the past five (5) years.

 

(d)               There is no pending or, to Seller’s Knowledge, threatened
claim by Seller against others for infringement, misuse or misappropriation of
any Intellectual Property owned or licensed by Seller and which is utilized or
required in the conduct of the Business, and there has been no such claim in the
past five (5) years.

 

(e)                No equityholder, stockholder, officer, manager, director,
employee or Affiliate (including any Equityholder) of Seller owns, directly or
indirectly, in whole or in part, any Intellectual Property therefor (i) which
Seller is presently using in the conduct of the Business; (ii) the use of which
is necessary for the Business; or (iii) which pertains to the Business.

 

7.12    Contracts. (a) Section 7.12 of the Disclosure Schedule contains a true
and complete list and description of all of the following Contracts to which
Seller is a party or by which any of Seller’s respective properties or assets
are bound (which such Section 7.12 is organized to correspond to the respective
subsections below) (each Contract listed on Section 7.12 or required to be
listed thereon is referred to herein as a “Material Contract”):

 

(i)                 Each Contract with (A) a Material Customer, (B) any other
customer involving payments in excess of $50,000 or with a remaining term of
greater than one year from the date hereof or (C) a Material Supplier;

 

(ii)               Each Contract relating to Indebtedness;

 

(iii)             Each Contract for the acquisition or disposition of any Person
or any business unit thereof or any material assets thereof;

 

(iv)             Each joint venture Contract, partnership agreement, limited
liability company agreement or similar Contract with a third party;

 

(v)               Each Contract requiring capital expenditures after the date
hereof in an amount in excess of $50,000;

 

40 

 

(vi)             Each Contract containing covenants limiting the freedom of
Seller to compete with any Person in a product line or line of business or
operate in any geographic location or solicit any Person;

 

(vii)           Each Contract pursuant to which Seller licenses Intellectual
Property from a third party, other than click-wrap, shrink-wrap and
off-the-shelf software licenses, and any other software licenses that are
commercially available on reasonable terms to the public generally with one-time
or annual license, maintenance, support and other fees less than $25,000 per
year;

 

(viii)         Each Contract with any Equityholder or any Affiliate of Seller or
any Equityholder or any manager, director or officer of Seller or any such
Affiliate;

 

(ix)             Each Contract under which Seller is lessee, sublessee, lessor
or sublessor of, or holds or operates, any real property, including all Leases
and Licenses all other Contracts with respect to the Leased Real Property and
the Licensed Real Property;

 

(x)               Each Contract for the purchase or sale of any real property;

 

(xi)             Each Contract containing a “most favored nation” pricing
agreement, exclusive dealing arrangement, rebate, volume commitment or
take-or-pay arrangement or constituting a requirements Contract;

 

(xii)           Each Contract with a Governmental Authority;

 

(xiii)         Each settlement agreement in connection with any litigation,
claim or proceeding having continuing effect, none of which imposes any material
obligation on Seller;

 

(xiv)         Each Contract with any employee of Seller;

 

(xv)           Each Contract with any independent contractor requiring the
payment of more than $50,000 over any 12-month period following the Closing; and

 

(xvi)         Each Contract to which both Seller and Truline are a party or
under which both Seller and Truline have rights and/or obligations.

 

(b)               All Material Contracts to be transferred, assigned or conveyed
to the Company under this Agreement are valid, binding and enforceable against
the applicable Seller party thereto and, to Seller’s Knowledge, the other
parties thereto in accordance with their terms. Upon consummation of the
Closing, and provided all third party required consents identified on Section
7.3(a) of the Disclosure Schedule and all Landlord Consents and Estoppel
Certificates are obtained, each Material Contract shall continue in full force
and effect and shall not give rise to any termination, amendment, acceleration,
cancellation, penalty or other adverse consequence.

 

(c)                Neither Seller nor, to Seller’s Knowledge, any other Person
is in breach in any material respect of, or default, in any material respect
under, any Material Contract, and no event or action has occurred, is pending,
or, to Seller’s Knowledge, is threatened, which, after the giving of notice, or
the lapse of time, or otherwise, could constitute or result in a breach in any
material respect by Seller, or to Seller’s Knowledge, any other Person, or a
default in any material respect by Seller, or, to Seller’s Knowledge, any other
Person, under any Material Contract.

 

41 

 

7.13    Financial Statements and Related Matters. (a) Except as set forth on
Section 7.13(a) of the Disclosure Schedule, the Financial Statements were
prepared in accordance with GAAP consistently applied and present fairly, in all
material respects, the financial position and results of operations, members’
equity and cash flow, of Seller at the dates and for the periods indicated
therein, provided, however, that the Interim Financial Statements and the
financial statements delivered pursuant to Section 5.3 lack footnotes, year-end
adjustments (none of which would be material) and other presentation items.

 

(b)               Seller maintains and complies in all material respects with a
system of accounting controls sufficient to provide reasonable assurances that:
(i) its business is operated in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of Seller’s financial statements in conformity with GAAP, and to maintain
accountability for items therein; (iii) access to properties and assets is
permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for items is compared with
the actual levels at regular intervals and appropriate actions are taken with
respect to any differences.

 

(c)                On the Most Recent Annual Balance Sheet Date, Seller had no
Liability of the type which should be reflected in balance sheets (including the
notes thereto) prepared in accordance with GAAP, which was not fully disclosed,
reflected or reserved against in the Most Recent Annual Balance Sheet of Seller;
and, except for Liabilities which have been incurred by Seller since the Most
Recent Annual Balance Sheet Date in the Ordinary Course (none of which are
material and none of which are a liability for breach of contract or warranty or
involves a tort, infringement, claim, lawsuit or environmental, health or safety
matter), since the Most Recent Annual Balance Sheet Date, Seller has not
incurred any Liability.

 

(d)               All of the Accounts Receivable which are reflected in the Most
Recent Annual Balance Sheet of Seller were acquired by Seller in the Ordinary
Course; and all of the Accounts Receivable which have been or will be acquired
by Seller since the Most Recent Annual Balance Sheet Date were or will be
acquired in the Ordinary Course. Each of the Accounts Receivable that constitute
Purchased Assets arose from bona fide sales of goods or services in the Ordinary
Course to Persons that are not Affiliates of Seller.

 

(e)                Seller has no Indebtedness, except as described in Section
7.13(e) of the Disclosure Schedule.

 

(f)                The books and records of Seller accurately reflect the
assets, liabilities, business, financial condition and results of operations of
Seller in all material respects and have been maintained in accordance with good
business and bookkeeping practices in all material respects.

 

42 

 

7.14    Changes Since the Most Recent Annual Balance Sheet Date. Since the Most
Recent Annual Balance Sheet Date, except as set forth in Section 7.14 of the
Disclosure Schedule:

 

(a)                The Business has been conducted and carried on only in the
Ordinary Course;

 

(b)               Except for tractors, trailers and supplies purchased, sold or
otherwise disposed of in the Ordinary Course, Seller has not purchased, sold,
leased, mortgaged, pledged or otherwise acquired or disposed of any properties
or assets of or for the Business in an aggregate amount exceeding $100,000;

 

(c)                Except for automobile accidents in the Ordinary Course,
Seller has not sustained or incurred any loss or damage (whether or not insured
against) to its properties or assets on account of fire, flood, accident or
other calamity which has interfered with or affected, or could reasonably be
expected to interfere with or affect, in any material respect, the operation of
the Business;

 

(d)               Seller has not made, or become committed to make, any payment,
contribution or award under or into any bonus, pension, profit sharing, deferred
compensation or similar plan, program or trust covering any employee of the
Business, except as disclosed in Section 7.18 of the Disclosure Schedule or
which are Transaction Expenses and included in the schedule delivered by Seller
to Purchaser pursuant to Section 2.4(b);

 

(e)                There has been no Material Adverse Change;

 

(f)                Seller has not made any loans, advances or capital
contributions to, or investments in, any other Person, other than as set forth
on Section 7.14(f) of the Disclosure Schedule;

 

(g)               Seller has not changed any accounting systems, policies,
principles or practices (including any change in depreciation or amortization
policies or rates);

 

(h)               Seller has not entered into, authorized or permitted any
agreement or transaction with an Equityholder or any Affiliate thereof that will
survive the Closing or which is an Assumed Liability or Purchased Asset; or

 

(i)                 Seller has not agreed to do any of the items set forth in
Sections 7.14(b), (d), (e), (f), (g) or (h).

 

7.15    Insurance. Section 7.15 of the Disclosure Schedule sets forth a list of
all policies of insurance which are maintained by Seller, including name of
insurer and type and amount of coverage; and all of such policies of insurance
are in good standing, valid and subsisting, and in full force and effect in
accordance with their terms. Seller has not been refused any insurance with
respect to the Purchased Assets or the Business, and its coverage has not been
limited by any insurance carrier to which it has applied for any such insurance
or with which it has carried.

 

7.16    Licenses and Permits. Section 7.16 of the Disclosure Schedule sets forth
a complete and correct list of all material licenses, franchises, permits, fuel
permits, operating authorities, state operating licenses or registrations and
other interstate or intrastate regulatory licenses and other governmental
authorizations held by Seller or the Company relating to the Business
(collectively, “Permits”). The Permits are valid and in effect. Neither Seller
nor the Company has received any notice that any Governmental Authority intends
to cancel, terminate or not renew any of the same. Seller or the Company holds
all Permits, and associated instruments of financial responsibility, necessary
for the conduct of the Business as heretofore conducted. Section 7.16 of the
Disclosure Schedule sets forth a list of the certificates of authority that
Seller or the Company holds from the Federal Motor Carrier Safety Administration
pursuant to 49 U.S.C. § 13902 to operate as a motor carrier of general
commodities and the certificates of authority that Seller or the Company holds
in certain states to operate as an intrastate motor carrier of general
commodities. No certificate of authority issued to Seller or the Company to
operate as a motor carrier is subject to pending or, to Seller’s Knowledge,
threatened action on the part of any Governmental Authority for downgrade,
suspension, revocation, restriction or encumbrance. Neither the U.S. Department
of Transportation nor any state regulatory agency has issued or threatened to
issue to Seller or the Company a safety rating of “unsatisfactory” or
“conditional.”

 

43 

 

7.17    Environmental Matters. (a) Seller has not used, transported,
manufactured, processed, stored, treated or disposed of any Hazardous Materials,
in, beneath or on the Leased Real Property or Licensed Real Property except as
necessary to the conduct of the Business and in compliance in all material
respects with Environmental Laws. Section 7.17(a) of the Disclosure Schedule
lists the customers for which Seller, to Seller’s Knowledge, has in the past
five (5) years transported, or arranged for the transportation of, Hazardous
Materials.

 

(b)               While Seller has occupied the Leased Real Property, there has
not occurred, nor is there presently occurring, a Release or threatened Release
of any Hazardous Material on, into, from or beneath the surface of any of the
parcels of Leased Real Property, and no part of the Leased Real Property or, to
Seller’s Knowledge, no part of any parcels adjacent to the Leased Real Property,
including the ground water located thereon, is presently contaminated by
Hazardous Materials.

 

(c)                Seller has not treated, transported or disposed of, nor, to
Seller’s Knowledge, has it allowed or arranged for any third parties to treat,
transport, or dispose of, any Hazardous Materials or other waste, (i) to or at a
site which was not lawfully permitted to receive such Hazardous Material or
other waste for such purpose, (ii) to or at a site which has been placed on the
National Priorities List or its state equivalent, (iii) to or at a site which
the United States Environmental Protection Agency or the relevant state agency
has proposed or is proposing to place on the National Priorities List or its
state equivalent, or (iv) in a manner which gives rise to liability under any
Environmental Laws. Seller has not received notice, and, to Seller’s Knowledge,
there are no facts which could give rise to any notice, that Seller is, or may
be, a potentially responsible party for a federal or state environmental cleanup
site arising from or relating to the Business or the Purchased Assets or for
corrective action arising from or relating to the Business or the Purchased
Assets under any Environmental Law. Seller has not (A) received any request for
information in connection with any federal or state environmental cleanup site
arising from or relating to the Business or Purchased Assets or (B) undertaken
(or been requested to undertake) any response or remedial actions or cleanup
action of any kind arising from or relating to the Business or the Purchased
Assets at the request of any Governmental Authority, or at the request of any
other Person.

 

44 

 

(d)               Except as identified in Section 7.17(d) of the Disclosure
Schedule, there are no underground storage tanks, aboveground storage tanks,
asbestos containing materials, or PCB containing capacitors, transformers or
other equipment on any of the parcels of Leased Real Property. There has been no
Release from any underground or aboveground storage tank or any PCB containing
transformer, capacitor or equipment, other than in compliance in all material
respects with applicable Laws. None of the underground or aboveground storage
tanks or the PCB containing capacitors, transformers or equipment identified in
Section 7.17(d) of the Disclosure Schedule has within the last five (5) years
been, and, to Seller’s Knowledge, none now need to be, repaired or replaced.

 

(e)                Section 7.17(e) of the Disclosure Schedule identifies and
Seller has provided to Purchaser copies of (i) all environmental audits,
assessments, or occupational health studies in the possession of Seller with
respect to the Business or the Purchased Assets within the past five (5) years,
(ii) the results of any groundwater, soil, air or asbestos monitoring undertaken
with respect to any of the parcels of Leased Real Property, (iii) all citations
issued with respect to the Business or the Purchased Assets within the past five
(5) years under the Occupational Safety and Health Act (29 U.S.C. Sections 651
et seq.) and (iv) all claims, liabilities, litigation, notices of violation,
administrative proceedings, whether pending or, to Seller’s Knowledge,
threatened, or Orders issued with respect to the Business within the past five
(5) years under applicable Environmental Laws.

 

(f)                Seller (i) has not pending or on file any application to
treat, incinerate or dispose of PCBs or holds any permit, license or right to
incinerate PCBs, (ii) engages (or has engaged) in the land filling of Hazardous
Materials except in compliance in all material respects with applicable
Environmental Laws or (iii) engages (or has engaged) in any road oiling
activities nor have they applied or used oil or Hazardous Materials for dust
control or paving purposes.

 

(g)               Seller has been and is in compliance in all material respects
with all applicable Environmental Laws, including obtaining and maintaining in
effect all permits, licenses or other authorizations required by applicable
Environmental Laws, and Seller has been and is currently in compliance in all
material respects with all such permits, licenses and authorizations.

 

(h)               Except as set forth in Section 7.17(h) of the Disclosure
Schedule, all Purchased Assets constituting vehicles, trucks, tractors, trailers
and other transportation equipment may immediately operate lawfully within the
State of California in compliance with all applicable Laws including those
promulgated and enforced by the California Environmental Protection Agency’s Air
Resource Board.

 

7.18    Employee Benefit Plans. (a) Except as set forth in Section 7.18(a) of
the Disclosure Schedule, Seller does not maintain, sponsor, contribute to or
have any Liability (including potential liability by reason of it being an ERISA
Affiliate with respect to another entity) with respect to:

 

(i)     any “employee welfare benefit plan” or “employee pension benefit plan”
as those terms are respectively defined in sections 3(1) and 3(2) of ERISA, or
any “multiemployer plan” (as defined in section 3(37) or Section 4001(3) of
ERISA) (a “Multiemployer Plan”); or

 

45 

 

(ii)   any retirement or deferred compensation plan as defined in Treas. Reg.
Section 1.409A-1(a)(1), incentive compensation plan, equity plan, unemployment
compensation plan, vacation pay, severance pay, bonus or benefit arrangement,
insurance or hospitalization program or any other fringe benefit arrangements
for any current or former employee, director, consultant or agent, whether
pursuant to contract, arrangement, custom or informal understanding, which does
not constitute an “employee benefit plan” (as defined in section 3(3) of ERISA).

 

(b)               A true and complete copy of each of the plans, arrangements
and agreements set forth in Section 7.18(a) of the Disclosure Schedule
(collectively, the “Benefit Plans”), and all contracts or agreements relating
thereto, or to the funding thereof, including all trust agreements, insurance
contracts, administration contracts, investment management agreements,
subscription and participation agreements, and recordkeeping agreements has been
provided to Purchaser. In the case of any Benefit Plan which is not in written
form, Purchaser has been provided with a true and complete description of such
Benefit Plan. A true and complete copy of the two most recent annual reports,
and the most recent summary plan description with respect to each such Benefit
Plan, to the extent applicable, and a current schedule of assets (and the fair
market value thereof assuming liquidation of any asset which is not readily
tradeable) held with respect to any funded Benefit Plan has been provided to
Purchaser.

 

(c)                As to all Benefit Plans:

 

(i)     All Benefit Plans comply and have been administered in form and in
operation in all material respects with all requirements of Law applicable
thereto, and there has been no notice issued by any Governmental Authority
questioning or challenging such compliance.

 

(ii)   All Benefit Plans that are employee pension benefit plans (as defined in
section 3(2) of ERISA) comply in form and in operation in all material respects
with all requirements of sections 401(a) and 501(a) of the Code; each such
Benefit Plan has a current determination or opinion letter issued with respect
thereto by the IRS; and no event has occurred which will or could give rise to
disqualification of any such Benefit Plan under such sections or to a tax under
section 511 of the Code.

 

(iii) None of the assets of any Benefit Plan is invested in “employer
securities” or “employer real property” as those terms are respectively defined
in sections 407(d)(1) and (2) of ERISA.

 

(iv) Each of the Benefit Plans complies with the requirements of section 409A of
the Code.

 

(v)   Except as set forth in Section 7.18(c) of the Disclosure Schedule, all
contributions and premiums required by Law or the terms of a Benefit Plan to be
paid prior to the Closing have been or will be timely made or paid in full prior
to the Closing.

 

46 

 

(vi) There has been no act or omission which has given rise to or may give rise
to fines, penalties, Taxes, or related charges under sections 502(c), 502(i),
502(l) or 4071 of ERISA or Chapters 43, 47, or 68 of the Code for which Seller
or any ERISA Affiliate of Seller may be liable. No action has been taken to
correct any defects with respect to any Benefit Plan under any IRS correction
procedure and, to Seller’s Knowledge, no such action is required.

 

(vii)                       Neither the execution of this document nor the
consummation of the transactions contemplated by this Agreement will, either
alone or in combination with another event, result in (A) any payment of
severance or other compensation to any current or former employee of Seller or
any Equityholder or (B) the acceleration of the time of payment or vesting of
any compensation or benefit, other than any payment that constitutes a
Transaction Expense and is included in the schedule delivered by Seller to
Purchaser pursuant to Section 2.4(b).

 

(viii)                     Except as set forth in Section 7.18(c) of the
Disclosure Schedule, there are no actions, suits or claims (other than routine
claims for benefits) pending or, to Seller’s Knowledge, threatened involving
such Benefit Plans or the assets thereof, and there has been no such actions,
suits or claims in the past five (5) years.

 

(ix) Except as set forth in Section 7.18(c) of the Disclosure Schedule, (A) No
Benefit Plan is subject to Title IV of ERISA or the funding requirements of
Section 412 of the Code and (B) no benefit plan is a Multiemployer Plan.

 

(x)   Each Benefit Plan which constitutes a “group health plan” (as defined in
section 607(1) of ERISA or section 4980B(g)(2) of the Code), has been operated
in compliance with applicable Law.

 

(xi) Except as set forth in Section 7.18(c) of the Disclosure Schedule, neither
Seller nor any ERISA Affiliate of Seller has Liability under any Benefit Plan or
otherwise for providing post-retirement medical or life insurance benefits,
other than statutory liability for providing group health plan continuation
coverage under Part 6 of Title 1 of ERISA and section 4980B (or any predecessor
section thereto) of the Code.

 

(xii)                       Except as set forth in Section 7.18(c) of the
Disclosure Schedule, Seller has not committed any act or omission that would
impair the right or ability of Seller or any ERISA Affiliate of Seller
unilaterally to amend or terminate any Benefit Plan.

 

(d)               Seller has provided Purchaser with a true, complete and
accurate list of each employee of Seller, the date(s) of hire, age, position and
title (if any), current rate of compensation (including bonuses, commissions and
incentive compensation, if any), whether such person is exempt or non-exempt for
overtime pay purposes, the number of such person’s accrued sick days and
vacation days as well as the employee’s vacation entitlement, whether such
person is absent from active employment and, if so, the date such person became
inactive (if known), the reason for such inactive status and, if applicable, the
anticipated date of return to active employment. Seller has provided Purchaser
with a true, complete and accurate list of each individual independent
contractor providing services to Seller, the date(s) of engagement, position and
title (if any), name of an applicable contact person and contact details,
location where services are provided by such independent contractor, and hourly,
monthly and annual remuneration of each independent contractor.

 

47 

 

7.19    Taxes. (a) Company has complied in all material respects with all Laws
relating to Taxes and has duly and timely filed all Tax Returns that it was
required to file in accordance with applicable Law. All such Tax Returns are
true, correct, and complete. All Taxes due and payable with respect to such Tax
Returns, or otherwise due and payable by the Company for which the Company could
be liable as a result of transferee liability, joint and several liability,
contractual liability, or otherwise, have been timely paid to the appropriate
taxing authority. Seller has materially complied with all Laws relating to Taxes
and has duly and timely filed all material Tax Returns relating to the Purchased
Assets, the Business, or the Transferred Employees that were due in accordance
with applicable Law. All such Tax Returns are true, correct, and complete. All
Taxes due and payable with respect to such Tax Returns, or otherwise due and
payable by Seller with respect to the Purchased Assets, the Business, or the
Transferred Employees or for which Seller could be liable as a result of
transferee liability, joint and several liability, contractual liability, or
otherwise, have been timely paid to the appropriate taxing authority. There are
no existing Liens for Taxes (other than Permitted Liens) upon the Purchased
Assets. Seller has provided Purchaser true, correct, and complete copies of (i)
all material federal, state, local, and foreign Tax Returns filed by any of
Seller, the Company (or their Affiliates) with respect to the Business, the
Purchased Assets, or the Transferred Employees in the past three years; and (ii)
all material notices, correspondence, and similar materials received by any of
Seller, the Company (or their Affiliates) from any taxing authority relating to
the Business, the Purchased Assets, or the Transferred Employees or Taxes
associated therewith.

 

(b)               Each of Seller and the Company has timely and properly
withheld under applicable Tax laws requiring same (i) all required amounts from
payments to its employees and (ii) all sales, use, and value added Taxes, in
each case, relating to the Business, the Purchased Assets, or the Transferred
Employees or Taxes associated therewith. Seller or the Company, as applicable,
has timely remitted all such Taxes to the proper Governmental Authority in
accordance with all applicable Laws.

 

(c)                No portion of the cost of any of the Purchased Assets was
financed directly or indirectly from the proceeds of any Tax exempt state or
local government obligation described in Code Section 103(a). None of the
Purchased Assets is Tax exempt use property under Code Section 168(h). None of
the Purchased Assets is property that Seller (or the Company) is required to
treat as being owned by any other Person pursuant to the safe harbor lease
provision of former Code Section 168(f)(8). None of the Purchased Assets (nor
any other property owned by the Company) constitutes stock in a corporate
subsidiary or a joint venture, partnership, limited liability company interest,
or other arrangement or Contract which is taxed as a partnership for U.S.
federal income Tax purposes.

 

48 

 

(d)               Seller is not a foreign person within the meaning of Code
Section 1445. Neither the Code nor any other provision of law requires Purchaser
to withhold any portion of the Purchase Price.

 

(e)                Neither Seller nor the Company has any obligation for Taxes
pursuant to any Contract that Purchaser is assuming as a result of the
transactions contemplated by this Agreement, other than real property taxes
under the Leases or motor fuel and similar vehicle excise taxes under Material
Contracts. Neither Seller nor the Company has extended any statute of
limitations relating to Taxes for which Purchaser could be liable under this
Agreement or pursuant to applicable Law. No taxing authority has made a claim
that, as a result of conducting the Business, owning any Purchased Assets, or
employing any Transferred Employee, either Seller or the Company is obligated to
pay Taxes in a jurisdiction in which Seller is not filing Tax Returns or paying
Taxes. No audits or other proceedings are ongoing or, to Seller’s Knowledge,
threatened with respect to any Taxes relating to the Business, the Purchased
Assets, or the Transferred Employees (or otherwise with respect to the Company)
for which Purchaser could have liability under this Agreement or under
applicable Laws. There are no unpaid assessments or proposed assessments for
Taxes with respect to any of the Purchased Assets or otherwise with respect to
the Company.

 

(f)                Neither Seller nor the Company is subject to any material Tax
holiday, Tax incentive or Tax grant in any jurisdiction with respect to Taxes
relating to the Business, the Purchased Assets, or Transferred Employees.

 

(g)               Neither Seller nor the Company is party to any Contract, plan,
or other arrangement with any Transferred Employee or other Person for which
Purchaser or the Company could have any liability and which could (either alone
or aggregated with other payments) give rise to a payment (or another benefit)
that is not deductible under Code section 280G or subject to the excise Tax
under Code section 4999. Neither Seller nor the Company has agreed to pay, gross
up or otherwise indemnify any employee or contractor for any employment or
income Taxes, including potential Taxes imposed under Code Sections 409A or
4999, pursuant to any Contract, plan or other arrangement with any Transferred
Employee or other Person.

 

(h)               The Company is (and has been for its entire existence)
properly treated as a “disregarded entity” for U.S. federal income Tax purposes
pursuant to Treasury Regulation Section 301.7701-3(b)(1)(ii) and no election has
been made (or is pending) to change such treatment.

 

7.20    Suppliers; Customers.

 

(a)                Suppliers. Section 7.20(a) of the Disclosure Schedule sets
forth the ten (10) largest suppliers of Seller (based on dollar amounts paid by
Seller for products or services supplied to Seller) for the year ended December
31, 2016 and the current year period ended March 31, 2017 (the “Material
Suppliers”) and the amounts paid by Seller to such Material Suppliers during
such periods. Except as set forth in Section 7.20(a) of the Disclosure Schedule,
(i) all Material Suppliers continue to be suppliers of Seller; (ii) to Seller’s
Knowledge, no Material Supplier intends to reduce materially its business with
Seller from the levels achieved during the year ended December 31, 2016 or the
current year period ended March 31, 2017; (iii) since the Most Recent Annual
Balance Sheet Date, no Material Supplier has terminated its relationship with
Seller or, to Seller’s Knowledge, threatened to do so; (iv) since the Most
Recent Annual Balance Sheet Date, no Material Supplier has modified or, to
Seller’s Knowledge, indicated that it intends to, modify its relationship with,
or the rates it charges to, Seller in a manner which is less favorable in any
material respect to Seller or has agreed not to or, to Seller’s Knowledge,
indicated it will not agree to, do business on such rates, terms and conditions
at least as favorable as the rates, terms and conditions provided to Seller on
the Most Recent Annual Balance Sheet Date; and (v) Seller is not involved in any
material claim, dispute or controversy with any Material Supplier. To Seller’s
Knowledge, no Material Supplier has threatened to take any of the actions
described in this Section 7.20(a) as a result of the transactions contemplated
by this Agreement. To Seller’s Knowledge, since the Most Recent Annual Balance
Sheet Date, there has been no other adverse material change in the relationship
between Seller and any Material Supplier.

 

49 

 

(b)               Customers. Section 7.20(b) of the Disclosure Schedule sets
forth all dedicated logistics customers of Seller for the year ended December
31, 2016 and the current year period ended March 31, 2017 (the “Material
Customers”) and the amounts for which Seller invoiced such Material Customers
during such periods. Except as set forth in Section 7.20(b) of the Disclosure
Schedule, (i) all Material Customers continue to be customers of Seller, (ii) to
Seller’s Knowledge, no Material Customer will reduce materially its business
with Seller from the levels achieved during the year ended December 31, 2016 or
the current year period ended March 31, 2017; (iii) since the Most Recent Annual
Balance Sheet Date, no Material Customer has terminated its relationship with,
or decreased the rates it pays to, Seller or, to Seller’s Knowledge, threatened
to do so; (iv) since the Most Recent Annual Balance Sheet Date, no Material
Customer has modified or, to Seller’s Knowledge, indicated that it intends to
modify, its relationship with Seller in a manner which is less favorable in any
material respect to Seller or has agreed not to or, to Seller’s Knowledge,
indicated it will not agree to, do business on such rates, terms and conditions
at least as favorable as the rates, terms and conditions provided to Seller on
the Most Recent Annual Balance Sheet Date; and (v) Seller is not involved in any
material claim, dispute or controversy with any Material Customer. To Seller’s
Knowledge, no Material Customer has threatened to take any of the actions
described in this Section 7.20(b) as a result of the transactions contemplated
by this Agreement. To Seller’s Knowledge, since the Most Recent Annual Balance
Sheet Date, there has been no other material adverse change in the relationship
between Seller and any Material Customer.

 

7.21    No Illegal Payments. Neither Seller nor, to Seller’s Knowledge, any of
Seller’s directors, managers, officers, employees or agents for the purpose of
helping Seller has in the past five (5) years directly or indirectly (i) given
or agreed to give any illegal gift, contribution, payment or similar benefit to
any supplier, customer, Governmental Authority or other Person or (ii) made or
agreed to make any illegal contribution, or reimbursed any illegal political
gift or contribution made by any other Person, to any candidate for federal,
state, local or foreign public office. Neither Seller nor any of its officers,
managers, directors, agents, employees or other Persons acting on behalf of
Seller has in the past five (5) years, directly or indirectly, taken any action
which would cause it to be in violation of the Foreign Corrupt Practices Act of
1977 or any rules or regulations thereunder or any similar anticorruption or
antibribery legal requirements applicable to Seller in any jurisdiction other
than the United States (collectively, the “FCPA”). Seller has no actions pending
or, to Seller’s Knowledge, threatened against it under the FCPA.

 

50 

 

7.22    Solvency. Immediately after giving effect to the Sale Transactions,
Seller shall be able to pay its debts as they become due and shall own cash and
property which has a fair saleable value greater than the amounts required to
pay its liabilities and debts (including a reasonable estimate of the amount of
all contingent liabilities, including with respect to any litigation to which
Seller is a party).  No transfer of property is being made and no obligation is
being incurred in connection with the Sale Transactions with the intent to
hinder, delay or defraud any present or future creditors of Seller.

 

7.23    Owner-Operators.

 

(a)                Seller has provided to Purchaser a correct and complete list
of all owner-operators used by Seller within the five (5) years preceding the
date hereof.

 

(b)               There are no actions, proceedings, complaints or, to Seller’s
Knowledge, investigations by or before any Governmental Authority pending or, to
Seller’s Knowledge, threatened with respect to the classification of any
owner-operator as an independent contractor or the improper payment of any
owner-operator under any Contract or otherwise.

 

(c)                Seller maintains a driver qualification file on each of its
owner-operators and all such driver qualification files comply, in all material
respects, with the requirements of the Federal Motor Carrier Safety Regulations,
including 49 C.F.R. Parts 382, 383 and 391.

 

(d)               Each Contract to which any Seller is a party with any
owner-operators or independent contractors is in compliance, in all material
respects, with the Federal Leasing Regulations under 49 C.F.R. Part 376.

 

ARTICLE VIII
Representations and Warranties of Purchaser

 

Purchaser represents and warrants to Seller as follows:

 

8.1        Due Incorporation. Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the State of Delaware.

 

8.2        Authority. Purchaser has the entity, right, power and authority to
enter into, and perform its obligations under this Agreement and each other
agreement delivered in connection herewith to which it is a party, and has taken
all requisite entity action to authorize the execution, delivery and performance
of this Agreement and such other agreements and the consummation of the Sale
Transactions and other transactions contemplated by this Agreement; and this
Agreement has been duly executed and delivered by Purchaser and each is binding
upon, and enforceable against, Purchaser in accordance with its terms; except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors’ rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity.)

 

51 

 

8.3        No Violations. Except as set forth on Schedule 8.3, neither the
execution, delivery or performance of this Agreement by Purchaser, nor the
consummation of the Sale Transactions or any other transaction contemplated by
this Agreement, does or will, after the giving of notice, or the lapse of time,
or otherwise conflict with, result in a breach of, or constitute a default
under, the certificate of incorporation or by-laws (or similar organizational or
governing documents) of Purchaser, or any Law or Order, or any Contract or plan
to which Purchaser is a party or by which it is bound or to which any of its
assets are subject. Except as required under the HSR Act, Purchaser is not
required by any Law to give any notice to, make any filing with, or obtain any
authorization, consent or approval of any Governmental Authority in order for
the parties to consummate the transactions contemplated by this Agreement.

 

8.4        Brokers. Neither this Agreement nor the Sale Transactions or any
other transaction contemplated by this Agreement was induced or procured through
any Person acting on behalf of, or representing, Purchaser or any of its
Affiliates as broker, finder, investment banker, financial advisor or in any
similar capacity

 

8.5        Funds Available. On the date hereof Purchaser has access to, and on
the Closing Date Purchaser will have, sufficient funds to enable it to pay the
Purchase Price and otherwise to perform its obligations under this Agreement.

 

ARTICLE IX
Conditions to Closing Applicable to Purchaser

 

The obligations of Purchaser hereunder (including the obligation of Purchaser to
close the transactions herein contemplated) are subject to the following
conditions precedent:

 

9.1        No Termination. Neither Purchaser nor Seller shall have terminated
this Agreement pursuant to Section 11.1.

 

9.2        Bring-Down of Seller’s Warranties and Covenants. The representations
and warranties of Seller set forth in this Agreement that are qualified by
materiality or “Material Adverse Change” shall be true and correct in all
respects, and all other representations and warranties of Seller set forth in
this Agreement shall be true and correct in all material respects, in each case
as of the date hereof and as of the Closing Date as though made as of the
Closing Date, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties shall be true and correct as of such date). Each of Seller and
the Company shall have performed or complied in all material respects with all
of its agreements and covenants required to be performed or complied with under
this Agreement as of or prior to the Closing. At the Closing, Purchaser shall
have received a certificate executed by an officer of Seller to the foregoing
effect.

 

9.3        No Material Adverse Change. Since the date hereof, there shall have
been no Material Adverse Change.

 

9.4        Pending Actions. No investigation, action, suit or proceeding by any
Governmental Authority and no action, suit or proceeding by any other Person,
shall be pending on the Closing Date which challenges, or could reasonably be
expected to result in a challenge to, this Agreement or any transactions
contemplated hereby, or which claims, or might give rise to a claim for, damages
against the Company or Purchaser in a material amount as a result of the
consummation of this Agreement.

 

52 

 

9.5        Required Contract Consents. Purchaser shall have received evidence
reasonably satisfactory to it of the receipt of the required consents listed in
Schedule 9.5.

 

9.6        No Order; HSR Act. There shall not be any Order in effect, pending or
threatened preventing consummation of any of the transactions contemplated by
this Agreement. The applicable waiting period, together with any extensions
thereof, under the HSR Act, shall have expired or been terminated, or clearance
in writing on terms reasonably satisfactory to Purchaser shall have been
received.

 

9.7        Required Permits. The Company shall have obtained those Permits that
are necessary for the Company to operate the business in substantially the same
manner as operated by Seller prior to the Closing.

 

9.8        All Necessary Documents. All proceedings to be taken in connection
with the consummation of the transactions contemplated by this Agreement and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to Purchaser and Purchaser shall have received copies of such
documents as Purchaser may reasonably request in connection therewith, including
those documents to be delivered pursuant to Section 3.2.

 

Purchaser shall have the right to waive any of the foregoing conditions
precedent, which waiver shall be in writing.

 

ARTICLE X
Conditions to Closing Applicable to Seller

 

The obligations of Seller and Equityholders hereunder (including the obligation
of Seller to close the transactions herein contemplated) are subject to the
following conditions precedent:

 

10.1    No Termination. Neither Purchaser nor Seller shall have terminated this
Agreement pursuant to Section 11.1.

 

10.2    Bring-Down of Purchaser Warranties and Covenants. The representations
and warranties of Purchaser set forth in this Agreement that are qualified by
materiality or “Material Adverse Change” shall be true and correct in all
respects, and all other representations and warranties of Purchaser set forth in
this Agreement shall be true and correct in all material respects, in each case
as of the date hereof and as of the Closing Date as though made as of the
Closing Date, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties shall be true and correct as of such date). Purchaser shall have
performed or complied in all material respects with all of its agreements and
covenants required to be performed or complied with under this Agreement as of
or prior to the Closing. At the Closing, Seller shall have received a
certificate executed by an officer of Purchaser to the foregoing effect.

 

53 

 

10.3    Pending Actions. No investigation, action, suit or proceeding by any
Governmental Authority, and no action, suit or proceeding by any other Person,
shall be pending on the Closing Date which challenges or could reasonably be
expected to result in a challenge to this Agreement or any transaction
contemplated hereby, or which claims, or might give rise to a claim for, damages
against Seller in a material amount as a result of the consummation of the
transactions contemplated hereby.

 

10.4    No Order; HSR Act. There shall not be any Order in effect, pending or
threatened preventing consummation of any of the transactions contemplated by
this Agreement. The applicable waiting period, together with any extensions
thereof, under the HSR Act, shall have expired or been terminated, or clearance
in writing on terms reasonably satisfactory to Seller shall have been received.

 

10.5    All Necessary Documents. All proceedings to be taken in connection with
the consummation of the transactions contemplated by this Agreement, and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to Seller, and Seller shall have received copies of such documents as
it may reasonably request in connection therewith, including those documents to
be delivered pursuant to Section 3.3.

 

10.6    Sellers Waiver. Seller and Equityholders shall have the right to waive
any of the foregoing conditions precedent, which waiver shall be in writing.

 

ARTICLE XI
Termination

 

11.1    Termination. This Agreement may be terminated at any time prior to the
Closing only as follows:

 

(a)                by mutual consent of Purchaser and Seller;

 

(b)               by Purchaser or by Seller, if at or before the Closing any
condition set forth herein for the benefit of Purchaser or Seller, respectively,
shall not have been timely met or cannot be timely met by August 23, 2017;
provided, the party seeking to terminate (and in the case of Seller, Seller or
the Company) is not in any material respect in breach of or default under this
Agreement; or

 

(c)                by Purchaser or by Seller if any representation or warranty
made herein for the benefit of Purchaser or Seller, respectively, is untrue in
any material respect, or Seller or the Company, on the one hand, or Purchaser,
on the other hand, respectively, shall have defaulted in any material respect in
the performance of any material obligation under this Agreement; provided, the
party seeking to terminate (and in the case of Seller, Seller or the Company) is
not in any material respect in breach of or default under this Agreement.

 

11.2    Effect of Termination. If either party terminates this Agreement
pursuant to this Article XI, all rights and obligations of each party hereunder
(except for the parties’ obligations under 13.1(a)) shall terminate without any
liability of any party, other than any liability of any party for the breach of
its obligations hereunder.

 

54 

 

ARTICLE XII
Indemnification

 

12.1    Indemnification by Seller. Subject to the provisions of this
Article XII, from and after the Closing, Seller covenants and agrees to
indemnify and hold harmless Purchaser and its Affiliates (including the
Company), and their respective officers, directors, managers, equityholders,
employees and agents (collectively, the “Purchaser Indemnitees”), from and
against any and all Adverse Consequences incurred or suffered by the Purchaser
Indemnitees to the extent arising or resulting from any of the following:

 

(a)                any inaccuracy in or breach of, or, with respect to a
third-party claim, any alleged breach or inaccuracy of, any representation or
warranty of Seller set forth in this Agreement or any Transaction Document, in
each case, determined without giving effect to any qualification or limitation
as to materiality, Material Adverse Change or words of similar import contained
in any such representation or warranty (other than with respect to (i) the terms
“Material Customers” or “Material Suppliers” and (ii) the representation and
warranty contained in Section 7.14(e));

 

(b)               any breach of any covenant or agreement of Seller,
Equityholders or Truline set forth herein or in any document or certificate
delivered by Seller, Equityholder, Truline or any of their Affiliates in
connection with this Agreement (excluding the Employment and Non-Compete
Agreement);

 

(c)                any breach of any covenant or agreement of the Company set
forth herein or in any document or certificate delivered by the Company in
connection with this Agreement, in each case, to be performed or complied with
by the Company at or prior to the Closing;

 

(d)               any Retained Liabilities;

 

(e)                any Retained Assets; or

 

(f)                the following Taxes: (i) Seller’s allocable share of any
Transfer Taxes (and related out-of-pocket expenses), in each case, as determined
pursuant to Section 2.9; and (ii) any Retained Taxes.

 

12.2    Indemnification by Purchaser. Subject to the provisions of this
Article XII, from and after the Closing, Purchaser covenants and agrees to
indemnify and hold harmless Seller and Equityholders, and, as applicable, their
respective officers, directors, managers, equityholders, employees, agents and
heirs (together, the “Seller Indemnitees”) from and against any and all Adverse
Consequences incurred or suffered by the Seller Indemnitees to the extent
arising or resulting from any of the following:

 

(a)                any inaccuracy in or breach of, or, with respect to a
third-party claim, any alleged breach or inaccuracy of, any representation or
warranty of Purchaser set forth in this Agreement or in any document or
certificate delivered by Purchaser in connection with this Agreement;

 

55 

 

(b)               any breach of any covenant or agreement of Purchaser set forth
herein or in any document or certificate delivered by Purchaser in connection
with this Agreement;

 

(c)                any breach of any covenant or agreement of the Company set
forth herein or in any document or certificate delivered by the Company in
connection with this Agreement, in each case, to be performed or complied with
by the Company after the Closing;

 

(d)               any Assumed Liability;

 

(e)                Purchaser’s allocable share of any Transfer Taxes (as
determined pursuant to Section 2.9); or

 

(f)                the Guarantees (but solely to the extent arising or resulting
from a liability incurred after the Closing under the associated Lease, License,
Material Contract or Indebtedness).

 

12.3    Claim Procedure/Notice of Claim.

 

(a)                A party entitled, or seeking to assert rights, to
indemnification under this Article XII (an “Indemnified Party”) shall give
written notification (a “Claim Notice”) to the party from whom indemnification
is sought (an “Indemnifying Party”) which contains (i) a description and the
amount (the “Claimed Amount”), if then known, of any Adverse Consequences
incurred or reasonably expected to be incurred by the Indemnified Party and (ii)
a statement that the Indemnified Party is entitled to indemnification under this
Article XII for such Adverse Consequences and a reasonable explanation of the
basis therefor.

 

(b)               Within twenty (20) days after delivery of a Claim Notice
(other than a Claim Notice based on a third-party claim), the Indemnifying Party
shall deliver to the Indemnified Party a written response (the “Response”) in
which the Indemnifying Party shall either: (i) agree that the Indemnified Party
is entitled to receive all of the Claimed Amount or (ii) dispute that the
Indemnified Party is entitled to receive any or all of the Claimed Amount and
the basis for such dispute (in such an event, the Response shall be referred to
as an “Objection Notice”). If no Response is delivered by the Indemnifying Party
to the Indemnified Party within such 20-day period, the Indemnifying Party shall
be deemed to have agreed that an amount equal to the entire Claimed Amount shall
be payable to the Indemnified Party and such Claimed Amount shall be promptly
paid to the applicable Indemnified Party.

 

(c)                In the event that the parties are unable to agree on whether
Adverse Consequences exist or on the amount of such Adverse Consequences within
the 20-day period after delivery of a Claim Notice, either Purchaser or Seller
may (but are not required to do so) petition or file an action in a court of
competent jurisdiction for resolution of such dispute.

 

56 

 

(d)               In the event that the Indemnified Party is entitled, or is
seeking to assert rights, to indemnification under this Article XII relating to
a third-party claim, the Indemnified Party shall give written notification to
the Indemnifying Party of any demand letter or the commencement of any suit or
other legal proceeding relating to such third-party claim. Such notification
shall be given promptly after receipt by the Indemnified Party of the demand
letter, notice of such suit or proceeding, shall be accompanied by reasonable
supporting documentation submitted by such third party (to the extent then in
the possession of the Indemnified Party) and shall describe in reasonable detail
(to the extent known by the Indemnified Party) the facts constituting the basis
for such suit or proceeding and the amount of the claimed Adverse Consequences,
if then known; provided, however, that no delay or deficiency on the part of the
Indemnified Party in so notifying the Indemnifying Party shall relieve the
Indemnifying Party of any liability or obligation hereunder except to the extent
of any liability caused by or arising out of such failure, including default
judgments. Within twenty (20) days after delivery of such notification, the
Indemnifying Party may, upon written notice thereof to the Indemnified Party,
assume and retain control of the defense of such suit or proceeding with counsel
reasonably satisfactory to the Indemnified Party for so long as the Indemnifying
Party is diligently defending such suit or proceeding in good faith; provided,
however, that the Indemnifying Party may not assume control of the defense of a
suit or proceeding (A) involving criminal liability, (B) in which any relief
other than monetary damages is sought against the Indemnified Party, (C) in
which increased statutory, enhanced or treble damages are sought based on
willful misconduct, (D) which is reasonably likely to result in Adverse
Consequences that exceed the amount the Purchaser Indemnitees will be entitled
to recover from Seller as a result of the limitations set forth in this Article
XII, or (E) is brought by any Material Customer or Material Supplier. In
addition, notwithstanding anything to the contrary in the foregoing, in the
event that an Indemnified Party in good faith determines that (x) the conduct of
the defense of any claim, suit or proceeding or any proposed settlement of any
such claim, suit or proceeding by the Indemnifying Party might be expected to
materially adversely affect the ability of the Indemnified Party to conduct its
business (including relationships with Governmental Authorities) or (y) the
Indemnifying Party is not diligently defending such suit or proceeding in good
faith, the Indemnified Party shall have the right at all times to take over and
assume control over the defense, settlement or negotiations relating to any such
claim, suit or proceeding at the sole cost of the Indemnifying Party. If the
Indemnifying Party does not so assume control of such defense, the Indemnified
Party shall control such defense at the Indemnifying Party’s expense. The party
not controlling such defense (the “Non-controlling Party”) may participate
therein at its own expense; provided, however, that if the Indemnifying Party
assumes control of such defense and the Indemnified Party reasonably concludes
that the Indemnifying Party and the Indemnified Party have conflicting interests
or different defenses available with respect to such suit or proceeding, the
reasonable fees and expenses of counsel to the Indemnified Party shall be
considered “Adverse Consequences” for purposes of this Agreement. The party
controlling such defense (the “Controlling Party”) shall keep the
Non-controlling Party reasonably advised of the status of such suit or
proceeding and the defense thereof and shall consider in good faith
recommendations made by the Non-controlling Party with respect thereto. The
Non-controlling Party shall furnish the Controlling Party with such information
as it may have with respect to such suit or proceeding (including copies of any
summons, complaint or other pleading which may have been served on such party
and any written claim, demand, invoice, billing or other document evidencing or
asserting the same) and shall otherwise cooperate with and assist the
Controlling Party in the defense of such suit or proceeding. The Indemnifying
Party shall not agree to any settlement of, or the entry of any judgment arising
from, any such suit or proceeding without the prior written consent of the
Indemnified Party, which shall not be unreasonably withheld, conditioned or
delayed. If the Indemnifying Party assumes the control of a third-party claim,
the Indemnified Party shall not agree to any settlement of, or the entry of any
judgment arising from, any such suit or proceeding without the prior written
consent of the Indemnifying Party, which shall not be unreasonably withheld,
conditioned or delayed. For the avoidance of doubt, Seller shall be the
Controlling Party with respect to the Pending Claims and Purchaser shall have
all rights of the Non-Controlling Party with respect to the Pending Claims as
set forth herein.

 

57 

 

12.4    Survival of Representations, Warranties and Covenants; Determination of
Adverse Consequences.

 

(a)                Except as set forth in Section 12.4(b), the representations
and warranties of Seller and Purchaser contained in this Agreement and the
certificates delivered pursuant to this Agreement shall survive until the
eighteen (18) month anniversary of the Closing Date, at which time such
representations and warranties and any right to make an indemnification claim
based thereon will terminate.

 

(b)               The Statute of Limitations Representations shall survive until
the expiration of the applicable statute of limitations plus one hundred eighty
(180) days, at which time such representations and warranties and any right to
make an indemnification claim based thereon shall terminate. The representations
and warranties of Seller contained in Section 7.1 (Due Organization, Equity
Interests), Section 7.2 (Authority), Section 7.3 (No Violations and Consents),
Section 7.4 (Brokers) and Section 7.7(a) and (b) (Title to Purchased Assets)
(collectively, the “Unlimited Representations”) shall survive indefinitely.

 

(c)                Notwithstanding anything to the contrary in this Agreement,
if an Indemnified Party delivers to an Indemnifying Party, before expiration of
the survival period of a representation or warranty, either a Claim Notice based
upon a breach of such representation or warranty, or a notice that, as a result
of a suit or other legal proceeding instituted by or claim made by a third
party, the Indemnified Party reasonably expects to incur Adverse Consequences,
then the applicable representation or warranty shall survive until, but only for
purposes of, the resolution of the matter covered by such notice.

 

(d)               All covenants and agreements contained in this Agreement and
the Transaction Documents delivered pursuant to this Agreement shall survive the
Closing Date in accordance with their terms.

 

(e)                If a Purchaser Indemnitee’s indemnification claim is based on
both a breach of a Seller representation and warranty and either a Retained
Liability or another matter not subject to the limitations set forth in Section
12.4 or 12.5, such limitations shall not apply or restrict Purchaser
Indemnitee’s right to indemnification.

 

(f)                The representations and warranties of Seller shall not be
affected or deemed waived by reason of any investigation made by or on behalf of
Purchaser or by reason of the fact that Purchaser or any of Purchaser’s
representatives knew or should have known that any such representation or
warranty is or might be inaccurate.

 

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12.5    Limitations on Indemnification Obligations.

 

(a)                Seller shall have no obligation to indemnify the Purchaser
Indemnitees with respect to Adverse Consequences arising under Section 12.1(a)
(other than the Unlimited Representations and the Statute of Limitations
Representations) until the aggregate amount of all Adverse Consequences
thereunder exceeds Two Hundred Fifty Thousand Dollars ($250,000), in which event
Seller shall be obligated to indemnify the Purchaser Indemnitees only for the
amount of Adverse Consequences in excess of such threshold.

 

(b)               Seller shall have no obligation to indemnify the Purchaser
Indemnitees with respect to Adverse Consequences arising under Section 12.1(a)
(other than the Unlimited Representations and the Statute of Limitations
Representations) in excess of Four Million Dollars ($4,000,000) (the “Cap”).

 

(c)                The amount of any Adverse Consequences incurred by any
Indemnified Party will be reduced by the net amount such Indemnified Party
actually recovers from any insurer or other party liable for such Adverse
Consequences (other than pursuant to the Representation and Warranty Insurance
Policy).

 

(d)               Notwithstanding anything to the contrary in this Agreement,
Purchaser Indemnitees’ rights to indemnification with respect to Adverse
Consequences arising under Section 12.1(b) (but only to the extent it relates to
a breach of a covenant or agreement and not a breach of the certificate
delivered pursuant to Section 9.2), (c), (d), (e) or (f) or the Unlimited
Representations or the Statute of Limitations Representations or based upon
fraud shall not be subject to the limitations set forth in Sections 12.5(a) and
12.5(b). As used in this Section “fraud” shall mean: (1) a misrepresentation of
material fact; (2) that the Person making the representation knew or should have
known was false; (3) that the Person making the representation intended that the
representation would induce the other party to rely and act on it; and (4) the
party relying on the representation suffered injury in justifiable reliance on
the representation.

 

(e)                The Purchaser Indemnitees shall assert all claims for
indemnification pursuant to Section 12.1(a) and Section 12.1(f)(ii) against the
Representation and Warranty Insurance Policy to the extent covered thereby prior
to seeking recovery from Seller hereunder. If the Purchaser Indemnitees incur
Adverse Consequences pursuant to Section 12.1(a) (other than with respect to the
Unlimited Representations or the Statute of Limitations Representations) which
Adverse Consequences would have been covered by the Representation and Warranty
Insurance Policy but for the fact that the Purchaser Indemnitees previously
recovered under the Representation and Warranty Insurance Policy for Adverse
Consequences arising from or with respect to breaches of the Unlimited
Representations or the Statute of Limitations Representations or under Section
12.1(f)(ii), then, notwithstanding anything else contained herein to the
contrary, Seller shall indemnify and reimburse the Purchaser Indemnitees for
such Adverse Consequences in an amount equal to the lesser of (i) the aggregate
amount of all such Adverse Consequences and (ii) the aggregate amount of Adverse
Consequences arising from or with respect to breaches of the Unlimited
Representations or the Statute of Limitations Representations or under Section
12.1(f)(ii) that the Purchaser Indemnitees had previously recovered under the
Representation and Warranty Insurance Policy.

 

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(f)                Any indemnity payments made pursuant to this Article XII
shall be treated for all income Tax purposes by the parties hereto as an
adjustment to the Purchase Price, unless otherwise required by applicable Law.

 

(g)               The Purchaser Indemnitees shall mitigate Adverse Consequences
in accordance with applicable Law.

 

12.6    Right of Set-Off. If Seller is obligated to indemnify Purchaser or any
other Purchaser Indemnitee for any indemnification claim in accordance with
Article XII, Purchaser may set-off the amount of such claim against any amounts
payable by Purchaser or the Company to Seller under this Agreement, including
the Earnout Payments and Catch-Up Payment, as the same becomes due. If Purchaser
intends to set-off any amount hereunder, Purchaser shall provide not less than
twenty (20) days’ prior written notice to Seller of its intention to do so,
together with a reasonably detailed explanation of the basis therefor (a
“Set-Off Notice”). If, within ten (10) days of its receipt of a Set-Off Notice,
Seller provides Purchaser with written notice of Seller’s dispute with
Purchaser’s right to make such set-off, Purchaser and Seller shall meet in good
faith within five (5) days to attempt to resolve their dispute. If such dispute
remains unresolved despite Purchaser’s good faith attempt to meet with Seller
and resolve such dispute, Purchaser may withhold the amount contemplated by the
Set-Off Notice until the matter is resolved. If it is finally determined that
Purchaser’s claim is valid, then Purchaser may effect the set-off contemplated
by the Set-Off Notice. If it is finally determined that Purchaser’s claim is not
valid, then Purchaser shall promptly pay to Seller the amount withheld pursuant
to the Set-Off Notice plus accrued interest from the date the amount set-off
pursuant to the Set-Off Notice was due to the date such amount is actually paid
at an interest rate equal to the interest rate that Purchaser pays under its
senior revolving credit facility from time to time. For purposes of this Section
12.6, “finally determined” means that the validity and amount of such claim has
either been (x) consented to in writing by Seller (whether pursuant to a
settlement agreement or otherwise) or (y) determined pursuant to a final,
non-appealable judgment or other similar determination of a court of competent
jurisdiction. The cost of any litigation between the parties with respect to any
contested set-off, including reasonable accounting and attorneys’ fees and court
costs, costs of expert witnesses and other expenses of litigation shall be paid
in accordance with Section 16.16.

 

12.7    Source of Recovery. Any payment to be made by Seller with respect to any
indemnification obligations for Adverse Consequences pursuant to this Article
XII shall be paid to the Purchaser Indemnitees (i) first, from the
Representation and Warranty Insurance Policy if coverage is available, provided
that, for the avoidance of doubt, any retention amount or deductible thereunder
or any matter excluded from coverage thereunder shall be paid in accordance with
clauses (ii) and (iii) below, (ii) second, at Purchaser’s sole election, either
from the Indemnification Escrow Funds or by set-off as contemplated by Section
12.6 or any combination of the foregoing and (iii) thereafter, to the extent
Seller’s indemnification obligations exceed the funds available described in
clauses (i) and (ii), from Seller, subject in each case to the applicable
limitations set forth in this Article XII.

 

12.8    Exclusive Remedy. The remedies provided in this Article XII constitute
the sole and exclusive remedies available to each party hereto for recoveries
against another party hereto for breaches of the representations and warranties
having continuing effect after the Closing Date, in this Agreement or in any
Transaction Document.

 

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ARTICLE XIII
Confidentiality

 

13.1    Confidentiality of Materials. (a) The parties hereto agree with respect
to all technical, commercial and other information that is furnished or
disclosed by the other party, including information regarding such party’s (and
its subsidiaries’ and Affiliates’) organization, personnel, business activities,
customers, policies, assets, finances, costs, sales, revenues, technology,
rights, obligations, liabilities and strategies (“Information”), that, unless
and until the transaction contemplated by this Agreement shall have been
consummated, (i) such Information is confidential and/or proprietary to the
furnishing/disclosing party and entitled to and shall receive treatment as such
by the receiving party; (ii) the receiving party will hold in confidence and not
disclose nor use (except in respect of the transactions contemplated by this
Agreement) any such Information, treating such Information with the same degree
of care and confidentiality as it accords its own confidential and proprietary
Information; provided, however, that the receiving party shall not have any
restrictive obligation with respect to any Information which (A) is contained in
a printed publication available to the general public, (B) is or becomes
publicly known through no wrongful act or omission of the receiving party, or
(C) is known by the receiving party without any proprietary restrictions by the
furnishing/disclosing party at the time of receipt of such Information; and
(iii) all such Information furnished to either party by the other, unless
otherwise specified in writing, shall remain the property of the
furnishing/disclosing party and, in the event this Agreement is terminated,
shall be returned to it, together with any and all copies made thereof, upon
request for such return by it (except for documents submitted to a Governmental
Authority with the consent of the furnishing/disclosing party or upon subpoena
and which cannot be retrieved with reasonable effort) and in the case of (x)
oral information furnished to any party by the other which shall have been
reduced to writing by the receiving party and (y) all internal documents of any
party describing, analyzing or otherwise containing Information furnished by the
other party, all such writings and documents shall be destroyed, upon request,
in the event this Agreement is terminated, and each party shall confirm in
writing to the other compliance with any such request. Notwithstanding the
foregoing, no party shall be required to erase electronically stored Information
that has been saved to a back-up file in the ordinary course of business;
provided that such Information shall remain subject to the confidentiality and
nonuse provisions of this Section 13.1 so long as such information is retained.

 

(b)               Seller and Equityholders also each agree with respect to all
Information regarding the Company, the Business and the Purchased Assets that,
from and after the Closing, (i) such Information is confidential and/or
proprietary to Purchaser and entitled to and shall receive treatment as such by
Seller, Equityholders and their respective Affiliates; (ii) Seller and
Equityholders shall, and shall cause their respective Affiliates to, hold in
confidence and not disclose nor use any such Information, treating such
Information with the same degree of care and confidentiality as it or he accords
its own confidential and proprietary information; provided, that neither Seller
nor Equityholders shall have any such obligations with respect to Information
which is of the type described in clauses (A) through (C) of Section
13.1(a)(ii).

 

13.2    Remedy. Each party hereto acknowledges that the remedy at law for any
breach by either party of its obligations under Section 13.1 is inadequate and
that the other party shall be entitled to equitable remedies, including an
injunction, in the event of breach by the other party.

 

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ARTICLE XIV
Employee Matters

 

14.1    Transferred Employees. (a) Immediately prior to the Closing, Seller and
its Affiliates shall take all actions necessary to cause each of the employees
of the Business who are employed on a full-time basis (other than Paul Truman or
those employees on Long-Term Disability) to be offered employment with the
Company on terms and conditions substantially comparable to their current terms
and conditions of employment as approved by Purchaser. Seller shall not be
obligated to obtain written employment agreements from any employee other than
Estenson, and any such employees of the Business who accept employment with the
Company pursuant to this Section 14.1(a) and are employed by the Company as of
the Closing are referred to herein as the “Transferred Employees”. Purchaser
may, in its discretion, provide, or cause the Company to provide, letters or
other communications to individuals who may become Transferred Employees
relating to their employment with the Company following the Closing.

 

(b)               Seller shall be solely responsible for any severance claims or
any other claims or causes of action asserted by or with respect to any employee
of the Business who is not a Transferred Employee or as a result of the transfer
of the Transferred Employees to employment with the Company prior to the Closing
(or the offers of employment with the Company), which amounts shall be included
in Transaction Expenses. Seller shall remain solely responsible for all
Liabilities arising from any employment claim made by a Transferred Employee
which arose or is otherwise attributable to an event or circumstance existing
before the Closing. The Company shall be solely responsible for any employment
claim made by a Transferred Employee which arises after Closing, provided that
such claim is not attributable to an event or circumstance existing before the
Closing.

 

14.2    Workers’ Compensation. Seller shall remain solely responsible for all
Liabilities arising from workers’ compensation claims, both medical and
disability, or other government-mandated programs which are based on injuries
allegedly occurring prior to Closing regardless of when such claims are filed,
including those claims set forth on Schedule 14.2. The Company shall be solely
responsible for such claims of Transferred Employees based on injuries allegedly
occurring after Closing.

 

14.3    Benefit Plans and Claims.

 

(a)                Except as otherwise listed in Schedule 14.3(a) or pursuant to
the assumption of the collective bargaining agreements set forth in Schedule
14.5, neither Purchaser nor the Company shall assume any Benefit Plan or any
Liabilities under or with respect thereto and Seller and its Affiliates (other
than the Company) shall retain the sponsorship of and all Liabilities under and
with respect thereto. Effective immediately prior to the Closing, Seller shall
cause the Benefit Plans that are set forth in Schedule 14.3(a) and all contracts
and agreements (including insurance contracts or administration agreements)
relating thereto (the “Assumed Benefit Plans”) to be transferred to sponsorship
with the Company and to cause the Company to assume sponsorship thereof and to
be substituted for Seller or its applicable Affiliate thereunder.
Notwithstanding any other provision of this Agreement to the contrary and
specifically notwithstanding the transfer of sponsorship of the Assumed Benefit
Plans to, and the assumption of sponsorship of the Assumed Benefit Plans by, the
Company, Seller and its Affiliates (other than the Company) shall retain all
Liabilities under and with respect to the Assumed Benefit Plans with respect to
claims incurred prior to the Closing Date in accordance with the terms of the
applicable Assumed Benefit Plan regardless of when the claim is filed or
reported. For purposes of this Section 14.3(a), (i) a medical, dental or vision
claim is incurred on the date the service is rendered or the product is
purchased; (ii) a life insurance claim is incurred on the date of the
individual’s death; and (iii) a disability claim is incurred on the date the
individual becomes disabled under the terms of the applicable Assumed Benefit
Plan.

 

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(b)               Effective immediately prior to the Closing, all Transferred
Employees shall cease to participate in all Benefit Plans for periods following
the Closing, other than the Assumed Benefit Plans, and any employees of Seller
and its Affiliates other than the Transferred Employees shall cease to
participate in the Assumed Benefit Plans. From and after the Closing,
Transferred Employees shall continue to participate in the Assumed Benefit
Plans, subject to the terms and conditions thereof and, effective as of the
Closing, the Transferred Employees shall participate in or shall be eligible to
participate in such other employee benefit plans, programs, policies and
arrangements maintained by the Company or Purchaser that are made available to
similarly-situated employees of the Company, including the Assumed Benefit Plans
(the “Company Benefit Plans”). In the case of any Company Benefit Plan that is
an Assumed Benefit Plan, a Transferred Employee who was a participant in the
Assumed Benefit Plan immediately prior to the Closing shall continue
participation in the Assumed Benefit Plan without interruption immediately
following the Closing, subject to the terms and conditions of the Assumed
Benefit Plan.

 

(c)                To the extent applicable, as of the Closing Date, the
Transferred Employees (and their eligible dependents) shall be given credit
under each of Company Benefit Plans, for purposes of vesting and eligibility,
for all service with Seller and its Affiliates before the Closing Date to the
same extent such service was credited for such respective purposes by Seller
immediately prior to the Closing Date under a corresponding Benefit Plan;
provided, however, that no such credit shall be provided to the extent such
crediting of service would result in the duplication of benefits.

 

(d)               To the extent applicable, as of the Closing Date, the
Transferred Employees (and their eligible dependents) shall be given credit
under each of the Company Benefit Plans which is an employee welfare benefit
plan (as that term is described in section 3(1) of ERISA), for their service
with Seller and its Affiliates for purposes of satisfying any waiting periods,
evidence of insurability requirements, or the application of any pre-existing
condition limitations, and shall be given credit under any such plan for amounts
paid under a corresponding Benefit Plan during the same period for purposes of
applying deductibles, copayments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of Company
Benefit Plans; provided, however, that credit for deductibles, copayments and
out-of-pocket maximums shall be provided only if the applicable Transferred
Employee provides sufficient information to the applicable Company Benefit Plan
to evidence such amounts. No credit of service or any amount shall be provided
to the extent that such credit would result in duplication of benefits.

 

(e)                Seller shall be responsible for all Liabilities in connection
with claims for benefits brought by or in respect of former or retired employees
of the Business or Truline under any of Seller’s welfare benefit plans with
respect to medical, dental, life insurance, health, accident or disability
benefits or otherwise and shall provide COBRA continuation coverage to any “M&A
qualified beneficiary” (within the meaning of Treasury Regulation Section
1.4980B-9) with respect to the Business or Truline.

 

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(f)                Notwithstanding the foregoing provisions of this Section
14.3, in the case of any Transferred Employee who is covered by a collective
bargaining agreement that is assumed by the Company pursuant to Section 14.5,
the terms and conditions of employment of such Transferred Employee and the
benefits provided to such Transferred Employee shall be governed by the terms of
the applicable collective bargaining agreement.

 

14.4    401(k) Plan. As soon as practicable following the Closing Date,
Purchaser shall, or shall cause the Company to, make available to Transferred
Employees a defined contribution plan that includes a cash or deferred feature
that satisfies the requirements of section 401(k) of the Code (the “Purchaser’s
401(k) Plan”). Effective as of the Closing Date, Transferred Employees who are
participants in the Seller’s 401(k) Plan shall have a fully vested and
nonforfeitable interest in their respective account balances thereunder and
shall be entitled to a distribution of their account balances under the Seller’s
401(k) Plan. Transferred Employees who receive an eligible rollover distribution
(within the meaning of section 402(f)(2) of the Code) which constitutes a direct
rollover distribution within the meaning of section 401(a)(31) of the Code and
regulations thereunder from the Seller’s 401(k) Plan shall, subject to the
provisions of section 402 of the Code and the terms of the Purchaser’s 401(k)
Plan, be permitted to make a rollover contribution to the Purchaser’s 401(k)
Plan. To the extent that, pursuant to the foregoing provisions of this Section
14.4, a Transferred Employee is eligible to make a rollover contribution of a
direct rollover distribution (within the meaning of section 401(a)(31) of the
Code and the regulations thereunder) to the Purchaser’s 401(k) Plan, such
rollover contribution may include promissory notes for loans made to such
Transferred Employee under the terms of the Seller’s 401(k) Plan.

 

14.5    Adoption of Collective Bargaining Agreements. At the Closing, pursuant
to Section 2.1(a), the Company shall assume the collective bargaining agreements
of Seller set forth on Schedule 14.5, including by executing amended collective
bargaining agreements, new participation agreements or other plan documentation
associated with the Multiemployer Plans to the extent applicable.

 

14.6    ERISA Section 4204. Seller, Purchaser and the Company hereto intend to
comply with the requirements of Section 4204 of ERISA in order that the
transactions contemplated by this Agreement with respect to the Multiemployer
Plan shall not be deemed a complete or partial withdrawal from the Multiemployer
Plan. Accordingly, Seller, Purchaser and the Company agree as follows:

 

(a)                After the Closing, the Company shall be obligated to make
contributions to the Multiemployer Plan in accordance with any collective
bargaining agreement relating thereto and shall contribute to the Multiemployer
Plan with respect to the Business on the same terms as Seller had an obligation
to contribute to the Multiemployer Plan prior to the Closing.

 

(b)               Prior to the first plan year of the Multiemployer Plan
beginning after the Closing Date, the Company may seek a variance from the
requirements of Section 4204(a)(1)(B) of ERISA that a bond be obtained or an
amount be held in escrow as provided in said section. The Company and Seller
agree to cooperate with respect to obtaining any such variance (including upon
request of the Company, Seller jointly with the Company and/or Purchaser
notifying the Multiemployer Plan of the parties’ intent that the transaction
contemplated hereby be covered by Section 4204 of ERISA) and sharing such
information as may be necessary to determine whether there is a basis for
applying for a variance from the applicable bonding requirements. Unless and
until a variance or exemption is obtained in accordance with Section 4204(c) of
ERISA, Purchaser shall cause the Company to provide to the Multiemployer Plan,
for a period of five plan years commencing with the first plan year beginning
after the Closing Date (the “Contribution Period”), a bond issued by a corporate
surety company that is an acceptable surety for purposes of Section 412 of
ERISA, or an amount held in escrow by a bank or similar financial institution
satisfactory to the Multiemployer Plan, as applicable, or such other security as
may be permitted under Section 4204(a)(1)(B) of ERISA or regulations thereunder,
in an amount equal to the greater of:

 

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(i)                 the average annual contribution required to be made by
Seller to the Multiemployer Plan with respect to the Business for the three (3)
plan years preceding the plan year in which the Closing Date occurs, or

 

(ii)               the annual contribution that Seller was required to make with
respect to the Business under the Multiemployer Plan for the last plan year
before the plan year in which the Closing Date occurs, which applicable bond or
escrow shall be paid to the Multiemployer Plan if the Company withdraws from the
Multiemployer Plan, or fails to make a contribution to the Multiemployer Plan
when due, at any time during the Contribution Period.

 

Seller agrees to cooperate with the Company and Purchaser in connection with any
application for a variance or exemption under Section 4204(c) of ERISA made by
the Company to the Pension Benefit Guaranty Corporation or to the Multiemployer
Plan.

 

(c)                Purchaser acknowledges that Seller is currently indemnified
by Darigold, Inc., a Washington corporation, pursuant to the terms of those
certain Contracts for the Spokane, Seattle and Portland locations (the “Darigold
Indemnifications”) for unfunded pension withdrawal liability under the
Multiemployer Plan. Seller’s rights under the Darigold Indemnifications are lost
if Seller abandons the Contract without cause or incurs a complete or partial
withdrawal during the Contribution Period. If the Company abandons one or more
of Darigold locations subject to the Darigold Indemnifications or incurs a
complete or partial withdrawal from the Multiemployer Plan, Purchaser shall
indemnify and hold Seller harmless from any such withdrawal liability, and
Seller shall pay to the Multiemployer Plan an amount equal to the payment that
would have been due from Seller but for the provisions of this Section 14.6(c).

 

14.7    Cooperation. Between the date of this Agreement and Closing, Seller and
Purchaser shall cooperate to achieve the requirements of this Article XIV,
including amendments to the Assumed Benefit Plans to reflect the provisions of
this Article XIV.

 

14.8       No Third Party Beneficiaries. Notwithstanding any other provision of
this Agreement to the contrary, nothing contained herein shall (a) be treated as
an amendment of any Benefit Plan or any other benefit plan, program, policy or
arrangement of any of Seller, Purchaser or any of their Affiliates, (b) give any
third party, including Transferred Employees or any other employee of the
Business or any representative thereof, any right to enforce the provisions of
this Article XIV or (c) obligate Seller, Purchaser or the Company or any of
their Affiliates to (i) maintain any particular benefit plan or (ii) retain the
employment of any particular employee.

 

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ARTICLE XV
Certain Other Agreements

 

15.1    Post-Closing Access to Records. Each party agrees to (i) provide the
other with such assistance as may reasonably be requested by the others in
connection with the preparation of any Tax Return or report of Taxes, any audit
or other examination by any Governmental Authority, or any judicial or
administrative proceedings relating to liabilities for Taxes or for any other
reasonable purpose, and (ii) provide any information necessary or reasonably
requested to allow Purchaser or the Company to comply with any information
reporting or withholding requirements contained in the Code or other applicable
Laws or to compute the amount of payroll or other employment Taxes due with
respect to any payment made in connection with this Agreement. Such assistance
shall include making employees available on a mutually convenient basis to
provide additional information or explanation of material provided hereunder and
shall include providing copies of relevant Tax Returns and supporting material.
Purchaser, Seller and the Company will retain for the full period of any statute
of limitations and provide the others with any records or information which may
be relevant to such preparation, audit, examination, proceeding or
determination.

 

15.2    Consents Not Obtained at Closing. (a) Seller shall use all commercially
reasonable efforts to obtain and deliver to Purchaser at or prior to the Closing
such consents as are required to allow the assignment by Seller to the Company
of Seller’s right, title and interest in, to and under any Contract or Permit
included in the Purchased Assets. To the extent any Contract or Permit is not
capable of being assigned without the consent or waiver of the other party
thereto or any third party (including any Governmental Authority), or if such
assignment or attempted assignment would constitute a breach thereof or a
violation of any Law or Order, neither this Agreement nor the Bill of Sale shall
constitute an assignment or an attempted assignment of such Contract or Permit.

 

(b)               Anything in this Agreement or the Bill of Sale to the contrary
notwithstanding, Seller is not obligated to transfer to the Company any of their
rights and obligations in and to any Contract or Permit without first having
obtained all necessary consents and waivers. After the Closing Date, Seller
shall use all commercially reasonable efforts, and Purchaser and the Company
shall cooperate with Seller at Seller’s expense, to obtain any consents and
waivers necessary to convey to the Company all Contracts and Permits intended to
be included in the Purchased Assets.

 

(c)                If any such consents and waivers are not obtained with
respect to any Contract or Permit, the Bill of Sale shall constitute an
equitable assignment by Seller to the Company of all of Seller’s rights,
benefits, title and interest in and to such Contract or Permit, to the extent
permitted by Law, and the Company shall be deemed to be Seller’s agent for the
purpose of completing, fulfilling and discharging all of Seller’s rights and
liabilities arising after the Closing Date under such Contract or Permit, and
Seller shall take all necessary steps and actions to provide the Company with
the benefits of such Contract or Permit. Seller shall hold Purchaser and the
Company harmless from any Adverse Consequences to the extent resulting from
Seller’s failure to obtain any consent to assignment as required under Section
15.2(b); provided, however, that such Adverse Consequences shall not have arisen
from Purchaser’s or the Company’s failure to reasonably cooperate with Seller to
obtain such consent or Purchaser’s or the Company’s failure to comply with any
commercially reasonable requirements imposed by the party from whom such consent
must be obtained; provided further, however, that Purchaser and the Company
shall have no obligation to pay any amount to any Person, or to accept any
change in the terms and conditions of any Contract or Permit, to obtain such a
consent.

 

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15.3          Avoidance of Double Withholding Taxes. With respect to employment
Tax matters (i) the Company shall prepare, file and furnish IRS Form W-2s with
respect to Transferred Employees for all wages and other compensation Seller
paid for both the portion of the year prior to and including the Closing Date
and the portion of the year after the Closing Date; (ii) Seller and the Company
shall agree to elect the “alternate procedure” for predecessors and successors
with respect to each Transferred Employee pursuant to Section 5 of Revenue
Procedure 2004-53, 34 I.R.B 320; and (iii) Seller and the Company shall work in
good faith to adopt similar procedures under applicable wage payment, reporting
(including IRS Forms 1094 and 1095) and withholding Laws for all Transferred
Employees in all appropriate jurisdictions.

 

15.4          Bulk Sale Waiver and Indemnity. The parties hereto acknowledge and
agree that no filings with respect to any bulk sales or similar laws have been
made, nor are they intended to be made, nor are such filings a condition
precedent to the Closing; and, in consideration of such waiver by the Company,
Seller shall indemnify, defend and hold Purchaser Indemnitees harmless against
any Adverse Consequences to the extent resulting or arising from such waiver and
failure to comply with applicable bulk sales laws.

 

15.5    Non-Competition; Non-Solicitation.

 

(a)                Prior to the third (3rd) anniversary of the Closing Date, no
Restricted Party shall, directly or indirectly, (i) engage in, carry on,
participate in or have any interest in, whether alone or in conjunction with any
Person, or as a holder of an equity or debt interest of any Person, or as a
principal, agent or otherwise, any business competing with the Business as
conducted prior to the Closing Date by Seller in the United States of America;
(ii) assist others in engaging in any business competing with the Business in
any manner described in the foregoing clause (i); or (iii) induce any supplier,
customer or other Person doing business with the Company or Purchaser to
terminate its relationship with the Company or Purchaser or otherwise reduce the
amount of business that any supplier, customer or other Person does with the
Company or Purchaser. For the avoidance of doubt, the business operations of
Truline as of the date hereof as described on Schedule 15.5, and of Mr. Truman
solely as an officer and director of Truline and Truman Trust and Estenson Trust
solely as shareholders of Truline, shall not be deemed to be competitive with
the Business, the Company or Purchaser; provided, however, that Truline shall
not solicit or service dedicated business from any of the customers of the
Business identified at items 1-42 of Section 7.12(a)(i) of the Disclosure
Schedule.

 

(b)               Prior to the third (3rd) anniversary of the Closing Date, no
Restricted Party shall directly or indirectly solicit for employment or hire any
Transferred Employee that remains an employee of the Company or any of its
Affiliates at the time of or within the six (6) month period prior to such
hiring or solicitation by a Restricted Party or any of their Affiliates. 

 

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(c)                Each Restricted Party acknowledges that the restrictions,
prohibitions and other provisions of this Section 15.5 are reasonable, fair and
equitable in scope, terms and duration, are necessary to protect the legitimate
business interests of Purchaser, and are a material inducement to Purchaser to
enter into the transactions contemplated by this Agreement.

 

(d)               It is the desire and intent of the parties to this Agreement
that the provisions of this Section 15.5 shall be enforced to the fullest extent
permissible under applicable Law and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Section 15.5 shall be adjudicated to be invalid or
unenforceable, such provision shall be deemed amended to delete or modify
(including to limit or reduce its duration, geographical scope, activity or
subject) the portion adjudicated to be invalid or unenforceable, such deletion
or modification to apply only with respect to the operation of such provision of
this Section 15.5 in the particular jurisdiction in which such adjudication is
made and to be made only to the extent necessary to cause the provision as
amended to be valid and enforceable.

 

(e)                Notwithstanding anything to the contrary contained herein, if
any Restricted Party is in violation of its obligations under this Section 15.5,
the applicable restrictive period shall be extended for a period equal to any
time period that such Person is in violation of this Section 15.5.

 

(f)                Each Restricted Party acknowledges and understands that the
provisions of this Section 15.5 are of a special and unique nature, the loss of
which cannot be accurately compensated for in damages by an action at law and
that the breach of the provisions of this Section 15.5 would cause Purchaser
irreparable harm. In the event of a breach or threatened breach by any
Restricted Party or any of their Affiliates of the provisions of Section 15.5,
Purchaser shall be entitled to seek an injunction restraining it from such
breach. Nothing herein contained shall be construed as prohibiting Purchaser
from pursuing any other remedies available for any breach or threatened breach
of this Section 15.5, and the pursuit of an injunction or any other remedy shall
not be deemed to be an exclusive election of such a remedy.

 

15.6    Use of Estenson Logistics Name. After the Closing, no Restricted Party
or any Affiliate thereof, may, directly or indirectly, use the name “Estenson
Logistics” or any derivative thereof or any similar name to identify itself or
himself, except that Estenson may use the name “Estenson Logistics: in
connection with his motorcycle racing team until October 31, 2017. Seller and
Equityholders shall be responsible for all filing fees required to be paid in
connection with filing the necessary change of name amendments in the state of
its organization and in each other state in which it is qualified to transact
business.

 

15.7    Equityholders’ Guarantee. Equityholders hereby, jointly and severally,
unconditionally and irrevocably guarantee for the benefit of Purchaser, the
Purchaser Indemnitees and their respective heirs, successors and assigns (a) all
of the obligations of Seller under this Agreement and under each other
agreement, contract or instrument executed and delivered to Purchaser by Seller
in connection with the transactions contemplated by this Agreement and (b)
Truline’s payment when due of all Accounts Receivable owed by Truline to Seller
and that is included in Current Assets.

 

15.8    Taxes.

 

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(a)                Seller, at its sole cost and expense, shall timely file all
Tax Returns to be filed prior to the Closing with respect to the Purchased
Assets, Business, or Transferred Employees, and all Tax Returns of Seller, and
timely pay all Taxes due with respect to such Tax Returns. To the extent any
such Tax Return could affect the Taxes of Purchaser or the Company for any
Post-Closing Tax Period, such Tax Return shall be prepared consistently with the
practices and procedures of Seller before the date hereof and Seller shall
provide a draft of any such Tax Return to Purchaser for Purchaser’s review and
comment at least ten (10) days prior to the due date of the Tax Return. Seller
shall incorporate any timely and reasonable comments made by Purchaser in any
such Tax Return prior to filing.

 

(b)               If any Tax relates to a Straddle Period, the parties shall use
the following conventions for determining the portion of such Tax that relates
to the Pre-Closing Tax Period and the portion that relates to the Post-Closing
Tax Period: (i) in the case of property Taxes and other similar Taxes imposed on
a periodic basis, the amount of Taxes attributable to the Pre-Closing Tax Period
shall be determined by multiplying the Taxes for the entire period by a
fraction, the numerator of which is the number of calendar days in the portion
of the period ending on the Closing Date and the denominator of which is the
number of calendar days in the entire period, and the remaining amount of such
Taxes shall be attributable to the Post-Closing Tax Period; and (ii) in the case
of all other Taxes, the amount of Taxes attributable to the Pre-Closing Tax
Period shall be determined as if a separate return was filed for the period
ending as of the end of the day on the Closing Date using a “closing of the
books methodology,” and the remaining amount of the Taxes for such period shall
be attributable to the Post-Closing Tax Period; provided, however, that for
purposes of clause (ii), exemptions, allowances, or deductions that are
calculated on an annual basis (including depreciation and amortization
deductions) shall be apportioned between the Pre-Closing Tax Period and the
Post-Closing Tax Period in proportion to the number of days in each such period.

 

(c)                Purchaser, the Company and Seller shall (i) assist in the
preparation and timely filing of any Tax Return with respect to the Purchased
Assets, Business or Transferred Employees (or otherwise with respect to the
Company); (ii) assist in any audit or other proceeding with respect to Taxes or
Tax Returns with respect to the Purchased Assets, Business or Transferred
Employees (or otherwise with respect to the Company); (iii) make available any
information, records, or other documents relating to any Taxes or Tax Returns
with respect to the Purchased Assets, Business or Transferred Employees (or
otherwise with respect to the Company); and (iv) provide any information
necessary or reasonably requested to allow Purchaser and the Company to comply
with any information reporting or withholding requirements contained in the Code
or other applicable Laws or to compute the amount of payroll or other employment
Taxes due with respect to any payment made in connection with this Agreement.

 

15.9    Seller’s Existence. For a period of five (5) years from and after the
Closing, Seller shall remain in existence as a limited liability company in good
standing in the State of Nevada and shall not wind-up or dissolve without the
prior written consent of Purchaser. From and after the Closing, Seller shall
retain sufficient cash (including any portion of the Purchase Price) necessary
to pay the Retained Liabilities and any other debts and liabilities of Seller in
full as they become due (and in any event, Seller shall retain an amount in cash
or marketable securities with respect to each pending claim listed on Section
7.10(c) of the Disclosure Schedule, Items 8-14, 17, 24, 27-30, 34 and 40
(collectively, the “Pending Claims”) as set forth in a writing delivered by
Seller to the Purchaser prior to Closing until such claim has been finally
determined by the non-appealable decision of a court of competent jurisdiction
or a written settlement agreement and all amounts owed by Seller in connection
therewith have been paid in full), and Seller shall pay the Retained Liabilities
and such debts and liabilities in full as they become due. At the request of
Purchaser, Seller shall deliver to Purchaser a certificate confirming its
compliance with its obligations under this Section 15.9, together with a bank or
brokerage statement evidencing its compliance with the minimum requirement set
forth above.

 

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15.10                        Guarantees. From and after the Closing Date,
Purchaser shall use commercially reasonable efforts to relieve Estenson, Truman,
the Estenson Trust and the Truman Trust, as applicable, from any continuing
obligation under the guarantees set forth on Schedule 15.10 previously provided
by them in respect of any Leases, Licenses, Material Contracts and Indebtedness
constituting Assumed Liabilities (collectively, the “Guarantees”), provided that
nothing herein shall require Purchaser or any of its Affiliates to make any
payment or grant any concession in connection therewith.

 

ARTICLE XVI
Miscellaneous

 

16.1    Cost and Expenses. Purchaser will pay its own costs and expenses
(including attorneys’ fees, accountants’ fees and other professional fees and
expenses) in connection with the negotiation, preparation, execution and
delivery of this Agreement and the consummation of the Sale Transactions and the
other transactions contemplated by this Agreement (except as otherwise
specifically provided for herein); and Seller will pay its own and the Company’s
costs and expenses (including attorneys’ fees, accountants’ fees and other
professional fees and expenses) in connection with the negotiation, preparation,
execution and delivery of this Agreement and the consummation of the Sale
Transactions and the other transactions contemplated by this Agreement (except
as otherwise specifically provided for herein).

 

16.2    Entire Agreement. The Disclosure Schedule and the Exhibits and Schedules
referenced in this Agreement are incorporated into this Agreement and together
contain the entire agreement between the parties hereto with respect to the
transactions contemplated hereunder, and supersede all negotiations,
representations, warranties, commitments, offers, contracts and writings prior
to the date hereof, including the letter of intent dated March 1, 2017 between
Hub Group, Inc. and Seller and the Confidentiality Agreement dated on or about
January 27, 2017 between Seller and Hub Group, Inc. No waiver and no
modification or amendment of any provision of this Agreement shall be effective
unless specifically made in writing and duly signed by the party to be bound
thereby.

 

16.3    Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which, together, shall constitute
one and the same instrument.

 

16.4    Assignment, Successors and Assigns. The respective rights and
obligations of the parties hereto shall not be assignable without the prior
written consent of the other parties; provided, however, that Purchaser may
assign all or part of its rights under this Agreement and delegate all or part
of its obligations under this Agreement to one of its Affiliates, in which event
all the rights and powers of Purchaser and remedies available to it under this
Agreement shall extend to and be enforceable by each such Affiliate. Any such
assignment and delegation shall not release Purchaser from its obligations under
this Agreement. In the event of any such assignment and delegation, the term
“Purchaser” as used in this Agreement shall be deemed to refer to such Affiliate
of Purchaser where reference is made to actions or to be taken with respect to
the acquisition of the Company, and shall be deemed to include both Purchaser
and such Affiliate where appropriate. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and permitted
assigns.

 

70 

 

16.5    Savings Clause. If any provision hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and shall
not affect the validity or effect of any other provision hereof.

 

16.6    Headings. The captions of the various Articles and Sections of this
Agreement have been inserted only for convenience of reference and shall not be
deemed to modify, explain, enlarge or restrict any of the provisions of this
Agreement.

 

16.7    Risk of Loss. Risk of loss, damage or destruction to the Purchased
Assets shall be upon Seller until the Closing, and shall thereafter be upon the
Company.

 

16.8    Governing Law. The validity, interpretation and effect of this Agreement
shall be governed exclusively by the laws of the State of Delaware, excluding
the “conflict of laws” rules thereof.

 

16.9    Press Releases and Public Announcements. No party hereto shall issue any
press release or make any public announcement relating to the existence, terms
and conditions or subject matter of this Agreement without the prior written
approval of the other parties; provided, however, that Purchaser and Hub Group,
Inc. may issue any press release or make any public announcement in such form as
it deems necessary in its sole discretion to comply with the United States
securities laws.

 

16.10   U.S. Dollars. All amounts expressed in this Agreement and all payments
required by this Agreement are in United States dollars.

 

16.11   Notices. (a) All notices, requests, demands and other communications
under this Agreement shall be in writing and delivered in person, or sent by
electronic transmission or sent by reputable overnight delivery service and
properly addressed as follows:

 

  To Purchaser or to the Company after the Closing:         Hub Group Trucking,
Inc.
2000 Clearwater Drive
Oak Brook, IL 60523   Email: DYeager@hubgroup.com, dbeck@hubgroup.com and
legal@hubgroup.com     Attention: Chief Executive Officer and General Counsel

 

71 

 

  With a copy to:         Winston & Strawn LLP
35 West Wacker Drive
Chicago, IL 60601   Email: PDoyle@winston.com     Attention: Patrick O. Doyle

 

  To Seller or to the Company prior to the Closing:         Estenson Logistics,
LLC
560 West Brown Road, Suite 3001
Mesa, Arizona 85201   Email: tim@estenson.com   Ptruman@trulinecorp.com  
Attention: Timothy Estenson     Paul Truman

 

  With Copy to:       Lewis Brisbois Bisgaard & Smith LLC
6385 S. Rainbow Blvd., Suite 600
Las Vegas, Nevada 89118
Fax: 702-893-3789
Tel.: 702-693-1719
Email: michael.kearney@lewisbrisbois.com       To Mr. Estenson and Estenson
Trust:
Timothy Estenson
9302 S. Rita Lane
Tempe, Arizona 85284
Attention: Tim Estenson
Email: timestenson@me.com       To Truline, Mr. Truman and Truman Trust:

Paul Truman, President
Truline Corporation
9390 Redwood Street
Las Vegas, Nevada 89139
Email: Ptruman@trulinecorp.com
Attention: Paul Truman

 

(b)               Any party may from time to time change its address for the
purpose of notices to that party by a similar notice specifying a new address,
but no such change shall be deemed to have been given until it is actually
received by the party sought to be charged with its contents.

 

72 

 

(c)                All notices and other communications required or permitted
under this Agreement which are addressed as provided in this Section 16.11 if
delivered personally or by courier, shall be effective upon delivery; if sent by
electronic transmission, shall be delivered upon receipt of proof of
transmission.

 

16.12                        SUBMISSION TO JURISDICTION; VENUE. THE PARTIES
HERETO HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN WILMINGTON, DELAWARE OVER ANY DISPUTE ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
EACH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH DISPUTE
OR ANY SUIT, ACTION OR PROCEEDING RELATED THERETO SHALL BE HEARD AND DETERMINED
IN SUCH COURTS AND IN NO OTHER COURTS. THE PARTIES HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE BROUGHT IN SUCH
COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE.
EACH OF THE PARTIES HERETO AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.

 

16.13                        WAIVER OF JURY TRIAL. Each party hereto hereby
waives, to the fullest extent permitted by applicable Law, any right it may have
to a trial by jury in respect of any suit, action or other proceeding arising
out of this Agreement or the transactions contemplated hereby. Each party hereto
(a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such party would not, in the event of
any action, suit or proceeding, seek to enforce the foregoing waiver and (b)
acknowledges that it and the other parties hereto have been induced to enter
into this Agreement, by, among other things, the mutual waiver and
certifications in this Section 16.13.

 

16.14                        No Third-Party Beneficiary. This Agreement is being
entered into solely for the benefit of the parties hereto and the Purchaser
Indemnitees and Seller Indemnitees, and the parties do not intend that any
employee or any other person shall be a third-party beneficiary of the covenants
by the parties contained in this Agreement.

 

16.15                        Disclosures. All matters disclosed by Seller in the
Disclosure Schedule shall be deemed a disclosure of such matter for purposes of
the specific Section of this Agreement referenced therein and for any other
Section for which the applicability of the disclosed item is reasonably apparent
on its face.

 

16.16                        Fees and Expenses. Notwithstanding anything else
contained in this Agreement to the contrary, in the event of any litigation
between the parties arising out of or relating to this Agreement, the prevailing
party shall be entitled to recover all costs incurred and reasonable attorneys’
fees, including attorneys’ fees in all investigations, trials, bankruptcies and
appeals.

 

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16.17                        Equityholders’ Obligations. Except as otherwise
expressly set forth in this Agreement, the Equityholders’ obligations hereunder
are joint and several.

 

 

 

[signature page follows]

 

74 

 

IN WITNESS WHEREOF, the parties hereto have executed this Purchase Agreement as
of the date first written above.

 

 

PURCHASER: HUB GROUP TRUCKING, INC.               By: /s/ Douglas G. Beck  
Name: Douglas G. Beck   Title: Secretary

 

 

SELLER: ESTENSON LOGISTICS, LLC, a Nevada limited liability company            
  By: /s/ Timothy J. Estenson   Name: Timothy J. Estenson   Title: CEO

 

 

COMPANY: ESTENSON LOGISTICS, LLC, a Delaware limited liability company          
    By: /s/ Timothy J. Estenson   Name: Timothy J. Estenson   Title: CEO

 

 

equityHOLDERS: /s/ Timothy J. Estenson   timothy J. estenson      

 

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  THE Timothy J. Estenson and
Traci M. Estenson Trust, dated
February 25, 2003         /s/ Timothy J. Estenson   timothy J. estenson, Trustee
        /s/ Traci M. Estenson   traci m. estenson, Trustee                    
/s/ Paul A. Truman  

PAUL A. TRUMAN

 

 

                    The Paul A. and Kristen Truman
Living Trust 2009, Dated August 6,
2009         By: /s/ Paul A. Truman     PAUL A. TRUMAN, Trustee         By: /s/
Kristen M. Truman     KRISTEN TRUMAN, Trustee             TRULINE: TRULINE
CORPORATION, a Nevada corporation               By: /s/ Paul A. Truman   Name:
Paul A. Truman   Title: President

 

 

 

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