Exhibit 10.2
 

 

 

 
STOCK PURCHASE AGREEMENT
 
by and among
 
DPWN HOLDINGS (USA), INC.,
 
EXEL TRANSPORTATION SERVICES, INC.
 
and
 
HUB GROUP, INC.
 
Dated as of April 1, 2011
 

 
   

 
 
 
 
TABLE OF CONTENTS

Page
 

ARTICLE I
PURCHASE AND SALE OF SHARES AND CLOSING 
1

 
 
1.1
Agreement to Purchase and Sell Shares 
1

 
 
1.2
Purchase Price 
1

 
 
1.3
Working Capital Adjustment 
1

 
 
1.4
Time and Place of Closing 
1

 
 
1.5
Manner of Payment of the Purchase Price 
2

 
 
1.6
Determination of Working Capital, Cash and Cash Equivalents and Indebtedness 
2

 
 
1.7
Disputes Regarding Closing Purchase Price Statement 
3

 
ARTICLE II
REPRESENTATIONS AND WARRANTIES 
4

 
 
2.1
General Statement; Disclosure Schedule 
4

 
 
2.2
Representations and Warranties of Purchaser 
4

 
 
2.3
Representations and Warranties of Seller 
5

 
ARTICLE III
CLOSING 
17

 
 
3.1
Form of Documents 
17

 
 
3.2
Purchaser’s Deliveries 
17

 
 
3.3
Seller’s Deliveries 
17

 
ARTICLE IV
TAX MATTERS 
19

 
 
4.1
Preparation and Filing of Tax Returns 
19

 
 
4.2
Tax Indemnity 
19

 
 
4.3
Apportionment of Straddle Period Income Taxes 
20

 
 
4.4
Cooperation and Records Retention 
20

 
 
4.5
Tax Contests 
20

 
 
4.6
Transfer Taxes 
20

 
 
4.7
Amendment of Tax Returns 
20

 
 
4.8
Section 338(h)(10) Election 
21

 
 
4.9
Tax Sharing Agreements 
21

 
 
4.10
Survival; Limitations 
21

 
 
4.11
Tax Treatment of Certain Payments 
21

 
 
 
 
ARTICLE V
POST-CLOSING AGREEMENTS 
22

 
 
5.1
Further Assurances 
22

 
 
5.2
Records 
22

 
 
5.3
Payments of Accounts Receivable 
22

 
 
5.4
Third Party Claims 
22

 
 
5.5
Director and Officer Indemnification 
22

 
 
5.6
Insurance Matters 
23

 
 
5.7
Use of Intellectual Property 
23

 
 
5.8
Bonds and Letters of Credit 
23

 
 
5.9
Releases 
24

 
 
5.10
Retrieval of Confidential Information 
24

 
 
5.11
Transaction Bonuses 
25

 
 
5.12
Receivables Owed by Seller and its Affiliates 
25

 
 
5.13
Corporate Names 
25

 
 
5.14
Assignment of Retained Litigation Claim to Seller 
25

 
 
5.15
Canadian MIP Payments 
25

 
ARTICLE VI
EMPLOYEES AND EMPLOYEE BENEFIT PLANS 
26

 
 
6.1
Continuation of Employment 
26

 
 
6.2
Other Benefits 
26

 
 
6.3
Non-qualified Deferred Compensation Plan 
26

 
 
6.4
Agent and Salesperson Deferral and Matching Program 
26

 
ARTICLE VII
INDEMNIFICATION 
27

 
 
7.1
General 
27

 
 
7.2
Certain Definitions 
27

 
 
7.3
Indemnification Obligations of Seller 
27

 
 
7.4
Limitation on Seller’s Indemnification Obligations 
28

 
 
7.5
Purchaser’s Indemnification Covenants 
29

 
 
7.6
Limitation on Purchaser’s Indemnification Obligations 
29

 
 
7.7
Mutual Limitation on Indemnification Obligations 
29

 
 
7.8
Cooperation 
30

 
 
 
 
 
7.9
Third Party Claims 
30

 
 
7.10
Obligations to Mitigate Damages 
31

 
 
7.11
Effect of Investigation 
31

 
 
7.12
Indemnification Exclusive Remedy 
31

 
 
7.13
Effect of Materiality in Certain Representations of Seller 
31

 
ARTICLE VIII
MISCELLANEOUS 
32

 
 
8.1
Definition of Best Efforts 
32

 
 
8.2
Publicity 
32

 
 
8.3
Notices 
32

 
 
8.4
Expenses 
33

 
 
8.5
Entire Agreement 
33

 
 
8.6
Non-Waiver 
33

 
 
8.7
Counterparts 
33

 
 
8.8
Severability 
34

 
 
8.9
Applicable Law 
34

 
 
8.10
Binding Effect; Benefit 
34

 
 
8.11
Assignability 
34

 
 
8.12
Amendments 
34

 
 
8.13
Headings 
34

 
 
8.14
Governmental Reporting 
34

 
 
8.15
Waiver of Trial by Jury 
34

 
 
8.16
Consent to Jurisdiction 
35

 
 
8.17
Rule of Construction 
35

 
ARTICLE IX
DEFINITIONS 
36

 
 
9.1
General 
36

 
 
9.2
Definitions 
36

 
 
9.3
Cross Reference of Other Definitions 
42

 

 
 
 

 
 
 
 

EXHIBITS
 
Exhibit A                      Description of Business

SCHEDULES

Schedule 1.6
Net Working Capital Example

Schedule 5.7
Excluded Marks

Schedule 5.8(a)
Seller’s Bonds and Letters of Credit

Schedule 5.8(b)
Company Bonds and Letters of Credit

Schedule 5.15
2010 MIP Participants and Amounts

Schedule 6.1A
Certain Excluded Employees

Schedule 6.1B
Certain Employees of Affiliates

Schedule 6.4
Agent/Salesperson Deferral and Matching Program

Schedule 7.3(g)
Indemnification Matters

 
DISCLOSURE SCHEDULE

 

Schedule 2.3(b)  Foreign Good Standing  Schedule 2.3(f)(i) 
Subsidiaries/Qualifications  Schedule 2.3(f)(ii)   Subsidiaries/Capitalization 
Schedule 2.3(f)(iii)   Subsidiaries/Equity Interests  Schedule 2.3(g)  
Consents  Schedule 2.3(i)(ii)   Conflicts Under Material Contracts and Permits 
Schedule 2.3(j)(i)   Financial Statements  Schedule 2.3(j)(ii)  Financial
Position  Schedule 2.3(k)(i)  Company and Subsidiaries Assets – Liens  Schedule
2.3(k)(ii)  Company and Subsidiaries Assets  Schedule 2.3(l)(i)  Accounts
Receivable Counterclaims  Schedule 2.3(l(ii)  Accounts Receivable  Schedule
2.3(m)(v)  Tax Matters  Schedule 2.3(m)(vi)   Tax Status  Schedule 2.3(n)(i) 
Conduct of Business – Company Sales of Material Assets  Schedule 2.3(n)(iii)  
Conduct of Business – Employees  Schedule 2.3(n)(iv)  Conduct of Business –
Agents  Schedule 2.3(n)(v)   Conduct of Business – Commissions  Schedule
2.3(n)(vi)   Conduct of Business – Loans  Schedule 2.3(n)(xi)  Conduct of
Business – Material Contracts  Schedule 2.3(o)  Contracts  Schedule 2.3(p)  
Permits  Schedule 2.3(q)(i)   Benefit Plans  Schedule 2.3(r)(i)  Current
Litigation  Schedule 2.3(r)(ii)  Past Litigation  Schedule 2.3(t)(iii)  
Environmental Reports  Schedule 2.3(u)(i)  Leased Real Estate  Schedule 2.3(x) 
Significant Customers, Vendors, Agents and Operating Agents  Schedule 2.3(y) 
Bank Accounts  Schedule 2.3(z)(i)  Insurance Policies  Schedule 2.3(z)(ii) 
Insurance Claims  Schedule 2.3(z)(v)   Affiliate Insurance 

                               
                               
                             
                               

 
 
 
 
 

STOCK PURCHASE AGREEMENT
 
This STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of April 1, 2011, by
and among DPWN Holdings (USA), Inc., an Ohio corporation (“Seller”), Exel
Transportation Services, Inc., a Delaware corporation (the “Company”), and Hub
Group, Inc., a Delaware corporation (“Purchaser”).  Certain capitalized terms
used in this Agreement are defined in Article IX.
 
R E C I T A L S
 
A.           Seller owns, beneficially and of record, all of the issued and
outstanding capital stock of the Company, comprised of 1,000 shares of common
stock, par value $0.01 per share, of the Company (the “Shares”).  The Company
owns, beneficially and of record (1) all of the issued and outstanding capital
stock of Exel Trucking, Inc, a Delaware corporation (“Exel Trucking”), comprised
of 20,000 shares of common stock, par value $1.00 per share, and (2) all of the
issued and outstanding capital stock of Exel Transportation Services of Canada
ULC, a Nova Scotia Canada unlimited liability company (“ETS Canada”, and
together with Exel Trucking, the “Subsidiaries” and each a “Subsidiary”),
comprised of 100 shares of common stock, no par value.
 
B.           The Company and the Subsidiaries are engaged in the businesses
described on Exhibit A hereto (collectively, the “Business”).
 
C.           Purchaser desires to purchase from Seller, and Seller desires to
sell to Purchaser, all of the Shares, upon the terms and subject to the
conditions contained in this Agreement.
 
A G R E E M E N T S
 
NOW THEREFORE, in consideration of the foregoing recitals, the representations,
warranties, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
 
 
ARTICLE I                      
 
 
Purchase and Sale of Shares and Closing
 
1.1 Agreement to Purchase and Sell Shares.  On the terms and subject to the
conditions contained in this Agreement, Seller hereby sells, transfers, conveys,
assigns and delivers to Purchaser, and Purchaser hereby purchases, acquires and
accepts from Seller, all right, title and interest in and to the Shares, free
and clear of all Liens.
 
1.2 Purchase Price.  Subject to Section 1.3, the aggregate purchase price for
the Shares (“Purchase Price”) is an amount equal to:
 
(a) Eighty Three Million Three Hundred Ninety One Thousand Dollars
($83,391,000);
 
(b) plus, if greater than zero, the amount of Cash and Cash Equivalents, or if
less than zero, minus the amount of Cash and Cash Equivalents; and
 
(c) minus the amount of any Indebtedness of the Company and the Subsidiaries.
 
1.3 Working Capital Adjustment.  The Purchase Price will be increased on a
dollar-for-dollar basis by the amount by which the Net Working Capital is
greater than Thirty One Million Dollars ($31,000,000) (the “Working Capital
Target”), or decreased, as the case may be, on a dollar-for-dollar basis by the
amount by which the Net Working Capital is less than the Working Capital Target.
 
1.4 Time and Place of Closing.
 
(a) The transaction contemplated by this Agreement is being consummated (the
“Closing”) on the date of this Agreement (the “Closing Date”) at 10:00 a.m.
eastern standard time at the offices of Winston & Strawn LLP, 35 West Wacker
Drive, Chicago, Illinois  60601.  The Closing shall be deemed effective as of
12:01 a.m. on the Closing Date (the “Effective Time”).
 
(b) All proceedings to be taken and all documents to be executed and delivered
by all parties at the Closing shall be deemed to have been taken and executed
simultaneously and no proceedings shall be deemed to have been taken nor
documents executed or delivered until all have been taken, executed and
delivered.
 
 
1
 
1.5 Manner of Payment of the Purchase Price.
 
(a) For purposes of the Closing, the parties have made a good faith estimate of
the Purchase Price (the “Estimated Purchase Price”) based upon the most recent
ascertainable financial information of the Company and the Subsidiaries as of
the Effective Time.  The final Purchase Price shall be determined, and any
necessary adjustment payments shall be made, following the Closing, in
accordance with Sections 1.3, 1.5, 1.6 and 1.7.
 
(b) At the Closing, Purchaser is paying the Estimated Purchase Price to Seller
by wire transfer of immediately available funds to such account as Seller has
designated by written notice delivered to Purchaser on or prior to the Closing
Date.
 
(c) Following the Closing, the parties shall determine the final Purchase Price,
taking into account the adjustments required pursuant to Section 1.3 and
employing the procedures and criteria set forth in Sections 1.6 and 1.7.  If,
based on the Purchase Price as finally determined,
 
(i) the Purchase Price exceeds the Estimated Purchase Price, Purchaser shall
forthwith (but in any event within five (5) Business Days of the final
determination of the Purchase Price) pay the amount of such excess to Seller by
wire transfer of immediately available funds as directed by Seller in writing to
Purchaser, and
 
(ii) the Estimated Purchase Price exceeds the Purchase Price, Seller shall
forthwith (but in any event within five (5) Business Days of the final
determination of the Purchase Price) pay the amount of such excess to Purchaser
by wire transfer of immediately available funds as directed by Purchaser in
writing to Seller.
 
1.6 Determination of Working Capital, Cash and Cash Equivalents and
Indebtedness.  The amount of Net Working Capital, Cash and Cash Equivalents and
Indebtedness shall be determined from an unaudited statement setting forth Net
Working Capital, Cash and Cash Equivalents and Indebtedness as of the Effective
Time (the “Closing Purchase Price Statement”).  The Closing Purchase Price
Statement shall be prepared by Purchaser in accordance with IFRS as applied in a
manner consistent with the policies, principles and methodologies utilized in
the preparation of the Most Recent Balance Sheet and, with respect to Net
Working Capital, consistent with the sample calculation of Net Working Capital
set forth on Schedule 1.6 hereto (the “Net Working Capital Example”).  To the
extent there is a conflict between IFRS and the Net Working Capital Example, the
Net Working Capital Example shall control.  Purchaser shall use commercially
reasonable efforts to cause the Closing Purchase Price Statement to be delivered
to Seller not more than ninety (90) days following the Closing Date (the date of
such delivery, the “Delivery Date”).
 
1.7 Disputes Regarding Closing Purchase Price Statement.  Disputes with respect
to the Closing Purchase Price Statement shall be resolved as follows:
 
(a) Seller shall have the period beginning on the Delivery Date and ending at
5:00 p.m., Chicago time, on the date thirty (30) days after the Delivery Date
(the “Dispute Period”) to bring any dispute regarding the elements of or amounts
reflected on the Closing Purchase Price Statement and affecting the calculation
of the Purchase Price (a “Dispute”), but only on the basis that the amounts
reflected on the Closing Purchase Price Statement that affect Net Working
Capital, Cash and Cash Equivalents and Indebtedness were not calculated in
accordance with Section 1.6.  Purchaser shall make available, without cost to
Seller, the books, records and personnel of the Company and the Subsidiaries
that Seller reasonably requires and requests in order to review the Closing
Purchase Price Statement.  If Seller does not provide a written notice of a
Dispute to Purchaser within the Dispute Period (“Dispute Notice”), the Closing
Purchase Price Statement shall be deemed to have been accepted and agreed to by
Seller in the form in which it was delivered to Seller, and shall be final and
binding upon Purchaser and Seller.  If Seller has a Dispute, Seller shall
provide Purchaser a Dispute Notice within the Dispute Period, setting forth in
reasonable detail the elements and amounts with which it disagrees.  Within
thirty (30) days after delivery of such Dispute Notice, Purchaser and Seller
shall attempt to resolve such Dispute and agree in writing upon the final
content of the disputed Closing Purchase Price Statement.
 
 
2
 
(b) If Purchaser and Seller are unable to resolve any Dispute within the thirty
(30) day period after Purchaser’s receipt of a Dispute Notice (the “Negotiation
Period”), Seller and Purchaser shall jointly engage Deloitte & Touche (the
“Arbitrating Accountant”) as arbitrator to settle such Dispute.  If the
Arbitrating Accountant is unable or unwilling to serve in such capacity,
Purchaser and Seller shall each select a nationally recognized certified public
accounting firm or financial services firm which is not rendering (and during
the preceding two-year period has not rendered) services to any of Seller,
Purchaser or their respective Affiliates and instruct such firms to agree,
within five Business Days after such firms have been selected by Purchaser and
Seller, on the identity of a third firm (conforming to the requirements set
forth in this sentence), which shall serve as the Arbitrating Accountant
hereunder.  In connection with the resolution of any Dispute, the Arbitrating
Accountant shall have reasonable access to all documents, records, work papers,
facilities and personnel necessary to perform its function as arbitrator
hereunder.  The Arbitrating Accountant’s function shall be to conform the
Closing Purchase Price Statement to the requirements of Section 1.6.  The
Arbitrating Accountant shall allow Purchaser and Seller to present their
respective positions regarding the Dispute.  The Arbitrating Accountant may, at
its discretion, conduct a conference concerning the Dispute, at which conference
Purchaser and Seller shall have the right to present additional documents,
materials and other information and to have present its advisors, counsel and
accountants.  In connection with such process, there shall be no other hearings
or any oral examinations, testimony, depositions, discovery or other similar
proceedings.  In resolving any disputed item, the Arbitrating Accountant may not
assign a value to such item greater than the greatest value for such item
claimed by Purchaser or Seller or less than the smallest value claimed by
Purchaser or Seller.  The Arbitrating Accountant shall promptly, and in any
event within sixty (60) days after the date of its appointment, render its
decision on the Dispute in writing and finalize the Closing Purchase Price
Statement.  Such written determination shall be final and binding upon the
parties hereto, and judgment may be entered on the award.  Upon the resolution
of all Disputes, the Closing Purchase Price Statement shall be revised to
reflect such resolution and the adjusting payments in respect of the final
determination of the Purchase Price shall be made in accordance with Section
1.5(c).  The Arbitrating Accountant shall determine the proportion of its fees
and expenses to be paid by each of Seller and Purchaser, based primarily on the
degree to which the Arbitrating Accountant has accepted the positions of the
respective parties.  If Seller or Purchaser is awarded by the Arbitrating
Accountant a majority of the monetary relief it seeks or disputes in a Dispute
(such party being awarded a majority of the monetary relief, the “Prevailing
Party”), the Prevailing Party shall be entitled to prompt reimbursement from the
non-prevailing party for all of the Prevailing Party’s fees and expenses
incurred in connection with the Dispute, including reasonable attorneys’,
accountants’ and expert witness fees and expenses and salaries of (and overhead
with respect to) “in-house” counsel and employees of the Prevailing Party and
its Affiliates.
 
 
 
3
 
ARTICLE II                      
 
 
Representations and Warranties
 
2.1 General Statement; Disclosure Schedule.  Seller and Purchaser make the
representations and warranties to each other which are set forth in this Article
II.  All representations and warranties of Seller are made subject to the
exceptions which are noted in the schedules delivered by Seller to Purchaser
concurrently herewith and identified by the parties as the “Disclosure
Schedule”.  No disclosure in any particular section of the Disclosure Schedule
with respect to the representations and warranties in this Article II shall be
adequate to disclose an exception to any other representation or warranty set
forth in Article II unless the applicability of such disclosure to such other
representation and warranty is reasonably apparent on its face.  The inclusion
of any item in the Disclosure Schedule is not evidence of the materiality of
such item for the purposes of this Agreement.
 
2.2 Representations and Warranties of Purchaser.  Purchaser represents and
warrants to Seller as of the Closing that:
 
(a) Organization.  Purchaser is a corporation duly organized, existing and in
good standing, under the laws of the State of Delaware.
 
(b) Power and Authority.
 
(i) Purchaser has all necessary corporate power and authority to enter into and
perform its obligations under this Agreement and each Ancillary Agreement to
which Purchaser is a party.  The execution, delivery and performance of this
Agreement and each Ancillary Agreement to which Purchaser is a party by
Purchaser and the consummation by Purchaser of the transactions contemplated
hereby and thereby have been duly and validly approved by all requisite
corporate action, including approval by the board of directors of Purchaser.  No
other corporate proceedings are necessary on the part of Purchaser to authorize
the execution, delivery and performance of this Agreement or any Ancillary
Agreement by Purchaser and the consummation by Purchaser of the transactions
contemplated hereby or thereby.
 
(ii) This Agreement and each Ancillary Agreement to which Purchaser is a party
has been duly executed and delivered by Purchaser and each such agreement
constitutes a legal, valid and binding agreement of Purchaser, enforceable
against Purchaser in accordance with its terms, except to the extent that
enforcement may be affected by laws relating to bankruptcy, reorganization,
insolvency and creditors’ rights and by the availability of injunctive relief,
specific performance and other equitable remedies.
 
(c) Consents.  Except for filings under the Hart-Scott Rodino Antitrust
Improvements Act of 1976, as amended (the “HSR Act”), no consent, authorization,
order or approval of, or filing or registration with, any Governmental Authority
is required for or in connection with the consummation by Purchaser of the
transactions contemplated hereby.
 
(d) Conflicts Under Constituent Documents or Laws.  Neither the execution and
delivery of this Agreement or any Ancillary Agreement by Purchaser, nor the
consummation by Purchaser of the transactions contemplated hereby and thereby,
will conflict with or result in a breach of any of the terms, conditions or
provisions of its certificate of incorporation or by-laws, or of any Law to
which Purchaser is a party or by which Purchaser is bound.
 
(e) Conflicts Under Contracts.  Purchaser is not a party to any Contract under
the terms of which the execution and delivery of this Agreement or any of the
Ancillary Agreements to which Purchaser is a party or the consummation by
Purchaser of the transactions contemplated hereby or thereby will result in
(with or without notice or lapse of time or both) a default, breach or an event
of acceleration, or grounds for termination, modification or cancellation, or
whereby timely performance by Purchaser according to the terms of this Agreement
or any Ancillary Agreement may be prohibited, prevented or delayed.
 
(f) Brokers.  None of Purchaser or any of its Affiliates has dealt with any
Person who is entitled to a broker’s commission, finder’s fee, investment
banker’s fee or similar payment from Purchaser for arranging the transactions
contemplated hereby or introducing the parties to each other.
 
 
4
 
 
(g) Solvency.  Immediately after giving effect to the transactions contemplated
hereby and the incurrence of any indebtedness therewith, the assets of
Purchaser, the Company and the Subsidiaries will exceed their respective
liabilities.  In connection with the consummation of the transactions
contemplated hereby and the incurrence of any indebtedness in connection
therewith, Purchaser does not intend to incur, and does not believe that the
Company or any Subsidiary will incur, debts that would be beyond Purchaser’s,
the Company’s or such Subsidiary’s ability to pay such debts as such debts
mature.
 
(h) Funding.  Purchaser has all funds required in order to perform its
obligations under this Agreement to be performed at the Closing.
 
(i) WARN Act.  Purchaser has no present plans or intention to cause the Company
or any Subsidiary to carry out, after the Closing, any plant closing or mass
layoff which would require notification under, or otherwise violate, the federal
Worker Adjustment and Retraining Notification Act at any facility of Company.
 
(j) Independent Investigation.  Purchaser has conducted an independent
investigation of the Company and the Subsidiaries, and their respective
operations, assets, liabilities, results of operations, financial condition and
prospects in making its determination as to the propriety of the transactions
contemplated by this Agreement and in entering into this Agreement, and
Purchaser has relied on the results of said investigation and not on any
representations and warranties of Seller other than those expressly contained in
Section 2.3.
 
(k) Acknowledgment.  Purchaser acknowledges that any estimates, forecasts, or
projections made available to it at any time, whether in the virtual data room
or in any other form or medium, concerning the Company and/or each Subsidiary or
the Company’s and each Subsidiary’s properties, businesses or assets have not
been prepared in accordance with GAAP, IFRS or standards applicable under any
federal or state securities Laws, and such estimates, and the estimates reflect
numerous assumptions, and are subject to material risks and
uncertainties.  Purchaser acknowledges that actual results may vary, perhaps
materially.
 
2.3 Representations and Warranties of Seller.  Seller represents and warrants to
Purchaser as of the Closing that:
 
(a) Organization.
 
(i) The Company is a corporation duly organized, validly existing and in good
standing, under the laws of the State of Delaware. The Company has all necessary
corporate power and authority to own and use all of its properties and assets
and to conduct the Business as the Business is now being conducted by the
Company.
 
(ii) Seller is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Ohio.
 
(b) Foreign Good Standing.  The Company is duly qualified to conduct business as
a foreign corporation, and is in good standing, under the Laws of each
jurisdiction where the nature of the Business or the nature or location of the
properties and assets owned, operated or leased by it requires such
qualification and where the failure to so qualify would have a Material Adverse
Effect, and each such jurisdiction is set forth on Schedule 2.3(b) of the
Disclosure Schedule.
 
(c) Power and Authority; Enforceability.
 
(i) Seller has all necessary corporate power and authority to enter into and
perform this Agreement and each Ancillary Agreement to which it is a party.  The
execution, delivery and performance by Seller of this Agreement and each
Ancillary Agreement to which it is a party and the consummation by Seller of the
transactions contemplated hereby and thereby have been duly and validly approved
by all requisite corporate action, including approval by the board of directors
of Seller.  No other corporate proceedings are necessary on the part of Seller
to authorize the execution, delivery and performance of this Agreement and each
Ancillary Agreement to which Seller is a party.
 
(ii) This Agreement and each Ancillary Agreement to which Seller is a party has
been duly authorized, executed and delivered by duly authorized officers or
other signatories of Seller and constitutes a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except to the extent that enforcement may be affected by laws relating to
bankruptcy, reorganization, insolvency and creditors’ rights and by the
availability of injunctive relief, specific performance and other equitable
remedies.
 
 
5
 
(d) Capitalization.  The authorized capital stock of the Company consists solely
of 1,000 shares of common stock, par value of $0.01 per share.  The Shares
represent the only issued and outstanding capital stock or other equity
interests of the Company and all of the Shares are owned beneficially and of
record by Seller.  There are no shares of capital stock of the Company of any
other class authorized, issued or outstanding.  All of the Shares have been duly
authorized and validly issued and are fully paid and non-assessable and none of
them was issued in violation of any preemptive right.  There are no outstanding
subscriptions, options, warrants, preemptive rights, calls, convertible
securities or other rights, commitments or agreements of any character
obligating the Company to issue any securities of any kind. The Company is not a
party to, or otherwise bound by, and has not granted any stock appreciation
rights, equity participations, phantom equity or similar rights.  There are no
voting trusts, voting agreements, proxies, shareholder agreements or other
similar agreements with respect to the capital stock or other equity interests
of the Company, including the voting or transfer thereof.
 
(e) Title to Shares.  Seller owns all of the Shares, free and clear of all
Liens.
 
(f) Subsidiaries.
 
(i) Schedule 2.3(f)(i) of the Disclosure Schedule lists each Subsidiary’s
jurisdiction of organization, the nature of its organization, the amount and
type of its authorized capital stock or other equity interests and the amount
and ownership (beneficially and of record) of its issued and outstanding capital
stock or other equity interests.  Each Subsidiary is duly organized, validly
existing and is in good standing under the laws of its jurisdiction of
organization.  Each Subsidiary has full power and authority to own all of its
properties and assets and to conduct its business as it is now conducted by such
Subsidiary, and is qualified as a foreign corporation and is in good standing
under the Laws of each jurisdiction where the nature of its business or the
nature and location of the properties and assets owned, operated or leased by
such Subsidiary requires such qualification and where the failure to so qualify
would reasonably be expected to have a Material Adverse Effect.  Schedule
2.3(f)(i) of the Disclosure Schedule lists all states in the United States in
which the Subsidiaries are qualified to do business.
 
(ii) All of the issued and outstanding shares of capital stock or other equity
interests of each Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and are owned beneficially and of record by the
Company in the amounts set forth on Schedule 2.3(f)(ii) of the Disclosure
Schedule, free and clear of all Liens.  There are no outstanding subscriptions,
stock options, share options, warrants, rights (including preemptive rights),
calls, convertible securities or other agreements or commitments of any
character relating to the issued or unissued capital stock or other equity
interests of either Subsidiary obligating such Subsidiary to issue any
securities of any kind or to enter any person into its register of members or
equivalent.  No subsidiary is a party to, or otherwise bound by, and no
Subsidiary has granted, any stock appreciation rights, participations, phantom
equity or similar rights.  There are no voting trusts, voting agreements,
proxies, shareholder agreements or other similar agreements with respect to the
capital stock or other equity interests of either Subsidiary, including the
voting or transfer thereof.
 
(iii) Except as set forth on Schedule 2.3(f)(iii) of the Disclosure Schedule,
other than the Subsidiaries, neither the Company nor any Subsidiary holds or
beneficially owns, directly or indirectly, any equity interest (whether it be
common or preferred stock or any other ownership interest in any Person that is
not a corporation), or any subscriptions, options, warrants, rights, calls,
convertible securities or other rights, agreements or commitments for any equity
interest, in any Person.
 
(g) Consents.  Except for filings under the HSR Act and as set forth in Schedule
2.3(g) of the Disclosure Schedule, no consent, authorization, order or approval
of, filing or registration with or notification to any Governmental Authority is
required for or in connection with the execution and delivery of this Agreement
or any of the Ancillary Agreements to which Seller is a party or the
consummation by Seller of the transactions contemplated hereby or thereby.
 
(h) Conflicts Under Constituent Documents or Laws.  Neither the execution and
delivery of this Agreement or any of the Ancillary Agreements to which Seller is
a party nor the consummation by Seller of the transactions contemplated hereby
or thereby, will (i) conflict with or result in a breach of any of the terms,
conditions or provisions of the certificate of incorporation or by-laws or other
organizational documents (as applicable) of Seller, the Company or any
Subsidiary, (ii) violate any Law applicable to Seller, the Company or any
Subsidiary or any of their properties or assets or (iii) result in the
imposition of any Lien upon any of the assets of the Company or any Subsidiary.
 
 
6
 
(i) Conflicts Under Contracts and Permits.
 
(i) Seller is not party to any Contract under the terms of which the execution
and delivery of this Agreement or any of the Ancillary Agreements to which
Seller is a party or the consummation by Seller of the transactions contemplated
hereby or thereby will result in (with or without due notice or lapse of time or
both) a default, breach or an event of acceleration or grounds for termination,
modification or cancellation, or whereby timely performance by Seller according
to the terms of this Agreement or any Ancillary Agreement may be prohibited,
prevented or delayed.
 
(ii) Except as set forth in Schedule 2.3(i)(ii) of the Disclosure Schedule,
neither the Company nor any Subsidiary is party to or bound by any (a) Material
Contract, (b) to the Company’s knowledge, any oral contract, agreement, lease or
license that would be a Material Contract if it was in writing, (c) to the
Company’s knowledge, any Contract or any oral contract or agreement with any of
the Sales Agents or Operating Agents of the Company or (d) any Permit, in each
case under the terms of which the execution and delivery of this Agreement or
any of the Ancillary Agreements or the consummation of the transactions
contemplated hereby or thereby require any notice, consent or waiver or will
result in (with or without due notice or lapse of time or both) a default,
breach or an event of acceleration thereunder or create in any party the
unilateral right to accelerate, terminate, modify or cancel such Contract or
Permit.
 
(j) Financial Statements.
 
(i) Correct and complete copies of the unaudited consolidated balance sheets and
statements of income of the Company and the Subsidiaries as of and for the
calendar years ended December 31, 2008, 2009 and 2010 (the “Annual Financial
Statements”) and the two (2) month period ended February 28, 2011 (the “Interim
Financial Statements”), are contained in Schedule 2.3(j)(i) of the Disclosure
Schedule.  The Annual Financial Statements and the Interim Financial Statements
are referred to herein collectively as the “Financial Statements”.  The
Financial Statements present fairly, in all material respects, the financial
position of the Company and the Subsidiaries as of the dates thereof, and the
results of operations of the Company and the Subsidiaries for the periods
covered by the Financial Statements, in accordance with IFRS, consistently
applied, except (i) as disclosed therein or in Schedule 2.3(j)(ii) of the
Disclosure Schedule, (ii) for the omission of footnote disclosures required by
IFRS, and (iii) solely in the case of the Interim Financial Statements, for
normal year-end adjustments.
 
(ii) The Financial Statements are consistent in all material respects with the
books and records of the Company and the Subsidiaries.
 
(k) Company and Subsidiaries’ Assets.
 
(i) The Company and the Subsidiaries have good and valid title to their
respective assets (excluding any Intellectual Property) (collectively, the
“Company Assets”), free and clear of any Liens, except for Permitted Liens and
Liens described in Schedule 2.3(k)(i) of the Disclosure Schedule.
 
(ii) Except as disclosed in Schedule 2.3(k)(ii) of the Disclosure Schedule, the
Company Assets are sufficient in all material respects to conduct the Business
as presently conducted.  To the knowledge of the Company, the Company and the
Subsidiaries have performed in all material respects all recommended material
maintenance on the Company Assets.
 
(iii) The representations and warranties set forth in this Section 2.3(k) shall
not apply to the Leased Real Estate which is the subject of the representations
and warranties contained in Section 2.3(u).
 
(iv) The Company owns all rights and interests in its Delta VII transactional
accounting system, free and clear of any Liens.
 
(l) Accounts Receivable.  All of the accounts receivable of the Company and the
Subsidiaries reflected in the Most Recent Balance Sheet or arising following the
Most Recent Balance Sheet Date (collectively, the “Accounts Receivable”) have
arisen from bona fide transactions by the Company or any Subsidiary in the
ordinary course of business.  To the knowledge of the Company, except as set
forth in Schedule 2.3(l)(i) of the Disclosure Schedule, the Accounts Receivable
are not subject to any counterclaim or set off in excess of the reserves set
forth in the Most Recent Balance Sheet as adjusted for the passage of
time.  Schedule 2.3(l)(ii) of the Disclosure Schedule sets forth a correct and
complete aged list of unpaid accounts and notes receivable owing to the Company
and the Subsidiaries as of February 28, 2011.
 
7
 
 
(m) Taxes.
 
(i) For purposes of this Agreement, the following terms have the following
meanings: (A) “Taxes” means any (1) net income, capital gains, gross income,
gross receipts, sales, use, transfer, ad valorem, franchise, profits, license,
capital, withholding, payroll, estimated, employment, excise, goods and
services, harmonized sales tax or HST, severance, stamp, occupation, premium,
property, unclaimed property, social security, environmental (including Code
section 59A), alternative or add-on, value added, registration, windfall profits
or other tax or similar amount imposed by any Governmental Authority, or any
interest, any penalties, additions to tax or additional amounts incurred or
accrued with respect to taxes assessed or charged by any Governmental Authority,
in each case, whether disputed or not; (2) any liability of the Company or any
Subsidiary for payment of the amounts described in clause (1) arising as a
result of being (or ceasing to be) a member of a affiliated group within the
meaning of Code section 1504(a) or any similar group defined under a similar
provision of applicable law or being included in any Tax Return of any
affiliated group within the meaning of Code section 1504(a) or any similar group
defined under a similar provision of applicable law; or (3) any liability of the
Company or any Subsidiary for the payment of amounts described in clause (1) as
a result of transferee, successor, or contractual liability, and the term “Tax”
means any one of the foregoing Taxes; (B) “Code” means the Internal Revenue Code
of 1986, as amended (all citations to the Code, or to the Treasury Regulations
promulgated thereunder, shall include any amendments or any substitute or
successor provisions thereto); and (C) “Tax Returns” means any return,
declaration, report, statement, information statement or other document filed or
required to be filed with respect to Taxes, including any claims for refunds of
taxes, any information returns and any amendments, schedules, attachments or
supplements of any of the foregoing.
 
(ii) Each of the Company and the Subsidiaries have timely filed all material Tax
Returns required to be filed by the Company or the Subsidiaries.  All such Tax
Returns were true, correct, and complete in all material respects.  All material
Taxes of the Company or the Subsidiaries due and payable with respect to such
Tax Returns (whether or not shown as due on a Tax Return), or otherwise payable
by the Company or the Subsidiaries, have been timely paid.
 
(iii) All Taxes of the Company and the Subsidiaries not yet due and payable have
been accrued in all material respects on the books of the Company or the
Subsidiaries.
 
(iv) Each of the Company and the Subsidiaries have timely and properly withheld
in all material respects (A) all required amounts from payments to its
employees, agents, contractors, nonresidents, and other Persons and (B) all
sales, use, and value added Taxes.  Each of the Company and the Subsidiaries
timely remitted all withheld Taxes to the proper Governmental Authority.
 
(v) Except as disclosed on Schedule 2.3(m)(v) of the Disclosure Schedule, in the
past thirteen (13) years, neither the Company nor the Subsidiaries have been a
member of any affiliated group that files a consolidated, combined or unitary
Tax Return for federal, state, local or non-U.S. Tax purposes other than a
Seller Group.  Except as disclosed on Schedule 2.3(m)(v) of the Disclosure
Schedule, in the past thirteen (13) years, neither the Company nor the
Subsidiaries are (or have been) a party to any arrangement relating to the
sharing of Tax benefits or liabilities between related parties.  Neither the
Company nor the Subsidiaries is liable for Taxes of any other Person (other than
other members of a Seller Group) as a result of successor liability, transferee
liability, joint or several liability (including pursuant to Treasury Regulation
section 1.1502-6 or any similar provision of state, local, or non-U.S.
applicable laws), contractual liability, or otherwise.  Neither the Company nor
the Subsidiaries have any contractual obligation to pay the amount of any Tax
benefits or Tax refunds realized or received by the Company or the Subsidiaries
(or an amount in reference to any such Tax benefits or Tax refunds realized or
received by the Company or the Subsidiaries) to any former shareholder(s) or
other Person(s).
 
(vi) Seller is not a foreign person within the meaning of Code section
1445.  The Company is not (and has never been) a “United States real property
holding corporation” within the meaning of Code section 897(c).  Schedule
2.3(m)(vi) of the Disclosure Schedule lists each Subsidiary’s status for U.S.
federal Income Tax purposes, and whether an election has been made under
Treasury Regulation 301.7701-3 with respect to the status of such Subsidiary.
 
(vii) No Tax audits or other Legal Proceedings are pending, or to the knowledge
of the Company, threatened in writing with regard to any Taxes of the Company or
the Subsidiaries.  Neither the Company nor any Subsidiary has a request for a
private letter ruling, a request for technical advice, a request for a change of
any method of accounting, or any other similar request that is pending with any
Governmental Authority with respect to Taxes.  Except with respect to a Seller
Group Return, no power of attorney granted by the Company or any Subsidiary with
respect to any Taxes is currently in force.  Neither the Company nor any
Subsidiary has executed or filed with any Governmental Authority any agreement
or other document extending or having the effect of extending the period for
assessment, reassessment or collection of any Taxes.
 
 
8
 
(viii) Neither the Company nor any Subsidiary engages in (or has engaged) in a
trade or business in a country other than the country in which the Company or
any Subsidiary is incorporated or otherwise organized.
 
(ix) Neither the Company nor any Subsidiary has been, in the past five (5)
years, a party to a transaction reported or intended to qualify as a
reorganization under Code section 368.  Neither the Company nor any Subsidiary
has constituted a “distributing corporation” or a “controlled corporation”
(within the meaning of Code section 355(a)(1)(A)) in a distribution of shares
that was reported or otherwise constitute a distribution of shares under Code
section 355(i) in the two (2) years prior to the date of this Agreement or that
could otherwise constitute part of a “plan” or “series of related transactions”
(within the meaning of Code section 355(e)) that includes the transactions
contemplated by this Agreement.
 
(x) Neither the Company nor any Subsidiary has engaged in any transaction that
could affect the Income Tax liability for any period not closed by the statute
of limitations which is a “listed transaction” (or a substantially similar
transaction) within the meaning of Treasury Regulation section 1.6011-4(b)(2)
(irrespective of the effective dates).
 
(xi) There is no Contract covering any employee or former employee or
independent contractor or former independent contractor of the Company or the
Subsidiaries that, individually or collectively, would give rise to a (or
already has resulted in a) payment or provision of any other benefit (including
accelerated vesting) by the Company or the Subsidiaries that would not be
deductible by reason of Code section 280G or would be subject to an excise tax
under Code section 4999.
 
(xii) Except as disclosed in Schedule 2.3(m)(xii), each of the Company’s and the
Subsidiaries’ “nonqualified deferred compensation plans” within the meaning of
Code section 409A has complied in form and operation with Code section 409A and
the Treasury Regulations promulgated thereunder, and no such “nonqualified
deferred compensation plan” has or will result in any participant incurring
income acceleration or penalties under Code section 409A.  Neither the Company
nor any Subsidiary is required to pay, gross up, or otherwise indemnify any
employee or contractor for any Taxes, including potential Taxes imposed under
Code section 409A or Code section 4999.
 
(xiii) Neither the Company nor any Subsidiary is required to include an item of
income, or exclude an item of deduction, for any period after the Closing Date
as a result of (A) an installment sale transaction occurring on or before the
Closing Date governed by Code section 453 (or any similar provision of state,
local or non-U.S. applicable laws); (B) a transaction occurring on or before the
Closing Date reported as an open transaction for U.S. federal income tax
purposes (or any similar doctrine under state, local, or non-U.S. applicable
laws); (C) any prepaid amounts received on or prior to the Closing Date; (D) an
adjustment pursuant to Code section 481 (or any similar provision of state,
local, or non-U.S. applicable laws); (E) an agreement entered into with any
Governmental Authority (including a “closing agreement” under Code section 7121)
on or prior to the Closing Date; or (F) the application of Code section 263A (or
any similar provision of state, local, or non-U.S. applicable laws).  Neither
the Company nor any Subsidiary has made an election (including a protective
election) pursuant to Code section 108(i).
 
(xiv) Neither the Company nor any Subsidiary owns an interest in any Flow Thru
Entity.
 
(xv) Neither the Company nor any Subsidiary has any item of income, gain, loss,
expense, or deduction that remains deferred under the intercompany transaction
rules of Treasury Regulation section 1.1502-13 (or similar provision of state,
local, or non-U.S. applicable laws).
 
 
9
 
(n) Conduct of Business.  Since the Most Recent Balance Sheet Date, there has
been no Material Adverse Effect and neither the Company nor the Subsidiaries
have:
 
(i) sold or transferred any material assets or property, except for sales or
transfers of property not necessary for the operation of the Business in the
ordinary course of business and any transfers of Cash and Cash Equivalents and
except as set forth on Schedule 2.3(n)(i) of the Disclosure Schedule;
 
(ii) suffered any material casualty or damage to, or any material interruption
in use of, any of its material assets or property (whether or not covered by
insurance), on account of fire, flood, riot, strike or other hazard or Act of
God;
 
(iii) made, or become committed to make, any material change to any bonus,
pension, profit sharing, deferred compensation or similar plan, program or trust
covering any of their employees, except as disclosed in Schedule 2.3(n)(iii) of
the Disclosure Schedule;
 
(iv) made, or become committed to make, any material change to any bonus or
other plan or program covering any of the Significant Sales Agents or
Significant Operating Agents, except as disclosed in Schedule 2.3(n)(iv) of the
Disclosure Schedule;
 
(v) made, or become committed to make, any change to commission rates under any
Contract, plan or program with any of their Sales Agents or Operating Agents,
except as disclosed in Schedule 2.3(n)(v) of the Disclosure Schedule;
 
(vi) made any loans, advances or capital contributions to, or equity investments
in, any other Person in excess of $20,000, except as set forth on Schedule
2.3(n)(vi) of the Disclosure Schedule;
 
(vii) changed in any material respect any of its accounting systems, policies,
principles or practices (including any change in reserve, depreciation or
amortization policies or rates);
 
(viii) changed in any material respect any intercompany accounting, tax or
treasury systems, policies, principles or practices;
 
(ix) declared, set aside, or paid a dividend or other distribution with respect
to the shares of the Company or the Subsidiaries (other than of Cash and Cash
Equivalents), or made any direct or indirect redemption, purchase or other
acquisition of any of its shares of capital stock;
 
(x) made any amendment or change to its certificate of incorporation or bylaws;
 
(xi) without limitation by the enumeration of any of the foregoing, entered into
any material transaction (including any Material Contract or amendment thereto)
other than in the usual and ordinary course of business, except as set forth on
Schedule 2.3(n)(xi) of the Disclosure Schedule;
 
(xii) made any material change to its insurance coverages or the intercompany
accounting therefor; or
 
(xiii) agreed to do any of the items set forth in Sections 2.3(n)(i), (iii),
(iv), (v), (vi), (vii), (viii), (ix), (x), (xi) or (xii) (the foregoing
representation and warranty shall not be deemed to be breached by virtue of the
entry by Seller into this Agreement or consummation of the transactions
contemplated hereby).
 
 
10
 
(o) Contracts.  Except as set forth in Schedule 2.3(o) of the Disclosure
Schedule, neither the Company nor any Subsidiary is a party to, or bound by, any
Contract of the type described below:
 
(i) Contract for the employment for any definite period of time whatsoever, or
in regard to the employment, or restricting the employment, of any employee of
the Company or any Subsidiary;
 
(ii) consulting agreement involving aggregate annual payments in excess of
$100,000;
 
(iii) collective bargaining agreement;
 
(iv) Contract providing for commissions, bonuses, options, deferred
compensation, retirement payments, profit sharing, medical and dental benefits
or the like covering employees of the Company or the Subsidiaries;
 
(v) Contract restricting the Company’s or any Subsidiary’s right to engage in
any business or to compete with any other Person, restricting the Company’s or
any Subsidiary’s right to sell to or purchase from any other Person or to employ
any Person, or restricting the right of any other party to compete with the
Company or any Subsidiary or the ability of such Person to employ any employees
of the Company or any Subsidiary;
 
(vi) Contract between the Company or any Subsidiary, on the one hand, and any
Affiliate of the Company, on the other hand, where the annual payments exceed
$50,000, other than Contracts for the provision of services that are similar to
those provided under the Transition Services Agreement;
 
(vii) Contract of agency, representation, distribution or franchise which cannot
be cancelled by the Company or any Subsidiary without payment or penalty upon
notice of sixty (60) days or less, excluding any Contracts with Sales Agents and
Operating Agents;
 
(viii) any Contract with the Significant Sales Agents or the Significant
Operating Agents;
 
(ix) any loan agreement or other Contract for the borrowing of money with any
Sales Agent or Operating Agent;
 
(x) maintenance Contract of the Company or any Subsidiary where the annual
service charge to the Company or such Subsidiary is in excess of $100,000 or has
an unexpired term as of the Closing Date in excess of one year;
 
(xi) guaranty, performance, bid or completion bond, or surety or indemnification
agreement, other than Contracts entered into in the ordinary course of business
with customers, agents and vendors of the Company and/or the Subsidiaries
(including carriers);
 
(xii) the reimbursement or other indemnification agreements with respect to each
of the Seller’s Bonds and Letters of Credit, the Company Bonds and Letters of
Credit and any other bonds or letters of credit with respect to which the
Company or any Subsidiary has any obligation (contingent or otherwise);
 
(xiii) any settlement agreement entered into during the past three (3) years
with respect to any Legal Proceeding involving payment by the Company or any
Subsidiary of an amount in excess of $100,000, other than settlement agreements
entered into in the ordinary course of business with customers and carriers for
cargo losses or any other damage or loss with respect to goods in transit;
 
(xiv) any Contract pursuant to which the Company or any Subsidiary is a lessor
or lessee or sublessor or sublessee of any real property;
 
(xv) any Contract pursuant to which the Company or any Subsidiary is either a
lessee or sublessee or lessor or sublessor, of personal property or intangibles,
where the Contract (A) provides for an annual rent in excess of $100,000, (B)
has an unexpired term as of the Closing Date in excess of one year or (C) is the
type required to be capitalized in accordance with IFRS;
 
 
11
 
(xvi) any trust indenture, mortgage, promissory note, loan agreement or other
Contract, in each case for the borrowing of money, currency exchange or other
hedging arrangement, or any guarantees with respect to the foregoing;
 
(xvii) any confidentiality, secrecy or non-disclosure Contract other than
non-disclosure agreements entered into in the ordinary course of business;
 
(xviii) any Contract regarding the development, ownership or use of Intellectual
Property (including material licenses to or from third parties, but other than
commercial off-the-shelf software, as the term is commonly understood);
 
(xix) any Contract with a rail carrier or ocean freight carrier involving
payment of an aggregate amount in excess of $100,000 per annum, other than rate
agreements entered into in the ordinary course of business;
 
(xx) each Insurance Policy owned by the Company or any Subsidiary; or
 
(xxi) any Contract that provides for the receipt or expenditure by the Company
or any Subsidiary of more than $200,000, except Contracts for the purchase or
sale of goods or the rendering or procuring of services in the ordinary course
of business and Contracts with Sales Agents, Operating Agents and/or any carrier
not required to be set forth in Schedule 2.3(o) of the Disclosure Schedule by
any of the foregoing paragraphs.
 
Each of the Material Contracts is valid, binding upon and enforceable against
the Company or a Subsidiary and, to the knowledge of the Company, the other
parties thereto, except to the extent that enforcement may be affected by laws
relating to bankruptcy, reorganization, insolvency and creditors’ rights and by
the availability of injunctive relief, specific performance and other equitable
remedies.  No material default or material breach by the Company or any
Subsidiary has occurred and is continuing under any Material Contract and, to
the Company’s knowledge, no material default or material breach by the other
contracting parties has occurred and is continuing thereunder.  To the Company’s
knowledge, no material default or material breach by the Company or any
Subsidiary has occurred and is continuing under any contract or agreement
described in Section 2.3(i)(ii)(b) or (c) and, to the Company’s knowledge, no
material default or material breach by the other contracting parties has
occurred and is continuing thereunder.  The Company has made available to
Purchaser correct and complete copies of each Material Contract.
 
(p) Permits.
 
(i) The Company and the Subsidiaries possess all material licenses, franchises,
permits, fuel permits, operating authorities, state operating licenses or
registrations and other material interstate or intrastate regulatory licenses
and other material governmental approvals that are required in order for the
Company and the Subsidiaries to conduct the Business as presently conducted (the
“Permits”).  Schedule 2.3(p) of the Disclosure Schedule sets forth a complete
and correct list of all of the Permits.  To the knowledge of the Company, the
Permits are valid and in effect.  The Company and the Subsidiaries are in
compliance in all material respects with all Permits.  Neither Seller, the
Company nor any Subsidiary has received in the past twenty-four (24) months any
written notice of any violation of the Permits or that any Governmental
Authority intends to cancel, terminate or not renew any of the
Permits.  Schedule 2.3(p) of the Disclosure Schedule sets forth a complete and
correct list of the material certificates of authority that each of the Company
and the Subsidiaries holds from the Surface Transportation Board to operate as a
motor carrier of general commodities or property broker and the certificates of
authority that each of the Company and the Subsidiaries holds in certain states
to operate as an intrastate motor carrier of general commodities or property
broker.  No certificate of authority issued to the Company or any Subsidiary to
operate as a motor carrier or property broker is subject to pending or, to the
knowledge of the Company, threatened action on the part of any Governmental
Authority for revocation or restriction.  Neither the U.S. Department of
Transportation nor any state regulatory agency has issued to the Company or any
Subsidiary a safety rating of “unsatisfactory.”
 
(ii) The representations and warranties set forth in this Section 2.3(p) shall
not apply to the Environmental Permits which are the subject of the
representations and warranties contained in Section 2.3(t).
 
 
12
 
(q) Employees and Employee Benefits.
 
(i) Schedule 2.3(q)(i) of the Disclosure Schedule sets forth a complete and
correct list of each “employee benefit plan” (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, (“ERISA”)),
profit-sharing, deferred compensation, bonus, option, change in control,
vacation pay, holiday pay, pension, retirement plans, medical or other material
benefit arrangement sponsored or maintained by the Company or any Subsidiary or
for which the Company or a Subsidiary is obligated to sponsor or maintain or in
which employees of the Company or any Subsidiary participate by virtue of their
employment with the Company or a Subsidiary (each, a “Benefit Plan” and
collectively, “Benefit Plans”).  No Benefit Plan is a “multi-employer plan” (as
defined in Section 3(37) of ERISA), and no Benefit Plan is subject to Title IV
of ERISA or Section 412 of the Code.
 
(ii) Each Benefit Plan is in compliance in all material respects with its terms
and all applicable legal requirements under ERISA, the Code and other applicable
Law.  Each welfare benefit plan (as defined in Section 3(1) of ERISA) maintained
by an entity that is treated as a single employer with the Company or the
Subsidiary under Sections 414(b), (c), (m) or (o) of the Code has complied in
all material respects with 4980B of the Code and/or Part 6 of Title I of ERISA.
 
(iii) With respect to each Benefit Plan, Seller has made available to Purchaser
true and complete copies of (i) all plan documents and any amendments, (ii) the
three most recent Annual Reports (Form 5500 Series) and audited financial
statements, if any, (iii) the current summary plan description and any material
modifications thereto and (iv) any trust document, funding vehicles and any
material third-party Contracts with respect to such Benefit Plan.
 
(iv) The Company and the Subsidiaries have no outstanding liabilities pursuant
to Title IV of ERISA because of the sponsorship or contributions by an entity
that is a member of a “controlled group of corporations” with or under “common
control” of Seller (as such terms are defined in Section 414(b) or Section
414(c) of the Code, respectively) ("ERISA Affiliate") to any employee pension
benefit plan subject to Title IV of ERISA nor has any event occurred or
circumstance exist with respect to any employee pension benefit plan subject to
Title IV of ERISA of an ERISA Affiliate that could reasonably be expected to
result in any liability to the Company or any Subsidiary under Title IV of
ERISA.
 
(v) None of the Benefit Plans provide benefits to any employee who is not living
in the United States.
 
(vi) Each Benefit Plan that is intended to be qualified under Section 401(a) of
the Code is the subject of a determination letter or an opinion letter from the
Internal Revenue Service that the form of the plan meets the applicable
requirements of Section 401(a) of the Code.  Seller has made available to
Purchaser copies of the most recent Internal Revenue Service determination
letter or opinion letters with respect to each such plan, and Seller has no
knowledge of any events or circumstances that could reasonably be expected to
jeopardize such qualified status.
 
(vii) All contributions, payments and liabilities accrued under each Benefit
Plan have been paid to the extent required by Law or such Benefit Plans.
 
(viii) With respect to the employees and former employees of the Company and the
Subsidiaries, there are no employee post-retirement medical or health plans in
effect that are sponsored and maintained by the Company or any Subsidiary and
that benefit such individuals, except as required by Section 4980B of the Code
and/or Part 6 of Title I of ERISA.
 
(ix) With respect to each Benefit Plan, there are no claims or other proceedings
pending or threatened with respect to the assets thereof (other than routine
claims for benefits), which could reasonably give rise to any liability, claim
or other proceeding against any Benefit Plan, any fiduciary or plan
administrator or other Person dealing with any Benefit Plan or the assets of any
such Benefit Plan.  To the Company’s knowledge, no Benefit Plan is being audited
or investigated by any Governmental Authority.
 
(x) There are no unfair labor practice charges or employee grievance charges
pending with respect to the Company or any Subsidiary and, to the Company’s
knowledge, no such charges have been overtly threatened in writing.
 
(xi) Seller has made available to Purchaser a correct and complete list of all
employees of the Company and each Subsidiary as of the Closing Date and the
annual base salary and location (i.e., home or office) of each such employee.
 
 
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(r) Litigation.  Except as set forth in Schedule 2.3(r)(i) of the Disclosure
Schedule, there is no Legal Proceeding, (i) that is pending against the Company
or the Subsidiaries, or (ii) to the Company’s knowledge, overtly threatened in
writing against the Company or the Subsidiaries (other than, in the case of this
item (ii), Legal Proceedings relating to cargo losses or other damage or loss
with respect to goods in transit), or with respect to the consummation of the
transaction contemplated hereby.  Neither the Company nor any Subsidiary is a
party to, or bound by, any Order (or agreement entered into in any Legal
Proceeding) that remains undischarged.  Each Legal Proceeding to which the
Company or any Subsidiary has been a party during the three (3) years preceding
the date hereof and which involved a claim against the Company or such
Subsidiary in an amount in excess of $100,000 is identified in Schedule
2.3(r)(ii) of the Disclosure Schedule other than Legal Proceedings relating to
cargo losses or other damage or loss with respect to goods in transit.
 
(s) Compliance with Laws.  Except for Environmental Laws (which are exclusively
covered in Section 2.3(t)), neither the Company nor any Subsidiary is in
violation in any material respect of, or delinquent in any material respect with
respect to, any Law of or agreement with, any Governmental Authority (or to
which its properties, assets, personnel, business activities or the Leased Real
Estate are subject or to which it, itself, is subject), including, without
limitation, Laws relating to hiring, employment, termination from employment, or
classification as an independent contractor (including wages and hours, equal
opportunity, collective bargaining, plant closing and mass layoff, health and
safety, immigration and the payment of social security and other Taxes).
 
(t) Environmental.
 
(i) Neither the Company nor any Subsidiary is in violation in any material
respect of any Environmental Laws.  The Company and the Subsidiaries possess all
material Environmental Permits that are required for the operation of the
Business as presently conducted, and are in compliance in all material respects
with the provisions of all such Environmental Permits.
 
(ii) To the Company’s knowledge, neither Seller, the Company nor any Subsidiary
has received written notice since January 1, 2005 that the Company or such
Subsidiary is, or may be, a potentially responsible party for a federal or state
environmental cleanup site or for corrective action under any Environmental
Law.  Neither Seller, the Company nor any Subsidiary has within the past three
(3) years (A) received any written request for information in connection with
any federal or state environmental cleanup site with respect to the Leased Real
Estate or the operations of the Company or any Subsidiary or (B) undertaken (or
been requested to undertake) in writing any response or remedial actions or
cleanup action of any kind at the request of any Governmental Authority, or at
the request of any other Person, with respect to the Leased Real Estate or the
operations of the Company or any Subsidiary.
 
(iii) Schedule 2.3(t)(iii) of the Disclosure Schedule identifies and Seller has
made available to Purchaser correct and complete copies of (A) all third party
environmental audits, assessments, or occupational health studies prepared in
the past five (5) years that are in the possession of Seller, the Company or the
Subsidiaries with respect to the Leased Real Estate or the operations of the
Company or any Subsidiary, (B) the results of any groundwater, soil, air or
asbestos monitoring undertaken with respect to any of the parcels of Leased Real
Estate or the operations of the Company or any Subsidiary within the past three
(3) years that are in the possession of Seller, the Company or the Subsidiaries
with respect to the Leased Real Estate or the operations of the Company or any
Subsidiary, (C) all material citations issued with respect to the Leased Real
Estate or the operations of the Company or any Subsidiary within the past three
(3) years under the Occupational Safety and Health Act (29 U.S.C. Sections 651
et seq.) and (D) all material claims, litigation, written notices of violation,
administrative proceedings, whether pending or, to the Company’s knowledge,
threatened in writing, or written orders issued to Seller, the Company or any
Subsidiary within the past three (3) years under applicable Environmental Laws,
in each case with respect to the Leased Real Estate or the operations of the
Company or any Subsidiary.
 
(u) Real Estate.
 
(i) Neither the Company nor any Subsidiary currently owns, or during the five
(5) year period prior to the date hereof, has owned, any real estate.  Schedule
2.3(u)(i) of the Disclosure Schedule lists all of the real estate leased by the
Company or any Subsidiary (the “Leased Real Estate”).  The Leased Real Estate:
(A) constitutes all real property and improvements leased or subleased by the
Company and the Subsidiaries; (B) is not subject to any leases or tenancies of
any kind (except for the Company or any Subsidiary’s lease); (C) to the
knowledge of the Company, is used in a manner that is consistent and permitted
by applicable zoning ordinances and other Laws or without special use approvals
or permits; and (D) is served by all water, sewer, electrical, telephone,
drainage and other utilities required for normal operations of the
Business.  All options in favor of the Company or any Subsidiary to purchase any
of the Leased Real Estate as set forth in the Leases, if any, are in full force
and effect.
 
 
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(ii) The Leased Real Estate is leased to the Company or any Subsidiary pursuant
to written leases, true and correct copies of which have been provided to
Purchaser (the “Leases”).  With respect to each such Lease: (A) the Company or a
Subsidiary has a valid interest or estate in such Lease, free and clear of all
Liens, other than Permitted Liens; (B) such Lease constitutes the entire
agreement to which the Company or a Subsidiary is a party with respect to the
subject Leased Real Estate; (C) neither the Company nor any Subsidiary has
assigned, sublet, transferred, conveyed, mortgaged, deeded in trust or
encumbered any interest in the interest or estate created thereby; and (D)
neither Seller, the Company nor any Subsidiary is in receipt of any written
notice of current default pursuant to such Lease and no rentals are past due.
(iii) There are no condemnation or eminent domain proceedings pending or, to the
Company’s knowledge, overtly threatened in writing with respect to any portion
of the Leased Real Estate.
 
(iv) There is no tax assessment (in addition to the normal, annual general real
estate tax assessment) pending or, to the Company’s knowledge, overtly
threatened in writing with respect to any portion of the Leased Real Estate.
 
(v) All of the tangible personal property located at the Company’s facilities in
Dallas, Texas, Memphis, Tennessee, Lombard, Illinois and Greenwood, Indiana (the
“Company Facilities”) at the Closing constitute Company Assets, other than (A)
any property or assets owned by Seller or its Affiliates and not used in the
Business as of the Closing or in the twelve (12) months preceding the Closing
Date and (B) the office furniture, personal computers and books, records and
files and any other immaterial assets or property relating primarily to the
Managed Transportation Business (the property in clause (A) and (B) is referred
to herein as the “Excluded Property”).
 
(v) [Intentionally Omitted]
 
(w) Brokers.  Except for LonePine Capital Advisors, LLC (the fees of which shall
be paid by Seller), the Company and the Subsidiaries have not dealt with any
Person or entity who is entitled to a broker’s commission, finder’s fee,
investment banker’s fee or similar payment for arranging the transaction
contemplated hereby or introducing the parties to each other.
 
(x) Significant Customers, Vendors, Sales Agents and Operating Agents.  Since
the Most Recent Balance Sheet Date, to the knowledge of the Company, no
Significant Customer has indicated to the Company in writing that it either
intends to terminate its business relationship with the Company and the
Subsidiaries or that it intends to alter its business relationship with the
Company and the Subsidiaries in any material and adverse respect.  Since the
Most Recent Balance Sheet Date, to the knowledge of the Company, no Significant
Vendor has indicated to the Company in writing that it either intends to
terminate its business relationship with the Company and the Subsidiaries or
that it intends to alter its business relationship with the Company and the
Subsidiaries in any material and adverse respect.  Since the Most Recent Balance
Sheet Date, to the knowledge of the Company, no Significant Sales Agent has
indicated to the Company in writing that it either intends to terminate its
business relationship with the Company and the Subsidiaries or that it intends
to alter its business relationship with the Company and the Subsidiaries in any
material and adverse respect.  Since March 31, 2010, to the knowledge of the
Company, no Significant Operating Agent has notified the Company, orally or in
writing, that it intends to terminate its business relationship with the Company
and the Subsidiaries.  Since the Most Recent Balance Sheet Date, to the
knowledge of the Company, no Significant Operating Agent has indicated in
writing that it intends to alter its business relationship with the Company and
the Subsidiaries in any material and adverse respect.  The Significant
Customers, Significant Vendors, Significant Sales Agents and Significant
Operating Agents are listed in Schedule 2.3(x) of the Disclosure Schedule.
 
(y) Bank Accounts.  Schedule 2.3(y) of the Disclosure Schedule contains a
correct and complete list showing:  (i) the name of each bank, safe deposit
company or other financial institution in which the Company or any Subsidiary
has an account, lock box or safe deposit box (collectively, the “Bank
Accounts”); and (ii) the names of all Persons authorized to draw thereon or to
have access thereto and the names of all Persons, if any, holding powers of
attorney from the Company or any Subsidiary.  From and after the Closing, none
of the Bank Accounts is subject to any “sweep” by Seller or any of its
Affiliates (or any lender to Seller or any of its Affiliates).
 
(z) Insurance.
 
(i) Schedule 2.3(z)(i) of the Disclosure Schedule contains a correct and
complete list and description (including insurer, coverages, deductibles,
limitations and expiration dates) of the following insurance policies for the
current policy year: (a) all third party insurance policies that are owned by
the Company or any Subsidiary and (b) all other third party insurance policies
that are owned by Seller or an Affiliate of Seller and cover the Company and/or
the Subsidiary’s assets, employees, agents and operations (collectively, the
“Insurance Policies”).  All of the Insurance Policies are in full force and
effect and are not void or voidable on account of any act, error, omission,
non-disclosure, breach of policy terms or conditions or failure to comply with
any warranty.  Seller has made available to Purchaser correct and complete
summaries of the material terms of the Insurance Policies.  All premiums due and
payable under all of the Insurance Policies have been paid, and Seller, the
Company or any Subsidiaries, as applicable, is otherwise in compliance with the
terms of the Insurance Policies.
 
 
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(ii) Except as set forth in Schedule 2.3(z)(ii) of the Disclosure Schedule,
there is no pending claim with respect to the Company’s or any Subsidiary’s
assets, employees, agents or operations under any of the Insurance Policies as
to which (A) coverage has been denied by the underwriters of the Insurance
Policies or (B) a reservation of rights letter has been issued with respect
thereto.  Schedule 2.3(z)(ii) of the Disclosure Schedule contains a summary of
all claims with respect to the Company’s or any Subsidiary’s assets, employees,
agents or operations submitted or paid under the Insurance Policies within the
past twelve (12) months.  To the knowledge of the Company, none of Seller, the
Company or any Subsidiary, as applicable, has failed to give any notice or
present any claim with respect to the Company’s or any Subsidiary’s assets,
employees, agents or operations under any Insurance Policy in due and timely
fashion or as required by any Insurance Policy.
 
(iii) During the twelve (12) month period ending on the date hereof, to the
Company’s knowledge, neither Seller, the Company nor any Subsidiary has received
any written notice from or on behalf of any insurance carrier issuing the
Insurance Policies to the effect that insurance rates will thereafter be
materially increased, that there will thereafter be no renewal of an existing
policy or that material alteration of any owned or leased personal or real
property, purchase of additional equipment or material modification of the
Company’s and/or any Subsidiary’s methods of doing business will be required.
 
(aa) Governing Documents.
 
(i) Seller has made available to Purchaser correct and complete copies of the
Company’s and each Subsidiary’s certificate of incorporation and all amendments
thereto (or similar formation documents) and the bylaws of the Company and each
Subsidiary as amended and as are currently in force (or similar organizational
documents).  Neither the Company nor any Subsidiary is in violation of any
provision of its formation or organizational documents.
 
(ii) The minute books and records of the Company and each Subsidiary in Seller’s
possession contain correct and complete copies of all material resolutions
adopted by the stockholders and boards of directors of the Company and each
Subsidiary during the three (3) year period ending on the date hereof.
 
(bb) EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2.3 SELLER MAKES NO EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, AND SELLER DISCLAIMS
ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY OR STATEMENT
MADE OR INFORMATION COMMUNICATED (ORALLY OR IN WRITING) TO PURCHASER OR ANY OF
ITS AFFILIATES (INCLUDING ANY OPINION, INFORMATION, OR ADVICE THAT MAY HAVE BEEN
PROVIDED TO PURCHASER OR ANY OF ITS AFFILIATES BY ANY PARTNER, DIRECTOR,
OFFICER, EMPLOYEE, ACCOUNTING FIRM, LEGAL COUNSEL, OR OTHER AGENT, CONSULTANT,
OR REPRESENTATIVE OF SELLER OR THE COMPANY OR ANY STOCKHOLDER OF SELLER).  ALL
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE
EXPRESSLY EXCLUDED.  ANY AND ALL PRIOR REPRESENTATIONS AND WARRANTIES MADE BY
ANY PARTY OR ITS REPRESENTATIVES, WHETHER ORALLY OR IN WRITING, ARE DEEMED TO
HAVE BEEN MERGED INTO THIS AGREEMENT, IT BEING INTENDED THAT NO SUCH PRIOR
REPRESENTATIONS OR WARRANTIES SHALL SURVIVE THE EXECUTION AND DELIVERY OF THIS
AGREEMENT.
 
 
 
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ARTICLE III                                
 
 
Closing
 
3.1 Form of Documents.  At the Closing, the parties shall deliver the documents,
and shall perform the acts, that are set forth in this Article III.  All
documents which Seller shall deliver shall be in form and substance reasonably
satisfactory to Purchaser and Purchaser’s counsel.  All documents Purchaser
shall deliver shall be in form and substance reasonably satisfactory to Seller
and Seller’s counsel.
 
3.2 Purchaser’s Deliveries.  On the Closing Date, Purchaser shall deliver to
Seller all of the following:
 
(a) the Estimated Purchase Price;
 
(b) the Transition Services Agreement, Trademark License Agreement and
Restrictive Covenant Agreement, each as executed by Purchaser and the Company;
 
(c) a certified copy of Purchaser’s certificate of incorporation and by-laws;
 
(d) a certificate of good standing of Purchaser, issued not earlier than ten
(10) days prior to the Closing Date by the Secretary of State of the State of
Delaware;
 
(e) an incumbency and specimen signature certificate with respect to the
officers of Purchaser executing this Agreement and the Ancillary Agreements to
which Purchaser is a party;
 
(f) a certified copy of the resolutions of Purchaser’s board of directors,
authorizing the execution, delivery and performance of this Agreement and the
Ancillary Agreements to which Purchaser is a party;
 
(g) subject to Section 5.13, amendments to the certificate of incorporation and
other formation documents of the Company and the Subsidiaries reflecting the
change of the names of the Company and the Subsidiaries to names that no longer
utilize the Excluded Marks (or any derivation thereof) and that are not
confusingly similar to the Excluded Marks; and
 
(h) without limitation by specific enumeration of the foregoing, all other
documents as may reasonably be required from Purchaser in order to effectuate
the transactions contemplated hereby.
 
3.3 Seller’s Deliveries.  On the Closing Date, Seller shall deliver to Purchaser
all of the following:
 
(a) certificates representing all of the Shares, duly endorsed in blank or with
duly executed stock powers attached;
 
(b) certificates representing all issued and outstanding shares of capital stock
of the Subsidiaries registered in the name of the Company;
 
(c) the written resignations effective as of the Closing of each of the
directors and officers of the Company and the Subsidiaries;
 
(d) the certificate or articles of incorporation (or equivalent governing
document) of each of Seller, the Company and the Subsidiaries certified by the
secretary of state of the state of its organization (or equivalent governing
body), issued not earlier than ten (10) days prior to the Closing Date;
 
(e) a certificate of good standing of Seller, issued not earlier than ten (10)
days prior to the Closing Date, by the Secretary of State of the State of Ohio;
 
(f) certificates of good standing of the Company and the Subsidiaries, issued
not earlier than ten (10) days prior to the Closing Date, by the secretary of
state of the state of its organization (or equivalent governing body) and from
each other jurisdiction where such entity is required to be authorized to do
business;
 
 
17
 
(g) a certificate of the Secretary or other authorized officer of Seller
certifying as to Seller’s articles of incorporation and bylaws, the incumbency
and signature of the officers of Seller executing this Agreement and the
Ancillary Agreements to which Seller is a party and a copy of the resolutions of
Seller’s board of directors, authorizing the execution, delivery and performance
of this Agreement and the Ancillary Agreements to which Seller is a party;
 
(h) a certificate of the Secretary or other authorized officer of the Company
and the Subsidiaries certifying as to their respective certificate of
incorporation and bylaws (or equivalent governing documents) and a list of their
respective directors and officers;
 
(i) the original corporate record books and stock record books of the Company
and the Subsidiaries;
 
(j) the Transition Services Agreement, Trademark License Agreement and
Restrictive Covenant Agreement, each as executed by Seller;
 
(k) an amendment, in form and substance satisfactory to Purchaser, of each of
the Business Continuation and Employment Agreements, as executed and delivered
by the parties thereto;
 
(l) a certificate from Seller, duly completed and executed by Seller pursuant
to, and in a form that complies with, 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;
 
(m) an assignment agreement between Exel, Inc., as assignor, and the Company, as
assignee, with respect to the Dallas Lease;
 
(n) evidence reasonably satisfactory to Purchaser that the “sweep” of any of the
Bank Accounts from and after the Closing has been terminated;
 
(o) a bill of sale and assignment agreement, executed by Seller, in favor of the
Company with respect to all tangible personal property located at the Company
Facilities that is owned by Seller or its Affiliates, including the phone system
located at the Company’s facility in Dallas, Texas, other than the Excluded
Property; and
 
(p) without limitation by specific enumeration of the foregoing, all other
documents as may reasonably be required from Seller in order to effectuate the
transactions contemplated hereby.
 
 
 
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ARTICLE IV                                
 
 
Tax Matters
 
4.1 Preparation and Filing of Tax Returns.
 
(a) Seller shall, at Seller’s expense, prepare and timely file (or cause to be
prepared and timely filed) (i) all Tax Returns of the Company or any Subsidiary
due (after taking into account all appropriate extensions) on or prior to the
Closing Date and all Tax Returns of the Company or any Subsidiary that are due
after the Closing Date that relate solely to periods ending on or before the
Closing Date other than Seller Group Returns (the “Pre-Closing Tax Returns”) and
(ii) any consolidated, combined or unitary Tax Return that includes Seller and
the Company or any Subsidiary for any taxable period ending on or prior the
Closing Date (the “Seller Group Returns” and collectively with Pre-Closing Tax
Returns, the “Seller Prepared Returns”) and (iii) any Tax Return prepared
pursuant to the Remediation Agreement.  Each Seller Prepared Return, solely to
the extent it relates to the Company or any Subsidiary, shall be prepared in
accordance with existing procedures and practices and accounting methods and, to
the extent applicable, the conventions provided for in Section 4.3.  To the
extent a Pre-Closing Tax Return is due after the Closing Date, such Tax Return
shall be delivered to Purchaser within five (5) calendar days of such due date
for Purchaser’s review and approval which shall not be unreasonably withheld or
delayed.  Purchaser shall notify Seller in writing within three (3) calendar
days of the receipt of any such Pre-Closing Tax Return of any reasonable
objections Purchaser may have to any items set forth on such Pre-Closing Tax
Return, and Purchaser and Seller agree to consult with each other and attempt to
resolve in good faith any such objections and to attempt to mutually agree to
the filing of such Pre-Closing Tax Return by the Company or the Subsidiary prior
to the due date of such Tax Return (including extensions thereof); provided,
however, that for any Pre-Closing Tax Return due after the Closing Date that is
an Income Tax Return, thirty (30) and ten (10) calendar day periods shall be
substituted for the five (5) and three (3) calendar day periods provided
herein.  In no event shall the Company or the Subsidiary be required to file a
Pre-Closing Tax Return that contains a position that counsel to Purchaser has
determined lacks sufficient support to avoid the imposition of penalties.
 
(b) Purchaser shall cause the Company and the Subsidiaries to prepare and timely
file all Tax Returns (other than Seller Group Returns and Pre-Closing Tax
Returns due after the Closing Date) of the Company and the Subsidiaries due
after the Closing Date (the “Purchaser Prepared Returns”).  To the extent that a
Purchaser Prepared Return relates to a taxable period beginning before the
Closing Date and ending after the Closing Date (each such time period being a
“Straddle Period” and such returns being the “Straddle Tax Returns”), such
Straddle Tax Return shall be prepared on a basis consistent with existing
procedures and practices and accounting methods, and, to the extent applicable,
the conventions provided in Section 4.3, unless, as set forth in a written
opinion of counsel to the Purchaser, such procedure, practice, accounting method
or other contemplated treatment does not have sufficient legal support to avoid
the imposition of Taxes in the form of penalties, in which case, such Purchaser
Prepared Return shall be prepared in accordance with a good faith method
determined by Purchaser that has sufficient support to avoid the imposition of
Taxes in the form of penalties and results in a tax liability most proximate to
the original procedure, practice, accounting method or other treatment
originally used by Seller and/or its Affiliates.  Purchaser shall deliver all
such Straddle Tax Returns to Seller for its review and approval, which approval
shall not be unreasonably withheld or delayed.  Such Tax Returns shall be
delivered to Seller within a reasonable time prior to the due date (including
extensions) of such Tax Returns in order to provide Seller with a reasonable
period of time to review and comment on such Tax Returns prior to the due date
of such Tax Returns.  Seller shall notify Purchaser in writing within ten (10)
calendar days of the receipt of any such Tax Return of any reasonable objections
Seller may have to any items set forth on such Tax Return, and Seller and
Purchaser agree to consult with each other and attempt to resolve in good faith
any such objections and to attempt to mutually agree to the filing of such Tax
Return prior to the due date of such Tax Return (including extensions thereof).
 
(c) In the event the Company or the Subsidiary is liable for Taxes due in
connection with any Pre-Closing Tax Return filed after the Closing Date (in each
case to the extent such Taxes are not adequately provided for as a current
liability in the Final Net Working Capital), Seller shall pay the amount of such
Taxes to Purchaser immediately upon request or at least five (5) business days
prior to the filing of such Tax Returns, whichever is later.
 
4.2 Tax Indemnity.  Subject to the survival period set forth in Section 4.10 and
the limitations on Seller’s indemnification obligations set forth in Article VII
(other than any limitations set forth in Sections 7.4(a) or 7.4(b)) Seller shall
pay and indemnify all Purchaser Indemnitees for the following Taxes (and all
other related Damages):
 
(a) all Taxes of the Company or any Subsidiary for (A) any taxable period ending
on or before the Closing Date or (B) the Pre-Closing Straddle Period, in each
case to the extent such Taxes are not adequately provided for as a current
liability on the Closing Purchase Price Statement for purposes of computing the
Net Working Capital, as finally determined;
 
(b) all Income Taxes that the Company or any Subsidiary is liable for (including
under Treasury Regulation section 1.1502-6 or any similar provision of state,
local, or non-U.S. applicable law) as a result of being a member of (or leaving)
a consolidated, combined, or unitary Tax group on or before the Closing Date;
 
 
19
 
(c) all Taxes resulting from a breach of a Tax Representation or a breach of a
covenant of Seller contained in this Article IV;
 
(d) all Income Taxes that the Company or any Subsidiary is liable for as a
result of the Election; and
 
(e) all Taxes resulting from any Tax Return filed pursuant to the Remediation
Agreement.
 
If Seller is obligated to pay any Tax of the Company or the Subsidiary, Seller
shall pay such amount to the Company or Subsidiary no later than five (5) days
prior to the date such Tax is due to the applicable Governmental Authority.
 
4.3 Apportionment of Straddle Period Income Taxes.  With respect to any Straddle
Period, the Taxes of the Company and the Subsidiaries attributable to such
Straddle Period shall be apportioned between the period of the Straddle Period
that begins on the first day of the Straddle Period and ends on the Closing Date
(the “Pre-Closing Straddle Period”), which portion shall be the responsibility
of Seller, and the period of the Straddle Period that begins on the day after
the Closing Date and ends on the last day of the Straddle Period (“Post-Closing
Straddle Period”), which portion shall be the responsibility of Purchaser.  The
portion of the Taxes allocated to the Pre-Closing Straddle Period shall (a) in
the case of any Taxes other than Taxes based upon or related to income,
receipts, gains, services or transactions, be deemed to be the amount of such
Tax for the entire Straddle Period multiplied by a fraction the numerator of
which is the number of days in the Straddle Period ending on the Closing Date
and the denominator of which is the number of days in the entire Straddle
Period; and (b) in the case of any Tax based upon or related to income,
receipts, services or transactions (including, without limitation, sales, use,
transfer, withholding, payroll and other employment taxes), be deemed equal to
the amount that would be payable if the relevant Straddle Period ended on the
Closing Date.  The portion of the Tax allocated to the Post-Closing Straddle
Period shall equal the balance of the Tax attributable to the Straddle Period.
 
4.4 Cooperation and Records Retention.  Purchaser and Seller shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the preparation and filing of any Tax Return or claim for refund
and any audit, litigation or other proceeding with respect to the Company’s and
the Subsidiaries’ Taxes.  Purchaser will retain and cause the Company and the
Subsidiaries to retain following the Closing, any records relevant to the
determination of Tax liabilities of the Company and the Subsidiaries for taxable
periods ending on or prior to the Closing Date and for any Straddle Period for a
period of not less than six (6) years following the Closing.  Seller shall
provide Purchaser with any information that Purchaser reasonably requests to
allow Purchaser, the Company, the Subsidiaries or any of their Affiliates to
comply with any information reporting requirements under the Code or applicable
Law.
 
4.5 Tax Contests.  If any Governmental Authority issues the Company or any
Subsidiary (a) a written notice of its intent to audit or conduct another Legal
Proceeding with respect to Taxes for any taxable period ending on or before the
Closing Date or any Straddle Period or (b) a written notice of deficiency for
Taxes for any taxable period ending on or before the Closing Date or any
Straddle Period, Purchaser shall notify Seller of its receipt of such
communication from the Governmental Authority within thirty (30) days of
receipt.  No failure or delay of Purchaser in the performance of the foregoing
shall reduce or otherwise affect the obligations or liabilities of Seller
pursuant to this Agreement unless such failure or delay materially impacts the
Seller’s ability to defend against an action by any Governmental
Authority.  Seller shall control the conduct of any audit or other Legal
Proceeding relating to any Taxes of the Company or any Subsidiary (a “Tax
Contest”) to the extent it relates solely to a Pre-Closing Tax Return or a Tax
Return prepared under the Remediation Agreement; provided, however, that
Purchaser, at its sole cost and expense, shall have the right to participate in
any such Tax Contest.  Purchaser shall control, or cause the Company or any
Subsidiary to control, the conduct of any Tax Contest to the extent it relates
solely to a Straddle Tax Return; provided, however, that Seller, at its sole
cost and expense, shall have the right to participate in any such Tax Contest,
and Purchaser shall not, and shall not allow the Company or any Subsidiary, to
settle, resolve or abandon any such Tax Contest without the prior written
consent of Seller, which shall not be unreasonably withheld, delayed or
conditioned.  Notwithstanding the foregoing, if any Tax Contest relates solely
to a Seller Group Return, Seller shall control such Tax Contest and Purchaser
shall have no right to participate.
 
4.6 Transfer Taxes.  Notwithstanding anything to the contrary herein contained,
Purchaser shall assume liability for and pay promptly when due one hundred
percent (100%) of all sales, use, transfer, real property transfer, documentary,
recording, gains, stock transfer and similar Taxes and fees, and any deficiency,
interest or penalty asserted with respect thereto (collectively, “Transfer
Taxes”), arising out of or in connection with the transactions effected pursuant
to this Agreement (including those payable by Company or any
Subsidiary).  Seller or Purchaser, as required by applicable law, shall timely
file or cause to be filed all necessary documentation, including any bulk sale
or other exemption certificates, and Tax Returns with respect to such Transfer
Taxes.
 
4.7 Amendment of Tax Returns.  Purchaser and its Affiliates shall not, and shall
cause the Company and the Subsidiaries not to, file an amended Tax Return for
the Company or any Subsidiary for any taxable period, or portion thereof, ending
on or prior to the Closing Date or any Straddle Period without the prior written
consent of Seller, which consent may be withheld by Seller in its sole
discretion if such amended Tax Return would increase the Tax liability of Seller
or increase Seller’s indemnification obligations hereunder.
 
 
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4.8 Section 338(h)(10) Election.
 
(a) If Purchaser notifies Seller in writing of its intention to make an election
under Section 338(h)(10) of the Code and Section 1.338(h)(10)-1 of the Treasury
Regulations promulgated thereunder and any comparable elections available under
state or local Tax law in respect of the purchase of the Shares and any deemed
purchase of shares of the Subsidiaries (collectively, the “Election”) within
ninety (90) days after the Closing Date, Seller shall join with Purchaser in
timely making the Election and in taking all legally required steps to
effectuate the same.  Purchaser shall, with the assistance and cooperation of
Seller, prepare all Internal Revenue Service Forms 8023 and 8883 and any similar
state or local forms (together with any schedules or attachments thereto) that
are required by Section 338 of the Code and the underlying Treasury Regulations
(or any comparable applicable provision of state or local law) (collectively,
the “Section 338 Forms”) in accordance with applicable Tax laws.  Subject to the
provisions of Sections 4.8(b), Purchaser shall deliver the Section 338 Forms to
Seller at least 60 days prior to the due date of filing and Seller shall deliver
to Purchaser signed and completed Section 338 Forms, as required under Section
338(h)(10) of the Code and analogous provisions of state or local law, at least
45 days prior to the due date of filing.  Seller and Purchaser shall each adopt
and abide by the Section 338 Forms for purposes of all income Tax Returns filed
by them and shall not take any position inconsistent therewith in connection
with any examination of any such Tax Return, any refund claim, or any judicial
litigation proceeding unless there has been a final determination of a
Governmental Authority which finally and conclusively establishes the amount of
any liability for Taxes.  In the event that the Election or purchase price
allocation described in this Section 4.8 is disputed by any taxing authority,
the party receiving notice of the dispute shall promptly notify the other
parties hereto of such dispute and the parties hereto shall consult and
cooperate with each other concerning resolution of the dispute.
 
(b) No later than one hundred five (105) days after the Closing Date, Purchaser
shall prepare and deliver to Seller for its review, comment and consent (such
consent not to be unreasonably withheld) a statement (together with all
supporting documentation) setting forth the allocation of the sum of the
Purchase Price, plus any related assumed liabilities, plus any other amounts as
required by applicable Tax law among the assets of the Company, which allocation
shall be made in accordance with Sections 338 and 1060 of the Code and any
applicable Treasury Regulations (the “Purchase Price Allocation”).  Seller shall
notify Purchaser in writing within fifteen (15) days after receipt of the
Purchase Price Allocation of any disagreement or reasonable objections Seller
may have with the Purchase Price Allocation, in which case Purchaser and Seller
shall use their good faith efforts to reach agreement thereon.  In the event
Purchaser and Seller fail to so agree within fifteen (15) days after Seller’s
notice of disagreement has been delivered, then Purchaser and Seller shall
promptly engage an Arbitrating Accountant in accordance with the procedures
described in Section 1.7, to be applied mutatis mutandis, to resolve the dispute
within fifteen (15) days of the engagement and resolution shall be final and
binding on the parties as described in Section 1.7.  The Purchase Price
Allocation finally determined pursuant to this Section 4.8(b) shall be used by
Seller and Purchaser for all purposes, including preparation and filing of IRS
Form 8883 and any other domestic or any foreign income Tax Returns with respect
to the transaction contemplated by this Agreement, and no party hereto shall
take or assert any position inconsistent therewith, except as otherwise required
by a final determination of a Governmental Authority.  Any subsequent
adjustments to Purchase Price required pursuant to the Agreement shall also be
allocated in accordance with the Purchase Price Allocation finally determined
pursuant to this Section 4.8(b).
 
(c) Unless Purchaser provides an earlier notice in writing to Seller of its
intention to make an Election, Seller’s obligation and Purchaser’s right to
cause an Election to be made shall expire on the date that is the earlier to
occur of: (i) the date that is ninety (90) days following the Closing Date; or
(ii) the date on which Purchaser provides written notice to Seller that it will
not make an Election (the “Election Termination Date”).
 
(d) Except as otherwise set forth in this Section 4.8 none of the Company, the
Subsidiaries, Purchaser, or any of their respective Affiliates shall file an
election under Section 338 of the Code (or any similar or corresponding
provision of state, local or foreign Law) with respect to the sale and purchase
of Shares under this Agreement.
 
4.9 Tax Sharing Agreements.  All agreements by and among Seller (and its
Affiliates), the Company and the Subsidiaries with respect to the sharing of
Taxes and Tax benefits shall be cancelled effective immediately after the
Closing such that neither the Company nor the Subsidiaries shall have any
obligation thereunder.
 
4.10 Survival; Limitations.  The obligations of Seller to pay any Taxes (and
related Damages or other indemnification obligations under Section 4.2) shall
survive as follows: (i) in case of Taxes the Company or any Subsidiary owes as a
result of an adjustment or assessment by any Governmental Authority or a breach
of a Tax Representation, until the expiration of the applicable statute of
limitation for the collection of the underlying Tax (after taking into account
all extensions, waivers, tolling, or mitigation thereof) plus a period of sixty
(60) days; and (ii) in the case of Taxes that the Company or any Subsidiary is
required to pay with respect to the filing of any Tax Return, until the
expiration of the statute of limitation to claim a refund for the payment of
such Tax plus a period of sixty (60) days.  All other obligations under this
Article IV shall survive until fully performed.
 
4.11 Tax Treatment of Certain Payments.  Unless required by a final
determination of a Governmental Authority, each of the parties hereto agree to
file all Tax Returns (and to cause their respective Affiliates to file all Tax
Returns) consistently with, and not take any position during the course of any
Tax audit or other Legal Proceedings with respect to Taxes (or allow their
respective Affiliates take any position during the course of any audit or other
Legal Proceeding with respect to Taxes) that is inconsistent with the treatment
that all indemnification payments under this Agreement constitute adjustments to
the Purchase Price.
 
 
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ARTICLE V                      
 
 
Post-Closing Agreements
 
5.1 Further Assurances.  The parties shall execute such further documents, and
perform such further acts, as may be necessary to transfer and convey the Shares
to Purchaser, on the terms herein contained, and to otherwise comply with the
terms of this Agreement and consummate the transaction contemplated hereby.
 
5.2 Records.  For a three (3) year period after the Closing Date, Seller shall
promptly provide, or cause its Affiliates to promptly provide, at Seller’s
expense, copies of the books and records (including those maintained in
electronic form) of the Company or any Subsidiary (including all payroll,
accounting and insurance records (only to the extent relating to the insurance
policies owned by the Company or the Subsidiaries)) in the possession of Seller
or its Affiliates which are reasonably requested by Purchaser and which have not
been provided to Purchaser at the Closing or are not otherwise in the possession
of Purchaser, the Company or any Subsidiary. Seller and Purchaser shall each
make their respective other books and records (including work papers in the
possession of their respective accountants) with respect to the Company and the
Subsidiaries available for inspection by the other party, or by its duly
accredited representatives, for reasonable business purposes at all reasonable
times during normal business hours and after receiving reasonable prior notice
from such other party, for a three (3) year period after the Closing Date, or
for such longer period of time as may be required to comply with Article IV,
with respect to all transactions of the Company and the Subsidiaries occurring
prior to and those relating to the Closing and the financial condition, results
of operations, assets or liabilities and cash flows of the Company and the
Subsidiaries prior to the Closing.  As used in this Section 5.2, the right of
inspection includes the right to make extracts or copies.  The representatives
of a party inspecting the records of the other party shall be reasonably
satisfactory to the other party.  Notwithstanding the foregoing provisions of
this Section 5.2, no party shall be required to permit inspection (or the right
to make extracts or copies) by the other party or any of its Affiliates’ books
and records pursuant to this Section 5.2 to the extent such inspection is
reasonably likely to result, in its reasonable judgment, in the loss or waiver
of attorney-client privilege, attorney work-product doctrine or other
protections applicable or that may be applicable to it (provided that, in such
case, the parties will use commercially reasonable efforts to reach another
mutually satisfactory accommodation).
 
5.3 Payments of Accounts Receivable.
 
(a) In the event Seller shall receive any instrument of payment of any of the
accounts receivable of the Company or any Subsidiary, Seller shall deliver it to
the Company or such Subsidiary, endorsed where necessary, without recourse, in
favor of the Company or such Subsidiary.
 
(b) In the event Purchaser or the Company or any Subsidiary shall receive any
payment on account of receivables of Seller or Affiliate of Seller, Purchaser or
the Company or such Subsidiary, as applicable, shall deliver such payment to
Seller, endorsed where necessary, without recourse, in favor of Seller or its
Affiliates.
 
5.4 Third Party Claims.  The parties shall cooperate with each other with
respect to the defense of any claims or litigation made or commenced by third
parties subsequent to the Closing Date or the prosecution of any claim against a
third party, in each case, which are not subject to the indemnification
provisions contained in Article VII, provided that the party requesting
cooperation shall reimburse the other party for the other party’s reasonable
out-of-pocket costs and expenses of furnishing such cooperation.  In connection
therewith, Seller or Purchaser, as the case may be, shall use their reasonable
best efforts to make available, at the  requesting party’s expense, personnel
(for reasonable periods of time) of Seller or Purchaser, as the case may be, for
purposes of depositions and testimony.
 
5.5 Director and Officer Indemnification.  Purchaser agrees to cause the Company
and the Subsidiaries to honor in accordance with their terms the provisions of
the Company’s or such Subsidiary’s certificate of incorporation (or similar
formation documents) and bylaws (or similar organizational document) as in
effect on the date hereof with respect to indemnification of officers, directors
and employees of the Company and the Subsidiaries (including provisions relating
to contributions, advancement of expenses and the like) and agrees such rights
shall not be modified or amended except as permitted by Law.
 
 
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5.6 Insurance Matters.  To the extent that any third-party claims against, or
first-party claims by, the Company or any Subsidiary arising out of a
pre-Closing occurrence  may be covered by Seller’s or its Affiliates’
occurrence-based insurance policies  (such claims, the “Potential Claims”, and
such policies, the “Seller Occurrence Policies”), Seller shall use commercially
reasonable efforts (including filing claims on behalf of Company or any
Subsidiary) to facilitate coverage under the relevant Seller Occurrence Policy
for such Potential Claims; such coverage determination to be governed by and
construed in accordance with the terms and conditions of the relevant Seller
Occurrence Policy.  The Company or a Subsidiary (as the case may be) shall
provide prompt written notice to Seller after receiving notice of any Potential
Claim.  Purchaser or the Company shall be responsible for (or shall reimburse
Seller for) the first $20,000 of each Potential Claim for which Seller
Occurrence Policy provides coverage subject to a deductible and Seller shall
indemnify Purchaser, the Company and the Subsidiaries for any amount in excess
of $20,000 of the deductible with respect to such Potential Claim.  For the
avoidance of doubt, the foregoing sharing arrangement and/or indemnity shall not
apply to any (i) Potential Claims not covered by the Seller Occurrence Policies,
and/or (ii) cargo losses or any other damage or loss to goods in transit
(whether or not covered by any insurance policy), which claims, losses or
damages (and any related deductibles or retention amounts) shall be the sole
responsibility of the Company.  In the event a Potential Claim is tendered but
coverage is denied in whole or in part under a Seller Occurrence Policy, upon
the request of Purchaser, Seller shall provide to the Company a summary of all
relevant provisions of the applicable Seller Occurrence Policy under which such
coverage was denied.
 
5.7 Use of Intellectual Property.  Except as expressly set forth in the
Trademark License Agreement and except for the Transferred Intellectual
Property, none of Purchaser, the Company, a Subsidiary nor any of their
respective Affiliates shall (and Purchaser, the Company and the Subsidiaries
shall not after the Closing direct any agent or contractor to) use the trade
names, trademarks and/or service marks that have been used by Company, a
Subsidiary or any of their respective Affiliates, at any time on or prior to the
Closing Date, including but not limited to those trade names, trademarks,
corporate names or service marks set forth on Schedule 5.7 hereto (or any
derivatives thereof or any other trade names, trademarks, service marks or logos
that are confusingly similar to any such names or marks on Schedule 5.7)
(collectively, the “Excluded Marks”), in any manner whatsoever or otherwise
operate the Business utilizing, based on or taking advantage of the name,
reputation or corporate goodwill of Seller or any of its Affiliates.  After the
Closing, except as expressly set forth in the Trademark License Agreement, (a)
none of Purchaser, the Company, a Subsidiary or any of their respective
Affiliates may (and Purchaser and the Company shall not after the Closing direct
any agent or contractor to) use any stationery, invoices, order forms, packaging
material or any other items that bear any Excluded Marks, and (b) to the extent
any of the foregoing items are included in the Company Assets, such items shall
be destroyed promptly following Closing and in no event shall be used by the
Company or any Subsidiary or any of their respective Affiliates, agents or
contractors following the Closing Date.
 
5.8 Bonds and Letters of Credit.
 
(a) Within 60 days after the Closing Date, Purchaser shall obtain releases in a
form reasonably satisfactory to Seller either releasing Seller and its
Affiliates with no replacement or substituting and replacing Seller and its
Affiliates with Purchaser or one of its Affiliates, under each surety,
performance, fidelity or similar bond or letter of credit with respect to the
Company and the Subsidiaries set forth on Schedule 5.8(a) hereto (collectively,
the “Seller’s Bonds and Letters of Credit”).
 
(b) Within 60 days after the Closing Date, Seller shall obtain releases in a
form reasonably satisfactory to Purchaser either releasing the Company or any
Subsidiary with no replacement or substituting and replacing the Company and its
Affiliates with Seller or one of its Affiliates, under each surety, performance,
fidelity or similar bond or letter of credit with respect to the Company and the
Subsidiaries set forth on Schedule 5.8(b) or any other surety, performance,
fidelity or similar bond or letter of credit outstanding as of the Closing that
does not relate to or support an obligation or liability of the Company or the
Subsidiaries (collectively, the “Company Bonds and Letters of Credit”).
 
 
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5.9 Releases.
 
(a) Seller, for itself and on behalf of its Affiliates, hereby forever fully and
irrevocably releases and discharges Purchaser, the Company and the Subsidiaries
and their respective predecessors, successors, direct or indirect subsidiaries
and past and present stockholders, members (direct and indirect), managers,
directors, officers, employees, agents, and Representatives (collectively, the
“Purchaser Released Parties”) from any and all actions, suits, claims, demands,
debts, promises, judgments, liabilities or obligations of any kind whatsoever in
law or equity and causes of action of every kind and nature, or otherwise
(including claims for Damages) arising out of (a) the Seller’s direct or
indirect ownership of the Shares or of the capital stock or other equity
interests of each Subsidiary, (b) any contract, agreement or commitment entered
into prior to Closing to which Seller or any of its Affiliates is a party that
relates to financing provided to the Company or any Subsidiary, administrative
and corporate services provided to the Company or any Subsidiary or the
provision of functions or services similar to those to be provided to the
Company or any Subsidiary under the Transition Services Agreement (collectively,
“Corporate Contracts”) (it being agreed that such Corporate Contracts are
terminated as of Closing), or (c) any adjustments to prior allocations charged
to the Company or the Subsidiary under any insurance program maintained or
administered by Seller or any of its Affiliates, in each case, which Seller (or
its Affiliates) can, shall or may have against the Purchaser Released Parties,
whether known or unknown, suspected or unanticipated as well as anticipated and
that now exist or may hereinafter accrue based on matters now known as well as
unknown (collectively, the “Purchaser Released Claims”), and hereby irrevocably
agrees to refrain from directly or indirectly asserting any claim or demand or
commencing (or causing to be commenced) any proceeding of any kind before any
Governmental Authority, against any Purchaser Released Party based upon any
Purchaser Released Claim.  Notwithstanding the preceding sentence of this
Section 5.9(a), “Purchaser Released Claims” does not include, and the provisions
of this Section 5.9(a) shall not release or otherwise diminish, (i) the
obligations of Purchaser, the Company or any Subsidiary expressly set forth in
any provisions of this Agreement, any Ancillary Agreement, or any document or
instrument delivered in connection with consummation of the transactions
contemplated by the Purchase Agreement, (ii) the obligations of the Company and
the Subsidiaries to indemnify, defend and hold harmless the present or former
directors, officers and employees of the Company and the Subsidiaries under the
Company’s and Subsidiaries’ certificate of incorporation (or similar formation
documents) and by-laws (or similar organizational document) and applicable Law,
(iii) in the case of any Purchaser Released Party that is an employee of the
Company or any Subsidiary, any claims made under an employment, retention or
similar agreement with the Seller or any of its Affiliates to the extent not
expressly terminated as of the Closing, (iv) any obligation, whether arising
prior to the Closing or after the Closing, of the Company or any of the
Subsidiaries with respect to the provision of logistics and warehousing services
in the ordinary course of business to the Seller or its Affiliates, (v) the
obligations of any Purchaser Released Party included in the Final Net Working
Capital as accounts receivable or other obligations owed to the Seller or any of
its Affiliates, and (vi) in the case of any Purchaser Released Party that is an
employee, manager, director or officer of the Company or any Subsidiary, any
claims for fraud or intentional torts.
 
(b) Purchaser, for itself and on behalf of its Affiliates (including the Company
and the Subsidiaries), hereby forever fully and irrevocably releases and
discharges Seller, its Affiliates and their respective predecessors, successors,
direct or indirect subsidiaries and past and present stockholders, members
(direct and indirect), managers, directors, officers, employees, agents, and
Representatives (collectively, the “Seller Released Parties”) from any and all
actions, suits, claims, demands, debts, promises, judgments, liabilities or
obligations of any kind whatsoever in law or equity and causes of action of
every kind and nature, or otherwise (including claims for Damages) arising out
of or related to (a) the Seller’s direct or indirect ownership of the Shares or
of the capital stock or other equity interests of each Subsidiary or (b) any
Corporate Contracts (it being agreed that such Corporate Contracts are
terminated as of Closing) which Purchaser (or its Affiliates) can, shall or may
have against the Seller Released Parties, whether known or unknown, suspected or
unanticipated as well as anticipated and that now exist or may hereinafter
accrue based on matters now known as well as unknown (collectively, the “Seller
Released Claims”), and hereby irrevocably agrees to refrain from directly or
indirectly asserting any claim or demand or commencing (or causing to be
commenced) any proceeding of any kind before any Governmental Authority, against
any Seller Released Party based upon any Seller Released Claim.  Notwithstanding
the preceding sentence of this Section 5.9(b), “Seller Released Claims” does not
include, and the provisions of this Section 5.9(b) shall not release or
otherwise diminish, (i) the obligations of Seller or its Affiliates expressly
set forth in any provisions of this Agreement, any Ancillary Agreement or any
document or instrument delivered in connection with consummation of the
transactions contemplated by the Purchase Agreement, (ii) the obligations of
Seller and its Affiliates to indemnify, defend and hold harmless their present
or former directors, officers and employees under their respective governance
documents and applicable Law, (iii) any obligation, whether arising prior to the
Closing or after the Closing, of Seller or is Affiliates with respect to the
provision of logistics and warehousing services in the ordinary course of
business to the Company or the Subsidiary, (iv) the obligations of any Seller
Released Parties included in the Final Net Working Capital as accounts
receivable owed to the Company or any Subsidiary or (v) in the case of any
Seller Released Party that is an employee, manager, director or officer of the
Seller or any of its Affiliates, claims for fraud or intentional torts.
 
5.10 Retrieval of Confidential Information.  At the Closing, Seller shall
deliver to Purchaser a list of all Persons to whom Seller, the Company or any of
its Representatives furnished confidential information concerning the Company in
connection with the proposed sale of the Company (or its assets) and copies of
all confidentiality agreements entered into by such Persons for the benefit of
Seller or the Company in connection with the solicitation of prospective
acquirers. To the extent permitted under the applicable confidentiality
agreements, Seller does hereby assign to Purchaser its respective rights, if
any, to enforce the confidentiality agreements, to the extent such agreements do
not run directly to the Company.
 
 
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5.11 Transaction Bonuses.  Seller or one of its Affiliates shall pay all of the
bonuses payable under the Business Continuation and Employment Agreements in
accordance with the terms of such agreements (the “Transaction Bonuses”).  All
employment Taxes that the Company or any Subsidiary incurs with respect to the
payment of the Transaction Bonuses shall be paid by the Seller to the
appropriate Governmental Authority when due in accordance with applicable Law.
 
5.12 Receivables Owed by Seller and its Affiliates.  From and after the Closing,
Seller shall (and shall cause its Affiliates to) pay all trade payables to the
Company or any Subsidiary as follows:  (i) with respect to any trade payables
accrued as of the Closing, in accordance with the practices applied by the
Seller or the applicable Affiliate of Seller prior to the Closing; and (ii) with
respect to any trade payables arising after Closing, on commercially reasonable,
arm’s length terms.
 
5.13 Corporate Names.  Within three (3) days after the Closing, the Company
shall, and Purchaser shall cause the Company to, amend its certificate of
incorporation and bylaws so that the name of the Company reflected therein no
longer utilizes the Excluded Marks (or any derivation thereof) and is not
confusingly similar to the Excluded Marks.  Within ten (10) days after the
Closing, Purchaser shall cause Exel Trucking to amend its certificate of
incorporation and bylaws so that the name of Exel Trucking reflected therein no
longer utilizes the Excluded Marks (or any derivation thereof) and is not
confusingly similar to the Excluded Marks.  Within ten (10) days after the
Closing, Purchaser shall either dissolve ETS Canada or cause ETS Canada to amend
its certificate of incorporation and bylaws (or similar governing documents) so
that the name of ETS Canada reflected therein no longer utilizes the Excluded
Marks (or any derivation thereof) and is not confusingly similar to the Excluded
Marks.  Within thirty (30) days after Closing, Purchaser shall cause the Company
and each Subsidiary to amend its respective foreign qualification statement (or
equivalent document) in each state or province where it is qualified to do
business so that the name of the Company and such Subsidiary no longer utilizes
the Excluded Marks (or any derivation thereof) and is not confusingly similar to
the Excluded Marks.
 
5.14 Assignment of Retained Litigation Claim to Seller.  The Company and the
Subsidiaries hereby assign to the Seller all right, title and interest of the
Company or the Subsidiaries in connection with the Retained Litigation Claim,
including all rights of subrogation and any rights of restitution in any
criminal proceeding, and the Company and the Subsidiaries shall reasonably
cooperate.  For the avoidance of doubt, the Retained Litigation Claim shall be
subject to Section 5.4.
 
5.15 Canadian MIP Payments.  With respect to the bonuses accrued as of the
Closing to the individuals set forth on Schedule 5.15 (the "Canadian
Participants") in the amounts set forth on Schedule 5.15 (the "2010 MIP
Amounts") under the Exel, Inc. Management Incentive Plan (the "MIP"), the
Company or ETS Canada shall pay the 2010 MIP Amounts to such Canadian
Participants in accordance with the terms of the MIP.  The Company and ETS
Canada shall reasonably cooperate with Seller after the Closing to determine the
method for paying the 2010 MIP Amounts in accordance with applicable law and the
terms of the MIP, and shall agree in writing on the appropriate method for
making such payment.  If the payment of the 2010 MIP Amounts by the Company or
ETS Canada results in taxes or other actual losses to the Company or ETS Canada
in excess of the 2010 MIP Amounts, Seller shall reimburse the Company or ETS
Canada for such taxes or other actual losses, up to an aggregate amount not to
exceed 100% of the 2010 MIP Amounts, provided that the Company or ETS Canada has
paid the 2010 MIP Amounts in accordance with the method agreed by the Parties. 
Any bonuses or other compensation accrued or payable after the Closing with
respect to the Canadian Participants shall be paid by the Company or ETS Canada
and shall not be subject to this Section 5.15.
 
 
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ARTICLE VI                                
 
 
Employees and Employee Benefit Plans
 
6.1 Continuation of Employment.  Subject to the terms set forth in this Section
6.1, Purchaser shall cause the Company and the Subsidiaries to continue to
employ the employees of the Company and the Subsidiaries (other than the
employees listed on Schedule 6.1A, which shall be employed by Seller or any of
its Affiliates as of the Closing), and cause the Company to employ each of the
other employees of Seller’s Affiliates listed on Schedule 6.1B, immediately
following the Closing Date, at compensation levels and with benefit packages
that, in the aggregate, are substantially similar to those in effect with
respect to such employees on the date hereof.  Each such Person who is employed
by Company or any Subsidiary pursuant to this Section 6.1 is hereinafter
referred to individually as an “Employee” and collectively as the
“Employees”.  Purchaser shall use its commercially reasonable best efforts (a)
to cover, or cause the Company and the Subsidiaries to cover, all Employees with
group medical benefits for which all waiting periods and pre-existing condition
exceptions are waived, (b) to credit the employees with amounts credited under
Seller’s welfare plan (or the applicable welfare plans of Seller’s Affiliates
disclosed on Schedule 2.3(q)(i) of the Disclosure Schedule) towards the
satisfaction of annual deductible and out-of-pocket maximums under the plans of
Purchaser, and (c) provide Employees with benefits as described in this Section
6.1 without imposing any waiting periods or other preconditions to
coverage.  The Company or a Subsidiary may at any time terminate any Employee
for cause or without cause or in connection with normal seasonal
layoffs.  Purchaser shall cause the Company and the Subsidiaries to recognize
for eligibility and vesting purposes, but not benefit accrual, under its
employee benefit plans, programs and policies (including vacation and
severance), the service recognized by the Company and the Subsidiaries (or an
Affiliate of the Company, as the case may be) of each Employee.
 
6.2 Other Benefits.  Seller shall cause all health benefits to which employees
of the Company and the Subsidiary are entitled under the Benefit Plans through
the Effective Time to be paid in accordance with the terms of such Benefit Plan
even if such claims for benefits are submitted in accordance with the Benefit
Plan terms after the Closing.  From and after the Closing Date, Purchaser shall,
at no expense to Seller, cause the Company or a Subsidiary to provide the
benefits, if any, required pursuant to section 4980B of the Code or Part 6 of
Title I of ERISA for any Employee (or spouse or dependent of such Employee) who
becomes entitled to such continuation from the Company or such Subsidiary on or
after the Closing (other than any person on Schedule 6.1A).  Seller shall be
responsible for continuing to provide such benefits to (a) any employee (or
spouse or dependent of such employee) of the Company or a Subsidiary who is
entitled thereto prior to the Closing or (b) any person identified on Schedule
6.1A.
 
6.3 Non-qualified Deferred Compensation Plan.
 
(a) Prior to the date hereof, Exel and the Company have established the ETS
Plan.  After the date hereof, Purchaser shall cause the Company to enter into a
rabbi trust agreement with Fidelity to establish the ETS Trust that will hold
assets for the ETS Plan.
 
(b) Prior to or as of the Closing, Seller shall cause Exel to transfer the ETS
Liabilities to the Company, and the Company shall assume such ETS Liabilities,
through the adoption of the ETS Plan.  Seller and Purchaser acknowledge and
agree that although the ETS Trust has not yet been formed, Seller and Purchaser
intend that the Company shall be considered as succeeding to Exel’s beneficial
ownership rights in their entirety with respect to the ETS Assets.  Seller and
Purchaser agree to deal (and shall cause their respective Affiliates to deal)
with the ETS Assets in a manner consistent with such intent, and agree that
after the Closing Seller shall and it shall cause its Affiliates to refrain from
giving instructions affecting the ETS Assets, other than such instructions as
are necessary or appropriate to effect the transfer of the ETS Assets to the ETS
Trust and other than as required by law or authorized by Purchaser.
 
6.4 Agent and Salesperson Deferral and Matching Program. Prior to the Closing,
Exel has assumed the Agent/Salesperson Deferral and Matching Program and all
Agent/Salesperson Deferral Liabilities and Agent/Salesperson Matching
Liabilities relating thereto.  Exel will distribute all Agent/Salesperson
Deferral Liabilities in the 2011 calendar year and will distribute the
Agent/Salesperson Matching Liabilities with respect to 2009 Deferrals in the
2012 calendar year by March 15, 2012 (unless another time for distribution of
such Agent/Salesperson Matching Liabilities is consented to by Purchaser) to
those Persons who made Deferrals in 2009 and who continue to provide services to
the Company or Subsidiary or any Affiliate of the Company or Subsidiary through
January 1, 2012 and the Agent/Salesperson Matching Liabilities with respect to
2010 Deferrals in the 2013 calendar year by March 15, 2013 (unless another time
for distribution of such Agent/Salesperson Matching Liabilities is consented to
by Purchaser)  to those Persons who made Deferrals in 2010 who continue to
provide services to the Company or Subsidiary or an Affiliate of the Company or
Subsidiary through January 1, 2013.  In addition, Exel shall distribute
Additional Payments and, as applicable, Additional Interest Payment  in the 2011
calendar year (and at the same time that the Agent/Salesperson Deferral
Liabilities are distributed) to those Persons who (a) made Deferrals, (b) are
designated as eligible to receive an Additional Payment on Schedule 6.4 and (c)
received more than 70% of their total revenue from services to the Company or
Subsidiary or Affiliates. The Company shall cooperate with Exel by providing
such information as reasonably requested by Exel in order for Exel to determine
whether Matching Contributions are due to be distributed and to otherwise
facilitate distributions as set forth in this Section 6.4.  For purposes of this
Section 6.4 and the distribution of Agent/Salesperson Matching Liabilities, a
Person shall be considered to provide services to the Company or Subsidiary or
an Affiliate of the Company or Subsidiary through the applicable date set forth
above only if such Person does not have a separation from service within the
meaning of Code section 409A prior to the applicable date.
 
 
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ARTICLE VII                                
 
 
Indemnification
 
7.1 General.  From and after the Closing, the parties shall indemnify each other
and the other Indemnified Parties as provided in this Article VII.
 
7.2 Certain Definitions.  As used in this Agreement, the following terms shall
have the indicated meanings:
 
(a) “Damages” shall mean all assessments, levies, losses, fines, penalties,
damages, liabilities, claims, demands, settlements, Taxes, fees, charges, costs
and expenses, including, without limitation, reasonable attorneys’,
accountants’, investigators’, and experts’ fees and expenses incurred in
connection with any Third Party Claim;
 
(b) “Indemnified Party” shall mean a Person entitled to indemnification pursuant
to this Article VII or Article IV;
 
(c) “Indemnifying Party” shall mean a Person required to provide indemnification
under this Article VII or Article IV;
 
(d) “Fundamental Representations” means the representations and warranties set
forth in (i) with respect to Purchaser, Section 2.2(b)(i) (Power and Authority)
and Section 2.2(f) (Brokers) and (ii) with respect to Seller, Section 2.3(c)(i)
(Power and Authority), Section 2.3(d) (Capitalization), Section 2.3(e) (Title to
Shares), Section 2.3(f)(ii) (Capitalization with respect to Subsidiaries) and
Section 2.3(w) (Brokers).
 
(e) “Survival Period” shall mean the period commencing on the Closing Date and
ending on the following dates, as applicable: (i) for breaches of the
Fundamental Representations and the representations and warranties contained in
Section 2.3(t) (Environmental), the date that is five (5) years after the
Closing Date; (ii) with respect to any breaches of the Tax Representations or
other claims relating to Taxes, the applicable survival period specified in
Section 4.10, (iii) for breaches of the Title IV Representations, the date that
is sixty (60) days following expiration of the statute of limitations with
respect to the ERISA liabilities described in such representation and warranty;
(iv) for breaches of all other representations and warranties of any kind or
nature in this Agreement, the date that is fourteen (14) months following the
Closing Date; and (v) for breaches of any covenants in this Agreement to be
performed after the Closing, the date, if any, on which the specific covenant
expires by its terms.
 
(f) “Third Party Claim” shall mean any Legal Proceeding that is asserted or
threatened by a Person other than the parties hereto, their Affiliates,
successors and permitted assigns, against any Indemnified Party or to which an
Indemnified Party is subject.
 
(g) “Title IV Representations” means the representations and warranties set
forth in Section 2.3(q)(iv).
 
7.3 Indemnification Obligations of Seller.  Subject to any applicable
limitations set forth in this Agreement, Seller shall indemnify, save and keep
harmless Purchaser and its Affiliates (including the Company and the
Subsidiaries), successors and permitted assigns (“Purchaser Indemnitees”) from
and against all Damages sustained or incurred by any of them resulting from or
arising out of:
 
(a) any inaccuracy in, or breach of, any representation and warranty made
by  Seller in this Agreement;
 
(b) any breach by Seller of, or failure by Seller to comply with, any of its
covenants or obligations under this Agreement (including, without limitation,
its obligations under this Article VII);
 
(c) any Indebtedness of the Company or any Subsidiary that is not deducted in
the calculation of Purchase Price pursuant to Section 1.2(c) or taken into
account in determining the Final Net Working Capital;
 
(d) any Company Transaction Expenses;
 
(e) for claims arising under the Company Bonds and Letters of Credit (regardless
of whether Seller has complied with Section 5.8(b));
 
(f) the Agent/Salesperson Deferral and Matching Program or termination or
transfer of employment prior to Closing by the Company or any Subsidiary of any
of the individuals identified on Schedule 6.1A; or
 
(g) the matters referenced in Schedule 7.3(g).
 
 
27
 
7.4 Limitation on Seller’s Indemnification Obligations.  Seller’s obligations
pursuant to Section 7.3 and Section 4.2 (other than the limitations set forth in
7.4(a) or 7.4(b)) are subject to the following limitations:
 
(a) The Purchaser Indemnitees shall not be entitled to recover under Section
7.3(a) with respect to any individual claim (or group of related claims arising
out of the same incident or occurrence) unless the Damages associated with such
claim (or group of related claims arising out of the same incident or
occurrence) exceed $20,000, and then may recover only to the extent of such
excess with respect to such claim (or group of related claims arising out of the
same incident or occurrence).  Any individual claim that does not involve
Damages in excess of $20,000 shall not count toward calculation of the
Deductible.
 
(b) The Purchaser Indemnitees shall not be entitled to recover under Section
7.3(a) until the total amount that Purchaser would recover under Section 7.3(a),
but for this Section 7.4(b), exceeds one percent (1%) of the Purchase Price (the
“Deductible”), and then only for the excess over the Deductible (provided that
the Deductible shall not apply to recovery under Section 7.3(a) for breaches of
the Fundamental Representations or the Tax Representations).
 
(c) The Purchaser Indemnitees shall not be entitled to recover under Section
7.3(a) to the extent the aggregate claims for which they are entitled to
recovery under Section 7.3(a) exceed twelve and one-half percent (12.5%) of the
Purchase Price, provided, however, that the foregoing limitation shall not apply
to recovery under Section 7.3(a) for breaches of one or more of the Fundamental
Representations, and provided, further, that the Purchaser Indemnitees shall not
be entitled to recover under Section 7.3(a) for breaches of the Tax
Representations and/or for indemnification under Section 4.2 (including without
limitation under the Remediation Agreement) in an amount in excess of
$17,500,000 in the aggregate. Notwithstanding anything to the contrary herein
contained, in no event shall Purchaser Indemnities be entitled to recover from
Seller under this Agreement an aggregate amount that exceeds the Purchase Price.
 
(d) The Purchaser Indemnitees shall not be entitled to recover under Section 7.3
or Article IV in respect of any claim for indemnification unless such claim has
been asserted by written notice, specifying the details of the alleged
misrepresentation or breach of warranty or covenant with reasonable specificity,
the sections of this Agreement alleged to have been breached, and a good faith
estimate of the Damages claimed, delivered to Seller on or prior to the
expiration of any applicable Survival Period for such claim.
 
(e) The Purchaser Indemnitees shall not be entitled to recover under Section 7.3
or under Article IV:
 
(i) WITH RESPECT TO CONSEQUENTIAL DAMAGES OF ANY KIND, DAMAGES CONSISTING OF
BUSINESS INTERRUPTION OR LOST PROFITS (REGARDLESS OF THE CHARACTERIZATION
THEREOF), DAMAGES FOR DIMINUTION IN VALUE OF THE BUSINESS, DAMAGES COMPUTED ON A
MULTIPLE OF EARNINGS, BOOK VALUE OR ANY SIMILAR BASIS WHICH MAY HAVE BEEN USED
IN ARRIVING AT THE PURCHASE PRICE, AND INDIRECT, SPECIAL, EXEMPLARY AND PUNITIVE
DAMAGES;
 
(ii) with respect to the nonassignability or nontransferability of any of
Contracts to which the Company or any Subsidiary is a party or any Permits, or
the failure to obtain any consent, or to satisfy any conditions imposed incident
to the giving of any consent, required under any Contract or any Permit, in
connection with, or as a consequence of, the transfer of the Shares to Purchaser
or any assignment of assets pursuant to the bill of sale contemplated in Section
3.3(o), but only if, in each case, such Contract or Permit is listed in Schedule
2.3(i) of the Disclosure Schedule;
 
(iii) with respect to any claim by or liability to any employee employed by the
Company or any Subsidiary for severance or other benefits arising as the result
of the termination of such employee’s employment with Company or any Subsidiary
subsequent to the Closing Date;
 
(iv) for a claim under Sections 7.3 with respect to any Indebtedness of the
Company or any Subsidiary or any Company Transaction Expenses, the amount of
which has already been deducted from the Purchase Price pursuant to Article I;
and
 
(v) with respect to any matter if (A) the Net Working Capital, Cash and Cash
Equivalents or Indebtedness set forth in the Closing Purchase Price Statement
was or could have been adjusted for such matter and Purchaser did not dispute
the amount of the adjustment in the Closing Purchase Price Statement or the
dispute as to the amount of the adjustment was resolved pursuant to Section 1.7,
or (B) the Net Working Capital, Cash and Cash Equivalents or Indebtedness set
forth in the Closing Purchase Price Statement was not adjusted for such matter,
Purchaser disputed such reduction, and the dispute was resolved in favor of
Seller pursuant to Section 1.7.
 
 
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7.5 Purchaser’s Indemnification Covenants.  Subject to any applicable
limitations set forth in this Agreement, Purchaser shall indemnify, save and
keep harmless Seller and its Affiliates, successors and permitted assigns
(“Seller Indemnities”) against and from all Damages sustained or incurred by any
of them resulting from or arising out of:
 
(a) any inaccuracy in, or breach of, any representation and warranty made by
Purchaser in this Agreement;
 
(b) any breach by Purchaser of, or failure by Purchaser to comply with, any of
its covenants or obligations under this Agreement (including, without
limitation, its obligations under this Article VII); or
 
(c) for claims made after the Closing under the Seller’s Bonds and Letters of
Credit (regardless of whether Purchaser has complied with Section 5.8(a)).
 
7.6 Limitation on Purchaser’s Indemnification Obligations.  Purchaser’s
obligations pursuant to Section 7.5 are subject to the following limitations:
 
(a) The Seller Indemnitees shall not be entitled to recover under Section 7.5(a)
with respect to any individual claim (or group of related claims arising out of
the same incident or occurrence) unless the Damages associated with such claim
(or group of related claims arising out of the same incident or occurrence)
exceed $20,000, and then may recover only to the extent of such excess with
respect to such claim (or group of related claims arising out of the same
incident or occurrence).  Any individual claim that does not involve Damages in
excess of $20,000 shall not count toward calculation of the Purchaser
Deductible.
 
(b) The Seller Indemnitees shall not be entitled to recover under Section
7.5(a) until the total amount that Purchaser would recover under Section 7.5,
but for this Section 7.6(b), exceeds one percent (1%) of the Purchase Price (the
“Purchaser Deductible”), and then only for the excess over the Purchaser
Deductible (provided that the Purchaser Deductible shall not apply to recovery
under Section 7.5(a) for breaches of Sections 2.2(b) or 2.2(f)).
 
(c) The Seller Indemnitees shall not be entitled to recover under Section 7.5 in
respect of any claim for indemnification unless such claim has been asserted by
written notice, specifying the details of the alleged misrepresentation or
breach of warranty or covenant with reasonable specificity, the sections of this
Agreement alleged to have been breached, and a good faith estimate of the
Damages claimed, delivered to Purchaser on or prior to the expiration of any
applicable Survival Period for such claim.
 
(d) The Seller Indemnitees shall not be entitled to recover under Section 7.5:
 
(i) WITH RESPECT TO CONSEQUENTIAL DAMAGES OF ANY KIND, DAMAGES CONSISTING OF
BUSINESS INTERRUPTION OR LOST PROFITS (REGARDLESS OF THE CHARACTERIZATION
THEREOF), DAMAGES FOR DIMINUTION IN VALUE OF THE BUSINESS, DAMAGES COMPUTED ON A
MULTIPLE OF EARNINGS, BOOK VALUE OR ANY SIMILAR BASIS WHICH MAY HAVE BEEN USED
IN ARRIVING AT THE PURCHASE PRICE, AND INDIRECT, SPECIAL, EXEMPLARY AND PUNITIVE
DAMAGES; and
 
(ii) with respect to any matter if (A) the Net Working Capital, Cash and Cash
Equivalents or Indebtedness set forth in the Closing Purchase Price Statement
was or could have been adjusted for such matter and Seller did not dispute the
amount of the adjustment in the Closing Purchase Price Statement or the dispute
as to the amount of the adjustment was resolved pursuant to Section 1.7, or (B)
the Net Working Capital, Cash and Cash Equivalents or Indebtedness set forth in
the Closing Purchase Price Statement was not adjusted for such matter, Seller
disputed such adjustment, and the dispute was resolved in favor of Purchaser
pursuant to Section 1.7.
 
7.7 Mutual Limitation on Indemnification Obligations.
 
(a) If any Indemnified Party receives any indemnification payment pursuant to
Article IV or this Article VII for Damages, at the election of the Indemnifying
Party, such Indemnified Party shall assign to the Indemnifying Party all of its
claims for recovery against third Persons as to such Damages, whether by
insurance coverage, contribution claims or subrogation.
 
 
29
 
(b) In the event an Indemnified Party is entitled to any recovery of any
proceeds, benefits, payments or recoveries (“Recoverable Damages”) from a Person
other than Indemnifying Party (a “Specified Third Party”) in respect of any
Damages for which such Indemnified Party is entitled to indemnification pursuant
to this Article VII or Article IV, such Indemnified Party shall use commercially
reasonable efforts to obtain, receive or realize such proceeds, benefits,
payments or recoveries, and any Damages otherwise recoverable from the
Indemnifying Party hereunder shall be reduced by the amount of such proceeds,
benefits, payments or recoveries that are obtained, received or realized from
any Specified Third Party.  In the event that an Indemnified Party is required
to use commercially reasonable efforts to pursue a claim against a Specified
Third Party but such Indemnified Party has not recovered Recoverable Damages
from such Specified Third Party with respect to such claim prior to the time
that such Indemnified Party receives the indemnification payment from the
Indemnifying Party, then with respect to the particular indemnifiable matter
hereunder to which such Recoverable Damages relate, such Indemnified Party shall
continue to pursue such claim against such Specified Third Party for a
commercially reasonable period under the circumstances.  In the event that any
such Recoverable Damages are actually realized by an Indemnified Party
subsequent to receipt by such Indemnified Party of any indemnification payment
hereunder in respect of the claims to which such Recoverable Damages relate,
then appropriate refunds shall be made promptly by the relevant Indemnified
Parties to the Indemnifying Party, of all or the relevant portion of such
indemnification payment.
 
7.8 Cooperation.  Subject to the provisions of Section 7.9, the Indemnifying
Party shall have the right, at its own expense, to participate in the defense of
any Third Party Claim, and if said right is exercised, the parties shall
cooperate in the investigation and defense of said Third Party Claim.
 
7.9 Third Party Claims.  Following the receipt of notice of a Third Party Claim
(other than a claim solely related to Taxes), the party receiving the notice of
the Third Party Claim shall (i) notify the other party hereto of its existence
setting forth with reasonable specificity the facts and circumstances of which
such party has received notice, and (ii) if the party giving such notice is an
Indemnified Party, specifying the basis hereunder upon which the Indemnified
Party’s claim for indemnification is asserted.  The Indemnified Party may, upon
reasonable notice, tender the defense of a Third Party Claim to the Indemnifying
Party.  If:
 
(a) the defense of a Third Party Claim is so tendered and within thirty (30)
days thereafter such tender is accepted by the Indemnifying Party; or
 
(b) within thirty (30) days after the date on which written notice of a Third
Party Claim has been given pursuant to this Section 7.9, the Indemnifying Party
shall notify the Indemnified Party in writing that the Indemnifying Party wishes
to assume the defense of such Third Party Claim;
 
then, except as hereinafter provided, the Indemnified Party shall not, and the
Indemnifying Party shall, have the right to contest, defend, litigate or settle
such Third Party Claim; provided, however, that the Indemnifying Party may not
assume control of the defense of a Third Party Claim (1) primarily involving
criminal liability on the part of the Company or any Subsidiary, (2) brought by
a Significant Customer or a Significant Operating Agent or (3) in which any
relief other than monetary damages is sought against the Indemnified Party.  If
the Indemnified Party elects to assume control over any Third Party Claim
brought by a Significant Customer or Significant Operating Agent (an “Agent
Claim”): (x) the Indemnified Party shall not settle or compromise any such Agent
Claim without the prior written consent of the Indemnifying Party (which may be
withheld in its sole discretion), (y) any counsel selected to defend the Agent
Claim shall be subject to the prior written consent of the Indemnifying Party
(which shall not be unreasonably withheld) and (z) subject to the rights of the
Indemnifying Party set forth in the previous items (x) and (y), the defense of
any such Agent Claim shall be conducted under the same procedures, and subject
to the same limitations and conditions, that would otherwise apply under this
Section 7.9 if the Indemnifying Party had assumed control of the Agent Claim
(and the Indemnifying Party shall have the rights of the Indemnified Party under
this Section 7.9).  The Indemnified Party shall have the right to be represented
by counsel at its own expense in any such contest, defense, litigation or
settlement conducted by the Indemnifying Party provided that the Indemnified
Party shall be entitled to reimbursement therefor if the Indemnifying Party
shall lose its right to contest, defend, litigate and settle the Third Party
Claim as herein provided.  The Indemnifying Party shall lose its right to
contest, defend, litigate and settle the Third Party Claim if it shall fail to
diligently contest the Third Party Claim.  So long as the Indemnifying Party has
not lost its right and/or obligation to contest, defend, litigate and settle as
herein provided, the Indemnifying Party shall have the exclusive right to
contest, defend and litigate the Third Party Claim and shall have the exclusive
right, in its discretion exercised in good faith, and upon the advice of
counsel, to settle any such matter, either before or after the initiation of
litigation, at such time and upon such terms as it deems fair and reasonable,
provided that at least ten (10) days prior to any such settlement, written
notice of its intention to settle shall be given to the Indemnified Party. 
 
 
30
 
 No failure by an Indemnifying Party to acknowledge in writing its
indemnification obligations under this Article VII shall relieve it of such
obligations to the extent they exist.  If an Indemnified Party is entitled to
indemnification against a Third Party Claim, and the Indemnifying Party fails to
accept a tender or assume the defense, of a Third Party Claim pursuant to this
Section 7.9, or if, in accordance with the foregoing, the Indemnifying Party
shall lose its right to contest, defend, litigate and settle such a Third Party
Claim, the Indemnified Party shall have the right, without prejudice to its
right of indemnification hereunder, in its discretion exercised in good faith
and upon the advice of counsel, to contest, defend and litigate such Third Party
Claim, and may settle such Third Party Claim, either before or after the
initiation of litigation, at such time and upon such terms as the Indemnified
Party deems fair and reasonable, provided that at least ten (10) days prior to
any such settlement, written notice of its intention to settle is given to the
Indemnifying Party.  If, pursuant to this Section 7.9, the Indemnified Party so
contests, defends, litigates or settles a Third Party Claim for which it is
entitled to indemnification hereunder, as hereinabove provided, the Indemnified
Party shall be reimbursed by the Indemnifying Party for the reasonable
attorneys’ fees and other reasonable expenses of defending, contesting,
litigating and/or settling the Third Party Claim which are incurred from time to
time, forthwith following the presentation to the Indemnifying Party of itemized
bills for said attorneys’ fees and other expenses (such reimbursement being
subject to the limitations on indemnification set forth in this Agreement).  The
parties hereto agree that any settlement with or failure to enforce any rights
against a third party shall not be deemed a waiver of any rights against any
Indemnifying Party or Indemnified Party or other party.  For the avoidance of
doubt, Seller or an Affiliate of Seller shall have the right to control and
contest, defend, litigate or settle, each of the matters set forth on Schedule
7.3(g) in accordance with this Section 7.9.
 
7.10 Obligations to Mitigate Damages.  Each Indemnified Party shall take, and
shall cause all other Indemnified Parties to take, all reasonable best efforts
to mitigate all Damages upon and after becoming aware of any event which could
reasonably be expected to give rise to Damages.
 
7.11 Effect of Investigation.  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 (including, but not limited to, by any of Purchaser’s
Representatives) 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.
 
7.12 Indemnification Exclusive Remedy.  Indemnification pursuant to the
provisions of this Article VII and Section 4.2 shall be the sole and exclusive
remedy of the parties with respect to any matters arising under this Agreement,
except for claims based upon actual fraud and claims seeking enforcement of any
equitable remedies (such as specific performance or injunctive relief) for
breach of the covenants set forth herein to be performed after the
Closing.  Without limiting the generality of the preceding sentence, no legal
action sounding in tort or strict liability may be maintained by any party
hereto against any other party hereto.
 
7.13 Effect of Materiality in Certain Representations of Seller.  For the sole
purpose of calculating Damages resulting from a breach of any of Seller’s
representations and warranties contained in the last paragraph of Section 2.3(o)
(Contracts) and Sections 2.3(m)(iii) and (iv) (Taxes), 2.3(p) (Permits), 2.3(s)
(Compliance with Laws) and 2.3(t) (Environmental), the terms “materiality,” “in
all material respects,” or “material” qualifiers contained in such
representation or warranty shall in each case be disregarded and without effect.
 
 
31
 
 
ARTICLE VIII                                
 
 
Miscellaneous
 
8.1 Definition of Best Efforts.  Except as otherwise specifically provided in
this Agreement, for purposes of this Agreement, the phrase “reasonable best
efforts” when used with reference to efforts to be made by a party hereto or any
of its Affiliates: (a) shall not require such party or any of its Affiliates to
pay or transfer any money, property or other thing of value to any other party
except nominal and routine charges for filing or recording fees, and courier and
other communication services; (b) shall require such party and its Affiliates to
act with all reasonable promptness and dispatch with respect thereto; and (c)
shall require the other party and its Affiliates to act with all reasonable
promptness and dispatch and to cooperate in all material respects with the first
party’s and its Affiliates’ efforts in connection therewith.
 
8.2 Publicity.  Except as otherwise required by Law or applicable stock exchange
rules, the initial press release concerning the transactions contemplated by
this Agreement shall be made only with the prior agreement of Seller and
Purchaser (and, in any event, the parties shall use all reasonable efforts to
consult and agree with each other with respect to the content of any such
required press release).  Following the Closing, Purchaser may make press
releases and any other public or private disclosures concerning the transactions
contemplated hereby without the consent of Seller.  Except as otherwise required
by Law or applicable stock exchange rules, neither Seller nor its Affiliates
shall make any press release or any other similar public communication
concerning the transactions contemplated hereby that is inconsistent with the
initial press release contemplated above without the prior written consent of
Purchaser.
 
8.3 Notices.  All notices required or permitted to be given hereunder shall be
in writing and may be delivered by hand, by facsimile, by nationally recognized
private courier, or by United States mail.  Notices delivered by mail shall be
deemed given three (3) Business Days after being deposited in the United States
mail, postage prepaid, registered or certified mail, return receipt
requested.  Notices delivered by hand, by facsimile, or by nationally recognized
private courier shall be deemed given on the first Business Day following
receipt; provided, however, that a notice delivered by facsimile shall only be
effective if such notice is also delivered by hand, or deposited in the United
States mail, postage prepaid, registered or certified mail, on or before two (2)
Business Days after its delivery by facsimile.  All notices shall be addressed
as follows:
 
If to Seller:
 
 
c/o Exel Inc.

 
570 Polaris Parkway

 
Westerville, Ohio 43082

 
Attention:  General Counsel

 
Fax:  (614) 865-8879

 
Email:  mark.smolik@exel.com

 
with a copy (which shall not constitute notice) to:

Perkins Coie LLP
131 S. Dearborn Street, Suite 1700
Chicago, Illinois 60603
Attention:  James Cruger and Theodore Wern
Fax:  (312) 324-9400
Email:  JCruger@perkinscoie.com
TWern@perkinscoie.com

 
32
 
 
If to Purchaser or the Company:

Addressed to

Hub Group, Inc.
3050 Highland Parkway, Suite 100
Downers Grove, Illinois 60515
Attention: David Zeilstra, VP, Secretary & General Counsel
Fax: (630)-271-3750
Email: dzeilstra@hubgroup.com

with a copy (which shall not constitute notice) to:

Winston & Strawn LLP
35 West Wacker Drive
Chicago, Illinois 60601
Attention:  Patrick O. Doyle
Fax:  (312) 558-5700
Email:  PDoyle@winston.com
 
 
and/or to such other respective addresses and/or addressees as may be designated
by notice given in accordance with the provisions of this Section 8.3.
 
8.4 Expenses.  Each party hereto shall bear all fees and expenses incurred by
such party in connection with, relating to or arising out of the negotiation,
preparation, execution, delivery and performance of this Agreement and the
consummation of the transaction contemplated hereby, including, without
limitation, financial advisors’, attorneys’, accountants’ and other professional
fees and expenses; provided, that Seller shall pay or otherwise be responsible
for all Company Transaction Expenses.  For the avoidance of doubt, Seller shall
pay the fees and expenses of LonePine Capital Advisors LLC, and the parties
shall pay their respective costs and expenses incurred in connection with any
filing under the HSR Act; provided that Purchaser and Seller shall each pay
one-half of the filing fee payable in connection with the initial filing under
the HSR Act.
 
8.5 Entire Agreement.  This Agreement constitutes the entire agreement between
the parties with respect to the subject matter covered hereby and shall be
binding upon and inure to the benefit of the parties hereto and their respective
legal representatives, successors and permitted assigns.  Each Exhibit, Schedule
and the Disclosure Schedule hereto, shall be considered incorporated into this
Agreement.
 
8.6 Non-Waiver.  The failure in any one or more instances of a party to insist
upon performance of any of the terms, covenants or conditions of this Agreement,
to exercise any right or privilege in this Agreement conferred, or the waiver by
said party of any breach of any of the terms, covenants or conditions of this
Agreement, shall not be construed as a subsequent waiver of any such terms,
covenants, conditions, rights or privileges, but the same shall continue and
remain in full force and effect as if no such forbearance or waiver had
occurred.  No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.
 
8.7 Counterparts.  This Agreement may be executed in multiple counterparts, each
of which shall be deemed to be an original, and all such counterparts shall
constitute but one instrument.  Counterparts delivered via facsimile or
electronically via pdf signature pages shall have the same force and effect as
originally executed counterparts.
 
 
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8.8 Severability.  Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, and, for purposes of such
jurisdiction, such provision or portion thereof shall be struck from the
remainder of this Agreement, which shall remain in full force and effect.  This
Agreement shall be reformed, construed and enforced in such jurisdiction so as
to best give effect to the intent of the parties under this Agreement.
 
8.9 Applicable Law.  This Agreement shall be governed and controlled as to
validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Delaware applicable to contracts
made in that state, without giving effect to any choice of law or conflict of
law provision or rule that would cause the application of laws of any
jurisdiction other than the State of Delaware.
 
8.10 Binding Effect; Benefit.  This Agreement shall inure to the benefit of and
be binding upon the parties hereto, the Indemnified Parties and their successors
and permitted assigns.  Nothing in this Agreement, express or implied, shall
confer on any Person other than the parties hereto, the Indemnified Parties and
their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, including,
without limitation, third party beneficiary rights.  This Agreement may only be
enforced against, and any claim or cause of action based upon, arising out of,
or related to this Agreement may only be brought against, the entities that are
expressly named as parties hereto and the Indemnified Parties and then only with
respect to the specific obligations set forth herein with respect to such
party.  Except to the extent a named party to this Agreement (and then only to
the extent of the specific obligations undertaken by such named party in this
Agreement and not otherwise), no past, present or future director, officer,
employee, incorporator, member, partner, stockholder, Affiliate, agent, attorney
or Affiliate of any of the foregoing shall have any liability (whether in
contract, tort, equity or otherwise) for any one or more of the representations,
warranties, covenants, agreements or other obligations or liabilities of Seller
or the Company under this Agreement (whether for indemnification or otherwise)
based on, in respect of, or by reason of, the transactions contemplated hereby
and thereby.  Notwithstanding anything herein to the contrary, the Company’s
only obligations under this Agreement are those obligations set forth in
Sections 4.1(b), 5.1, 5.3, 5.4, 5.5, 5.9, 5.13, 5.14, 5.15, 6.1, 6.2 and 6.3.
 
8.11 Assignability.  This Agreement shall not be assignable by any party hereto
without the prior written consent of the other party.
 
8.12 Amendments.  This Agreement shall not be modified or amended except
pursuant to an instrument in writing executed and delivered on behalf of each of
the parties hereto.
 
8.13 Headings.  The headings contained in this Agreement are for convenience of
reference only and shall not affect the meaning or interpretation of this
Agreement.
 
8.14 Governmental Reporting.  Anything to the contrary in this Agreement
notwithstanding, nothing in this Agreement shall be construed to mean that a
party hereto or other Person must make or file, or cooperate in the making or
filing of, any return or report to any Governmental Authority in any manner that
such Person or such party reasonably believes or reasonably is advised is not in
accordance with law.
 
8.15 Waiver of Trial by Jury.  EACH OF THE PARTIES HERETO WAIVES THE RIGHT TO A
JURY TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING SEEKING ENFORCEMENT
OF SUCH PARTY’S RIGHTS UNDER THIS AGREEMENT.
 
 
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8.16 Consent to Jurisdiction.  THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN
AND SHALL BE DEEMED TO HAVE BEEN MADE IN COOK COUNTY IN THE STATE OF
ILLINOIS.  SELLER AND PURCHASER AGREE TO THE NON-EXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT WITHIN COOK COUNTY IN THE STATE OF ILLINOIS, WITH RESPECT
TO ANY CLAIM OR CAUSE OF ACTION ARISING UNDER OR RELATING TO THIS AGREEMENT OR
ANY ANCILLARY AGREEMENT, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT, AND CONSENTS THAT ALL SERVICES OF PROCESS BE MADE BY REGISTERED MAIL,
DIRECTED TO IT AT ITS ADDRESS AS SET FORTH IN SECTION 8.3, AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED WHEN RECEIVED.  SELLER AND PURCHASER WAIVE ANY
OBJECTION BASED ON FORUM NON CONVENIENS AND WAIVES ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER.  NOTHING IN THIS SECTION 8.16 SHALL AFFECT THE
RIGHT OF SELLER OR PURCHASER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
 
8.17 Rule of Construction.  The parties acknowledge and agree that each has
negotiated and reviewed the terms of this Agreement, assisted by such legal and
tax counsel as they desired, and has contributed to its revisions.  The parties
further agree that the rule of construction that any ambiguities are resolved
against the drafting party will be subordinated to the principle that the terms
and provisions of this Agreement will be construed fairly as to all parties and
not in favor of or against any party.  Unless otherwise expressly provided or
unless the context requires otherwise, (a) all references in this Agreement to
Articles, Sections, Schedules and Exhibits shall mean and refer to Articles,
Sections, Schedules and Exhibits of this Agreement; (b) words using the singular
or plural number also shall include the plural and singular number,
respectively; (c) the words “include,” “includes,” and “including” shall be
deemed to be followed by “without limitation” whether or not they are in fact
followed by such words or words of similar import; (d) references to “hereof,”
“herein,” “hereby” and similar terms shall refer to this entire Agreement
(including the Schedules and Exhibits hereto); (e) all pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the Person or Persons may
require; (f) references to any Person shall be deemed to mean and include the
successors and permitted assigns of such Person; and (g) references to Laws
shall be deemed to mean and include such Laws as amended through the Closing
Date.
 
 
 
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ARTICLE IX                                
 
 
Definitions
 
9.1 General.  Each term defined in the first paragraph of this Agreement and in
the Recitals shall have the meaning set forth above whenever used herein, unless
otherwise expressly provided or unless the context clearly requires otherwise.
 
9.2 Definitions.  As used in this Agreement, the following terms shall have the
meanings ascribed to them in this Section 9.2:
 
 “Additional Interest Payment” is an additional amount equal to the Interest
plus an amount equal to 35% of the Interest.
 
“Additional Payment” is an additional amount equal to 35% of the Deferrals made
by a Person designated on Schedule 6.4 as entitled to an Additional Payment.
 
“Affiliate” with respect to any Person means any other Person who directly or
indirectly Controls, is Controlled by, or is under common Control with such
Person.
 
“Agent/Salesperson Deferral and Matching Program” is the aggregate of the
Agent/Salesperson Deferral Liabilities and Agent/Salesperson Matching
Liabilities.  
 
“Agent/Salesperson Deferral Liabilities” are the aggregate Deferrals set forth
on Schedule 6.4.
 
“Agent/Salesperson Matching Liabilities” are the aggregate Matching
Contributions set forth on Schedule 6.4.
 
“Ancillary Agreements” shall mean, collectively, the Transition Services
Agreement, the Trademark License Agreement, the Restrictive Covenant Agreement,
the Intellectual Property License Agreement, the Intellectual Property
Assignment, the Remediation Agreement and all other documents, instruments and
certificates executed and/or delivered at the Closing in connection with the
transactions contemplated hereby.
 
“Business Day” means any day that banks are open for business in the City of
Chicago, Illinois (not to include a Saturday, Sunday or a statutory holiday in
the State of Illinois).
 
“Business Continuation and Employment Agreements” means, collectively, the
Business Continuation and Employment Agreements between Exel and each of James
J. Damman, Todd Thompson, Bruce A. Wise and Bradley Young.
 
“Cash and Cash Equivalents” means (i) all cash on hand and in the Company’s and
each Subsidiary’s bank, lock box and other accounts (including cash resulting
from the clearance of checks deposited with the Company or any Subsidiary prior
to the Effective Time, whether or not such clearance occurs before, on or after
the Effective Time, but not including the amount of any such deposited checks in
payment of accounts receivable that are reflected in the calculation of Net
Working Capital), plus (ii) the dollar amount of all deposits held by third
parties for the benefit of the Company or any Subsidiary, in each case as of the
Effective Time, minus (iii) the amount of all “cut” but un-cashed checks of the
Company and the Subsidiaries outstanding as of the Effective Time.
 
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.
 
“Company Transaction Expenses” means all of the out of pocket fees and expenses
(including investment banking and legal fees and expenses), if any, incurred by
the Company and the Subsidiaries prior to the Closing Date in connection with
the negotiation, documentation and consummation of the transactions contemplated
by this Agreement, including any bonuses or similar payments payable in
connection with the consummation of the transactions contemplated by this
Agreement, in each case, only to the extent unpaid as of the Closing.
 
“Contracts” means, with respect to any Person, any written contract, agreement,
deed, mortgage, lease, license or commitment, or other written 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.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through ownership of securities, by contract or otherwise.
 
 
36
 
“Dallas Lease” means that certain Office Building Lease dated October 25, 2006
between CP Preston Trail Atrium, L.P. and Exel, Inc., as amended on or prior to
the date hereof.
 
“Deferrals” are the amounts that participants in the Agent/Salesperson Deferral
and Matching Program elected to defer in the respective calendar years as set
forth on Schedule 6.4.
 
“Environmental Laws” means all Laws that pertain or relate to:  (a) Releases or
threatened Releases of Hazardous Materials; (b) the use, treatment, storage,
disposal, handling, manufacturing, transportation or shipment of Hazardous
Materials; (c) the regulation of storage tanks; or (d) otherwise relating to
pollution or the protection of human health, safety or the environment,
including the following statutes as now written and amended as of Closing,
including any and all regulations promulgated thereunder and any and all state
and local counterparts:  CERCLA, 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., and the Safe Drinking Water Act, 42 U.S.C.
§300f et seq.
 
“Environmental Permits” means licenses, permits, registrations, governmental
approvals, agreements and consents which are required under or are issued
pursuant to Environmental Laws.
 
“ETS Assets” means that portion of the assets of the Exel Trust which correspond
on a one-to-one basis with the ETS Liabilities.
 
“ETS Canada” means Exel Transportation Services ULC, a Nova Scotia unlimited
liability company.
 
“ETS Liabilities” the Exel Plan accounts of the ETS Participants and all
liabilities or obligations of any kind or nature arising therefrom or relating
thereto.
 
“ETS Participants” means the employees of the Company and the Subsidiaries
immediately prior to the Closing that participate in the Exel Plan.
 
“ETS Plan” means that certain stand-alone deferred compensation plan established
for certain employees of the Company and known as the “2011 Supplemental
Deferred Compensation Plan”, the material terms of which are substantially the
same as the terms of the Exel Plan.
 
“ETS Trust” means that certain trust to be established after the Closing
pursuant to a rabbi trust agreement between the Company and Fidelity.
 
“Exel” means Exel Inc., a Massachusetts corporation.
 
“Exel Plan” means the Supply Chain Executive Deferred Compensation Plan, a
nonqualified account-balance deferred compensation plan sponsored by Exel.
 
“Exel Trust” means the rabbi trust formed to assist Exel in satisfying its
obligations under the Exel Plan.
 
“Fidelity” means Fidelity Management Trust Company.
 
“Final Net Working Capital” means the Net Working Capital set forth in the
finally determined Closing Purchase Price Statement.
 
“Flow-Thru Entity” means (i) (a) any entity, plan or arrangement that is treated
for Income Tax purposes as a partnership, (b) a “controlled foreign corporation”
within the meaning of Code section 957, or (c) a “passive foreign investment
corporation” within the meaning of Code section 1297 or (ii) with respect to
which a holder of a (direct or indirect) equity interest in the entity is (or
could be) subject to Tax under the Code (or other applicable domestic law
relating to Taxes) by reference to earnings, income, assets, or activities of
the entity.  Notwithstanding the foregoing, no Subsidiary shall constitute a
Flow-Thru Entity as a result of the application of consolidated return
provisions under Code section 1504 and the Treasury Regulations promulgated
thereunder (or any similar provision of state, local, or non-U.S. Applicable
Laws).
 
“GAAP” means generally accepted accounting principles, consistently applied.
 
 
37
 
“Governmental Authority” means any of the following: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, cantonal, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or entity and any court or
other tribunal).
 
“Hazardous Material” means (a) all substances, wastes, pollutants, contaminants
and materials (collectively, “Substances”) regulated, or defined or designated
as hazardous, extremely or imminently hazardous, dangerous or toxic, under the
following federal statutes and their state counterparts, as well as these
statutes’ implementing regulations:  the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. (“CERCLA”) the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S. C. Section 136 et
seq; the Atomic Energy Act, 42 U.S.C. Section 22011 et seq; and the Hazardous
Materials Transportation Act, 42 U.S.C. Section 1801 et seq; (b) all Substances
with respect to which any Governmental Authority otherwise requires
environmental investigation, monitoring, reporting, or remediation; (c)
petroleum and petroleum products and by products including crude oil and any
fractions thereof; (d) natural gas, synthetic gas, and any mixtures thereof; and
(e) radon, radioactive substances, asbestos, urea formaldehyde, and
polychlorinated biphenyls (“PCB”).
 
“High Performance Agent Incentive Plan” means the obligations of the Company or
a Subsidiary under certain Contracts entered into with Operating Agents that
achieve pre-tax income ranked in the top forty (40) of all Operating Agents with
year over year pre-tax income growth and contribution margin of at least thirty
percent (30%), for which such qualifying Operating Agents earn bonuses, vesting
at the end of three (3) years, tied to their pre-tax income and paid after
vesting only if the Operating Agent is an active Agent at the time of payment.
 
 “IFRS” means International Financial Reporting Standards, consistently applied.
 
“Income Tax” (and, with the correlative meaning, “Income Taxes”) means any Tax
that is based on, or computed with respect to, net income or earnings, gross
income or earnings, capital gains and any related Tax in the form of penalties
or interest.
 
“Indebtedness” means all (a) obligations relating to indebtedness for borrowed
money, (b) fifty percent (50%) of the amount of any obligations to Operating
Agents under the High Performance Agent Incentive Plan that are accrued or
payable as of the Closing, other than the current portion of any such
obligations which are included as current liabilities in the Final Net Working
Capital, (c) obligations for the deferred purchase price of property or services
accrued and unpaid as of the Closing, excluding (i) any trade payables or other
liabilities or obligations that are accrued as a current liability on the
Closing Purchase Price Statement or would otherwise be treated as current
liabilities under IFRS, (ii) the ETS Liabilities and/or any obligations under
the Agent/Salesperson Deferral and Matching Program, which are addressed in
Section 6.3 and Section 6.4, respectively, and/or (iii) obligations under the
High Performance Agent Incentive Plan which are addressed exclusively in the
preceding item (b) of this definition, (d) any reimbursement obligations related
to banker’s acceptances, surety bonds or letters of credit, but only to the
extent such obligations have actually matured (and specifically excluding any
such obligations that are undrawn or unmatured), (e) obligations evidenced by a
note, debenture or similar instrument, (f) any capitalized lease obligations,
(g) any obligations of the Company or any Subsidiary relating to stock
appreciation rights payable by Seller or any of its Affiliates to certain
members of management of the Company or any Subsidiary, and (h) obligations of
the types referred to in the preceding clauses (a) through (g) of any other
Person guaranteed by the Company or any Subsidiary or secured by any Lien on any
assets of the Company or any Subsidiary.
 
“Intellectual Property” means all of the following owned or licensed in any
jurisdiction throughout the world: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof; (b) all trademarks, service marks, trade dress, logos,
slogans, trade names, corporate names, and rights in telephone numbers, together
with all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith; (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith; (d) all trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals); (e) all
software and computer programs, source code, object code and associated
procedural code and data and any modifications thereto; (f) all material
advertising and promotional materials; (g) all other proprietary rights; and
(h) all copies and tangible embodiments thereof (in whatever form or medium).
 
“Intellectual Property Assignment” means that certain Intellectual Property
Assignment dated as of March 31, 2011 among the Company, the Subsidiaries and
Seller.
 
“Intellectual Property License Agreement” means that certain Intellectual
Property License Agreement dated as of March 31, 2011 among the Company, the
Subsidiaries and Seller.
 
 
38
 
“Interest” with respect to any Person listed on Schedule 6.4 is the amount of
interest reasonably determined by Exel to be payable by such Person with respect
to Deferrals and Matching Contributions pursuant to Code section
409A(a)(B)(i)(1) through the date of distribution of such Deferrals and Matching
Contributions (after taking into account any reductions or eliminations in such
interest permitted under applicable IRS guidance).
 
“knowledge of the Company” and “to the Company’s knowledge” (and words of
similar import) means the actual knowledge as of the Closing Date of James
Damman, Todd Thompson, Brad Young, Bruce Wise and Richard Merrill, without
giving effect to imputed knowledge.
 
“Law” shall mean any federal, state, regional, local or foreign law,
constitution, rule, statute, ordinance, regulation, common law or Order, in each
case as in effect on the Closing Date, other than as used in any representation
or warranty that addresses matters as of a specific date or time period other
than the Closing Date.
 
“Legal Proceeding” means any action, suit, litigation, arbitration, proceeding
(including any civil, criminal, administrative, appellate or eminent domain
proceeding) or audit, in each case commenced, brought, conducted or heard by or
before any court or other Governmental Authority (whether judicial or
administrative) or any arbitrator or arbitration panel.
 
“Lien” shall mean any mortgage, deed of trust, deed to secure debt, pledge,
security interest, encumbrance, charge, assessment, indenture, option,
hypothecation, judgment, attachment, restriction on transfer, right-of-way,
easement, title defect, lease, encroachment, servitude, right of first option,
right of first refusal or other lien (whether arising by contract or by
operation of law).
 
“made available to Purchaser” means either (i) included prior to the Closing
Date in the virtual data room established by Seller with IntraLinks for purposes
of the transactions contemplated hereby or (ii) delivered prior to the Closing
Date to the Purchaser or its Representatives in writing (including by facsimile,
email or other electronic transmission).
 
“Managed Transportation Business” means the business conducted by Seller and its
Affiliates (other than the Company and the Subsidiaries) out of their
Mechanicsburg, Pennsylvania, Houston, Texas, and Akron, Ohio facilities and
historically managed in part by certain employees of the Company located in the
Company’s Dallas, Texas facility, including Andrew Hadland and the other
employees listed on Schedule 6.1.A, and for which the revenues and expenses are
recorded by Seller and/or its Affiliates and not by the Company or either
Subsidiary.  The Managed Transportation Business includes the provision to
customers of the following services:  carrier management, rate/contract
negotiation, regulatory compliance, freight optimization, transportation
procurement, shipment management, load tendering, carrier bid management,
freight bill payment/auditing, claims management and performance reporting.  In
providing these services, the Managed Transportation Business usually serves as
an outsourced provider of a customer’s transportation management organization.
 
"Matching Contributions" are the amounts that participants in the
Agent/Salesperson Deferral and Matching Program would be entitled to with
respect to Deferrals provided such participants continue to provide services to
the Company or Subsidiary or an Affiliate of the Company or Subsidiary through
January 1st of the third calendar year following the calendar year in which the
Deferrals were made.
 
“Material Adverse Effect” means a material adverse effect on the business or
financial condition of the Company and the Subsidiaries, taken as a whole,
provided that the foregoing shall not include any event, circumstance, change,
occurrence, fact or effect resulting from or relating to: (a) changes in general
economic or political conditions in any region in which the Company or any
Subsidiary operates, including any change in commodity prices or increase in
interest rates, (b) changes in United States or global financial markets in
general, (c) changes in the industry in which the Company or any Subsidiary
operates, (d) any change in applicable Laws or IFRS or any interpretation
thereof by any governmental authority, (e) any natural disaster or pandemic, (f)
any act of terrorism or war or the outbreak of escalation of hostilities, or
change in geopolitical conditions, (g) any failure of the Company and/or any
Subsidiary to meet any projections or forecasts, (h) any disruption to or effect
on the Company or any Subsidiary as a result of the negotiation and execution of
this Agreement, or (i) any action taken or failed to be taken by the Company or
any of its Affiliates or representatives at the request of Purchaser or that is
required or contemplated by this Agreement.
 
“Material Contracts” shall mean each of the Contracts listed (or required to be
listed) in Schedule 2.3(o) of the Disclosure Schedule.  For the avoidance of
doubt, the Software License Agreement for Mercury Gate International Inc.
Transportation Management Software dated as of February 2, 2007 among Mercury
Gate International Inc., the Company and certain other parties thereto shall be
deemed a Material Contract.
 
 
39
 
“Most Recent Balance Sheet” shall mean the unaudited consolidated balance sheet
of the Company and the Subsidiaries as of the Most Recent Balance Sheet Date.
 
“Most Recent Balance Sheet Date” shall mean December 31, 2010.
 
“Net Working Capital” means the assets of the Company and the Subsidiaries that
are treated as current assets under IFRS, minus the liabilities of the Company
and the Subsidiaries that are treated under IFRS as current liabilities, all as
determined in the manner set forth in Sections 1.6 and 1.7.  Notwithstanding
anything to the contrary herein contained, the calculation of Net Working
Capital shall include only the categories of current assets and current
liabilities reflected in the Net Working Capital Example.  For the avoidance of
doubt, (a) Cash and Cash Equivalents, Indebtedness and any assets or liabilities
for Income Taxes of the Company and the Subsidiaries shall not be taken into
account in the calculation of Net Working Capital, (b) to the extent not paid at
or prior to Closing, any payable owed by the Company or any Subsidiary to Seller
or any Affiliate thereof, including on account of payroll expenses of the
Company or any Subsidiary, shall constitute a current liability in the
calculation of Net Working Capital, (c) any current liabilities under the
Agent/Salesperson Deferral and Matching Program shall not be taken into account
in the calculation of Net Working Capital and (d) any current liabilities
relating to matters for which Seller is providing indemnification hereunder
shall not be reflected in the calculation of Net Working Capital.
 
“Operating Agent” means any Person identified as an independent business owner
or independent contractor in any (a) Operations Independent Business Owner
Agreement, (b) Sales and Independent Contractor Operations Agreement, (c) Sales
and Agency Operations Agreements or (d) other similar Contract, respectively, to
which the Company or any Subsidiary is party.
 
“Orders” means any judgment, injunction, decree, order or arbitration award.
 
“Permitted Liens” means any of the following: (a) statutory liens for Taxes not
yet due; (b) statutory liens of landlords, carriers, warehousemen, mechanics and
materialmen incurred in the ordinary course of business for sums not yet due;
(c) liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation and unemployment insurance or to secure
the performance of surety and appeal bonds or leases, which bonds and leases are
identified in Schedule 2.3(o) of the Disclosure Schedule; (d) irregularities of
title which do not detract in any material respect from the value or use of any
material Company Assets and (e) security interests securing the Indebtedness and
disclosed on Schedule 2.3(k)(i) of the Disclosure Schedule.
 
“Person” means any individual, corporation, partnership, limited liability
company, joint venture, association, bank, trust company, trust or other entity,
whether or not legal entities, or any Governmental Authority.
 
“Release” means releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping.
 
“Remediation Agreement” means that certain Remediation Agreement dated as of the
date hereof by and among Purchaser, Seller and the Company.
 
“Representatives” means, with respect to any Person, the partners, members,
directors, officers, managers, employees, agents or other representatives of
such specified Person, including financial advisors, consultants, investors,
lenders, other financing sources and counsel.
 
“Restrictive Covenant Agreement” means that certain restrictive covenant
agreement dated as of the date hereof by and between Seller and Purchaser.
 
“Retained Litigation Claim” means all claims for fraud (and any similar or
related claims) in connection with John Budzynski's and Intex International's
submission of fraudulent invoices to the Company for the period commencing
January, 2010 through August, 2010.
 
“Sales Agent” means any Person identified as an independent business owner or
independent contractor in any (a) Sales Independent Business Owner Agreement,
(b) Sales Agent Agreement or (c) other similar Contract, respectively, to which
the Company or any Subsidiary is a party.
 
“Seller Group” means any affiliated group within the meaning of Section 1504(a)
of the Code (or any similar group defined under a similar provision of state,
local, or non-U.S. applicable law) with Seller as its common parent that has
elected, or is required, to file a consolidated, combined, or unitary Tax
Return.
 
“Significant Customer” means each of the top five (5) customers of the Company
and the Subsidiaries (on a consolidated basis) for the year ended December 31,
2010 measured by the aggregate dollar amount of gross margins of the Company and
the Subsidiaries (on a consolidated basis) generated by sales to customers of
the Company and the Subsidiaries for the year then ended.
 
 
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“Significant Operating Agent” means each of the top twenty (20) Operating Agents
of the Company and the Subsidiaries (on a consolidated basis) as measured by the
dollar amount of the aggregate gross margins generated for the Company and the
Subsidiaries (on a consolidated basis) by sales activities of Operating Agents
for the year ended December 31, 2010.
 
“Significant Sales Agent” means each of the top ten (10) Sales Agents of the
Company and the Subsidiaries (on a consolidated basis) as measured by the dollar
amount of the aggregate gross margins generated for the Company and the
Subsidiaries (on a consolidated basis) by sales activities of Sales Agents for
the year ended December 31, 2010.
 
“Significant Vendor” means each of the top ten (10) vendors of the Company and
the Subsidiaries (on a consolidated basis) for the year ended December 31, 2010
measured based on dollar amounts of services provided and products supplied to
the Company and the Subsidiaries (on a consolidated basis) for the year then
ended.
 
“Tax Representations” means the representations set forth in Section 2.3(m).
 
“Trademark License Agreement” means that certain trademark license agreement
dated as of the date hereof by and among Seller, Purchaser and the Company.
 
“Transferred Intellectual Property” means the following trade names: “Mark VII”,
“Tritan”, “TEMSTAR”, “Delta VII” and the slogan “One Source, Many Modes, Endless
Solutions”.
 
“Transition Services Agreement” means that certain transition services agreement
dated as of the date hereof by and among Seller, Purchaser and the Company.
 
 
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9.3 Cross Reference of Other Definitions.  Each of the terms set forth in the
table below is defined in the Section of this Agreement set forth opposite such
term:                                                                        
 

 Defined Term  Section      2010 MIP Amounts  5.15  Accounts Receivable  2.3(l)
 Agent Claim   7.9(b)  Agreement   Preamble  Annual Financial Statements
 2.3(j)(i)  Arbitrating Accountant   1.7(b)  Bank Accounts   2.3(y)  Benefit
Plan(s)   2.3(q)(i)  Business   Recitals  Canadian Participants  5.15  Closing
 1.4(a)  Closing Date   1.4(a)  Closing Purchase Price Statement  1.6  Code
 2.3(m)(i)  Company  Preamble  Company Assets   2.3(k)(i)  Company Bonds and
Letters of Credit  5.8(b)  Corporate Contracts  5.9(a)  Damages   7.2(a)
 Deductible    7.4(b)  Delivery Date   1.6  Disclosure Schedule  2.1  Dispute 
 1.7(a)  Dispute Notice   1.7(a)  Dispute Period   1.7(a)  Effective Time
 1.4(a)  Election  4.8(a)  Election Termination Date  4.8(c)  Employee(s)   6.1
 ERISA  2.3(q)(i)  Estimated Purchase Price   1.5(a)  ETS Canada  Recitals
 Excluded Marks  5.7  Exel Trucking   Recitals  Financial Statements  2.3(j)(i)
 Fundamental Representations   7.2(d)  HSR Act   2.2(c)  Indemnified Party 
 7.2(b)  Indemnifying Party  7.2(c)  Insurance Policies   2.3(z)(i)  Interim
Financial Statements  2.3(j)(i)  Leased Real Estate   2.3(u)(i)  Leases
 2.3(u)(ii)  Material Contracts   2.3(o)  MIP  5.15  Negotiation Period   1.7(b)
 Net Working Capital Example  1.6  Permits  2.3(p)(i)  Post-Closing Straddle
Period   4.3  Potential Claims  5.6  Pre-Closing Straddle Period   4.3
 Pre-Closing Tax Returns   4.1(a)  Prevailing Party   1.7(b)

 
 
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 Purchase Price   1.2  Purchase Price Allocation  4.8(b)  Purchaser  Preamble
 Purchaser Deductible  7.6(b)  Purchaser Indemnitees  7.3  Purchaser Prepared
Returns   4.1(b)  Purchaser Released Claims  5.9(a)  Purchaser Released Parties
 5.9(a)  Recoverable Damages  7.7(b)  Section 338 Forms  4.8(a)  Seller
 Preamble  Seller Group Returns  4.1(a)  Seller Indemnities   7.5  Seller
Occurrence Policies  5.6  Seller Owned Property  2.3(u)(v)  Seller Prepared
Returns  4.1(a)  Seller Released Claims  5.9(b)  Seller Released Parties  5.9(b)
 Seller’s Bonds and Letters of Credit  5.8(a)  Shares  Recitals  Specified Third
Party  7.7(b)  Straddle Period  4.1(b)  Straddle Tax Returns   4.1(b)
 Subsidiaries or Subsidiary  Recitals  Survival Period   7.2(e)  Tax   2.3(m)(i)
 Tax Contest   4.5  Tax Returns   2.3(m)(i)  Taxes   2.3(m)(i)  Third Party
Claim   7.2(f)  Title IV Representations  7.2(g)  Transaction Bonuses  5.11
 Transfer Taxes   4.6  Working Capital Target   1.3

[SIGNATURE PAGE FOLLOWS]

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

  SELLER:        DPWN HOLDINGS (USA), INC.  
 
By:
/s/ Brian Newton     Its:  Attorney in Fact          

  COMPANY:       EXEL TRANSPORTATION SERVICES, INC.   
 
By:
/s/ Rob Whipple     Its:  Authorized Signatory          

  PURCHASER:       HUB GROUP, INC.   
 
By:
/s/ Mark A. Yeager     Its:  President and C.O.O.