Document:

Exhibit 10.23

 

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

 

	
MARCHBANKS   TRUCK SERVICE, INC., et al., on   behalf of itself and all others similarly situated, 

 

Plaintiffs,   

v.

 

COMDATA   NETWORK, INC., d/b/a COMDATA CORPORATION, et al.,   

 

Defendants.
    	
 
    	
 

 

 

Civil   Action No. 07-1078-JKG

 

 

Consolidated   Case
    

 

DEFINITIVE MASTER CLASS SETTLEMENT AGREEMENT

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
I.
    	
DEFINITIONS
    	
7
    
	
 
    	
 
    	
 
    
	
II.
    	
SETTLEMENT CLASS
    	
20
    
	
 
    	
 
    	
 
    
	
III.
    	
CLASS SETTLEMENT ESCROW ACCOUNT
    	
20
    
	
 
    	
 
    	
 
    
	
IV.
    	
PAYMENTS TO THE CLASS SETTLEMENT ESCROW   ACCOUNT
    	
22
    
	
 
    	
 
    	
 
    
	
V.
    	
CONSIDERATION PROVIDED TO SETTLEMENT   CLASS MEMBERS
    	
24
    
	
 
    	
 
    	
 
    
	
VI.
    	
RELEASE, WAIVER AND COVENANT NOT TO SUE
    	
35
    
	
 
    	
 
    	
 
    
	
VII.
    	
PRELIMINARY APPROVAL
    	
41
    
	
 
    	
 
    	
 
    
	
VIII.
    	
CLASS NOTICE AND ADMINISTRATION
    	
43
    
	
 
    	
 
    	
 
    
	
IX.
    	
REQUESTS FOR EXCLUSION FROM THE SETTLEMENT   CLASS
    	
47
    
	
 
    	
 
    	
 
    
	
X.
    	
OBJECTIONS TO THE SETTLEMENT
    	
49
    
	
 
    	
 
    	
 
    
	
XI.
    	
ATTORNEYS’ FEE AWARDS, REIMBURSEMENT FOR   COSTS AND EXPENSES AND PLAINTIFFS’ SERVICE AWARDS
    	
50
    
	
 
    	
 
    	
 
    
	
XII.
    	
FINAL APPROVAL
    	
52
    
	
 
    	
 
    	
 
    
	
XIII.
    	
MODIFICATION OR TERMINATION OF THIS   SETTLEMENT AGREEMENT
    	
54
    
	
 
    	
 
    	
 
    
	
XIV.
    	
CONTINUING JURISDICTION
    	
59
    
	
 
    	
 
    	
 
    
	
XV.
    	
GENERAL MATTERS AND RESERVATIONS
    	
60
    

 

i

 

TABLE OF EXHIBITS

 

	
 
    	
Exhibit
    
	
 
    	
 
    
	
Sample   Claim Form
    	
A
    
	
 
    	
 
    
	
Proposed   Final Judgment
    	
B
    
	
 
    	
 
    
	
Proposed   Final Approval Order
    	
C
    
	
 
    	
 
    
	
Long   Form Notice
    	
D
    
	
 
    	
 
    
	
Plan   of Administration and Distribution
    	
E
    
	
 
    	
 
    
	
Proposed   Preliminary Approval Order
    	
F
    
	
 
    	
 
    
	
Publication   Notice
    	
G
    
	
 
    	
 
    
	
Escrow   Agreement
    	
H
    
	
 
    	
 
    
	
Sample   Merchant Services Agreement
    	
I
    
	
 
    	
 
    
	
Declaration   of Settlement Administrator
    	
J
    

 

ii

 

WHEREAS, in or around March 2007, several independent Truck Stops filed lawsuits on behalf of a proposed class of independent Truck Stops and retail fueling merchants against Comdata and/or Ceridian in the U.S. District Court for the Eastern District of Pennsylvania and, in or around June 2007, filed similar lawsuits against Comdata, Ceridian and/or the Major Chains  in the U.S. District Court for the Middle District of Tennessee (the “Actions” as defined below) alleging, among other things, that certain provisions in Comdata’s Merchant Services Agreements with members of the proposed class, as well as certain supposed agreements with the Major Chains, violated Section 1 and/or Section 2 of the Sherman Act;

 

WHEREAS, the actions filed in the U.S. District Court for the Eastern District of Pennsylvania were consolidated by the Honorable James Knoll Gardner under Civil Action No. 07-CV-1078-JKG and certain Plaintiffs’ Class Counsel were appointed interim Co-Lead Counsel and Liaison Counsel for the Plaintiffs and the proposed class;

 

WHEREAS, on May 1, 2007, Plaintiffs filed on behalf of themselves and the proposed class a Consolidated Amended Complaint against Comdata and Ceridian in the U.S. District Court for the Eastern District of Pennsylvania alleging violations of Sections 1 and 2 of the Sherman Act;

 

WHEREAS, on June 22, 2007, Comdata filed an answer with affirmative defenses to Plaintiffs’ Consolidated Amended Complaint and Ceridian moved to dismiss Plaintiffs’ Consolidated Amended Complaint for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure;

 

WHEREAS, the cases filed in the U.S. District Court for the Middle District of Tennessee were dismissed voluntarily in or around July 2007;

 

1

 

WHEREAS, on September 18, 2007, after Ceridian’s Motion to Dismiss the Consolidated Amended Complaint was fully briefed, and after Plaintiffs and Ceridian had entered into a tolling agreement providing for, inter alia, Ceridian’s cooperation with Plaintiffs in discovery, Plaintiffs dismissed their claims without prejudice as to Ceridian only and Ceridian’s Motion to Dismiss was denied as moot on December 19, 2007;

 

WHEREAS, Plaintiffs and Comdata subsequently engaged in extensive document and deposition discovery, including the production of millions of pages of documents by Comdata, Plaintiffs, and third-parties, collectively;

 

WHEREAS, on April 6, 2009, Plaintiffs filed a Motion for Leave to File a Second Consolidated Amended Complaint, seeking, among other things, to rejoin Ceridian as a party to the case and to assert claims under Sections 1 and 2 of the Sherman Act against each of the Major Chains;

 

WHEREAS, with its Motion for Leave to File a Second Consolidated Amended Complaint pending before the Court, in order to preserve the statute of limitations, Plaintiffs on behalf of themselves and a proposed class of independent Truck Stops and other retail fueling merchants filed on May 21, 2009 a separate case in the U.S. District Court for the Eastern District of Pennsylvania against Ceridian and the Major Chains only;

 

WHEREAS, on July 17, 2009, Plaintiffs filed their Motion for Class Certification in the original case pending against Comdata and Plaintiffs and Comdata thereafter engaged in expert discovery, including depositions, with respect to one another’s class certification experts;

 

WHEREAS, before Comdata’s opposition to Plaintiffs’ Motion for Class Certification was due, on November 10, 2009, the Court dismissed Plaintiffs’ Motion for Class Certification as moot, and on March 25, 2010, Plaintiffs’ separate lawsuit against Ceridian and the Major

 

2

 

Chains was consolidated into Plaintiffs’ lawsuit against Comdata and Plaintiffs were granted leave to file a Second Consolidated Amended Complaint;

 

WHEREAS, on March 31, 2010, Plaintiffs filed a Second Consolidated Amended Complaint naming Comdata, Ceridian and the Major Chains as Defendants;

 

WHEREAS, all Defendants moved to dismiss the Second Consolidated Amended Complaint, and on March 24, 2011, the Court denied such motions as to all Defendants except for the TA Defendants and ordered Plaintiffs to file a Third Consolidated Amended Complaint (Marchbanks Truck Service Inc. v. Comdata Network, Inc., No. 07-1078, 2011 U.S. Dist. LEXIS 158011, 2011 WL 11559549 (E.D. Pa. Mar. 24, 2011));

 

WHEREAS, on April 21, 2011, Plaintiffs filed their Third Consolidated Amended Complaint against all Defendants;

 

WHEREAS, on May 6, 2011, all Defendants, with the exception of Comdata, moved to dismiss the Third Consolidated Amended Complaint and, on May 19, 2011, Comdata filed an Answer with Affirmative Defenses to Plaintiffs’ Third Consolidated Amended Complaint;

 

WHEREAS, on March 29, 2012, the Court denied Defendants’ motions to dismiss the Third Consolidated Amended Complaint and the remaining Defendants filed answers on April 30, 2012;

 

WHEREAS, during the pendency of the various motions to dismiss, Plaintiffs and Defendants engaged in additional and substantial document and deposition discovery;

 

WHEREAS, during this time period, all Plaintiffs and Defendants participated in a settlement conference with Magistrate Judge Perkin on or about May 9, 2011, and Plaintiffs, on the one hand, and Comdata and Ceridian, on the other, participated in a separate private

 

3

 

mediation on July 12, 2012, with retired District Court Judge Layn R. Phillips of Irell & Manella LLP, but were unable to reach any settlements;

 

WHEREAS, on June 7, 2013, Plaintiffs filed their second Motion for Class Certification under Rule 23(b)(3) of the Federal Rules of Civil Procedure, seeking certification of a litigation class, defined in material part to include “truck stops and other retail merchants with one or more physical locations in the United States that paid transaction fees on Over-the-Road (“OTR”) Fleet Card transactions, which fees were computed based on a percentage of the purchase amount, directly to Comdata at any time from March 1, 2003 through June 30, 2010 [with the exception of] the Major Chains [and] Wilco Hess....”

 

WHEREAS, Plaintiffs’ June 7, 2013 Motion for Class Certification was accompanied by the opinions of three economic experts for class and merits purposes (all of whom were deposed), to which Comdata and the other Defendants responded on September 27, 2013, proffering the opinions of a total of three economic experts, two of which related both to class and the merits (all of whom were deposed);

 

WHEREAS, on August 30, 2013, Plaintiffs moved to disqualify certain of Defendants’ experts and Defendants moved to disqualify Plaintiffs’ proffered experts, responses to such motions were filed on September 20, 2013, and a hearing was held on those motions on October 28 and 29, 2013;

 

WHEREAS, Ceridian filed a motion for summary judgment on Plaintiffs’ claims against it only on September 11, 2013, Plaintiffs responded on November 26, 2013, and Ceridian filed a reply on December 20, 2013;

 

WHEREAS, a trial was scheduled in this matter to begin on August 18, 2014;

 

4

 

WHEREAS, while Ceridian’s motion for summary judgment, the various motions to disqualify experts, and Plaintiffs’ class certification motion were pending, the Parties all participated in a private mediation before Professor Eric D. Green of Resolutions LLC on December 9, 2013;

 

WHEREAS, after extensive subsequent arm’s length negotiations took place between Class Counsel and Comdata’s Counsel and Ceridian’s Counsel under the supervision of Professor Green during December 2013, Plaintiffs, on the one hand, and Comdata and Ceridian, on the other hand, reached a settlement, which was documented in a detailed memorandum of understanding that was signed on behalf of those parties on December 31, 2013;

 

WHEREAS, after further arm’s length negotiations took place between Class Counsel and Counsel for Love’s, Plaintiffs, on the one hand, and Love’s, on the other hand, reached a settlement, which was documented in a separate memorandum of understanding that was signed on behalf of those parties on January 3, 2014;

 

WHEREAS, on or about January 9, 2013, the Court held a settlement conference with Class Counsel and TA Defendants’ Counsel and Pilot Defendants’ Counsel, and after additional separate arm’s length negotiations between Class Counsel and counsel for the TA Defendants and the Pilot Defendants under the supervision of the Court, those parties reached separate settlements, which were documented in a joint memorandum of understanding that was signed on behalf of those parties on January 21, 2014;

 

WHEREAS, the Parties’ obligations with respect to each of the memoranda of understanding are separate, distinct, and not contingent upon one another, but the Parties have agreed that, for the convenience of the Court and for purposes of streamlining the settlement

 

5

 

process for the benefit of the Settlement Class, those settlements shall be memorialized in a single master Settlement Agreement;

 

WHEREAS, Plaintiffs and Plaintiffs’ Class Counsel, having conducted substantial discovery, investigated the facts and underlying events relating to the subject matter of their claims, and carefully analyzed the applicable legal principles, believe based upon their investigation, and taking into account the risks, uncertainties, burdens, and costs of further prosecution of their claims, and taking into account the substantial benefits to be received, that the resolutions and compromises reached between Plaintiffs, on the one hand, and Defendants, on the other, which were initially described in the Parties’ various memoranda of understanding, and which are set forth in greater detail herein, are fair, reasonable and adequate and that settlement under the terms set forth herein is in the best interests of the proposed Settlement Class;

 

WHEREAS, Defendants, for the purpose of avoiding the burden, expense, risk, and uncertainty of continuing to litigate the Plaintiffs’ claims, and for the purpose of putting to rest all controversies with Plaintiffs and the Settlement Class that were or could have been alleged, and without any admission of liability or wrongdoing whatsoever, desire to enter into this settlement, which was initially described in the Parties’ various memoranda of understanding, and which is set forth in greater detail herein;

 

WHEREAS, it is agreed between Plaintiffs, on the one hand, and Defendants, on the other, that this Settlement Agreement shall not be deemed or construed to be an admission, concession, or evidence of any violation of any federal, state, or local statute, regulation, rule, or other law, or principle of common law or equity, or of any liability or wrongdoing whatsoever,

 

6

 

by any Defendant, or of the truth of any of the claims that the Plaintiffs have asserted against any Defendant;

 

NOW, THEREFORE, without any admission or concession by Plaintiffs of any lack of merit to their allegations and claims, and without any admission or concession by Defendants of any liability or wrongdoing or lack of merit in their defenses, in consideration of the mutual covenants and terms contained herein, and subject to the final approval of the Court, the Parties agree as follows:

 

I.                                        DEFINITIONS

 

1.             For purposes of this Settlement Agreement, the following words and terms shall be defined to have the meanings set forth below, and all undefined words and phrases shall have their usual and customary meaning.

 

a.             “Action” or “Actions” means all pending or prior actions that were consolidated in the United States District Court for the Eastern District of Pennsylvania under the caption Marchbanks Truck Service, Inc. d/b/a/ Bear Mountain Truck Stop, et al. v. Comdata Network, Inc. d/b/a Comdata Corporation, No. 07-0178-JKG (E.D. Pa.), as well as any other related cases, including, but not limited to, the following:

 

1.             Universal Delaware, Inc. d/b/a Gap Truck Stop v. Comdata Network, Inc., et al., No. 07-1078 (E.D. Pa.);

 

2.                                      Marchbanks Truck Service, Inc. d/b/Bear Mountain Travel Stop v. Comdata Network, Inc. et al., No. 07-1128 (E.D. Pa.);

 

3.                                      Mahwah Fuel Stop v. Comdata Network, Inc. et al., No. 07-1323 (E.D. Pa.);

 

4.             Gerald Krachey d/b/a Krachey’s BP South v. Comdata Network, Inc., No. 07-1732 (E.D. Pa.);

 

5.             Walt Whitman Truck Stop v. Comdata Network, Inc. et al., No. 07-2829 (E.D. Pa.);

 

7

 

6.             Nu-Way Cooperative v. Comdata Network, Inc. et al., No. 07-1734 (E.D. Pa.);

 

7.             Universal Delaware, Inc. d/b/a Gap Truck Stop v. Ceridian Corporation et al., No. 09-2327 (E.D. Pa.);

 

8.             Riverbend Truck Stop & Palace Casinos, Inc. v. Ceridian Corporation, et al., No. 07-647 (M.D. Tenn.);

 

9.             Minnows LLC v. Ceridian Corporation, et al., No. 07-658 (M.D. Tenn.);

 

10.          Dickerson Petroleum, Inc.  v. Ceridian Corporation, et al.,  No. 07-659 (M.D. Tenn.); and

 

11.          VGD Services v. Ceridian Corporation, et al., No. 07-660 (M.D. Tenn.).

 

b.             “Aggregate Settlement Fund” means the settlement fund created within five (5) business days following the Final Effective Date by transferring the Comdata/Ceridian Settlement Fund, the Love’s Settlement Fund, the Pilot Settlement Fund, and the TA Settlement Fund into a single sub-account within the Escrow Account.

 

c.             “Attorneys’ Fee Award” means any and all attorneys’ fees that are awarded by the Court for the work performed for the benefit of the members of the Settlement Class by Plaintiffs’ Class Counsel or other counsel for Plaintiffs or the proposed class in the Actions, as further described in Section XI of this Settlement Agreement.

 

d.             “Buying Groups” means and is limited to North American Truck Stop Network (“NATSN”), Professional Transportation Partners, LLC (“PTP”), AMBEST, and Roady’s.

 

e.             “Ceridian” means Defendant Ceridian Corporation n/k/a Ceridian LLC.

 

f.             “Ceridian’s Counsel” means Carolyn P. Short and Shannon E. McClure of Reed Smith LLP.

 

8

 

g.             “Ceridian Releasees” means Ceridian, together with its affiliates, subsidiaries, shareholders, officers, directors, managers, and representatives and their predecessors, assignees and successors in interest and its or their respective past, present or future officers, directors, managers, stockholders, agents, employees, partners, trustees, parents, subsidiaries, divisions, affiliates, heirs, administrators, purchasers, assigns and other legal representatives, including, but not limited to, Fidelity National Financial, Inc., Thomas H. Lee Partners, L.P., Ceridian Holding LLC, Foundation Holding LLC, Ceridian LLC, Ceridian Co-Issuer Inc., and Ceridian HCM Holding Inc. and their direct and indirect subsidiaries, and their predecessors, including but not limited Ceridian Holding Corp., Ceridian Intermediate Corp., Foundation Holdings, Inc. and Ceridian Corporation.

 

h.             “Claim” means the claim of a Settlement Class Member or his or her or its representative submitted on a Claim Form as provided in this Settlement Agreement.

 

i.              “Claimant” means a Settlement Class Member who has submitted a Claim.

 

j.              “Claim Bar Date” means the deadline by which Settlement Class Members must submit a timely, valid, and complete Claim Form.

 

k.             “Claim Forms” mean the documents, in substantially the same form as Exhibit “A” to this Settlement Agreement.

 

l.              “Claim Period” means the time period in which Settlement Class Members may submit a Claim Form for review to the Settlement Administrator.  The Claim Period shall run for approximately 8 weeks from the Notice Date.  The expiration of the Claim Period shall be specified in the Publication Notice, the Long Form Notice, and the Settlement Website.

 

m.           “Class Notice” means the notice program described in Section VIII.

 

9

 

n.             “Class Objection Period” means the period in which a Settlement Class Member must file any objections to this Settlement Agreement.

 

o.             “Comdata” means Defendant Comdata Network, Inc., n/k/a Comdata Inc. and its successors or assigns.

 

p.             “Comdata Proprietary Transactions” means transactions in which the method of payment used is: (i) the Comdata OTR Fleet Card; or (ii) the Comdata MasterCard where such MasterCard transactions are processed by Comdata rather than by the MasterCard because of the existence of an agreement between Comdata and the merchant.

 

q.             “Court” means the United States District Court for the Eastern District of Pennsylvania.

 

r.              “Comdata’s Counsel” means J. Gordon Cooney, Jr., Steven A. Reed, and R. Brendan Fee of Morgan, Lewis & Bockius LLP and Kevin J. Arquit, Matthew J. Reilly, and Abram J. Ellis of Simpson Thacher & Bartlett LLP.

 

s.             “Comdata/Ceridian Settlement Fund” means the settlement monies deposited into the Escrow Account by Comdata/Ceridian as described in Paragraph 7 of this Settlement Agreement.

 

t.              “Comdata Releasees” means Comdata, together with its affiliates, subsidiaries, assignees, shareholders, officers, directors, managers, and representatives and their predecessors and successors in interest and its or their respective past, present or future officers, directors, managers, stockholders, agents, employees, partners, trustees, parents, subsidiaries, divisions, affiliates, heirs, administrators, purchasers, assigns and other legal representatives, including, but not limited to, Comdata Inc. and its direct and indirect subsidiaries, and its predecessors, Comdata Network, Inc. and Ceridian Stored Value Solutions, Inc.

 

10

 

u.             “Custom-Fee Arrangement” means an agreement between Comdata, on the one hand, and a merchant on the other, under which Comdata will charge the merchant a Merchant Transaction Fee that is lower than its Effective Comdata Proprietary Merchant Transaction Fee on transactions by a particular fleet at the particular merchant’s location.

 

v.             “Defendants” means Comdata, Ceridian, Love’s, the TA Defendants and the Pilot Defendants collectively.

 

w.            “Defense Counsel” means Comdata’s Counsel, Ceridian’s Counsel, Love’s Counsel, the TA Defendants’ Counsel and the Pilot Defendants’ Counsel collectively.

 

x.             “Effective Comdata Proprietary Merchant Transaction Rate” means the Merchant Transaction Fee rate that Comdata charges a merchant on transactions in which no Custom-Fee Arrangement or other special exception applies.

 

y.             “Escrow Agent” means the agreed-upon entity to address and hold for distribution the funds identified in this Settlement Agreement pursuant to the terms of an Escrow Agreement.

 

z.             “Escrow Account” means the custodial or investment account administered by the Settlement Administrator in which the funds to be deposited will be held, invested, administered, and disbursed pursuant to this Settlement Agreement and the Escrow Agreement.

 

aa.          “Escrow Agreement” means the agreement by and among Plaintiffs’ Class Counsel, Defense Counsel, and the Escrow Agent with respect to the escrow of the funds to be deposited into the Escrow Account pursuant to this Settlement Agreement.

 

bb.          “Fairness Hearing” means the hearing that is to take place as provided for in the Preliminary Approval Order for purposes of, among other things: (a) entering the Final Order and Final Judgment and dismissing the Actions with prejudice; (b) determining whether the

 

11

 

settlement should be approved as fair, reasonable, adequate and in the best interests of the Settlement Class Members; and (c) ruling upon an application by Plaintiffs’ Class Counsel for an Attorneys’ Fee Award, Reimbursement for Costs and Expenses and for Plaintiffs’ Service Awards.

 

cc.           “Final Approval Date” means the date on which the Court enters the Final Order and Final Judgment, or the latter of the two in the event the Final Order and Final Judgment are not entered on the same date.

 

dd.          “Final Effective Date” means the latest date on which the Final Order and Final Judgment approving this Settlement Agreement become final.  For purposes of this Settlement Agreement: (1) if no appeal has been taken from the Final Order and Final Judgment, “Final Effective Date” means the date on which the time to appeal therefrom has expired; or (2) if any appeal has been taken from the Final Order and Final Judgment, “Final Effective Date” means the date on which all appeals therefrom, including petitions for rehearing or reargument, petitions for rehearing en banc and petitions for certiorari or any other form of review, have been finally disposed of in a manner that affirms the Final Order and Final Judgment; or (3) if Plaintiffs’ Class Counsel and Defense Counsel agree in writing, the “Final Effective Date” can occur on any other agreed-upon date.

 

ee.           “Final Judgment” means the Court’s final judgment as described in Section XII of this Settlement Agreement, which is to be substantially in the form attached hereto as Exhibit “B”.

 

ff.            “Final Order” means the Court’s final order approving the settlement and this Settlement Agreement, as described in Section XII of this Settlement Agreement, which is to be substantially in the form attached hereto as Exhibit “C”.

 

12

 

gg.           “Long Form Notice” means the Long Form Notice substantially in the form attached hereto as Exhibit “D”.

 

hh.          “Love’s” means Defendant Love’s Travel Stops & Country Stores, Inc.

 

ii.             “Love’s Counsel” means Mack J. Morgan, III of Crowe & Dunlevy P.C.

 

jj.            “Love’s Releasees” means Love’s, together with its affiliates, shareholders, officers, directors, managers, members, and representatives and their predecessors and successors in interest and its or their respective past, present or future officers, directors, managers, members,  stockholders, agents, employees, partners, trustees, parents, subsidiaries, divisions, affiliates, heirs, administrators, purchasers, assigns and other legal representatives.

 

kk.          “Love’s Settlement Fund” means the settlement monies deposited into the Escrow Account by Love’s as described in Paragraph 8 of this Settlement Agreement.

 

ll.             “Lowest Posted Cash Price” shall mean the lowest price posted on signage at a physical location by a merchant for the purchase of fuel.  This price is typically referred to as the “cash price” and is the base price from which discounts or rebates offered to fleets or truckers are often calculated.

 

mm.        “Major Chains” means the Pilot Defendants, the TA Defendants, and Love’s collectively.

 

nn.          “Merchant Services Agreement” means the agreement setting forth the commercial terms under which a merchant accepts an OTR Fleet Card.

 

oo.          “Merchant Transaction Fee” is the fee per transaction paid to an OTR Fleet Card issuer by a Truck Stop or other merchant in connection with a transaction in which a purchaser presents that OTR Fleet Card for payment at the merchant’s location.

 

13

 

pp.                               “Mobile Fueler” means an entity whose primary business is delivering fuel to a customer’s terminal or job site.

 

qq.                               “Net Aggregate Settlement Fund” means the Aggregate Settlement Fund less (1) the Taxes and administrative costs related to the accounts, and (2) any payments approved by the Court, including, but not limited to, any Attorneys’ Fee Award, any Reimbursement for Costs and Expenses, any Plaintiffs’ Service Awards, any Settlement Administration Costs, and any other such expenses and payments as the Court deems appropriate.

 

rr.                                     “Notice Date” means the last date on which dissemination of the Long Form Notice can begin as set forth in the Preliminary Approval Order.

 

ss.                                   “Objector” means any Settlement Class Member who or which timely and properly submits an objection to this settlement that fully complies in all respects with the criteria set forth in Paragraphs 62 and 63 below.

 

tt.                                     “Operative Class Complaint” means the Third Consolidated Amended Complaint filed in the Action.

 

uu.                               “Opt-Out” means any member of the Settlement Class who or which timely and properly excludes itself (or himself or herself) from the Settlement Class that fully complies in all respects with the criteria set forth in Paragraphs 57 and 58 and those exclusion procedures approved by the Court.

 

vv.                               “OTR Fleet Card” means a payment card or card number used by fleets and over-the-road truck drivers to purchase diesel fuel and other items at Truck Stops and other Retail Fueling Faclities and that provides (1) enhanced data capture functionality and (2) purchase controls.

 

14

 

ww.                           “Paragraph” or “Paragraphs” means one or more paragraphs of this Settlement Agreement.

 

xx.                               “Pilot Defendants” means Defendants Pilot Travel Centers LLC and Pilot Corporation collectively.

 

yy.                               “Pilot Defendants’ Counsel” means John H. Bogart of Telos VG PLLC.

 

zz.                                 “Pilot Releasees” means Pilot Travel Centers LLC and Pilot Corporation, together with their affiliates, shareholders, officers, directors, members, managers, and representatives and their predecessors and successors in interest and their respective past, present or future officers, directors, stockholders, members, agents, employees, partners, trustees, parents, subsidiaries, divisions,  heirs, administrators, purchasers, assigns and other legal representatives.

 

aaa.                        “Pilot Settlement Fund” means the settlement monies deposited into the Escrow Account by the Pilot Defendants as described in Paragraph 9 of this Settlement Agreement.

 

bbb.                        “Plan of Administration and Distribution” means the plan pursuant to which the Net Settlement Fund will be distributed to Claimants, which such plan is attached hereto as Exhibit “E”.

 

ccc.                           “Principal OTR Fleet Card Competitor” means the principal OTR Fleet Cards with which the OTR Fleet Card issued by Comdata competes, which, for purposes of this Settlement Agreement, consists of TCH, EFS, T-Chek and WEX/FleetOne, together with their respective successors and assigns.

 

ddd.                        “Parties” means Plaintiffs and Defendants collectively, as each of those terms is defined in this Settlement Agreement.

 

15

 

eee.                           “Plaintiffs” means Marchbanks Truck Service, Inc. d/b/a Bear Mountain Travel Stop, Mahwah Fuel Stop, Gerald F. Krachey d/b/a/ Krachey’s BP South, and Walt Whitman Truck Stop, Inc.  Mahwah Fuel Stop includes Royal Gas and Diesel Stations, LLC.

 

fff.                              “Plaintiffs’ Service Award” means any incentive or service payments that the Court orders to be paid to any Plaintiff, but not including any Attorneys’ Fee Award, Reimbursement for Costs and Expenses, the amount any Plaintiff receives under the Plan of Administration and Distribution, or any Settlement Administration Costs.

 

ggg.                           “Plaintiffs’ Class Counsel” or “Class Counsel” means Eric L. Cramer and Andrew C. Curley of Berger & Montague, P.C., Eric B. Fastiff and Dean Harvey of Lieff Cabraser Heimann & Bernstein, LLP, and Stephen R. Neuwirth and Dale H. Oliver of Quinn Emanuel Urquhart & Sullivan, LLP.

 

hhh.                        “Preliminary Approval Date” means the date on which the Court enters the Preliminary Approval Order.

 

iii.                                    “Preliminary Approval Order” means the order to be entered by the Court preliminarily approving the settlement as outlined in Section VII of this Settlement Agreement and to be substantially in the form attached hereto as Exhibit “F”.

 

jjj.                                 “Publication Notice” means the Publication Notice substantially in the form attached hereto as Exhibit “G”.

 

kkk.                        “Reimbursement for Costs and Expenses” means Plaintiffs’ request for recovery out of the Aggregate Settlement Fund of costs and expenses reasonably incurred by Plaintiffs’ Class Counsel and/or the Plaintiffs in investigating, prosecuting, and settling this matter for the benefit of Plaintiffs and members of the Settlement Class, including, e.g., fees and costs

 

16

 

for experts and consultants, but not including any Plaintiffs’ Service Awards or Settlement Administration Costs, as further described in Section XI of this Settlement Agreement.

 

lll.                                    “Release” means the release, waiver and covenant not to sue set forth in Section VI of this Settlement Agreement and in the Final Order and Final Judgment.

 

mmm.            “Released Claims” means any claim covered by the Release.

 

nnn.                        “Releasees” means the Comdata Releasees, the Ceridian Releasees, the Love’s Releasees, the Pilot Releasees, and the TA Releasees collectively.

 

ooo.                        “Retail Fueling Facilities” means merchants that sell fuel, including diesel fuel, at retail to the public generally and to truckers and fleets.

 

ppp.                        “Settlement Administrator” means Rust Consulting, Inc., which shall effectuate and administer the Class Notice, the exclusion process for Opt-Outs, the Claims process, and distribution(s) to eligible Claimants under the supervision of Plaintiffs’ Class Counsel and the Court, and which firm is unrelated to and independent of the Plaintiffs, Plaintiffs’ Class Counsel, and Defense Counsel, within the meaning of Treasury Regulations § 1.468B-1(d) and § 1.468B-3(c)(2)(A).

 

qqq.                        “Settlement Administration Costs” means the expenses incurred in the administration of this Settlement Agreement, including all amounts awarded by the Court for costs associated with providing Class Notice, locating members of the Settlement Class and determining their eligibility to submit a Claim, administering, calculating, and distributing the Net Aggregate Settlement Fund to eligible Claimants, other costs of claims administration, payment of Taxes or administration costs with respect to the Escrow Account(s), and other reasonable third-party fees and expenses incurred by the Settlement Administrator or other consultants retained by agreement of the Parties or by authority of the Court to assist with claims administration in

 

17

 

connection with prosecuting, handling, and settling the Actions, and administering the terms of this Settlement Agreement, that are not categorized as an Attorneys’ Fee Award, Reimbursement for Costs and Expenses, or a Plaintiffs’ Service Award.

 

rrr.                                 “Settlement Agreement” means this Definitive Master Settlement Agreement and the exhibits attached hereto or incorporated herein, including any subsequent amendments and any exhibits to such amendments.

 

sss.                              “Settlement Class” means the class defined for settlement purposes only in Section II of this Settlement Agreement.

 

ttt.                                 “Settlement Class Exclusion Period” means the period in which a member of the Settlement Class may timely and properly become an Opt-Out, which period is specified in Paragraph 58 below.

 

uuu.                        “Settlement Class Members” or “Settlement Class Member” means a member of the Settlement Class who or which does not submit a timely and valid request for exclusion from the settlement.

 

vvv.                        “Settlement Class Period” means the time period between March 1, 2003 and the Preliminary Approval Date.

 

www.                  “Settlement Website” means the dedicated website to be established for purposes of this Settlement Agreement, which is described in Paragraph 49 below.

 

xxx.                        “TA Defendants” means Defendants TravelCenters of America LLC, TravelCenters of America Holding Company LLC, TA Operating LLC, and Petro Stopping Centers collectively.

 

yyy.                        “TA Defendants’ Counsel” means Jane E. Willis and Matthew L. McGinnis of Ropes & Gray LLP.

 

18

 

zzz.                           “TA Releasees” means the TA Defendants, together with their affiliates, shareholders, officers, directors, members, managers, and representatives and their predecessors and successors in interest and each entities’ respective past, present or future officers, directors, managers, stockholders, agents, employees, partners, trustees, parents, direct and indirect subsidiaries, divisions, affiliates, heirs, administrators, purchasers, assigns and other legal representatives.

 

aaaa.                 “TA Settlement Fund” means the settlement monies deposited into the Escrow Account by the TA Defendants as described in Paragraph 10 of this Settlement Agreement.

 

bbbb.                 “Taxes” means (1) any and all applicable taxes, duties, and similar charges imposed by a government authority (including any estimated taxes, interest, or penalties) arising in any jurisdiction, if any, (A) with respect to the income or gains earned by or in respect of the Escrow Account including, without limitation, any taxes that may be imposed upon Plaintiffs or Defendants with respect to any income or gains earned by or in respect of an Escrow Account for any period while it is held by the Escrow Agent during which the Escrow Account does not qualify as a Qualified Settlement Fund for federal or state income tax purposes, or (B) with respect to the income or gains earned by or in respect of any of the Escrow Account, or by way of withholding as required by applicable law on any distribution by the Escrow Agent of any portion of the Escrow Account to the Settlement Administrator, Settlement Class Members, or other persons entitled to such distributions pursuant to this Settlement Agreement, and (2) any and all expenses, liabilities, and costs incurred in connection with the taxation of the Escrow Account (including without limitation expenses of tax attorneys and accountants, if any).

 

19

 

cccc.                     “Truck Stops” means merchants that, among other things, sell diesel fuel at retail and provide other services and amenities to over-the road fleets and truckers, such as overnight parking, showers, a convenience store, a truck service center, and/or a restaurant.

 

dddd.                 The terms “he or she” and “his or her” include “it” or “its” where applicable, and vice versa.

 

eeee.                     Other capitalized terms used in this Settlement Agreement but not defined in this Section I shall have the meanings ascribed to them elsewhere in this Settlement Agreement.

 

II.                                   SETTLEMENT CLASS

 

2.                                      Pursuant to the procedure described in Paragraphs 42, 44 and 73 below, Plaintiffs will seek, and Defendants will not oppose, the Court’s certification of a class for settlement purposes only consisting of:  All owners and operators of Truck Stops or other Retail Fueling Facilities with at least one physical location in the United States that paid Merchant Transaction Fees directly to Comdata on Comdata Proprietary Transactions and that were calculated based on a percentage of the face amount of the transaction during the Settlement Class Period with the exception of Mobile Fuelers, Wilco-Hess locations, the Pilot Defendants, the TA Defendants, and Love’s and any of the parents, subsidiaries, affiliates, franchisees or employees of any of the Defendants.

 

III.                              CLASS SETTLEMENT ESCROW ACCOUNT

 

3.                                      The Parties and the Escrow Agent will establish the Escrow Account as being at all times a Qualified Settlement Fund pursuant to Internal Revenue Code § 468B and the Regulations issued thereto.  All payments to be made by Defendants pursuant to Section IV below shall be made by wire transfer into separate sub-accounts within an Escrow Account at

 

20

 

Huntington National Bank pursuant to an Escrow Agreement attached as Exhibit “H” hereto.  All (i) Taxes on the income of the Escrow Account and (ii) expenses and costs incurred with taxes paid from the Escrow Account (including, without limitation, expenses of tax attorneys and accountants) shall be timely paid out of the Escrow Account without prior Order of the Court.

 

4.                                      The Escrow Agent shall invest the funds paid into the Escrow Account by Defendants pursuant to this Settlement Agreement exclusively in instruments backed by the full faith and credit of the U.S. Government or fully insured by the U.S. Government or an agency thereof, including, e.g., U.S. Treasury Bills, U.S. Treasury Money Market Funds, or a bank account insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the guaranteed FDIC limit.  Defendants shall not bear any responsibility or liability related to the investment of the funds paid into the Escrow Account by the Escrow Agent.

 

5.                                      The Parties agree that the Settlement Administrator shall be responsible for filing tax returns for the Qualified Settlement Fund and paying from the Escrow Account any Taxes owed with respect to the Qualified Settlement Fund.  The Parties hereto agree that the Escrow Account shall be treated as a Qualified Settlement Fund from the earliest date possible, and agree to any relation-back election required to treat the Escrow Account as a Qualified Settlement Fund from the earliest date possible.

 

6.                                      In no event shall any of the Releasees have any obligation, responsibility, or liability arising from or relating to the administration, maintenance, preservation, investment, use, allocation, adjustment, distribution, disbursement, or disposition of any funds in the Escrow Account.

 

21

 

IV.                               PAYMENTS TO THE CLASS SETTLEMENT ESCROW ACCOUNT

 

7.                                      Within five (5) business days after the Preliminary Approval Date, Comdata and Ceridian shall cause a total cash payment in the amount of one hundred million dollars ($100,000,000.00) to be paid by wire transfer into a dedicated sub-account within the Escrow Account, which Comdata and Ceridian shall be under no obligation to restore, supplement, or replenish.  Although Comdata and Ceridian are jointly responsible for the entire amount of this payment, neither Plaintiffs nor Plaintiffs’ Class Counsel shall have a role in determining the allocation of Comdata’s and Ceridian’s respective contributions to the Comdata/Ceridian Settlement Fund.

 

8.                                      Within five (5) business days after the Preliminary Approval Date, Love’s shall cause a total cash payment in the amount of ten million dollars ($10,000,000.00) to be paid by wire transfer into a dedicated sub-account within the Escrow Account, which Love’s shall be under no obligation to restore, supplement, or replenish.

 

9.                                      Within five (5) business days after the Preliminary Approval Date, the Pilot Defendants shall cause a total cash payment in the amount of ten million dollars ($10,000,000.00) to be paid by wire transfer into a dedicated sub-account within the Escrow Account, which the Pilot Defendants shall be under no obligation to restore, supplement, or replenish.  Although each of the Pilot Defendants is jointly responsible for the entire amount of this payment, neither Plaintiffs nor Plaintiffs’ Class Counsel shall have a role in determining the allocation of each Pilot Defendants’ respective contribution to the Pilot Settlement Fund.

 

10.                               Within five (5) business days after the Preliminary Approval Date, the TA Defendants shall cause a total cash payment in the amount of ten million dollars ($10,000,000.00) to be paid by wire transfer into a dedicated sub-account within the Escrow

 

22

 

Account, which the TA Defendants shall be under no obligation to restore, supplement, or replenish. Although each of the TA Defendants is jointly responsible for the entire amount of this payment, neither Plaintiffs nor Plaintiffs’ Class Counsel shall have a role in determining the allocation of the TA Defendants’ respective contributions to the TA Settlement Fund.

 

11.                               None of the payments into the Escrow Account described in Paragraphs 7 through 10 above is contingent or dependent on another such payment, each Defendant is responsible for making its own payment into the Escrow Account, and no Defendant shall have any responsibility whatsoever for making a payment into the Escrow Account for any other Defendant (except as specified with regard to the respective amounts separately identified in Paragraphs 7 through 10 above).

 

12.                               The Comdata/Ceridian Settlement Fund, the Love’s Settlement Fund, the Pilot Settlement Fund, and the TA Settlement Fund shall be segregated by the Escrow Agent in separate sub-accounts within the Escrow Account, each of which shall unto itself constitute a Qualified Settlement Fund under Internal Revenue Code § 468B and the Regulations issued thereto, until five (5) days after the Final Effective Date at which time the fund remaining in each separate sub-account shall be combined into the Aggregate Settlement Fund to facilitate the payment of any Attorneys’ Fee Award, any Reimbursement for Costs and Expenses, any Plaintiffs’ Service Awards, and any remaining Settlement Administration Costs and any other such costs and expenses as directed by the Court, as well as the distribution of the Net Aggregate Settlement Fund to Claimants pursuant to the Plan of Administration and Distribution attached as Exhibit “E” to this Settlement Agreement.  No Defendant shall have any reversionary interest in any of the separate Settlement Funds or in any portion of the Aggregate Settlement Fund, regardless of the number of Claimants, except and only to the

 

23

 

extent that any termination rights under this Settlement Agreement are triggered and specifically invoked.

 

13.                               The payments described in Paragraphs 7 through 10 above shall exhaust and fully satisfy any and all payment obligations under this Settlement Agreement of Defendants and any Releasees, and shall extinguish entirely any further obligation, responsibility, or liability to pay any notice expenses, reasonable attorneys’ fees, litigation costs, costs of administration, Taxes, settlement sums, or sums of any kind to the Escrow Account, or to the Plaintiffs or other Settlement Class Members, or to any of their respective counsel, experts, advisors, agents, and representatives, all of whom shall look solely to the Escrow Account for settlement and satisfaction of all claims released in this Settlement Agreement.

 

V.                                    CONSIDERATION PROVIDED TO SETTLEMENT CLASS MEMBERS

 

14.                               The consideration provided to Settlement Class Members consists of (a) a right to make a claim for a monetary payment from the Net Aggregate Settlement Fund, (b) the payment of Plaintiffs’ Class Counsel’s attorneys’ fees and costs as well as the costs of Settlement Administration out of the Aggregate Settlement Fund, (c) an agreement by Comdata not to enforce or not to use certain provisions in Major Chain Merchant Services Agreements, (d) an agreement by Comdata not to enforce or to modify certain provisions in Settlement Class Member Merchant Services Agreements, and (e) an agreement by Comdata to engage in good faith negotiations with Buying Groups.  The consideration identified in (c)-(e) of the preceding sentence and described more fully in Section V.B-V.D of this Settlement Agreement are the sole and exclusive obligation of Comdata and no other Defendant.

 

24

 

A.                                    Monetary Payment from the Net Aggregate Settlement Fund

 

15.                               Settlement Class Members may receive money payments from the Net Aggregate Settlement Fund by submitting a Claim Form pursuant to the claims process specified in the Plan of Administration and Distribution attached as Exhibit “E” hereto, which Plaintiffs will propose to the Court in moving for preliminary approval of this Settlement Agreement, and as later or otherwise modified and ordered by the Court.

 

16.                               No person shall have any claim against the Defendants, Defense Counsel, Plaintiffs, Plaintiffs’ Class Counsel, Releasees and/or the Settlement Administrator based on any determinations, distributions, or awards made in good faith with respect to any Claim Form.  This provision does not affect or limit in any way the right of review by the Court of any disputed Claim Forms as provided in this Settlement Agreement.

 

B.                                    Non-Enforcement/Non-Use of Certain Provisions in Major Chain Merchant Services Agreements

 

17.                               For a period of five (5) years from the Preliminary Approval Date, Comdata will not enforce Section 3(b) in its Merchant Services Agreement with the TA Defendants or any one of them (or a similar provision in any subsequent agreement), which provides that the TA Defendants or any one of them must:

 

“refrain from any active sales effort to convert customers of Comdata to any other third party billing, debit or credit program, or any active effort to convert such customers to an in-house open account or billing program/system; provided, however, that it is understood that this Section 3(b) does not restrict or prohibit Merchant from maintaining its own billing, debit or credit programs/systems and, provided, further, that Merchant may participate in the billing, debit or credit programs of other third party billing service companies.  Additionally, this Section 3(b) shall not be construed to restrict or prohibit Merchant from identifying and engaging trucking companies using criteria other than being a Comdata customer for the marketing, promotion and sales by Merchant of Merchant’s various billing, debit or credit programs/systems or acceptance of other billing, debit or credit systems at Merchant, and in any case, the foregoing does not prohibit Merchant from accepting the request of a Comdata customer to

 

25

 

use or convert to a Merchant billing, debit or credit program/system or other service or system or acceptance of another third party billing, debit or credit system on that customer’s behalf.”

 

and for a period of five (5) years from the Preliminary Approval Date, Comdata will not enforce or include any similar provision preventing the TA Defendants or any one of them from active sales efforts to convert fleet customers of Comdata to any other billing program, including in-house open accounts.

 

18.                               For a period of five (5) years from the Preliminary Approval Date, Comdata will not enforce Section 3(b) in its Merchant Services Agreement with Love’s (or a similar provision in any subsequent agreement), which provides that Love’s must:

 

“refrain from any active, targeted sales effort to convert customers of [Comdata] from [Comdata] payment methods to any third party fuel card or billing program; provided, however, that it is understood that this Section 3(b) does not restrict or prohibit Merchant from maintaining its own billing, debit or credit programs/systems and, provided, however, that it is understood that this Section 3(b) does not restrict or prohibit Service Center from maintaining its own fuel card or billing program or participating in the fuel cards or billing programs of third parties.  Additionally, this Section 3(b) does not (and shall not be construed to) restrict or prohibit Service Center from identifying customers using criteria other than being a Comdata customer for the marketing, promotion and sales by Service Center of Service Center’s fuel card or billing program, or acceptance of other fuel cards or billing programs at Service Center, and in any case, the foregoing does not prohibit Service Center from: (1) accepting the request of a Comdata customer to use or convert to a Service Center fuel card or billing program or another third party fuel card or billing program; or (2) participating in any conversion (or proposed conversion) of a Comdata customer to a third party fuel card or billing program if either: (a) Service Center has the ability to grow the amount of fuel volumes purchased by any Comdata customer from Service Center, or (b) the amount of fuel volumes committed to Service Center by any Comdata customer are at risk of reduction”

 

and for a period of five (5) years from the Preliminary Approval Date, Comdata will not enforce or include any similar provision preventing Love’s from active sales efforts to convert fleet customers of Comdata to any other billing program, including in-house open accounts.

 

26

 

19.                               For a period of five (5) years from the Preliminary Approval Date, Comdata will not enforce or insert in Merchant Services Agreements with any Major Chain, any provision that requires that Major Chain to refrain from active sales efforts to convert fleet customers of Comdata to any other billing program, including in-house open accounts, including any provision similar to the provisions described above in Paragraphs 17 and 18.

 

20.                               Comdata agrees that for a period of five (5) years from the Preliminary Approval Date, it will not include or enforce in any Merchant Services Agreement with any Major Chain a provision that would require that Major Chain to pay to Comdata a Merchant Transaction Fee that is equal to or greater than the highest Merchant Transaction Fee paid by that Major Chain to any other competing OTR Fleet Card supplier.

 

C.                                    Non-Enforcement/Modification of Certain Provisions in Settlement Class Member Merchant Services Agreements

 

21.                               For a period of five (5) years from the Preliminary Approval Date, Comdata will not enforce in existing Settlement Class Member Merchant Services Agreements and will not insert in new agreements with Settlement Class Members any provision that requires such merchants to refrain from active sales efforts to convert fleet customers of Comdata to any other billing program, including in-house open accounts.  For the sake of clarity, an example of the contractual provision referenced herein can be found in Section 3(b) of the sample Comdata Merchant Services Agreement attached as Exhibit “I”.

 

22.                               For a period of five (5) years from the Preliminary Approval Date, Comdata will not enforce in existing Settlement Class Member Merchant Services Agreements and will not insert in new agreements with Settlement Class Members any provision that requires such merchants to pay to Comdata and/or its cardholders an amount equal to the amount of any rebates or discounts per gallon of fuel purchased which the merchant pays to any other

 

27

 

competing OTR Fleet Card issuer and/or its cardholders.  For avoidance of doubt, this means that Comdata shall not bar any merchant accepting any payment card offered by Comdata from offering a more favorable discount to a trucker or fleet using a rival OTR Fleet Card than that merchant offers to fleets or truckers using Comdata.  For the sake of clarity, an example of the contractual provision referenced herein can be found in Section 3(g) of the sample Comdata Merchant Services Agreement attached as Exhibit “I”.

 

23.                               Comdata agrees that any provision in existing Settlement Class Member Merchant Services Agreements or in new Merchant Services Agreements with Settlement Class Members that obligates the merchant to charge Comdata cardholders its “lowest cash price” shall only obligate such merchants to charge Comdata cardholders the Lowest Posted Cash Price, and not the credit price, if such merchant charges a higher credit price.  Nothing in any such provision shall preclude any Settlement Class Member from offering additional discounts or rebates from the Lowest Posted Cash Price to a trucker or fleet using a rival OTR Fleet Card and Comdata further states that the offering of any such discount or rebate by such merchant shall not trigger any of the obligations with regard to surcharging set forth in Paragraph 25 below.  For the sake of clarity, an example of the contractual provision referenced herein can be found in Section 3(c) of the sample Comdata Merchant Services Agreement attached as Exhibit “I”.

 

24.                               For a period of five (5) years from the Preliminary Approval Date, Comdata will not seek to include in any Merchant Services Agreement with any Settlement Class Member a most favored nations clause or other similar contractual provision that would require such merchant to pay to Comdata a Merchant Transaction Fee that is equal to or greater than the highest Merchant Transaction Fee paid by that merchant to any other OTR Fleet Card issuer.

 

28

 

25.                               For a period of five (5) years from the date ninety (90) days after mailing of the Long Form Notice, Comdata will not enforce in existing Settlement Class Member Merchant Services Agreements and will not insert in new agreements with Settlement Class Members any provision that completely prohibits such merchants from surcharging Comdata Proprietary Transactions.  For the sake of clarity, an example of the contractual provision referenced herein can be found in Section 3(d) of the sample Comdata Merchant Services Agreement attached as Exhibit “I”.  During this five-year period, Comdata shall not prohibit Settlement Class Members from surcharging that portion of Comdata Proprietary Transactions on which a percentage fee is charged (the “Qualifying Portion”) subject to the following conditions:

 

a.                                      A Settlement Class Member may impose a surcharge on the Qualifying Portion of any Comdata Proprietary Transaction provided that the surcharge does not exceed the difference between the merchant’s Effective Comdata Proprietary Merchant Transaction Rate and the lower of (i) the next highest rate (after Comdata) charged to the merchant by Comdata’s Principal OTR Fleet Card Competitors, or (ii) a set amount of 1.5 percent.

 

b.                                      If a Settlement Class Member elects to impose a surcharge on the Qualifying Portion of any Comdata Proprietary Transactions, it must do so for all Comdata Proprietary Transactions performed by fleets at its locations and shall not be permitted to grant exemptions for particular fleet customers, provided, however, that the merchant is not required to surcharge fleets or truckers that are covered by a Custom-Fee Arrangement at that particular location.

 

c.                                       The ability to surcharge the Qualifying Portion of Comdata Proprietary Transactions pursuant to sub-paragraph (a) above shall not apply if any of the merchant’s then-existing Merchant Services Agreement with any of Comdata’s Principal OTR Fleet Card

 

29

 

Competitors prohibits that merchant from levying a surcharge on transactions in which that Principal OTR Fleet Card Competitor’s OTR Fleet Card is presented for payment.

 

d.                                      A Settlement Class Member wishing to impose a surcharge on the Qualifying Portion of any Comdata Proprietary Transactions subject to the terms and conditions set forth herein shall notify Comdata thirty (30) days before implementing the surcharge by completing and submitting a form to be made available by Comdata to all Settlement Class Members upon email request to surcharge@comdata.com and provided with any new Merchant Services Agreement presented to a Settlement Class Member, which shall require the merchant to specifically identify the next highest rate (after Comdata) charged to the merchant by the applicable Principal OTR Fleet Card Competitor, and to attach the portion of the pertinent contract reflecting the rate and duration of the agreement unless prohibited by a confidentiality provision, in which case, the merchant will provide to Comdata a statement under oath (a template for which will be made available by Comdata upon request) setting forth (i) the rate of the next highest Principal OTR Fleet Card Competitor, (ii) the identity of that Principal OTR Fleet Card Competitor (unless prohibited by a confidentiality provision in the pertinent contract), and (iii) the start and end dates of the pertinent agreement with that OTR Fleet Card Competitor.  Nothing in this Paragraph shall preclude a Settlement Class Member from surcharging the difference between the merchant’s Effective Comdata Proprietary Merchant Transaction Rate and 1.5% in the event the next-highest rate charged by a Principal OTR Fleet Card Competitor is less than 1.5%.  If Comdata agrees to match the next-highest rate charged by the OTR Fleet Card Competitor within the thirty-day period, the Settlement Class Member shall not be permitted to impose a surcharge on Comdata Proprietary Transactions.

 

30

 

e.                                       A Settlement Class Member electing to impose a surcharge on any Comdata Proprietary Transaction shall prominently disclose through signage at the diesel fuel pump (i) that the merchant (as opposed to Comdata) is imposing a surcharge, (ii) the amount of the surcharge being imposed, and (iii) the fact that the surcharge being imposed does not exceed the difference between the merchant’s Effective Comdata Proprietary Merchant Transaction Rate and the lower of (a) the next highest rate (after Comdata) charged to the merchant by a Principal OTR Fleet Card Competitor, or (b) a set amount of 1.5 percent.

 

f.                                        The required disclosure described in sub-paragraph (e) above shall not include language that could be deemed to disparage Comdata or its products and such disclosure shall otherwise comply with all applicable state and federal laws regarding misleading or deceptive disclosures.  A factual statement that the surcharge was implemented because of the cost of Comdata’s Merchant Transaction Fee to the Settlement Class Member shall not violate this provision.

 

g.                                       Nothing in this Settlement Agreement shall preclude Comdata from truthfully advising its fleet customers that a Settlement Class Member imposes a surcharge on the Qualifying Portion of its Comdata Proprietary Transactions as long as in doing so, Comdata acknowledges in its first communication that the merchant’s ability to choose to impose a surcharge was obtained through a lawsuit settlement agreement executed by Comdata and that the surcharge does not exceed the difference between the merchant’s Effective Comdata Proprietary Merchant Transaction Rate and the lower of (i) the next highest rate (other than Comdata) charged to the merchant by a Principal OTR Fleet Card Competitor, or (ii) a set amount of 1.5 percent.  In any such communications with fleet customers, Comdata may not include language that could be deemed to disparage any Settlement Class Member or its products

 

31

 

or services and such disclosure shall otherwise comply with all applicable state and federal laws regarding misleading or deceptive disclosures.

 

h.                                      A Settlement Class Member electing to impose a surcharge on the Qualifying Portion of any Comdata Proprietary Transaction shall be required before implementing the surcharge to have installed on an eligible point-of-sale device an update that will facilitate the processing of a transaction on which a surcharge is imposed.  This update will be distributed by Comdata to the supplier of Settlement Class Member’s eligible point-of-sale device within sixty (60) days of the mailing of Long Form Notice.  Any costs or expenses associated with the development and distribution of the update described in this Paragraph, as well as costs associated with correcting any system-wide defect in this update that would materially impair a Settlement Class Member with an eligible point-of-sale device from exercising its rights under this Paragraph shall be borne by Comdata.  Upon installation of the update, the eligible point-of-sale device shall generate a receipt that displays the surcharge as a separate line item, which shall be supplied to the driver by the merchant at the point-of-sale.  If a Settlement Class Member wishing to impose a surcharge pursuant to this Paragraph does not have an eligible point-of-sale device on which the update described herein can be installed, it may still impose a surcharge on the Qualifying Portion of its Comdata Proprietary Transactions, provided that it produces and furnishes to the driver at the point-of-sale documentation setting forth, at a minimum, the products purchased, the prices of those products, and the amount of the surcharge imposed.

 

i.                                          Any Settlement Class Member electing to impose a surcharge pursuant to this Paragraph shall bear sole responsibility for complying with any applicable state laws that prohibit, limit or otherwise govern surcharging.

 

32

 

D.                                    Good Faith Negotiations with Buying Groups

 

26.                               Within six months after the Final Effective Date, each of the Buying Groups, in its discretion, may engage in and complete at least one bi-lateral negotiation with Comdata in which both parties (Comdata, on the one hand, and the Buying Group, on the other) will attempt in good faith to reach a commercially reasonable agreement regarding, inter alia, the rates and commercial terms for Comdata Proprietary Transactions between Comdata and merchant members of those Buying Groups that are members as of July 1, 2014.  It shall be incumbent on any of the Buying Groups in such negotiations to demonstrate in any negotiation pursuant to this Paragraph an ability to bring tangible economic value to Comdata in addition to existing transaction volume.  Comdata shall exercise its discretion and business judgment in good faith: (a) in determining whether a proposal sets forth tangible economic value to Comdata in addition to existing transaction volume; (b) in negotiations related to such proposals; and (c) in making its determination whether to accept or reject a proposal.  Notwithstanding the foregoing, the exercise of good faith by Comdata shall not impose an obligation on Comdata to provide a discounted Merchant Transaction Fee rate to some or all of the Buying Groups or their members, but if a discounted Merchant Transaction Fee rate is provided by Comdata to the membership of any Buying Group, such discounted Merchant Transaction Fee rate and any other accompanying commercial terms shall be memorialized in a separate agreement with the Buying Group.

 

27.                               Any claim by any Buying Group that Comdata has failed to discharge its obligations under Paragraph 26 above to negotiate in good faith shall be initiated within twelve (12) months of the Final Effective Date and shall be resolved in mandatory arbitration before Professor Eric D. Green (the “Arbitrator”) in which both Comdata and the Buying Group must be represented by counsel.  In any such arbitration proceeding, the Buying Group will be

 

33

 

required to establish any failure by Comdata to exercise good faith in negotiations by clear and convincing evidence, and, in all events, if bad faith by Comdata is established, the remedy available to the Buying Group will be limited to declaratory relief, and no other relief.  At the conclusion of any such arbitration proceeding, the Arbitrator shall have the discretion to award attorneys’ fees and costs to the prevailing party in any arbitration between a Buying Group and Comdata pursuant to this Paragraph should he conclude that the losing party brought the matter to arbitration or defended the arbitration in bad faith or generally brought claims or made arguments that did not have a reasonable possibility of succeeding.  In the event that Professor Green is unable to serve as the Arbitrator, Plaintiffs’ Class Counsel and Comdata’s Counsel will meet and confer with regard to a mutually agreeable alternative who shall conduct the arbitration consistent with the terms of this Paragraph.  Arbitration shall be the exclusive means of challenging Comdata’s obligations under Paragraph 26 of this Settlement Agreement.

 

28.                               No Opt-Out shall have any rights under any contract that may be reached between a Buying Group and Comdata pursuant to negotiations authorized by Paragraphs 26.  Nothing in this Paragraph shall be construed as limiting discussions, negotiations or contractual relationships not covered by the terms of this Settlement Agreement.

 

29.                               Nothing in Paragraphs 26 of this Settlement Agreement shall limit the ability of Comdata to, in its own sole discretion, set Merchant Transaction Fee rates, whether default rates or rates applicable to individual Settlement Class Members, groups of Settlement Class Members, or Buying Groups.  Nor shall anything in Paragraphs 26 of this Settlement Agreement impose any limitation upon any other conduct of any Releasee not expressly addressed by the terms hereof.

 

34

 

VI.                               RELEASE, WAIVER AND COVENANT NOT TO SUE

 

30.                               The Parties agree to the following Release, waiver and covenant not to sue, which shall take effect on the Final Approval Date.

 

31.                               In consideration for the relief described above, Plaintiffs and each Settlement Class Member, as well as their respective past, present or future officers, directors, stockholders, members, agents, employees, partners, trustees, parents, subsidiaries, divisions, affiliates, heirs, administrators, purchasers, predecessors, successors, assigns and any other legal representatives, agree to dismiss with prejudice all claims against the Releasees, and grant to each Releasee the broadest general release and covenant not to sue allowed by law, which shall unconditionally and forever bar Plaintiffs and Settlement Class Members from bringing, prosecuting, or participating in any and all claims, known or unknown, that Plaintiffs or Settlement Class Members brought or could have brought against the Defendants as of the Final Approval Date that arise out of, in whole or in part, or relate in any way to the subject matter of, or conduct alleged in, the Operative Class Complaint in the Actions, as well as any prior complaints filed in the Actions.  This Release does not release any claims relating to conduct occurring or actions taken by any of the Defendants or Releasees after the Final Approval Date except to the extent that such claims (a) pertain to the terms of Comdata’s Merchant Services Agreements, either with Settlement Class Members or the Major Chains, as modified by the prospective relief described above, or (b) are based upon conduct or activity that is expressly required by or consistent with the terms of this Settlement Agreement, in which case such claims (except to the extent they relate to any breach of this Settlement Agreement) are expressly released herein.  Nor does this Settlement Agreement release any claims (a) arising out of contractual terms imposed or offered by any OTR Fleet Card issued by any entity other than Comdata, but only where such OTR Fleet Card is generally made

 

35

 

available for acceptance by Truck Stops and Retail Fueling Facilities and is not exclusive to any particular Major Chain;  or (b) involving standard commercial disputes arising in the ordinary course of business, such as disputes regarding lines of credit or other related credit relations, individual chargeback disputes, misappropriation of cardholder data or invasion of privacy, and compliance with technical specifications for acceptance of any Comdata product or other product sold by Defendants.  Further, nothing in this Release shall preclude any action to enforce the terms of the Settlement Agreement.

 

32.                               Without limiting the foregoing, and although the operative pleadings, filings and transcripts speak for themselves, and shall govern the scope of the claims released and forever barred under this Settlement Agreement and that are subject to any covenant not to sue set forth in this Settlement Agreement, and subject to the limitations and exclusions set out in Paragraph 31 above, claims based on the following are specifically released, barred, and subject to the covenant not to sue set forth herein:

 

a.                                      Comdata’s and Ceridian’s alleged monopoly or market power in supposed markets for OTR Fleet Cards or point-of-sale devices that route OTR Fleet Cards, or any other similar markets;

 

b.                                      the alleged inflation of the Comdata Merchant Transaction Fee paid by merchants as a result of alleged anticompetitive conduct of Comdata or any other Defendant;

 

c.                                       the so-called fee restructuring under which Comdata and Ceridian in or around 2000 and 2001 changed its Merchant Transaction Fee structure for non-Major Chain merchants and required those merchants to pay Comdata Merchant Transaction Fees based on a percentage of the face amount of the transaction while retaining a flat Merchant Transaction Fee structure for the Major Chains;

 

36

 

d.                                      any alleged conspiracy between and among Comdata, Ceridian and/or any of the Major Chains with regard to any payment instrument, payment method, or point-of-sale device provided by Comdata;

 

e.                                       the non-issuance of an OTR Fleet Card by each of the Major Chains, and in particular, the claim that such decision was the result of an agreement, including without limitation any oral agreement, written contract or letter of intent, between or among the Major Chains, and Comdata and/or Ceridian;

 

f.                                        the non-acceptance of the TCH Card by each of the Major Chains, and in particular the claim that such decision was the result of an agreement between or among the Major Chains, and Comdata and/or Ceridian;

 

g.                                       the provisions in Comdata’s past and/or present Merchant Services Agreements and any other oral or written agreements or understandings between Comdata and/or Ceridian and the Major Chains, including without limitation, the provisions that Plaintiffs have described as the transaction fee MFN, the fuel discount MFN, the active sales ban, the no-surcharge rule, the honor-all-cards rule, and the lowest cash price provision, and any other similar so-called anti-steering provision in Comdata’s Merchant Services Agreements with any one of the Major Chains;

 

h.                                      the provisions in Comdata’s past and/or present Merchant Services Agreements with non-Major Chain merchants, including without limitation the provisions that Plaintiffs have described as the fuel discount MFN, the active sales ban, the no-surcharge rule, the honor-all-cards rule, and the lowest cash price provision, and any other similar so-called anti-steering provision in Comdata’s Merchant Services Agreements with any non-Major Chain merchant;

 

37

 

i.                                          any actions by Comdata and Ceridian to discourage merchants or fleets from accepting or carrying an OTR Fleet Card that competes with Comdata;

 

j.                                         any loyalty provisions in Comdata’s cardholder agreements with fleets, including without limitation any minimum volume commitment provision;

 

k.                                      any alleged use by Comdata and Ceridian of its point-of-sale device that reads and routes OTR Fleet Cards to impair competition among OTR Fleet Cards, including without limitations any claim that Comdata programmed its point-of-sale device not to process or accept competing OTR Fleet Cards;

 

l.                                          Ceridian’s conduct in engaging in acquisitions which Plaintiffs claim had the purpose and effect of enabling Comdata to monopolize the purported relevant markets, including but not limited to Ceridian’s alleged acquisitions of Comdata, NTS, Inc., TIC, Archco, EDS, Fleet Services, Saunders, Inc., IAES, CCIS, and TCC, and Trendar;

 

m.                                  Ceridian’s alleged alter ego liability arising out of its actions in allegedly overseeing, supervising, actively managing, extending credit to, setting rates and policy for, directing, instructing, and/or being extensively involved with Comdata, including but not limited to in Comdata’s negotiations with Major Chains, fleets and other customers; and

 

n.                                      Ceridian’s alleged direct liability arising out of its actions in allegedly conspiring with, threatening, negotiating with, and/or forming agreements with the Major Chains.

 

33.                               Plaintiffs and the Settlement Class Members expressly agree that this Release, the Final Order, and the Final Judgment are, will be, and may be raised as a complete defense to, and will preclude any action or proceeding encompassed by, this Release.

 

34.                               Plaintiffs and the Settlement Class Members shall not now or hereafter institute, maintain, prosecute, assert, and/or cooperate in the institution, commencement, filing, or

 

38

 

prosecution of any suit, action, and/or proceeding, against the Releasees, either directly or indirectly, on their own behalf, on behalf of a class, or on behalf of any other person or entity with respect to the claims, causes of action and/or any other matters released through this Settlement Agreement.

 

35.                               Plaintiffs and the Settlement Class Members acknowledge that they may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those that they now know or believe to be true concerning the subject matter of the Action and/or the Release herein.  Nevertheless, it is the intention of Plaintiffs’ Class Counsel, Plaintiffs, and the Settlement Class Members in executing this Settlement Agreement to fully, finally and forever settle, release, discharge, and hold harmless all such matters, and all claims relating thereto which exist, hereafter may exist, or might have existed (whether or not previously or currently asserted in any action or proceeding) with respect to the Action, except as otherwise stated in this Settlement Agreement.

 

36.                               Plaintiffs expressly understand and acknowledge, and all Plaintiffs and Settlement Class Members will be deemed by Final Order and the Final Judgment to acknowledge and waive Section 1542 of the Civil Code of the State of California, which provides that:  “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”  Plaintiffs and the Settlement Class Members expressly waive and relinquish any and all rights and benefits that they may have under, or that may be conferred upon them by, the provisions of Section 1542 of the California Civil Code, or any other law of any state or territory

 

39

 

that is similar, comparable or equivalent to Section 1542, to the fullest extent they may lawfully waive such rights.

 

37.                               Plaintiffs represent and warrant that they are the sole and exclusive owners of all claims that they personally are releasing under this Settlement Agreement.  Plaintiffs further acknowledge that they have not assigned, pledged, or in any manner whatsoever, sold, transferred, assigned or encumbered any right, title, interest or claim arising out of or in any way whatsoever pertaining to the Actions, including without limitation, any claim for benefits, proceeds, or value under the Actions, and that Plaintiffs are not aware of anyone other than themselves claiming any interest, in whole or in part, in the Actions or in any benefits, proceeds, or values under the Actions.

 

38.                               Settlement Class Members submitting a Claim Form shall represent and warrant therein that they are the sole and exclusive owner of all claims that they personally are releasing under the Settlement Agreement and that they have not assigned, pledged, or in any manner whatsoever, sold, transferred, assigned or encumbered any right, title, interest or claim arising out of or in any way whatsoever pertaining to the Actions, including without limitation, any claim for benefits, proceeds, or value under the Actions, and that such Settlement Class Member(s) are not aware of anyone other than themselves claiming any interest, in whole or in part, in the Actions or in any benefits, proceeds, or values under the Actions.

 

39.                               Without in any way limiting its scope, and, except to the extent otherwise 
 specified in the Settlement Agreement, this Release covers by example and without limitation, any and all claims for reasonable attorneys’ fees, costs, expert fees, consultant fees, interest, litigation fees, costs, or any other fees, costs, and/or disbursements incurred by any attorneys,

 

40

 

Plaintiffs’ Class Counsel, Plaintiffs, or Settlement Class Members who claim to have assisted in conferring the benefits under this Settlement upon the Settlement Class.

 

40.                               In consideration for the Settlement, the Releasees shall be deemed to have, and by operation of the Final Order and Final Judgment shall have, released Plaintiffs’ Class Counsel and each current and former Plaintiff from any and all causes of action that were or could have been asserted pertaining solely to the conduct in filing and prosecuting the litigation or in settling the Action.

 

41.                               Plaintiffs and Plaintiffs’ Class Counsel hereby agree and acknowledge that the provisions of this Release together constitute an essential and material term of the Settlement Agreement and shall be included in any Final Order and Final Judgment entered by the Court.

 

VII.                          PRELIMINARY APPROVAL

 

42.                               As soon as is practicable following the signing of this Settlement Agreement by all Parties, but not later than March 4, 2014, and separately from any motions for an Attorneys’ Fee Award, Reimbursement for Costs and Expenses, or for Plaintiffs’ Service Awards, Plaintiffs and Plaintiffs’ Class Counsel will request, and Defendants will not oppose, the entry by the Court of a Preliminary Approval Order (substantially in the form attached at Exhibit “F”):

 

a.                                      Finding that the requirements for provisional certification of the Settlement Class have been satisfied, appointing Plaintiffs as the representatives of the Settlement Class, and Plaintiffs’ Class Counsel as counsel for the Settlement Class, and preliminarily approving the settlement as being within the range of reasonableness such that the Class Notice should be sent to the members of the Settlement Class;

 

b.                                      Approving the Class Notice and directing that it shall be given as set forth in Section VIII of this Settlement Agreement;

 

41

 

c.                                       Scheduling the Fairness Hearing not earlier than seventy-five (75) days following the Notice Date;

 

d.                                      Appointing the Settlement Administrator;

 

e.                                       Authorizing the payment of Settlement Administration Costs reasonably incurred by the Settlement Administrator and those entities or consultant, such as Econ One, Inc. (“Econ One”), working with the Settlement Administrator;

 

f.                                        Finding that the Escrow Account is to be a “Qualified Settlement Fund” as defined in Section 1.468B-1(c) of the Treasury Regulations;

 

g.                                       Providing that members of the Settlement Class will have until the Claim Bar Date to submit Claim Forms;

 

h.                                      Providing that any objections by any Settlement Class Member shall be heard and any papers submitted in support of said objections shall be considered by the Court at the Fairness Hearing only if, on or before the date(s) specified in the Class Notice and Preliminary Approval Order, such Settlement Class Member follows the procedures set forth in this Settlement Agreement and approved by the Court;

 

i.                                          Establishing dates by which the Parties shall file and serve all papers in support of the application for final approval of the settlement and/or in response to any valid and timely objections;

 

j.                                         Providing that all Settlement Class Members will be bound by the Final Order and Final Judgment dismissing the Actions with prejudice unless such member of the Settlement Class timely submits to the Settlement Administrator a valid written request for exclusion in accordance with this Settlement Agreement and the Class Notice;

 

42

 

k.                                      Providing that, pending the Fairness Hearing, Plaintiffs, or any of them, are enjoined from commencing or prosecuting, either directly or indirectly, any action asserting any of the Released Claims against any of the Releasees; and

 

l.                                          Issuing other related orders to effectuate the preliminary approval of the Settlement Agreement.

 

43.                               Following the entry of the Preliminary Approval Order, the Class Notice shall be given and published in the manner directed and approved by the Court.  The Parties agree that the methods of Class Notice contemplated by this Settlement Agreement are valid and effective, that they provide reasonable notice to the Settlement Class, and that they represent the best practicable notice under the circumstances.

 

44.                               Upon entry of the Preliminary Approval Order, Plaintiffs, Plaintiffs’ Class Counsel, Defendants, Releasees, and Defense Counsel agree to use reasonable and good faith efforts to effectuate the Court’s final approval of this Settlement Agreement, including filing the necessary motion papers and scheduling any necessary hearings for a date and time that are convenient for the Court.

 

VIII.                     CLASS NOTICE AND ADMINISTRATION

 

45.                               Class Notice will be accomplished through a combination of Publication Notice, notice through the Settlement Website, and Long Form Notice, each of which is described below, as specified in the Preliminary Approval Order, the Declaration of the Settlement Administrator (attached hereto as Exhibit “J”), and this Settlement Agreement and in order to comply with all applicable laws, including but not limited to, Fed. R. Civ. P. 23, the Due Process Clause of the United States Constitution, and any other applicable statute, law or rule.

 

43

 

46.                               Beginning not later than twenty-eight (28) days following the Court’s entry of the Preliminary Approval Order (the Notice Date), the Settlement Administrator shall send the Long Form Notice substantially in the form attached hereto as Exhibit “D”, by U.S. first class mail, proper postage prepaid, to the last known address of those members of the Settlement Class that can reasonably be identified (by merchant name and address) in Comdata’s FMLog transaction database.

 

47.                               To aid with effectuating dissemination of the Long Form Notice, within seven (7) business days after the Court enters the Preliminary Approval Order, Comdata shall, at its own expense, provide Plaintiffs with Comdata’s FMLog transaction data in the same form that Comdata produced it to Plaintiffs during discovery in the Actions for the entire Settlement Class Period to the extent such data has not already been produced to Plaintiffs’ Class Counsel.

 

48.                               Beginning not later than twenty-eight (28) days following the Court’s entry of the Preliminary Approval Order, the Settlement Administrator shall cause the publication of the Publication Notice, substantially in the form attached hereto as Exhibit “G”, in such appropriate trade publications as may be agreed upon by the Parties and as may be necessary to ensure the best notice that is practicable under the circumstances, including, for example, NACS (National Association for Convenience and Fuel Retailing) Magazine and/or NATSO’s weekly e-newsletter.

 

49.                               As soon as practicable following the Court’s entry of the Preliminary Approval Order, but before dissemination of the Long Form Notice and the Publication Notice, the Settlement Administrator shall establish the dedicated Settlement Website, Post Office Box, and toll-free telephone line for providing notice and information to the members of the Settlement Class.  The website shall include, at least, the Long Form Notice, a sample Claim Form, and such

 

44

 

other materials, in .pdf format, as would be necessary or appropriate to reasonably inform Settlement Class members regarding the settlement.

 

50.                               In addition to its availability on the Settlement Website, the Settlement Administrator shall send via first-class mail, the Long Form Notice to those persons who request it in writing or through the toll-free telephone number.

 

51.                               Without limiting the foregoing provisions, the Settlement Administrator shall be responsible for, without limitation: (a) printing, mailing, or arranging for the mailing of the Long Form Notices; (b) handling returned mail not delivered to members of the Settlement Class; (c) arranging for the publication of the Publication Notice; (d) attempting to obtain updated address information for any Long Form Notices returned without a forwarding address; (f) responding to requests for Long Form Notice; (g) receiving and maintaining on behalf of the Court any correspondence regarding requests for exclusion and/or objections to the settlement; (h) forwarding written inquiries to Plaintiffs’ Class Counsel or their designee for a response, if warranted; (i) establishing a post-office box for the receipt of any correspondence; (j) responding to requests from Plaintiffs’ Class Counsel; (k) establishing a website to which members of the Settlement Class may refer for information about the Actions and the settlement; (l) fulfilling any escheatment obligations that may arise; and (m) otherwise implementing and/or assisting with the dissemination of the Class Notice.  The Settlement Administrator shall also be responsible for, without limitation, implementing the terms of the Claim Process and related administrative activities.

 

52.                               Not later than ten (10) days before the date of the Fairness Hearing, Plaintiffs’ Class Counsel shall file with the Court a Declaration from the Settlement Administrator (a)

 

45

 

containing a list of Opt-Outs, if any, that have excluded themselves from the settlement; and (b)   outlining the scope, method and results of the Notice Program.

 

53.                               Not later than ten (10) days after the Settlement Agreement is filed with the Court, the Settlement Administrator on behalf of each Defendant shall send to each appropriate State and Federal official the materials specified in 28 U.S.C. § 1715 and otherwise comply with its terms. The identities of such officials and the content of the materials shall be mutually agreeable to the Parties.  The Parties and their counsel agree to cooperate fully with the Settlement Administrator in order to ensure timely notice is provided by the Settlement Administrator to each appropriate State and Federal official and to use their best efforts to ensure that the Settlement Administrator timely issues such notice.

 

54.                               Settlement Administration Costs, including, but not limited to, costs and expenses for the Class Notice and the Settlement Administrator, including those of any third-party vendors used to perform tasks necessary for the implementation or effectuation of the Class Notice, shall be allocated by and among the Comdata/Ceridian Settlement Fund, the Love’s Settlement Fund, the Pilot Settlement Fund, and the TA Settlement Fund on a pro rata basis until such time that such accounts are combined into the Aggregate Settlement Fund following the Final Effective Date.  After the creation of the Aggregate Settlement Fund, any further payments or distributions for Settlement Administration Costs and any other costs and expenses ordered by the Court shall be paid from the Aggregate Settlement Fund.  For avoidance of doubt, in no event shall any Releasee have any obligation, responsibility, or liability with respect to the Settlement Administrator, the Class Notice, or the exclusion procedures, including with respect to the costs, administration expenses, or any other charges for any notice and exclusion procedures.

 

46

 

55.                               The Releasees are not and will not be obligated to compute, estimate, or pay any Taxes on behalf of any Plaintiff, any Settlement Class Member, Plaintiffs’ Class Counsel and/or the Settlement Administrator.

 

56.                               If the Settlement Administrator makes a material or fraudulent misrepresentation to, or conceals requested material information from, Plaintiffs’ Class Counsel, any Defendant, or any Defense Counsel, then the Party to whom the misrepresentation is made shall, in addition to any other appropriate relief, have the right to demand that the Settlement Administrator immediately be replaced.  If the Settlement Administrator fails to perform adequately, the Parties may unanimously agree to remove the Settlement Administrator.  Under such circumstances, the other Party (or Parties) shall not unreasonably withhold consent to remove the Settlement Administrator, but removal of the Settlement Administrator shall occur only after Defense Counsel and Plaintiffs’ Class Counsel have attempted to resolve any disputes regarding the retention or dismissal of the Settlement Administrator in good faith, and, if they are unable to do so, after the matter has been referred to the Court for resolution.

 

IX.                              REQUESTS FOR EXCLUSION FROM THE SETTLEMENT CLASS

 

57.                               Persons or entities in the Settlement Class may elect to opt out of the settlement, relinquishing their rights to benefits hereunder; provided, however, that any such person or entity who or which owns or operates multiple Truck Stop or Retail Fueling Facility locations may not opt out only some but not all such locations from the Settlement Class.  For avoidance of doubt, that means that any such persons or entities who or which operate multiple Truck Stop or Retail Fueling Facility locations must remain fully in the Settlement Class, or fully exclude itself and all of its locations from the settlement.

 

47

 

58.                               Opt-Outs will not release their claims pursuant to this Settlement Agreement.  Any member of the Settlement Class wishing to opt out of the settlement must send to the Settlement Administrator a letter including its name, address, and telephone number and providing a clear statement communicating that it elects to be excluded from the Settlement Class, does not wish to be a Settlement Class Member, and elects to be excluded from any judgment entered pursuant to the Settlement.  Any request for exclusion or opt out must be postmarked on or before the opt-out deadline provided in the Court’s Preliminary Approval Order.  The date of the postmark on the return mailing envelope shall be the exclusive means used to determine whether a request for exclusion has been timely submitted.

 

59.                               Any Opt-Out may not file an objection to the settlement and shall be deemed to have waived any rights or benefits under this settlement.

 

60.                               Not later than five (5) business days after the deadline for submission of requests for exclusion or opt out, the Settlement Administrator shall provide to Plaintiffs’ Class Counsel a complete list of Opt-Outs together with copies of the opt-out requests and any other related information.  Plaintiffs’ Class Counsel shall provide the complete list of Opt-Outs with copies of the opt-out requests and any other information relating to Opt-Outs furnished to Plaintiffs’ Class Counsel by the Settlement Administrator within two (2) business days of receiving them to Defense Counsel.

 

61.                               Any member of the Settlement Class who does not file a valid and timely written request for exclusion as provided in this Section shall be bound by all subsequent proceedings, orders and judgments in the Actions, including, but not limited to, the Release, the Final Order, and the Final Judgment, even if such Settlement Class Member has litigation pending or

 

48

 

subsequently initiates litigation against any Releasee relating to the claims and transactions released in the Actions.

 

X.                                   OBJECTIONS TO THE SETTLEMENT

 

62.                               Any Settlement Class Member who wishes to object to the fairness, reasonableness, or adequacy of any aspect of the settlement, must deliver to the Settlement Administrator and file with the Court, so that it is received on or before the date ordered by the Court, a written statement setting forth that Settlement Class Member’s objection and any supporting brief it wishes to file.  Any such objection shall include a statement of whether the Objector intends to appear and argue at the Fairness Hearing.  Objectors may prepare, file, and serve the written objection and any supporting brief on their own or through an attorney retained at their own expense. The objection must include proof that the Objector falls within the definition of the Settlement Class.

 

63.                               Any Objector who files and serves a written objection may appear at the Fairness Hearing, either in person at their own expense or through personal counsel hired at the Objector’s expense, to object to the fairness, reasonableness, or adequacy of any aspect of the settlement.  Objectors or their attorneys who intend to make an appearance at the Fairness Hearing must deliver a notice of intention to appear to the Settlement Administrator and file such notice of intention to appear with the Court, so that it is filed and received by both on or before the date ordered by the Court.

 

64.                               Objectors shall be entitled to all of the benefits of the settlement if this Settlement Agreement and the terms contained herein are approved, as long as the Objector complies with all requirements of this Settlement Agreement applicable to Settlement Class Members, including the timely and complete submission of Claim Forms and other requirements herein.

 

49

 

XI.                              ATTORNEYS’ FEE AWARDS, REIMBURSEMENT FOR COSTS AND EXPENSES AND PLAINTIFFS’ SERVICE AWARDS

 

65.                               After agreeing to the principal terms set forth in this Settlement Agreement and the amount of compensation to the Settlement Class, Plaintiffs’ Class Counsel and Defense Counsel discussed the amount of any Attorneys’ Fee Award, any Reimbursement for Costs and Expenses, and any Plaintiffs’ Service Award that Plaintiffs’ Class Counsel and Plaintiffs would seek, subject to the approval of the Court.

 

66.                               The Parties agreed that any and all such Attorneys’ Fee Awards, Reimbursement for Costs and Expenses, and Plaintiffs’ Service Awards shall be paid from the Aggregate Settlement Fund and the Releasees shall have no obligation to pay any additional amounts above and beyond the amount paid by each Defendant into the Escrow Account and used to create the Comdata/Ceridian Settlement Fund, the Love’s Settlement Fund, the Pilot Settlement Fund, and the TA Settlement Fund.

 

67.                               Although the reimbursement of litigation costs and the attorneys’ fee amount to which Plaintiffs’ Class Counsel may be entitled shall be determined by the Court, Defendants agree that they will not oppose any application for (a) an award of attorneys’ fees by Plaintiffs’ Class Counsel up to the amount of one-third of the $130 million Aggregate Settlement Fund  or $43,333,333.33; and (b) reimbursement of reasonably incurred out of pocket costs and expenses, as documented on the books and records of Plaintiffs’ Class Counsel, Plaintiffs, and the other firms, persons, and consulting companies providing services to Plaintiffs and the Settlement Class in these Actions, of an amount not to exceed $7.5 million.

 

68.                               Plaintiffs’ Class Counsel shall have the discretion to allocate any Attorneys’ Fee Award and Reimbursement for Costs and Expenses among themselves and any other law firms who represented Plaintiffs in the Actions in a manner that Plaintiffs’ Class Counsel in good faith

 

50

 

believes reflects the contributions of each to the prosecution and settlement of the claims against Defendants in the Actions.

 

69.                               Plaintiffs’ Class Counsel may also petition the Court for a Plaintiffs’ Service Award in the following amounts, reflecting each Plaintiff’s contributions in terms of time, effort, and risk incurred in connection with the Actions and for each Plaintiff’s efforts undertaken on behalf of the Settlement Class in the following amounts: $150,000 for Marchbanks Truck Service, Inc. d/b/a Bear Mountain Travel Stop; $75,000 for Gerald F. Krachey d/b/a/ Krachey’s BP South, $75,000 for Walt Whitman Truck Stop, Inc.; and $15,000 for Mahwah Fuel Stop. These amounts are separate and apart from any amount these Plaintiffs may recover by submitting a Claim as provided herein.

 

70.                               The proceedings for the Court to determine the amount of any Attorneys’ Fee Award, any Reimbursement for Costs and Expenses, and any Plaintiffs’ Service Award, and the Court’s award of such attorneys’ fees, expenses, or service payments, are to be considered by the Court separately from the Court’s consideration of the fairness, reasonableness, and adequacy of the settlement.  Any Attorneys’ Fee Award, Reimbursement for Costs and Expenses, or Plaintiffs’ Service Award shall be set forth in a fee and expense award order separate from the Final Order and Final Judgment so that any appeal of one shall not constitute an appeal of the other.  Any order or proceedings relating to the application for an Attorneys’ Fee Award, Reimbursement for Costs and Expenses, or for any Plaintiffs’ Service Award, or any appeal from any order related thereto, or reversal or modification thereof, will not operate to terminate or cancel this Settlement Agreement, or affect or delay the Final Effective Date.

 

71.                               For avoidance of doubt, no Defendant shall be liable for, or obligated to pay, any fees, expenses, costs, or disbursements to any person or entity, either directly or indirectly, in

 

51

 

connection with the Actions or the Settlement Agreement beyond the amount paid by each Defendant into the Escrow Account and used to create the Comdata/Ceridian Settlement Fund, the Love’s Settlement Fund, the Pilot Settlement Fund, and the TA Settlement Fund.  Nor will any Defendant be obligated to pay any Attorneys’ Fee Award, Reimbursement for Costs and Expenses or Plaintiffs’ Service Award if the Final Effective Date does not occur.

 

72.                               Any Attorneys’ Fee Award, Reimbursement for Costs and Expenses, or Plaintiffs’ Service Award awarded by the Court shall be paid not earlier than thirty (30) days after the later of the Final Effective Date or the expiration of any appeal period for any order making an Attorneys’ Fee Award, Reimbursement for Costs and Expenses or Plaintiffs’ Service Award or, in the event of an appeal, the date on which all appeals therefrom, including petitions for rehearing or reargument, petitions for rehearing en banc and petitions for certiorari or any other form of review, have been finally disposed of, concluded, or resolved.

 

XII.                         FINAL APPROVAL

 

73.                               Separately from any motions for an Attorneys’ Fee Award, any Reimbursement for Costs and Expenses, or any Plaintiffs’ Service Awards, Plaintiffs and Plaintiffs’ Class Counsel agree to file with the Court, and Defendants will not oppose, a motion and supporting papers seeking final approval of this Settlement Agreement and for the entry of a Final Order and Final Judgment substantially in the forms attached hereto as Exhibits “B” and “C”:

 

a.                                      Determining that the Court has personal jurisdiction over all Plaintiffs and Settlement Class Members, that the Court has subject matter jurisdiction over the claims asserted in the Action, and that venue is proper;

 

b.                                      Finally approving the Settlement Agreement and settlement as fair, reasonable, and adequate, pursuant to Fed. R. Civ. P. 23;

 

52

 

c.                                       Finally approving and certifying the Settlement Class for settlement purposes only;

 

d.                                      Finding that the Class Notice and dissemination methodology complied with all laws, including, but not limited to, the Due Process Clause of the United States Constitution, and was fair, adequate, and sufficient, as the best practicable notice under the circumstances, and as reasonably calculated to apprise members of the Settlement Class of the Action, the Settlement Agreement, their objection rights, and their exclusion rights;

 

e.                                       Dismissing the Action with prejudice and without costs (except as provided for herein as to costs);

 

f.                                        Incorporating the Release set forth in the Settlement Agreement and making the Release effective as of the Final Approval Date;

 

g.                                       Listing all Opt-Outs;

 

h.                                      Certifying that the notification requirements of the Class Action Fairness Act, 28 U.S.C. § 1715, have been met;

 

i.                                          Approving the Plan of Administration and Distribution;

 

j.                                         Authorizing the Parties to implement the terms of the Settlement Agreement;

 

k.                                      Permanently enjoining Plaintiffs and all other Settlement Class Members and those subject to their control, from commencing, maintaining, or participating in, or permitting another to commence, maintain, or participate in on its behalf, any Released Claims against the Releasees;

 

53

 

l.                                          Retaining jurisdiction relating to the administration, consummation, enforcement, and interpretation of the Settlement Agreement and the Final Order and Final Judgment, and for any other necessary purpose; and

 

m.                                  Issuing related Orders to effectuate the final approval of the Settlement Agreement and its implementation.

 

XIII.                    MODIFICATION OR TERMINATION OF THIS SETTLEMENT AGREEMENT

 

74.                               The terms and provisions of this Settlement Agreement may be amended, modified, or expanded by written agreement of the Parties and approval of the Court; provided, however, that after entry of the Final Order and Final Judgment, the Parties may by written agreement effect such amendments, modifications, or expansions of this Settlement Agreement and its implementing documents (including all exhibits hereto) without further notice to the Settlement Class or approval by the Court if such changes are consistent with the Court’s Final Order and Final Judgment and do not limit the rights of Settlement Class Members under this Settlement Agreement.

 

75.                               If the Court declines to finally approve the settlement, or if such approval is reversed, vacated, or otherwise materially modified on appeal, or if the Court materially modifies the terms of the proposed Final Order or Final Judgment as provided for in Section XII hereto, or if the Court enters the Final Order and Final Judgment and appellate review is sought, and on such review, either the Final Order or Final Judgment is reversed, vacated or materially modified, then any party to this Settlement Agreement may terminate its participation in this Settlement Agreement; provided, however, that any reversal, vacating or modification on appeal of any amount of Plaintiffs’ Class Counsel’s Attorneys’ Fees Award or Reimbursement for Costs and Expenses by the Court, or any amount of Plaintiffs’ Service Awards to any Plaintiff, or any

 

54

 

determination by the Court to award less than the amount requested in attorneys’ fees or costs to Plaintiffs’ Class Counsel or incentive payments to Plaintiffs, shall not give rise to any right of termination or otherwise serve as a basis for termination of this Settlement Agreement.  The terminating party must exercise the option to withdraw from and terminate its participation in this Settlement Agreement, as provided in this Section, by a signed writing served on all of the other Parties no later than five (5) days after receiving notice of the event prompting the termination.  Upon such termination, the terminating parties (party) will be returned to their position status quo ante in relation to their (its) adversary or adversaries, meaning, inter alia, that some or all of the motions, documents, and other filings relating to the terminating parties deemed withdrawn pursuant to the various stipulations between and among the Parties that were approved as Orders by the Court at Docket Nos. 689, 690 and 696 shall be deemed filed or served as of their original filed and service date and the orders docketed at Nos. 689, 690, 696 and 697 shall be deemed null and void.

 

76.                               The procedure for and the allowance or disallowance by the Court of any application for attorneys’ fees, costs, expenses, or reimbursement to be paid to Plaintiffs’ Class Counsel or for any Plaintiffs’ Service Awards are not part of the settlement of the Released Claims as set forth in this Settlement Agreement.  Neither Plaintiffs nor Plaintiffs’ Class Counsel, nor any other attorney who claims a right to receive attorneys’ fees and costs from this settlement, shall have the right to terminate the Settlement Agreement or otherwise affect or delay the finality of the Final Order and Final Judgment based on any finding, ruling, holding, or proceeding relating to any Attorneys’ Fee Award, Reimbursement for Costs and Expenses, or Plaintiffs’ Service Awards, or any separate appeal from any separate order, finding, ruling, holding, or proceeding relating to any of them or reversal or modification of any of them.

 

55

 

77.                               Each Defendant will have the right (but not the obligation) to terminate its respective portion of the settlement if the total number of percentage-based Comdata Proprietary Transactions during the Settlement Class Period at members of the Settlement Class who choose to opt out of the settlement exceeds 11.5 percent of the total number of Settlement Class Members’ percentage-based Comdata Proprietary Transactions during the Settlement Class Period.

 

78.                               If an option to withdraw from and terminate this Settlement Agreement arises under the preceding Paragraph, any Defendant wishing to exercise such option must inform Plaintiffs’ Class Counsel in writing within five (5) business days of receiving the Opt-Out information from Class Counsel.  Failure to exercise such option within that time period will constitute a termination of the option.   Defendants are not required for any reason or under any circumstance to exercise that option and any exercise of that option shall be in good faith.

 

79.                               If, but only if, this Settlement Agreement is terminated pursuant to Paragraphs 75 or 77 above, then this Settlement Agreement shall be null and void as between the terminating Defendant and Plaintiffs and shall have no force or effect as between them and neither the terminating Defendant nor Plaintiffs shall be bound as between one another to the terms of this Settlement Agreement, except as follows:

 

a.                                      The terminating Defendant and Plaintiffs will be required to petition the Court to have any stay or similar orders entered as a result of the settlement, including pursuant to this Settlement Agreement lifted as to them;

 

b.                                      All of its provisions, and all negotiations, statements, and proceedings relating to it shall be without prejudice to the rights of the terminating Defendant, Plaintiffs, or any member of the Settlement Class, all of whom shall be restored to their respective positions

 

56

 

existing immediately before the execution of any memoranda of understanding contemplating this  Settlement Agreement, except that the terminating Defendant and Plaintiffs shall cooperate in requesting that the Court set a new scheduling order such that their substantive and procedural rights are not prejudiced by the settlement negotiations and proceedings;

 

c.                                       The terminating Defendant would expressly and affirmatively reserve all defenses, arguments, and motions as to all claims that have been or might later be asserted in the Actions, including, without limitation, the argument that the Actions may not be litigated as a class action;

 

d.                                      Plaintiffs and all other members of the Settlement Class, on behalf of themselves and their heirs, assigns, executors, administrators, predecessors, and successors, would expressly and affirmatively reserve and would not waive all motions as to, and arguments in support of, all claims, causes of actions or remedies that have been or might later be asserted in the Actions including, without limitation, any argument concerning class certification;

 

e.                                       The terminating Defendant would expressly and affirmatively reserve and would not waive any motions and positions as to, and arguments in support of, all defenses to the causes of action or remedies that have been sought or might be later asserted in the Actions, including, without limitation, any argument or position opposing class certification, liability or damages;

 

f.                                        Neither this Settlement Agreement, the fact of its having been made, nor the negotiations leading to it, nor any discovery or action taken by a Party or member of the Settlement Class pursuant to this Settlement Agreement shall be admissible or entered into evidence for any purpose whatsoever;

 

57

 

g.                                       Any settlement-related order(s) or judgment(s) entered in this Action after the date of execution of this Settlement Agreement shall be deemed vacated and shall be without any force or effect as to the terminating Defendant and Plaintiffs, and the Release with respect each terminating Defendant’s Releasees shall be null and void;

 

h.                                      All Settlement Administration Costs incurred in connection with the settlement and the Settlement Administrator, including, but not limited to, notice, publication, and customer communications, will be paid from the Comdata/Ceridian Settlement Fund, the Love’s Settlement Fund, the Pilot Settlement Fund, and the TA Settlement Fund and, after its creation following the Final Effective Date, the Aggregate Settlement Fund.  Neither Plaintiffs nor Plaintiffs’ Class Counsel shall be responsible for any of these costs or other settlement-related costs;

 

i.                                          The amount of any Attorneys’ Fees Award previously sought by Plaintiffs’ Class Counsel or Plaintiffs at the time of termination, if any, shall be reduced on a pro rata basis to reflect the termination of this Settlement Agreement by the terminating Defendant; and

 

j.                                         The entire remainder of the terminating Defendants’ Settlement Fund, less the Settlement Administration Costs incurred as of the date of termination shall be returned to the respective terminating Defendant.

 

XIV.                     CONTINUING JURISDICTION

 

80.                               The Court will retain continuing jurisdiction over Plaintiffs, the Settlement Class Members, Plaintiffs’ Class Counsel, and Defendants to implement, administer, consummate, and enforce this Settlement Agreement and the Final Order and Final Judgment, except that the exclusive jurisdiction for adjudicating any disputes pursuant to Paragraphs 26 through 29 shall be

 

58

 

by arbitration as provided in those paragraphs and nothing in this Section or this Settlement Agreement shall be construed to limit the operation of those Paragraphs.

 

81.                               All proceedings with respect to the administration, processing and determination of Claim Forms or with respect to any Attorneys’ Fee Award, any Reimbursement for Costs and Expenses, or any Plaintiffs’ Service Award described in this Settlement Agreement and the determination of all controversies relating thereto, shall be subject to the continuing jurisdiction of the Court.

 

82.                               Except for the resolution of any claims under Paragraphs 26 through 29 above, which will be resolved by the Arbitrator, Defendants, Plaintiffs’ Class Counsel, and Plaintiffs agree, and Settlement Class Members will be deemed to have agreed, to submit irrevocably to the exclusive jurisdiction of the Court for the resolution of any matter covered by this Settlement Agreement, the Release, the Final Order, the Final Judgment, or the applicability of this Settlement Agreement, the Release, the Final Order, or the Final Judgment.

 

83.                               All applications to the Court with respect to any aspect of this Settlement Agreement, the Release, the Final Order, or the Final Judgment shall be presented to and be determined by United States District Court Judge James Knoll Gardner for resolution, or, if he is not available, any other District Court Judge designated by the Court.

 

XV.                          GENERAL MATTERS AND RESERVATIONS

 

84.                               Defendants have denied and continue to deny each and all of the claims and contentions alleged in the Actions, and have denied and continue to deny that they have committed any violation of law or engaged in any wrongful act that was alleged, or that could have been alleged, in the Actions.  Defendants believe that they have valid and complete defenses to the claims asserted against them in the Actions and deny that they committed any violations of

 

59

 

law, engaged in any unlawful act or conduct, or that there is any basis for liability for any of the claims that have been, are, or might have been alleged in the Actions.  Nonetheless, Defendants have concluded that it is desirable that the Actions be fully and finally settled in the matter and upon the terms and conditions set forth in this Settlement Agreement.

 

85.                               The obligation of the Parties to conclude the proposed settlement is and shall be contingent upon each of the following:

 

a.                                      Entry by the Court of the Final Order and Final Judgment approving the settlement, from which the time to appeal has expired or which have remained unmodified after any appeal(s); and

 

b.                                      Any other conditions stated in this Settlement Agreement.

 

86.                               Except as otherwise previously agreed, the Parties and their counsel agree to keep the contents of this Settlement Agreement confidential until the date on which the motion for preliminary approval is filed; provided, however, that this Paragraph shall not prevent Defendants from disclosing such information, prior to the date on which the motion for preliminary approval is filed, to state and federal agencies, independent accountants, actuaries, advisors, financial analysts, insurers or attorneys, or as otherwise required by law or regulation, nor shall it prevent Defendants from disclosing such information based on the substance of this Settlement Agreement.  Nor shall it prevent the Parties and their counsel from disclosing such information to persons or entities (such as experts, courts, co-counsel, escrow agents, banks, and/or administrators) to whom the Parties agree disclosure must be made in order to effectuate the terms and conditions of this Settlement Agreement.

 

87.                               Information provided by any Defendant or its counsel to Plaintiffs, Plaintiffs’ Class Counsel, any individual member of the Settlement Class, counsel for any individual

 

60

 

member of the Settlement Class, administrators and/or consultants from Econ One, pursuant to the negotiation and implementation of this Settlement Agreement, includes trade secrets and highly confidential and proprietary business information and shall be deemed “Highly Confidential” pursuant to the Second Amended Protective Order in the Action, and shall be subject to all of the provisions thereof.  Any materials inadvertently produced shall, upon the producing Defendant’s request, be promptly returned to that Defendant through its counsel, and there shall be no implied or express waiver of any privileges, rights and defenses.  Nothing in this Paragraph shall be deemed to preclude Plaintiffs’ Class Counsel from furnishing Comdata’s FMLog transaction data to the Settlement Administrator and Econ One for purposes of providing Class Notice and executing the claims administration process, so long as the Settlement Administrator and Econ One each agrees in writing to be bound by the terms of the governing protective order in the Actions, nor shall this Paragraph be construed as precluding the Settlement Administrator or Econ One from making use of such data for purposes of providing Class Notice or executing the claims administration process.

 

88.                               Six months after the distribution of the settlement funds to Settlement Class Members who submitted timely and valid Claim Forms, the Settlement Administrator shall either destroy or return all documents and materials to the Defendants and/or their counsel and/or Plaintiffs’ Class Counsel that produced the documents and materials, except that it shall not destroy any and all Claim Forms, including any and all information and/or documentation submitted by Settlement Class Members. Nothing in this Settlement Agreement shall affect any confidentiality order or protective order entered by the Court in the Actions.

 

89.                               The Parties agree that within ten (10) days after the opt-out deadline provided in the Court’s Preliminary Approval Order, they may, in their own discretion, lift or release any and

 

61

 

all applicable litigation holds or document preservation notices requiring their employees or agents to preserve documents and electronic data as a result of the Actions on a going forward basis, and may return to their ordinary document retention policies, if any, provided that the Parties must continue to retain through the Final Effective Date previously collected documents, and in the case of Comdata, FMLog transaction data.  The Parties agree that such release of any such litigation holds or document preservation notices pursuant to this Paragraph shall not under any circumstances provide a basis for any claim of spoliation of evidence in the Actions or any subsequent proceeding involving the Parties.

 

90.                               With respect to documents produced by the Parties in the Actions, the Final Effective Date shall constitute the “termination of the Litigation” for purposes of Paragraph 19 of the Second Amended Protective Order such that within sixty (60) days of the Final Effective Date the Parties shall return or destroy Confidential Material and/or Highly Confidential Material in compliance with the terms of that Paragraph of the Second Amended Protective Order.

 

91.                               Defendants’ execution of this Settlement Agreement shall not be construed to release—and Defendants expressly do not intend to release—any claim Defendants may have or make against any insurer for any cost or expense incurred in connection with this settlement, including, without limitation, for attorneys’ fees and costs.

 

92.                               Plaintiffs’ Class Counsel represent that: (1) they are authorized by Plaintiffs to enter into this Settlement Agreement with respect to the claims in the Actions; and (2) they are seeking to protect the interests of the Settlement Class.

 

93.                               Plaintiffs and Plaintiffs’ Class Counsel further represent that Plaintiffs: (1) have agreed to serve as representatives of the Settlement Class proposed to be certified herein; (2) are willing, able, and ready to perform all of the duties and obligations of representatives of the

 

62

 

Settlement Class, including, but not limited to, being involved in discovery and fact finding; (3) have read the pleadings in the Actions, or have had the contents of such pleadings described to them; (4) are familiar with the results of the fact-finding undertaken by Plaintiffs’ Class Counsel to the extent possible given the Protective Order in this case; (5) have been kept apprised of settlement negotiations among the Parties (except that plaintiff Mahwah Fuel Stop was not involved in the preliminary negotiations of the memoranda of understanding entered in to in advance of this Settlement Agreement), and have either read this Settlement Agreement, including the exhibits annexed hereto, or have received a detailed description of it from Plaintiffs’ Class Counsel and they have agreed to its terms; (6) have consulted with Plaintiffs’ Class Counsel about the Actions and this Settlement Agreement and the obligations imposed on representatives of the Settlement Class; (7) have authorized the execution of this Settlement Agreement; (8) shall remain and serve as representatives of the Settlement Class until the terms of this Settlement Agreement are effectuated, this Settlement Agreement is terminated in accordance with its terms, or the Court at any time determines that said Plaintiffs cannot represent the Settlement Class, and (9) believe the settlement to be in the best interests of the Settlement Class.

 

94.                               Plaintiffs further represent and warrant that the individuals executing this Settlement Agreement are authorized to enter into this Settlement Agreement on behalf of each respective Plaintiff.

 

95.                               Defendants represent and warrant that the individuals executing this Settlement Agreement are authorized to enter into this Settlement Agreement on behalf of each respective Defendant.

 

96.                               This Settlement Agreement, complete with its exhibits, sets forth the sole and entire agreement among the Parties with respect to its subject matter, and it may not be altered,

 

63

 

amended, or modified except by written instrument executed by Plaintiffs’ Class Counsel and each Defendant and its counsel.  The Parties expressly acknowledge that no other agreements, arrangements, or understandings not expressed in this Settlement Agreement exist among or between them, and that in deciding to enter into this Settlement Agreement, they rely solely upon their judgment and knowledge. This Settlement Agreement supersedes any prior agreements, understandings, or undertakings (written or oral) by and between the Parties regarding the subject matter of this Settlement Agreement.

 

97.                               The Parties further acknowledge that they are executing this Settlement Agreement after independent investigation and without fraud, duress or undue influence.

 

98.                               The Parties acknowledge and agree that no opinion concerning the tax consequences of the proposed settlement to Settlement Class Members is given or will be given by the Parties, nor are any representations or warranties in this regard made by virtue of this Settlement Agreement.  Each Settlement Class Member’s tax obligations, and the determination thereof, are the sole responsibility of the Settlement Class Member, and it is understood that the tax consequences may vary depending on the particular circumstances of each individual Settlement Class Member.

 

99.                               This Settlement Agreement and any amendments thereto shall be governed by and interpreted according to the law of the Commonwealth of Pennsylvania notwithstanding its conflict of law provisions.

 

100.                        Except as set forth in Paragraphs 26 through 29, any disagreement and/or action to enforce this Settlement Agreement shall be commenced and maintained only in the Court.

 

64

 

101.                        Whenever this Settlement Agreement requires or contemplates that one of the Parties shall or may give notice to the other, notice shall be provided by e-mail and/or next-day (excluding Saturdays, Sundays and Federal Holidays) express delivery service as follows:

 

	
If to   Comdata, then to:
    
	
 
    
	
J.   Gordon Cooney, Jr.
    
	
Steven   A. Reed
    
	
R.   Brendan Fee
    
	
MORGAN   LEWIS & BOCKIUS LLP
    
	
1701   Market Street
    
	
Philadelphia,   PA 19103
    
	
E-mail:   jgcooney@morganlewis.com
    
	
sreed@morganlewis.com
    
	
bfee@morganlewis.com
    
	
 
    
	
If to   Ceridian, then to:
    
	
 
    
	
Carolyn   P. Short
    
	
Shannon   E. McClure
    
	
REED   SMITH LLP
    
	
2500   One Liberty Place
    
	
1650   Market Street
    
	
Philadelphia,   PA 19103
    
	
E-mail:   cshort@reedsmith.com
    
	
smcclure@reedsmith.com
    
	
 
    
	
If to   Love’s, then to:
    
	
 
    
	
Mack   J. Morgan, III
    
	
CROWE &   DUNLEVY, P.C.
    
	
20   North Broadway, Suite 1800
    
	
Oklahoma   City, OK 73102
    
	
E-mail: mack.morgan@crowedunlevy.com
    
	
 
    
	
If to   Pilot, then to:
    
	
 
    
	
John   H. Bogart
    
	
TELOS   VG, PLLC
    
	
299   South Main, Suite 1300
    
	
Salt   Lake City, UT 84111
    
	
E-mail:   Jbogart@telosvg.com
    

 

65

 

	
If to   the TA Defendants, then to:
    
	
 
    
	
Jane   E. Willis
    
	
Matthew   L. McGinnis
    
	
ROPES &   GRAY LLP
    
	
Prudential   Tower
    
	
800   Boylston Street
    
	
Boston, MA 02199
    
	
E-mail: jane.willis@ropesgray.com
    
	
matthew.mcginnis@ropesgray.com
    
	
 
    
	
If to   Plaintiffs, then to:
    
	
 
    
	
Eric   L. Cramer
    
	
Andrew   C. Curley
    
	
BERGER &   MONTAGUE, P.C.
    
	
1622   Locust Street
    
	
Philadelphia,   PA 19103
    
	
E-mail:   ecramer@bm.net
    
	
acurley@bm.net
    

 

102.                        All time periods set forth herein shall be computed in calendar days unless otherwise expressly provided.  In computing any period of time prescribed or allowed by this Settlement Agreement or by order of the Court, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, a Sunday, or a Federal Holiday, or, when the act to be done is the filing of a paper in court, a day on which weather or other conditions have made the office of the clerk of the court inaccessible, in which event the period shall run until the end of the next day that is not one of the aforementioned days.  As used in this Section, “Federal Holiday” includes New Year’s Day, Birthday of Martin Luther King, Jr., Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Patriot’s Day, Thanksgiving Day, Christmas Day, and any other day appointed as a holiday by the President, the Congress of the United States, or the Clerk of the United States District Court for the Eastern District of Pennsylvania.

 

66

 

103.        The Parties reserve the right, subject to the Court’s approval, to agree to any reasonable extensions of time that might be necessary to carry out any of the provisions of this Settlement Agreement.

 

104.        Neither the Settlement Class, Plaintiffs, Plaintiffs’ Class Counsel, Defendants, nor their counsel shall be deemed to be the drafter of this Settlement Agreement or of any particular provision, nor shall they argue that any particular provision should be construed against its drafter.  All Parties agree that this Settlement Agreement was drafted by counsel for the Parties during extensive arm’s length negotiations.  No parol or other evidence may be offered to explain, construe, contradict, or clarify its terms, the intent of the Parties or their counsel, or the circumstances under which this Settlement Agreement was made or executed.

 

105.        The Parties expressly acknowledge and agree that this Settlement Agreement and its exhibits, along with all related drafts, motions, pleadings, conversations, negotiations, and correspondence, constitute an offer of compromise and a compromise within the meaning of Federal Rule of Evidence 408 and any equivalent rule of evidence in any state.  In no event shall this Settlement Agreement, any of its provisions or any negotiations, statements or court proceedings relating to its provisions in any way be construed as, offered as, received as, used as, or deemed to be evidence of any kind in the Action, any other action, or in any judicial, administrative, regulatory or other proceeding, except in a proceeding to enforce this Settlement Agreement or the rights of the Parties, their counsel, or the Releasees.  Without limiting the foregoing, neither this Settlement Agreement nor any related negotiations, statements, or court proceedings shall be construed as, offered as, received as, used as or deemed to be evidence or an admission or concession of any liability or wrongdoing whatsoever on the part of any person or entity, including, but not limited to, the Releasees, Plaintiffs, or the Settlement Class or as a

 

67

 

waiver by the Releasees, Plaintiffs, or the Settlement Class of any applicable privileges, claims or defenses.

 

106.        Plaintiffs expressly affirm that the allegations contained in the Actions were made in good faith, but consider it desirable for the Action to be settled and dismissed because of the substantial benefits that the proposed settlement will provide to Settlement Class Members.

 

107.        The Parties, their successors and assigns, and their counsel undertake to implement the terms of this Settlement Agreement in good faith, and to use good faith in resolving any disputes that may arise in the implementation of the terms of this Settlement Agreement.

 

108.        The waiver by one Party of any breach of this Settlement Agreement by another Party shall not be deemed a waiver of any prior or subsequent breach of this Settlement Agreement.

 

109.        If one Party to this Settlement Agreement considers another Party to be in breach of its obligations under this Settlement Agreement, that Party must provide the breaching Party with written notice of the alleged breach and provide a reasonable opportunity to cure the breach before taking any action to enforce any rights under this Settlement Agreement.

 

110.        The Parties, their successors and assigns, and their counsel agree to cooperate fully with one another in seeking Court approval of this Settlement Agreement and to use their best efforts to effect the prompt consummation of this Settlement Agreement and the proposed settlement.

 

111.        This Settlement Agreement may be signed with a facsimile signature and in counterparts, each of which shall constitute a duplicate original.

 

112.        In the event any one or more of the provisions contained in this Settlement Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such

 

68

 

invalidity, illegality, or unenforceability shall not affect any other provision if Defendants and Plaintiffs’ Class Counsel, on behalf of Plaintiffs and the Settlement Class, mutually agree in writing to proceed as if such invalid, illegal, or unenforceable provision had never been included in this Settlement Agreement. Any such agreement shall be reviewed and approved by the Court before it becomes effective.

 

113.        All headings used in this Settlement Agreement are for reference and convenience only and shall not affect the meaning or interpretation of this Settlement Agreement.

 

IN WITNESS WHEREOF, the signatories below have read and understood this Settlement Agreement, have executed it, represent that the undersigned are authorized to execute this Settlement Agreement on behalf of their respectively represented parties, have agreed to be bound by its terms, and have duly executed this Settlement Agreement.

 

 

[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

69

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
MARCHBANKS TRUCK SERVICE, INC. D/B/A BEAR   MOUNTAIN TRAVEL STOP
    
	
PLAINTIFF
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
GERALD   F. KRACHEY D/B/A/ KRACHEY’S BP SOUTH
    	
 
    
	
PLAINTIFF
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
WALT   WHITMAN TRUCK STOP
    	
 
    
	
PLAINTIFF
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
MAHWAH   FUEL STOP
    	
 
    
	
PLAINTIFF
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
ERIC   L. CRAMER
    	
 
    
	
BERGER &   MONTAGUE, P.C.
    	
 
    
	
PLAINTIFFS’   CLASS COUNSEL
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
ERIC FASTIFF
    	
 
    
	
LIEFF CABRASER HEIMANN & BERNSTEIN, LLP
    	
 
    
	
PLAINTIFFS’   CLASS COUNSEL
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
STEPHEN   NEUWIRTH
    	
 
    
	
QUINN   EMANUEL URQUHART & SULLIVAN, LLP
    	
 
    
	
PLAINTIFFS’   CLASS COUNSEL
    	
 
    

 

70

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
COMDATA   NETWORK, INC. N/K/A COMDATA INC.
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
J.   GORDON COONEY, JR.
    	
 
    
	
MORGAN,   LEWIS & BOCKIUS LLP
    	
 
    
	
COUNSEL FOR COMDATA NETWORK, INC. N/K/A   COMDATA INC.
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
CERIDIAN   CORPORATION N/K/A CERIDIAN LLC
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
CAROLYN   P. SHORT
    	
 
    
	
REED   SMITH LLP
    	
 
    
	
COUNSEL FOR CERIDIAN CORPORATION N/K/A CERIDIAN   LLC
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
PILOT   TRAVEL CENTERS LLC AND PILOT CORPORATION
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
JOHN   H. BOGART
    	
 
    
	
TELOS   VG PLLC
    	
 
    
	
COUNSEL FOR PILOT TRAVEL CENTERS LLC AND PILOT   CORPORATION
    

 

71

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
TRAVELCENTERS   OF AMERICA LLC, TRAVELCENTERS OF AMERICA HOLDING COMPANY LLC, TA OPERATING   LLC, AND PETRO STOPPING CENTERS, L.P.
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
JANE   E. WILLIS
    	
 
    
	
ROPES &   GRAY LLP
    	
 
    
	
COUNSEL   FOR TRAVELCENTERS OF AMERICA LLC, TRAVELCENTERS OF AMERICA HOLDING COMPANY   LLC, TA OPERATING LLC, AND PETRO STOPPING CENTERS, L.P.
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
NAME:
    	
 
    
	
POSITION:
    	
 
    
	
LOVE’S   TRAVEL STOPS & COUNTRY STORES, INC.
    	
 
    

 

 

	
BY
    	
 
    	
 
    	
DATE:                   ,   2014
    
	
MACK   J. MORGAN, III
    	
 
    
	
CROWE &   DUNLEVY, P.C.
    	
 
    
	
COUNSEL FOR LOVE’S TRAVEL STOPS & COUNTRY   STORES, INC.
    

 

72Heritage Global, Inc. - Exhibit 10.1 - Filed by newsfilecorp.com

EXHIBIT 10.1 

 

 

STOCK PURCHASE AGREEMENT 

by and among 

NATIONAL LOAN EXCHANGE, INC., 
as the Company;

DAVID LUDWIG, 
as Seller; 

 

and 

 

HERITAGE GLOBAL, INC., 
as Buyer 

TABLE OF CONTENTS 

	ARTICLE
      1 DEFINITIONS 	1
      
	         1.1
      	Definitions
      	1
      
	         1.2
      	Interpretation
      	6
      
	  	  	  
	ARTICLE
      2 PURCHASE AND SALE 	6
      
	         2.1
      	Sale
      and Purchase of the Company Stock; Contribution 	6
      
	         2.2
      	Purchase
      Price 	7
      
	         2.3
      	Purchase
      Price Adjustment 	7
      
	         2.4
      	Earn
      Out Payment 	9
      
	  	  	  
	ARTICLE
      3 THE CLOSING 	11
      
	         3.1
      	Time
      and Place 	11
      
	         3.2
      	Closing
      Deliveries of Seller and the Company Parties 	11
      
	         3.3
      	Closing
      Deliveries of Buyer 	11
      
	  	  	  
	ARTICLE
      4 REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY PARTIES AND THE
      BUSINESS 	11
      
	         4.1
      	Organization
      	11
      
	         4.2
      	Authorization
      	12
      
	         4.3
      	No
      Violations 	12
      
	         4.4
      	Capitalization
      	12
      
	         4.5
      	Subsidiaries
      	13
      
	         4.6
      	Financial
      Statements 	13
      
	         4.7
      	Company
      Indebtedness; No Undisclosed Liabilities 	13
      
	         4.8
      	Absence
      of Certain Changes 	14
      
	         4.9
      	Legal
      Proceedings 	15
      
	         4.10
      	Compliance
      with Law 	15
      
	         4.11
      	Environmental
      Matters 	15
      
	         4.12
      	Material
      Contracts 	16
      
	         4.13
      	Taxes
      	17
      
	         4.14
      	Employees
      	20
      
	         4.15
      	Employee
      Benefits 	20
      
	         4.16
      	Labor
      Relations 	22
      
	         4.17
      	Real
      Properties and Related Matters 	23
      
	         4.18
      	Proprietary
      Rights 	23
      
	         4.19
      	Brokers,
      Finders and Investment Bankers 	23
      
	         4.20
      	Insurance
      	24
      
	         4.21
      	Title
      to Properties 	24
      
	         4.22
      	Condition
      of Properties 	24
      
	         4.23
      	Transactions
      with Affiliates 	24
      
	         4.24
      	Adequacy
      of Assets 	25
      
	         4.25
      	Accounts
      Receivable and Bad Debts 	25
      
	         4.26
      	Books
      and Records 	25
      
	         4.27
      	Powers
      of Attorney 	25
      
	         4.28
      	Bank
      Accounts 	25
      

i 

	         4.29
      	No
      Material Misstatements or Omissions 	25
      
	  	  	  
	ARTICLE
      5 REPRESENTATIONS AND WARRANTIES OF SELLER 	25
      
	         5.1
      	Authorization
      	26
      
	         5.2
      	No
      Violations 	26
      
	         5.3
      	Brokers,
      Finders and Investment Bankers 	26
      
	         5.4
      	Title
      to Shares 	26
      
	  	  	  
	ARTICLE
      6 REPRESENTATIONS AND WARRANTIES OF BUYER 	27
      
	         6.1
      	Organization
      	27
      
	         6.2
      	Authorization
      	27
      
	         6.3
      	No
      Violations 	27
      
	         6.4
      	Brokers
      and Finders 	27
      
	  	  	  
	ARTICLE
      7 CERTAIN COVENANTS AND AGREEMENTS 	27
      
	         7.1
      	Announcements
      	27
      
	         7.2
      	Tax
      Matters 	28
      
	         7.3
      	Further
      Assurances 	31
      
	         7.4
      	Filings
      and Notifications; Cooperation 	31
      
	         7.5
      	Buyer’s
      Benefit Plans 	31
      
	  	  	  
	ARTICLE
      8 CONDITIONS 	32
      
	         8.1
      	Conditions
      to Obligations of Seller 	32
      
	         8.2
      	Conditions
      to Obligations of Buyer 	32
      
	  	  	  
	ARTICLE
      9 INDEMNIFICATION 	34
      
	         9.1
      	Indemnification
      by Seller 	34
      
	         9.2
      	Indemnification
      by Buyer 	35
      
	         9.3
      	Limitations
      on Indemnification 	36
      
	         9.4
      	Survival
      	37
      
	         9.5
      	Right
      of Offset 	37
      
	  	  	  
	ARTICLE
      10 MISCELLANEOUS PROVISIONS 	37
      
	         10.1
      	Notices
      	37
      
	         10.2
      	Exhibits
      and Schedules to this Agreement 	38
      
	         10.3
      	Assignment;
      Successors in Interest 	38
      
	         10.4
      	Controlling
      Law; Integration 	38
      
	         10.5
      	Amendment;
      Waiver 	38
      
	         10.6
      	Severability
      	38
      
	         10.7
      	Counterparts
      	39
      
	         10.8
      	No
      Third-Party Beneficiary 	39
      
	         10.9
      	JURISDICTION
      AND FORUM; WAIVER OF JURY TRIAL 	39
      
	         10.10
      	Interpretation
      	40
      
	         10.11
      	Specific
      Performance and Other Remedies 	40
      
	         10.12
      	Expenses
      	40
      

ii 

List of Exhibits and Schedules

	Exhibits 	  	  
	Exhibit A 	- 	Lease Agreement
    
	Exhibit B 	- 	Employment Agreement 
	 	  	  
	Schedules 	  	  
	Schedule 4.1 	- 	Organization
  
	Schedule 4.3(a) 	- 	Consents and Approvals 
	Schedule 4.4 	- 	Capitalization
  
	Schedule 4.5 	- 	Subsidiaries 
	Schedule 4.7(a) 	- 	Company
      Indebtedness 
	Schedule 4.7(b) 	- 	No Undisclosed Liabilities 
	Schedule 4.7(c) 	  	Closing Costs
  
	Schedule 4.8 	- 	Absence of Certain Changes 
	Schedule 4.9 	- 	Legal Proceedings
    
	Schedule 4.10 	- 	Compliance with Law 
	Schedule 4.11 	- 	Environmental
      Matters 
	Schedule 4.12 	- 	Material Contracts 
	Schedule 4.13 	- 	Taxes 
	Schedule 4.14 	- 	Employees 
	Schedule 4.15 	- 	Employee Benefits
    
	Schedule 4.16 	- 	Labor Relations 
	Schedule 4.17 	- 	Real Properties
      and Related Matters 
	Schedule 4.18(a) 	- 	Proprietary Rights 
	Schedule 4.18(c) 	- 	Infringement
  
	Schedule 4.19 	- 	Brokers, Finders, and Investment
      Bankers 
	Schedule 4.20 	- 	Insurance 
	Schedule 4.23(a) 	- 	Transactions with Affiliates
  
	Schedule 4.23(b) 	- 	Transactions with
      Affiliates (Business Employee) 
	Schedule 4.25 	- 	Accounts Receivables and Bad
      Debts 
	Schedule 4.28 	- 	Bank Accounts
  
	Schedule 5.2 	- 	No Violations 
	Schedule 8.2(a) 	- 	Consents to
      Material Contracts 

iii 

STOCK PURCHASE AGREEMENT 

             THIS
STOCK PURCHASE AGREEMENT is effective as of May 31, 2014
(“Effective Date”) by and among National Loan
Exchange, Inc., an Illinois corporation (the “Company”); Heritage
Global, Inc., a Florida corporation (“Buyer”); and David Ludwig
(the “Seller”). 

P R E A M B L E 

            
WHEREAS, the Company is engaged in the Business (as defined below); 

             WHEREAS,
Seller owns all of the issued and outstanding equity interests of common stock
of the Company (the “Shares”); and 

             WHEREAS, at the Closing (defined below), Seller
desires to sell to Buyer for cash, and Buyer desires to purchase from Seller,
all of the Shares, upon the terms and subject to the conditions contained in
this Agreement. 

             NOW,
THEREFORE, in consideration of the premises and of the covenants made herein and
of the mutual benefits to be derived herefrom, the parties hereto, intending to
be legally bound, agree as follows: 

ARTICLE 1 
DEFINITIONS 

             1.1        
Definitions. The following words and terms as used in this Agreement
shall have the following meanings: 

            
“Action” means any claim, action, suit or proceeding, arbitral
action, governmental inquiry, criminal prosecution or other investigation. 

             “Affiliate”
with reference to a specified Person, (a) any Person that directly or indirectly
through one or more intermediaries controls or is controlled by or is under
common control with the specified Person, (b) any other Person who is an officer
or director of the specified Person and who owns or controls 5% or more of any
class of equity securities (including any equity securities issuable upon the
exercise of any option or convertible security) of such specified Person or any
of its Affiliates, (c) any Person of which any Company Party (or other specified
Person) shall, directly or indirectly, beneficially own at least ten percent
(10%) of such Person’s outstanding equity securities, or (d) in the case of a
specified Person who is an individual, any immediate family member, uncle, aunt,
nephew, niece or first cousin of such Person. For purposes of this definition,
“control” (including, with correlative meaning, the terms “controlled by” and
“under common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. 

             “Agreement”
means, collectively, this Stock Purchase Agreement, all Exhibits and Schedules
and all amendments made hereto and thereto in accordance with their terms. 

            
“Allocation of Purchase Price” has the meaning specified in
Section 7.2(j)(i) . 

             “Applicable
Law” means, with respect to any Person, any domestic or foreign,
federal, state or local statute, law, ordinance, rule, administrative
interpretation, regulation, order, writ, injunction, directive, judgment,
decree, or other requirement of any Authority (including common law) applicable
to such Person or any of its Affiliates or any of their respective properties,
assets, officers, directors, general partners, members, managers, employees,
consultants, or agents (in connection with such officer’s, director’s, general
partner’s, member’s, manager’s, employee’s, consultant’s or agent’s activities
on behalf of such Person or any of its Affiliates). 

            
“Benefit Plans” has the meaning specified in Section 4.15(a) .

             “Business”
means the business of purchasing and selling distressed financial assets,
facilitating such purchases and sales and other operations of any of the Company
Parties as of the Effective Date or transferred to Company Parties at or prior
to Closing in accordance with this Agreement. 

            
“Business Employees” has the meaning specified in Section 4.14.

            
“Business Insurance Policies” has the meaning specified in Section
4.20. 

            
“Buyer” has the meaning specified in the introductory paragraph to
this Agreement. 

             “Buyer
Documents” means this Agreement and each agreement, document or
instrument required to be delivered or caused to be delivered by Buyer in
connection with this Agreement and the Contemplated Transactions. 

            
“Buyer Indemnified Parties” has the meaning specified in Section
9.1.

              “Buyer’s
Tax Indemnity” has the meaning specified in Section 7.2(d)(ii) . 

             “Calculation
Period” means (a) the period beginning on the Effective Date and ending
on the first anniversary of the Effective Date, and (b) each of the twelve (12)
month periods ending on the second, third and fourth anniversaries of the
Effective Date, respectively.

            
“Closing” have the meanings specified in Section 3.1. 

            
“COBRA” has the meaning specified in Section 4.15(f) . 

            
“Code” means the Internal Revenue Code of 1986, as amended. 

             “Company”
has the meaning specified in the introductory paragraph to this Agreement. 

            
“Company Indebtedness” means (a) all indebtedness of the Company
Parties for borrowed money, (b) all obligations of the Company Parties for the
deferred purchase price of property or assets, (c) all obligations of the
Company Parties evidenced by notes, bonds, debentures or other similar
instruments, (d) all capital leases, (e) any letters of credit issued under letter of credit facilities or other similar facilities,
(f) all indebtedness of any other Person guaranteed in any manner by any Company
Party, which in the case of clauses (a) through (f), shall include all accrued
interest thereon and applicable prepayment premiums and any other fees, costs or
expenses payable in connection therewith, including breakage costs, all of which
Company Indebtedness is described on Schedule 4.7(a). 

2 

             “Company
Parties” means the Company and its wholly-owned Subsidiaries, NLEX, LLC
and Solutions Management Group International, LLC. 

             “Contemplated
Transactions” means the purchase and sale of the Shares and the
execution, delivery and performance of and compliance with this Agreement and
all other Contracts, documents and instruments to be executed and delivered
pursuant to this Agreement. 

             “Contract”
means any contract, agreement, indenture, note, bond, instrument, lease,
conditional sales contract, mortgage, license (excluding any off-the-shelf,
shrink-wrap, or click-wrap licenses or website terms of use), franchise
agreement, concession agreement, insurance policy, security interest, guaranty,
binding commitment or other agreement or arrangement, whether written or oral.

            
“Disclosure Schedules” has the meaning specified in Article 4.

            
“Dollars” or “$” shall mean the United States Dollar. 

             “Earn-Out
Period” means the period beginning on the Effective Date and ending on
the fourth anniversary of the Effective Date. 

            
“EEOC” has the meaning specified in Section 4.16. 

            
“Employment Agreement” has the meaning specified in Section 8.2(j)
.. 

            
“Environmental Laws” has the meaning specified in Section 4.11(a)
.. 

            
“ERISA” means the Employee Retirement Income Security Act of 1974,
as amended. 

             “ERISA
Affiliate” means any Person who for purposes of Title IV of ERISA is a
member of the Company’s controlled group, or under common control with the
Company within the meaning of Section 414 of the Code, as amended. 

             “Financial
Statements” means the consolidated balance sheet of the Company Parties
as of December 31, 2011, 2012 and 2013, and the related income statements for
the years then ended, and the monthly balance sheet and related monthly income
statement of the Company Parties for the four months ending April 30, 2014.

             “Governmental
Authority” means any government, any governmental or quasi governmental
entity, department, commission, board, bureau, agency or instrumentality, and
any court, tribunal or judicial body, in each case whether federal, state,
county, provincial, local or foreign. 

3 

             “Governmental
Order” means any statute, rule, regulation, order, judgment, injunction,
decree, stipulation or determination issued, promulgated or entered by or with
any Governmental Authority of competent jurisdiction. 

            
“Hazardous Substances” has the meaning specified in Section
4.11(a) . 

             “Key
Employees” means David Ludwig, Aaron Hadam, Tom Ludwig or Chris Jenkins.

            
“Knowledge” means, with respect to any Company Party making a
representation to its “knowledge” (whether or not capitalized) those facts and
circumstances actually known by any of David Ludwig, Aaron Hadam, Tom Ludwig,
Norm Slaznik or Chris Jenkins. 

             “Law”
shall mean any law, statute, ordinance, regulation, rule, notice requirement,
court decision, agency guideline, principle of law and order of any foreign,
federal, state or local government and any other governmental department or
agency, including environmental, healthcare, energy, motor vehicle safety,
public utility, zoning, building and health codes, occupational safety and
health, and laws respecting employment practices, employee documentation, terms
and conditions of employment and wages and hours. 

            
“Lease Agreement” has the meaning specified in Section 8.2(1) .

            
“Leased Real Property” has the meaning specified in Section 4.17.

             “Liability”
means any indebtedness, obligation or other liability (whether absolute,
accrued, matured, contingent, known or unknown, fixed or otherwise, determined
or determinable or whether due or to become due), including without limitation,
any fine, penalty, expense, judgment, award or settlement respecting any
judicial administrative or arbitration proceeding, damage, loss, claim or
demand. 

             “Licensed
IP” means all of the intellectual property rights licensed to any
Company Party which are used in the Business. 

             “Liens”
means any security interest, pledge, mortgage, lien, charge, adverse claim of
ownership or use, restriction on transfer (such as a right of first refusal or
other similar right), defect of title, or other encumbrance of any kind or
character. 

            
“Losses” has the meaning specified in Section 9.1.

             “Material
Adverse Effect” means any event, fact, circumstance, condition,
development, change in, effect or occurrence that, individually or in the
aggregate with any other event, fact, circumstance, condition, development,
change in, effect or occurrence, has had or could reasonably be expected to have
a materially adverse effect on the business, assets, operation, condition
(financial or otherwise), or results of operations of the Business, taken as a
whole. 

            
“Material Contracts” has the meaning specified in Section 4.12.

            
“NLRB” has the meaning specified in Section 4.16. 

4 

            
“Permits” has the meaning specified in Section 4.10. 

             “Permitted
Liens” means liens for mechanics’ and materialmen’s liens and workmen’s,
repairmen’s, warehousemen’s and carriers’ liens arising in the ordinary course
of the Business, the obligations of which are not overdue or otherwise
delinquent. 

             “Person”
means an individual, firm, partnership, limited liability company, association,
unincorporated organization, trust, corporation, or any other entity or
organization including, without limitation, a government or political
subdivision or any department, agency or instrumentality thereof. 

             “Proprietary
Rights” means all of the following intellectual property rights owned
by, issued to or licensed to any Company Party which are used in the Business,
that, now or hereafter, may be secured throughout the world: (a) patents, patent
rights, patent applications, patent disclosures and inventions and improvements
thereto (whether or not patentable and whether or not reduced to practice) and
any reissues, continuations, continuations-in-part, revisions, extensions,
renewals or reexaminations thereof; (b) internet domain names, trademarks,
service marks, trade dress, logos, domain names, trade names and corporate names
together with all goodwill associated therewith; (c) copyrights (registered or
unregistered) and copyrightable works and registrations, applications for
registration and renewals thereof; (d) trade secrets and confidential business
information; (e) computer software, data, data bases, systems and related
documentation; (f) other proprietary rights; (g) all copies and tangible
embodiments of the foregoing (in whatever form or medium), and (h) licenses
granting any rights with respect to any of the foregoing.

             “Purchase
Price” shall mean an amount equal to $2,000,000 minus the amount of
Company Indebtedness as of Closing (whether paid off by Buyer at the Closing or
remaining outstanding after the Closing as an obligation of any Company Party in
accordance with Section 2.2(b)(i)) . 

            
“Real Property Leases” has the meaning specified in Section 4.17.

            
“Section 338(h)(10) Election” has the meaning set forth in Section
7.2(j)(i) . 

            
“Seller” has the meanings specified in the introductory paragraph
of this Agreement. 

             “Seller
Closing Costs” means the fees and expenses of any legal counsel to
Seller and any Company Party and any other attorneys, accountants, advisors,
consultants, investment bankers, finders or agents to Seller or any Company
Party incurred in connection with the Contemplated Transactions at or prior to
Closing.

             “Seller
Documents” means this Agreement and each agreement, document or
instrument required to be delivered or caused to be delivered by Seller or any
Company Party in connection with this Agreement and the Contemplated
Transactions. 

            
“Seller’s Tax Indemnity” has the meaning specified in Section
7.2(d)(i) . 

            
“Shares” has the meaning specified in the Preamble hereto. 

5 

             “Subsidiary”
shall mean with respect to any specified Person, any other Person (a) whose
board of directors or similar governing body, or a majority thereof, may
presently be directly or indirectly elected or appointed by such specified
Person, (b) whose management decisions and corporate actions are directly or
indirectly subject to the present control of such specified Person, and/or (c)
whose voting securities are more than 50% owned, directly or indirectly, by such
specified Person.

             “Tax”
or “Taxes” means any federal, state, county, provincial, local or
foreign income, gross receipts, sales, use, ad valorem, employment, severance,
transfer, gains, profits, excise, franchise, property, capital stock, premium,
minimum and alternative minimum or other taxes, fees, levies, duties,
assessments or charges of any kind or nature whatsoever imposed by any
Governmental Authority (whether payable directly or by withholding and including
any tax liability incurred or borne as a transferee or successor or by contract,
or otherwise), together with any interest, penalty (civil or criminal), or
additional amounts imposed by, any Governmental Authority with respect thereto.

             “Tax
Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof. 

            
“Transfer Taxes” has the meaning specified in Section 7.2(d) .

             “Warn
Act” means the Worker Adjustment and Retraining Notification Act, 29
U.S.C. Sections 2101-2109 and related regulations, as amended. 

             1.2        
Interpretation. The following provisions shall govern the interpretation
of this Agreement: 

                            
(a)         Headings or captions are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. 

                             (b)        
Words importing the singular number only shall include the plural and vice versa
and words importing the masculine gender shall include the feminine and neuter
genders and vice versa and words importing individuals shall include Persons and
vice versa. 

                             (c)        
Reference to any Person includes such Person’s successors and assigns, if
applicable, but only if such successors and assigns are permitted by this
Agreement. 

                             (d)        
With respect to the determination of any period of time, “from” means “from and
including” and “to” means “to but excluding.” 

ARTICLE 2 
PURCHASE AND SALE 

             2.1        
Sale and Purchase of the Company Stock; Contribution. At the Closing (i)
Seller shall sell, assign, convey and transfer to Buyer all of the Shares, and
shall deliver to Buyer the stock certificates representing all the Shares, with
duly executed stock powers reasonably satisfactory to Buyer, in proper form for
transfer, free and clear of all Liens, except for the Permitted Liens, and (ii) Buyer shall pay and deliver the
Purchase Price with respect to the Shares in the manner and as set forth in
Section 2.2 below.  

6 

            
2.2         Purchase Price.

                             (a)        
At the Closing, Buyer shall pay to Seller an aggregate amount equal to the
Purchase Price, subject to adjustment as provided in Section 2.3 in immediately
available funds by wire transfer to an account designated by Seller.

                             (b)        
At the Closing, Company shall (i) repay the Company Indebtedness outstanding
immediately prior to the Closing in full to the party or parties entitled
thereto, except to the extent Buyer determines such Company Indebtedness shall
remain outstanding after the Closing, and (ii) pay the Seller Closing Costs to
the Persons to whom they are owed. 

            
2.3         Purchase Price
Adjustment.

                            
(a)         Effective Date
Adjustment. 

             (i)        
At Closing, Seller shall provide Buyer with an estimated balance sheet of the
Company as of the open of business on the Effective Date (the “Closing
Balance Sheet”) and a statement of the estimated Closing Working
Capital. “Closing Working Capital” means (x) the sum of the
non-cash and cash current assets of the Company Parties and the cash of the
Company Parties that exceeds two hundred fifty thousand dollars ($250,000), less
(y) the current liabilities of the Company Parties. Prior to the Closing, Seller
shall have removed all cash from the Company, except for two hundred fifty
thousand dollars ($250,000) (“Seller Loan”) which Seller will
provide at Closing, through cash immediately available to the Seller including
any of the Purchase Price being paid by Buyer, as a loan to Company and which
shall not be considered in the calculation of the Company’s Closing Working
Capital. The calculation of Closing Working Capital shall not include Company
Indebtedness to be paid at Closing as provided in Subsection 2(b) above. 

             (ii)        
At Closing, if the Closing Working Capital is less than $0, the Purchase Price
will be decreased by the amount which the Closing Working Capital is less than
$0. If the Closing Working Capital is greater than $0, the Purchase Price at
Closing will be increased by the amount which the Closing Working Capital
exceeds $0. The term “Adjusted Purchase Price”, as used herein,
shall mean the Purchase Price at Closing as increased or decreased (if at all)
by this Section 2.3(a) . 

                            
(b)         Post-Effective Date
Purchase Price Adjustment. 

             (i)        
The Closing Balance Sheet and the Seller’s calculation of Closing Working
Capital delivered by Seller to Buyer shall be conclusive and binding upon the
Parties unless Buyer, within sixty (60) calendar days after Closing notifies
Seller in writing that Buyer disputes any of the amounts set forth therein,
specifying the nature of the dispute and the basis therefor. The Parties shall
in good faith attempt to resolve any such
dispute. If the Parties do not reach an agreement in resolving any and all such
disputes within twenty (20) calendar days after notice is given by Seller to
Buyer pursuant to the second preceding sentence, the parties shall jointly
select and engage an independent accounting firm (other than Buyer’s or Seller’s
accounting firm) (the “Independent Accountant”) to resolve any
remaining disputes regarding the Closing Balance Sheet and the Seller’s
calculation of Closing Working Capital. If the parties cannot agree on the
selection of an independent accounting firm to act as the Independent
Accountant, the parties shall request the American Arbitration Association to
appoint such a firm, and such appointment shall be conclusive and binding on the
parties. Promptly, but no later than twenty (20) calendar days after acceptance
of its appointment as Independent Accountant, the Independent Accountant shall
determine (it being understood that in making such determination, the
Independent Accountant shall be functioning as an expert and not as an
arbitrator), based solely on written submissions by Buyer and Seller, each
containing a computation of and explanation of the basis for its computation of
Closing Working Capital (the final submission made by Buyer and Seller to the
Independent Accountant being referred to herein as such Party’s
“Final Submission”), and not by independent
review, only those issues in dispute and shall render a written report as to the
resolution of the disputes and the resulting computation of the Closing Working
Capital. Such written report shall be conclusive and binding on the Parties. All
proceedings conducted by the Independent Accountant shall take place in
Edwardsville, Illinois. In resolving any disputed item, the Independent
Accountant (x) shall be bound by the provisions of this Section 2.3 and (y) may
not assign a value to any item greater than the greatest value for such item
claimed by either party or less than the smallest value for such item claimed by
either party. The fees, costs and expenses of the Independent Accountant shall
be borne solely by the party whose calculation of Closing Working Capital, as
reflected in such party’s Final Submission, is furthest in amount, whether
positive or negative, from the amount of Closing Working Capital as determined
by the Independent Accountant. 

7 

           (ii)        
Upon final determination of the actual Closing Working Capital as provided in
Section 2.3(b)(i), the following shall occur: (A) if the actual Closing Working
Capital is more than the estimated Closing Working Capital determined by Seller
at Closing, then the Adjusted Purchase Price shall be increased by such excess
and Buyer shall promptly, but no later than seven (7) days after such final
determination, pay the amount of such difference to Seller and (B) if the actual
Closing Working Capital is less than the estimated Closing Working Capital
determined by Seller at Closing, Buyer shall deduct such deficiency as follows:
(1) from the Seller Loan, and (2) if the Seller Loan is insufficient to fully
pay the deficiency, Seller shall promptly pay such difference to Buyer. Any
payment pursuant to this Section 2.3(b)(ii) shall be made at a mutually
convenient time and place by wire transfer by Buyer or Seller, as the case may
be, of immediately available funds to the account of such other Party as may be
designated in writing by such other Party. After the final determination of the
actual Closing Working Capital, Buyer shall pay to Seller
within five (5) days any portion of the Seller Loan not used to satisfy
adjustments pursuant to this Section 2.3(b)(ii) . 

8 

                             (c)        
Purchase Price Adjustment. Any payment pursuant to this Section 2.3 shall
be treated for all Tax purposes as an adjustment to the Purchase Price. 

            
2.4         Earn Out Payment.

                             (a)        
As additional Purchase Price for the Shares, Buyer shall pay to Seller with
respect to each Calculation Period an amount, if any (each, an “Earn-out
Payment”), equal to the Net Profits (defined below) of the Company
Parties during the applicable Calculation Period; provided, that in no
event shall Buyer be obligated to pay Seller Earn-Out Payments exceeding five
million dollars ($5,000,000) in the aggregate. “Net Profits” shall
mean the product of: (A) fifty percent (50%) multiplied by (B) the sum of (i)
gross revenues actually received by the Company Parties in connection with the
operation of the Business, minus (ii) all Losses of the Company Parties
customarily incurred by the Company Parties over the ordinary course of their
doing business unless otherwise approved by Seller, minus (iii) all expenses of
the Company Parties, whether paid by any Company Party or by Buyer or its
Affiliates on behalf of any Company Party (including without limitation, all
Company Party overhead expenses, salaries, bonuses, benefits and perquisites
paid to employees and independent contractors of any Company Party, commissions,
fees and other payments made to third parties and Losses incurred by any Company
Party), that are customarily incurred by the Company Parties or its Affiliates,
as the case may be, over the ordinary course of their doing business unless
otherwise approved by Seller, minus (iv) the Overhead Expenses (defined below),
and minus (v) the Capital Expenses (defined below). “Overhead
Expenses” shall mean all overhead expenses of Buyer arising out of or
relating to Buyer’s compliance with its obligations as a public company, which
are allocated to the Company Parties in Buyer’s reasonable discretion and
approved by Seller in Seller’s reasonable discretion. “Capital
Expenses” shall mean any funds provided by Buyer for
transactions to be consummated by any Company Party, provided that the terms of
such funding shall be consistent with terms available from unrelated third
parties and mutually agreed upon by Buyer and Seller. 

                            
(b)         Procedures Applicable to
Determination of the Earn-out Payments.

             (i)        
On or before the date which is sixty (60) days after the last day of each
Calculation Period (each such date, an ”Earn-Out Calculation
Delivery Date”), Buyer shall prepare and deliver to
Seller a written statement (in each case, an “Earn-out Calculation
Statement”) setting forth in reasonable detail its determination of Net
Profits for the applicable Calculation Period and its calculation of the
resulting Earn-Out Payment (in each case, an “Earn-Out
Calculation. 

             (ii)        
Seller shall have ten (10) days after receipt of the Earn-Out Calculation
Statement for each Calculation Period (in each case, the
“Review Period”) to review the Earn-Out
Calculation Statement and the Earn-Out Calculation set forth therein. During the
Review Period, Seller shall have the right to inspect the books and records of
any Company Party during normal business hours at such Company Party’s
offices, upon reasonable prior notice and solely for purposes reasonably related
to the determinations of Net Profits and the resulting Earn-Out Payment. Prior
to the expiration of the Review Period, Seller may object to the Earn-Out
Calculation set forth in the Earn-Out Calculation Statement for the applicable
Calculation Period by delivering a written notice of objection (an
“Earn-Out Calculation Objection Notice”) to Buyer. Any Earn-Out
Calculation Objection Notice shall specify the items in the applicable Earn-Out
Calculation disputed by Seller and shall describe in reasonable detail the basis
for such objection, as well as the amount in dispute. If Seller fails to deliver
an Earn-Out Calculation Objection Notice to Buyer prior to the expiration of the
Review Period, then the Earn-Out Calculation set forth in the Earn-Out
Calculation Statement shall be final and binding on the Parties hereto. If
Seller timely delivers an Earn-Out Calculation Objection Notice, Buyer and
Seller shall negotiate in good faith to resolve the disputed items and agree
upon the resulting amount of the Net Profits and the Earn-Out Payment for the
applicable Calculation Period. If Buyer and Seller are unable to reach agreement
within fifteen (15) days after such an Earn-Out Calculation Objection Notice has
been given, all unresolved disputed items shall be promptly referred to the
Independent Accountant. The Independent Accountant shall be directed to render a
written report on the unresolved disputed items with respect to the applicable
Earn-Out Calculation as promptly as practicable, but in no event greater than
fifteen (15) days after such submission to the Independent Accountant, and to
resolve only those unresolved disputed items set forth in the Earn-Out
Calculation Objection Notice. If unresolved disputed items are submitted to the
Independent Accountant, Buyer and Seller shall each furnish to the Independent
Accountant such work papers, schedules and other documents and information
relating to the unresolved disputed items as the Independent Accountant may
reasonably request. The Independent Accountant shall resolve the disputed items
based solely on the applicable definitions and other terms in this Agreement and
the presentations by Buyer and Seller, and not by independent review. The
resolution of the dispute and the calculation of Net Profits that is the subject
of the applicable Earn-Out Calculation Objection Notice by the Independent
Accountant shall be final and binding on the parties hereto. The fees and
expenses of the Independent Accountant shall be borne by Seller and Buyer in
proportion to the amounts by which their respective calculations of Net Profits
differ from Net Profits as finally determined by the Independent Accountant. 

9 

                             (c)        
Timing of Payment of Earn-out Payments. Any Earn-Out Payment that Buyer
is required to pay pursuant to Section 2.4(a) hereof shall be paid in full no
later than five (5) days following the date upon which the determination of Net
Profits for the applicable Calculation Period becomes final and binding upon the
parties as provided in Section 2.4(b)(ii) (including any final resolution of any
dispute raised by Seller in an Earn-Out Calculation Objection Notice).

                             (d)        
Post-Closing Operation of the Company Parties. Subject to Section 7.6 of
this Agreement, subsequent to the Closing, Buyer shall have sole discretion with
regard to all matters relating to the operation of the Company Parties. 

10 

                             (e)        
Treatment of Earn-Out payment. Any payment pursuant to this Section 2.4
shall be deemed part of the Purchase Price. 

ARTICLE 3 
THE CLOSING 

             3.1        
Time and Place. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place on June 2, 2013. The
Closing shall take place at the offices of Harwell Howard Hyne Gabbert &
Manner, P.C., 333 Commerce Street, Suite 1500, Nashville, Tennessee 37201, or
such other place or in such other manner, electronic or otherwise, as shall be
mutually agreed upon by the parties. Closing shall be effective as of 11:59 p.m.
on the Effective Date (the “Effective Time”). 

          
3.2         Closing Deliveries of
Seller and the Company Parties.

                             (a)        
Instruments of Transfer and Assignment; Certificates. At the Closing,
Seller shall execute and deliver, or cause to be delivered, to Buyer the
instruments, certificates and other documents effecting transfer that are
identified in Section 2.1, as well as other such documents reasonably requested
by Buyer to effect the Contemplated Transactions.

                             (b)        
Other Deliveries. At the Closing, the Company Parties and Seller shall
execute and deliver, or cause to be executed delivered to Buyer, the
instruments, certificates and other documents identified in Section 8.2. 

            
3.3         Closing Deliveries of
Buyer.

                             (a)        
Purchase Price. At the Closing, Buyer shall deliver the Purchase Price as
provided in Section 2.2. 

                             (b)        
Other Deliveries. At the Closing, Buyer shall execute and deliver, or
cause to be delivered to Seller, the instruments, certificates and other
documents identified in Section 8.1(a) . 

ARTICLE 4 
REPRESENTATIONS AND WARRANTIES REGARDING

THE COMPANY PARTIES AND THE BUSINESS 

             Except
as specifically set forth on the disclosure schedules attached to this Agreement
(the “Disclosure Schedules”), as a material inducement to Buyer to
enter into this Agreement and consummate the Contemplated Transactions, the
Company represents and warrants to Buyer that the statements contained in this
Article 4 are true and correct as of the Effective Time. All representations and
warranties made in this Article 4 with respect to each Company Party shall be
deemed to be made (as applicable) with respect to any predecessor entities. 

             4.1        
Organization. Each Company Party is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on the Business as now being conducted.
Each Company Party is duly qualified to transact business, and is in good standing as a foreign entity in each
jurisdiction where the character of its activities requires such qualification,
which jurisdictions are set forth on Schedule 4.1. The Company has
heretofore made available to Buyer accurate and complete copies of the charter,
bylaws and other organizational documents of each Company Party, as the case may
be, as currently in effect, and has made available to Buyer copies of its minute
books and equity records, and such books and records are accurate and complete. 

11 

             4.2        
Authorization. Each Company Party has full power and authority to execute
and deliver this Agreement (as applicable) the Seller Documents and to perform
its obligations under this Agreement and the Seller Documents and to consummate
the Contemplated Transactions. The execution and delivery of this Agreement and
the Seller Documents by each Company Party and the performance by each Company
Party of its obligations hereunder and thereunder and the Contemplated
Transactions have been duly and validly authorized by all necessary action on
the part of each Company Party. This Agreement and each of the other Seller
Documents have been duly executed and delivered by each Company Party (as
applicable) and is or once executed shall be the legal, valid and binding
agreement of such Company Party, enforceable against it in accordance with their
terms, subject to applicable bankruptcy, insolvency and other similar Laws
affecting the enforceability of creditor’s rights generally, general equitable
principles and the discretion of the courts in granting equitable remedies. 

            
4.3         No Violations.

                             (a)        
Consents and Approvals. Except as set forth in Schedule 4.3(a),
the execution, delivery and performance of this Agreement and the Seller
Documents, the consummation of the Contemplated Transactions and the fulfillment
of and compliance with the terms and conditions of this Agreement and the Seller
Documents do not and shall not violate or conflict with, constitute a breach of
or default under, result in the loss of any benefit under, or permit the
acceleration of any obligation under, (i) the charter or other organizational
document of any Company Party, (ii) any Contract to which any Company Party is a
party or by which any Company Party (or any of its respective properties or
assets) is subject or bound, (iii) any Governmental Order to which any Company
Party is a party or by which such Seller or any of its respective properties or
assets is bound, or (iv) any Law applicable to such Seller. 

                             (b)        
Except as set forth on Schedule 4.3(a), no consent, approval, order or
authorization of, or registration, declaration, notice or filing with, any (i)
Governmental Authority or other Person or (ii) party to a Contract is required
in connection with the execution, delivery or performance of this Agreement and
the Seller Documents by any Company Parties or the consummation of the
Contemplated Transactions. 

             4.4        
Capitalization. The authorized and issued and outstanding equity
interests of each Company Party (and each beneficial owner thereof) are as set
forth on Schedule 4.4. The Shares of the Company and equity of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and are owned as set forth on Schedule 4.4. Except as set
forth on Schedule 4.4, there are no other equity interests of any Company
Party outstanding, and there are no subscriptions, options, convertible
securities, calls, rights, warrants or other agreements, claims or commitments
of any nature whatsoever obligating any Company Party or issue, transfer,
deliver or sell, or cause to be issued, transferred, delivered or sold,
additional equity interests of any Company Party or obligating any Company Party
to grant, extend or enter into any such Contract. No Person has any rescission
rights with respect to any issuance of equity interests of any Company Party.
There are no registration rights agreements, shareholder agreements, voting
trusts or agreements, proxies or other agreements, instruments or understandings
with respect to any equity interests of any Company Party.

12 

             4.5        
Subsidiaries. The direct and indirect Subsidiaries of each Company Party
are listed on Schedule 4.5. The Company owns directly or indirectly each
of the outstanding shares of capital stock or other equity interests of each of
the Subsidiaries. There are no outstanding options, or other rights of any kind
to acquire any equity interests of any Subsidiary or securities convertible into
or exchangeable for such interests. Except as set forth on Schedule 4.5,
no Company Party owns directly or indirectly any interest or investment (whether
equity or debt) in any Person (other than investments in short-term investment
securities). 

            
4.6         Financial
Statements.

                             (a)        
The Financial Statements have been prepared in accordance with GAAP, applied on
a consistent basis throughout the periods indicated. Such Financial Statements
are true, complete and accurate in all respects and fairly present the financial
condition and results of operations of each Company Party as of the dates and
for the periods indicated thereon.

                             (b)        
With the exception of the liabilities set forth in the Financial Statements and
the liabilities incurred in the ordinary course of the business of each Company
Party since the December 31, 2013, no Company Party has any liabilities with
respect to the Business of any nature, whether absolute, accrued, contingent or
otherwise or whether due or to become due. There are no conditions existing with
respect to the properties, assets or personnel of any Company Party that might
adversely affect the Shares, the assets or the financial condition or prospects
of the Business. 

                             (c)        
Each Company Party has designed and maintains disclosure controls and procedures
to ensure that material information relating to the Company Party is made known
to such Company Party’s executive officers by others employed by such Company
Party. Each Company Party has designed and maintains internal control over
financial reporting to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. There are no significant deficiencies or
material weaknesses in the design or operation of internal control over
financial reporting that are could affect such Company Party’s ability to
record, process, summarize and report financial information. 

            
4.7         Company Indebtedness; No
Undisclosed Liabilities.

                             (a)        
Except as set forth on Schedule 4.7(a), there is no Company
Indebtedness.

                             (b)        
Other than as disclosed on Schedule 4.7(b), to the Knowledge of Company,
there are no Liabilities of any Company Party, other than Liabilities disclosed
or provided for in the Financial Statements or incurred in the ordinary course
of business consistent with past practice since December 31, 2013 (none of which
result from, arise out of, relate to, are in the nature of, or were caused by any breach
of contract, breach of warranty, tort, infringement or violation of Law).

13 

                            
(c)         Schedule 4.7(c) sets
forth all of the Seller Closing Costs. 

             4.8        
Absence of Certain Changes. Except as set forth in Schedule 4.8,
since December 31, 2013, each Company Party has operated the Business only in
the usual and ordinary course consistent with past practice, and without
limiting the generality of the foregoing there has not occurred any event,
circumstance or condition that has had or that could reasonably be expected to
have a Material Adverse Effect and no Company Party has (nor has it committed or
agreed to, whether by written Contract or otherwise): 

                            
(a)         permitted or allowed any of
its assets or properties, whether tangible or intangible, to be mortgaged,
pledged or made subject to any Lien, other than Permitted Liens that shall be
released at or prior to Closing; 

                            
(b)         incurred any Liability
except in the ordinary course of business consistent with past practice; 

                            
(c)         incurred any Company
Indebtedness or suffered any bad debt; 

                            
(d)         suffered any change in its
business relationship with any of its customers, distributors or suppliers; 

                            
(e)         entered into any employment
Contract or collective bargaining agreement, written or oral, or modified the
terms of any existing employment Contract; 

                            
(f)         made any loan to, or entered
into any other transaction or Contract with, any of its equity holders,
directors, officers, employees and consultants; 

                            
(g)         delayed or postponed the
payment of any accounts payable or commissions or any other Liability or agreed
or negotiated with any Person to extend the payment date of any accounts payable
or commissions or any other Liability or accelerated the collection of (or
discounted) any accounts or notes receivable or made any changes to the
customary methods of operations of such Person; 

                            
(h)         cancelled any of its debts
or waived any claims or rights, or sold, transferred or otherwise disposed of
any properties or assets (real, personal or mixed, tangible or intangible),
except in transactions in the ordinary course of business and consistent with
past practice, such as the sale of inventory and the use of supplies; 

                            
(i)         declared or paid any
dividends on or made any other distributions (whether in cash, stock or
property) in respect of any of its capital stock; or 

                            
(j)         made any Tax election or
changed an existing election or settled or compromised any Liability with
respect to Taxes of any Company Party. 

14 

             4.9        
Legal Proceedings. Except as set forth in Schedule 4.9, there are
no (and in the last 3 years, there have been no) Actions pending or threatened
by or against any Company Party or the Business and, to the Knowledge of the
Company, there is no reasonable basis for any such Action. Except as set forth
on Schedule 4.9, no Company Party is subject to or bound by any
Governmental Order or any settlement agreement.

             4.10      
Compliance with Law. Schedule 4.10 sets forth all authorizations,
accreditations, approvals, licenses and orders of and from all Governmental
Authorities held by any Company Party (the “Permits”). Only the
Permits marked with an asterisk on Schedule 4.10 are required to carry on the
Business as it is now being conducted, to own or hold under lease the properties
and assets it owns or holds under lease and to perform all of its obligations
under the Contracts to which it is a party. Except as is set forth on
Schedule 4.10, no suspension, cancellation or termination of any Permit
is threatened other than the expirations of Permits requiring renewal in the
ordinary course of business, and, to the Knowledge of the Company, there is no
basis therefor. Except as is set forth on Schedule 4.10, the Company
Parties are in compliance with all Applicable Laws and Permits to which the
Business and the Company Parties are subject, and no Company Party has received
any claim or notice that they are not in such compliance.

            
4.11       Environmental Matters.

                             (a)        
For purposes of this Agreement, the term “Environmental Laws”
shall mean all foreign, federal, state and local laws, regulations, ordinances,
decrees and orders relating to the environment, health and safety, including,
without limitation, regulation of Hazardous Substances or any other material or
substance which constitutes a health, safety or environmental hazard to any
person or property, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, and
the Resource Conservation and Recovery Act of 1980, as amended. For the purposes
of this Agreement, the term “Hazardous Substances” means any
solid, liquid or gaseous material, alone or in combination, mixture or solution,
which is defined, listed or identified as hazardous (whether a substance,
material or waste), “toxic,” “pollutant” or “contaminant” pursuant to
Environmental Laws, including, without limitation asbestos or
asbestos-containing materials, polychlorinated biphenyls, radon, mold, petroleum
or petroleum products and any other material or substance limited, controlled or
regulated under any applicable Environmental Laws. 

                             (b)        
Except as set forth on Schedule 4.11: (i) each Company Party is and has
been in compliance in all material respects with all Environmental Laws, and
does not have any Liabilities under any Environmental Laws with respect to any
properties and assets (whether real, personal or mixed) in which such Company
Party has or had an ownership, leasehold or other interest; (ii) no Company
Party has received at any time any citation, notice or other communication from
any Governmental Authority regarding any alleged, actual or potential violation
by such Company Party of any Environmental Law, or any alleged, actual or
potential obligation by such Company Party to undertake or bear the cost of any
Liabilities under any Environmental Law, and (iii) there are no Hazardous
Substances present in, on, under or emanating from any property leased or
operated by any Company Party, or any property formerly owned, leased or
operated by any Company Party, in violation of any applicable Environmental
Laws, or which may give rise to any common law or legal Liability of any Company Party, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, notice of violation, study or
investigation. 

15 

             4.12       Material
Contracts. Schedule 4.12 sets forth a correct and complete list of
the following Contracts to which any Company Party is a party with respect to
the Business (the “Material Contracts”): 

                            
(a)         all Contracts evidencing or
otherwise relating to obligations for Company Indebtedness; 

                            
(b)         all existing Contracts
(other than those described in subparagraphs (a) or (c), and any of the
Company’s Benefit Plans) to which any Company Party is a party or by which any
Company Party or its properties or assets may be bound (i) involving an annual
commitment or annual payment by any party thereto of more than $10,000
individually, (ii) which have a fixed term extending more than twelve months
from the date hereof and which involve cumulative payments in excess of $25,000,
or (iii) which is likely to result in payment by any party thereto of $10,000
over the twelve months following the date hereof, in each case individually, or
which are otherwise material to the Business and operations of any Company
Party; 

                            
(c)         all Contracts imposing a
noncompetition obligation on any Company Party or other restriction on the
business activities of any Company Party or use of information in the Business
in any location, including, without limitation, exclusive dealing obligations;

                            
(d)         all Contracts with customers
of any Company Party; 

                            
(e)         Real Property Leases; 

                            
(f)         Capital or operating leases
or conditional sales agreements; 

                            
(g)         employment, collective
bargaining, severance, stay bonuses, retention, consulting, employee benefit and
similar plans and Contracts; 

                            
(h)         Contracts under which any
Company Party is obligated to indemnify or hold harmless, or entitled to
indemnification from, any other Person, or Contracts under which a Company Party
is obligated to pay liquidated damages; 

                            
(i)         Contracts between any
Company Party and any stockholder, director, partner, officer or employee or
other Affiliate of any Company Party, or its Affiliates; 

                            
(j)         joint venture, partnership
or similar agreements; 

                            
(k)         barter, currency, hedge or
broker Contracts; 

                            
(l)         any settlement agreements
pursuant to which any Company Party is entitled to, or obligated to make, future
payments (whether lump sum or by installment); or 

16 

                             (m)        
to the extent not covered above, any other Contract material to any Company
Party or the Business. 

             Correct
and complete copies of all Material Contracts, including all amendments thereto,
have been provided to Buyer. The Material Contracts are in full force and effect
and are valid and enforceable in accordance with their respective terms with
respect to the Company Party that is party to such Material Contract (as
applicable) and are valid and enforceable in accordance with their respective
terms with respect to any other party thereto. Except as reflected in
Schedule 4.12, there have been no amendments, assignments, modifications
or supplemental arrangements to or with respect of any Material Contract, and no
consents or notices are required for the Company to execute this Agreement or
perform the Contemplated Transactions. There is no event which has occurred or
existing condition (including the execution and delivery of this Agreement and
the consummation of the Contemplated Transactions) which constitutes or which,
with notice, the happening of an event and/or the passage of time would
constitute a breach, default or event of default by any Company Party or would
cause the acceleration of any obligation of any Company Party, give rise to any
right of termination or cancellation by any party other than a Company Party or
cause the creation of any Lien on any of the assets of any Company Party, nor
does any Company Party have Knowledge of, and a Company Party has not received
notice of, or made a claim with respect to, any breach or default by any other
party thereto. There are no renegotiations of, or attempts to renegotiate or
outstanding rights to renegotiate, any terms or provisions of any Material
Contract and no Person has made a demand for such renegotiations.

            
4.13         Taxes. 

                             (a)        
The Company Parties have each timely filed all Tax Returns required to be filed
(determined without regard to extensions) on or before the date hereof. All Tax
Returns filed by any Company Party were complete and correct in all respects,
and such Tax Returns correctly reflected the material facts regarding the
income, business, assets, operations, activities, status and other matters of
the respective Company Party and any other information required to be shown
thereon. 

                             (b)        
The Company Parties have each, as applicable, timely paid all Taxes owed
(whether or not shown, or required to be shown, on Tax Returns) on or before the
date hereof. Each Company Party has withheld and timely paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party.
All Taxes that have not yet become due and payable on or at the Effective Date
have been adequately reserved in the Financial Statements in accordance with
GAAP. All required estimated Tax payments sufficient to avoid any underpayment
penalties have been timely made by or on behalf of the Company. None of the Tax
Returns filed by any Company Party contains a disclosure statement under former
Section 6661 of the Code or current Section 6662 of the Code (or any similar
provision of state, local or foreign Tax law). There are no liens for Taxes upon
any of the Company Parties’ assets, other than Liens for Taxes not yet due and
payable and for which there are adequate reserves in accordance with GAAP. 

17 

                             (c)        
None of the Tax Returns filed by any Company Party or Taxes paid or payable by
any Company Party have been the subject of an audit, action, suit, proceeding,
claim, examination, deficiency or assessment by any Taxing Authority, and no
such audit, action, suit, proceeding, claim, examination, deficiency or
assessment is currently pending or, to the Knowledge of the Company, threatened.
No Company Party has received from any Governmental Authority (including
jurisdictions where any Company Party has not filed Tax Returns) any (i) written
notice indicating an intent to open an audit or other review, (ii) request for
information related to any Tax matters, or (iii) notice of deficiency or
proposed adjustment for any amount of Tax proposed, asserted, or assessed by any
taxing authority against any Company Party. 

                             (d)        
None of the Company Parties are currently the beneficiary of any extension of
time within which to file any Tax Return, and no Company Party has waived any
statute of limitation with respect to any Tax or agreed to any extension of time
with respect to a Tax assessment or deficiency. All elections with respect to
Taxes affecting any Company Party, as of the date hereof, are set forth in
Schedule 4.13. 

                             (e)        
No Company Party shall be required to include any item of income in, or exclude
any item of deduction from, taxable income for any taxable period (or portion
thereof) ending after the Effective Date as a result of any (i) change in method
of accounting for a taxable period ending on or prior to the Effective Date,
(ii) “closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign Tax law) executed
on or prior to the Effective Date, (iii) intercompany transaction or excess loss
account described in United States Treasury Regulations under Section 1502 of
the Code (or any corresponding or similar provision of state, local, or foreign
Tax law), (iv) installment sale or open transaction disposition transaction made
on or prior to the Effective Date, (v) prepaid amount received on or prior to
the Effective Date; or (vi) election under Section 108(i) of the Code. 

                             (f)        
None of the shares of outstanding capital stock or other equity interest of any
Company Party is subject to a “substantial risk of forfeiture” within the
meaning of Section 83 of the Code. No Company Party has distributed stock of
another Person, or has had its stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part by
Sections 355 or 361 of the Code. No portion of the Purchase Price is subject to
the Tax withholding provisions of Section 3406 of the Code, or of Subchapter A
of Chapter 3 of the Code or of any other provision of Law.

                             (g)        
No Company Party is a party to or bound by any Tax allocation or sharing
agreement or similar arrangement (including, but not limited to, an
indemnification agreement or arrangement). No Company Party has been a member of
a group filing a consolidated federal income Tax Return or a combined,
consolidated, unitary or other affiliated group Tax Return for state, local or
foreign Tax purposes (other than a group the common parent of which is the
Company). No Company Party has any liability for the Taxes of any Person (other
than the Company) under Treasury Regulation Section 1.1502 -6 (or any
corresponding provision of state, local or foreign Tax law), or as a transferee
or successor, or by contract, or otherwise. 

18 

                             (h)        
The unpaid Taxes of each of the Company Parties did not, as of the date of this
Agreement, exceed the reserve for actual Taxes (as opposed to any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) as shown on the December 31, 2013 balance sheet of each such Company
Party, if any, and shall not exceed such reserve as adjusted for the passage of
time through the Effective Date in accordance with the reasonable past custom
and practice of each such Company Party in filing Tax Returns. No Company Party
shall incur any liability for Taxes from the date of this Agreement through the
Effective Date other than in the ordinary course of business and consistent with
reasonable past practice.

                             (i)        
Schedule 4.13 hereto contains a list of all jurisdictions (whether
foreign or domestic) to which any Tax is properly payable by any Company Party.
No claim has ever been made by a Governmental Authority in a jurisdiction where
a Company Party does not file Tax Returns that a Company Party is or may be
subject to Tax in that jurisdiction. No Company Party has nor has never had, a
permanent establishment or other taxable presence in any foreign country, as
determined pursuant to applicable foreign law and any applicable Tax treaty or
convention between the United States and such foreign country. 

                             (j)        
Seller has delivered to Buyer correct and complete copies of all Tax Returns,
and any corresponding examination reports and statements of deficiencies
assessed against or agreed to by any Company Party since January 1, 2011. Each
Company Party has disclosed on its respective federal Tax Return, if any, all
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Section 6662 of the Code. Schedule
4.13 sets forth the following information with respect to each Company Party
as of the most recent practicable date (as well as on an estimated pro forma
basis as of the Closing giving effect to the consummation of the Contemplated
Transactions): the amount of any net operating loss, net capital loss, unused
investment or other credit, unused foreign tax, or excess charitable
contribution of each Company Party. No Company Party is or has been a party to
any ‘‘reportable transaction,’’ as defined in Section 6707A(c)(1) of the Code
and treasury regulation section §1.6011 -4(b). No Company Party has received any
private letter ruling from the Internal Revenue Service (or any comparable
ruling from any other Governmental Authority).

                             (k)        
For purposes of this Section 4.13 and Section 7.3 any reference to any Company
Party shall be deemed to include any Person that merged with or was liquidated
into any such Company Party. 

                             (l)        
The Company (and any predecessor of the Company) has been a valid S corporation
up to and including the Effective Date.

                             (m)        
The Company shall not be liable for any Tax under Section 1374 of the Code in
connection with the deemed sale of the Company’s assets caused by the
§338(h)(10) election. The Company has not, in the past 10 years (i) acquired
assets from another corporation in a transaction in which the Company’s Tax
basis for the acquired assets was determined, in whole or in part, by reference
to the Tax basis of the acquired assets (or any other property) in the hands of
the transferor or (ii) acquired the stock of any corporation that is a qualified
subchapter S subsidiary. 

19 

             4.14      
Employees. Schedule 4.14 contains a correct and complete list of
all of (a) the officers, (b) directors and (c) employees of each Company Party
(collectively, the “Business Employees”),
including the name, date and location of employment, current title, and the
following information: tenure with Company Party, salary, bonus and all other
benefits and compensation. Each of the employment agreements entered into by the
Company and the Key Employees in connection with this Agreement identifies and
accurately reflects the amounts historically paid by the Company to the Key
Employees as compensation. Except as set forth on Schedule 4.14, no
increase in the salary, bonus, benefits or other compensation (other than normal
periodic increases in base compensation applied on a basis consistent with that
of prior years with respect to Business Employees who are not officers or
directors of any Company Party) of any Business Employee has been made (or
promised) during the twelve (12) month period prior to the Effective Date. Other
than as set forth in Schedule 4.14, no Company party has entered into any
Contract with respect to severance payments nor does any Company Party have any
policy with respect to the payment of severance. To the Knowledge of the
Company, no Business Employee intends (or has announced an intention) to
terminate employment with any Company Party. 

            
4.15       Employee Benefits.

                            
(a)         Schedule 4.15 sets
forth a true and complete list of (i) each “employee benefit plan” as defined in
Section 3(3) of ERISA, and (ii) each bonus or other incentive compensation,
stock option, stock purchase, or other equity-related award, deferred
compensation, severance pay, change in control, retention, salary continuation,
sick leave, vacation pay, leave of absence, paid time off, loan, educational
assistance, legal assistance, and other material fringe benefit plan, program,
agreement or arrangement, in each case (i) which are currently maintained or
contributed to by any Company Party or ERISA Affiliate, (ii) which was
maintained or contributed to by any Company Party or ERISA Affiliate within the
past seven (7) years or (iii) with respect to which any Company Party or ERISA
Affiliate has any liability or obligations to any current or former officer,
employee, or service provider of any Company Party or ERISA Affiliate, or the
dependents or beneficiaries of any thereof, regardless of whether funded,
(collectively, the “Benefit Plans”). With respect to each Benefit
Plan, true, correct and complete copies of the following documents (if
applicable), have been delivered to Purchaser or its counsel: (i) the most
recent plan document constituting the Benefit Plan and all amendments thereto,
and any related trust documents (including a description of any unwritten
Benefit Plan), (ii) the most recent summary plan description and all related
summaries of material modifications, (iii) the Form 5500 and attached schedules
filed with the Internal Revenue Service for the past three (3) fiscal years, and
(iv) for any Benefit Plan intended to be qualified under Section 401 of the
Code, the most recent determination letter or opinion letter upon which the
Benefit Plan is entitled to rely issued by the Internal Revenue Service and no
event has occurred which would reasonably be expected to cause any Benefit Plan
to become disqualified for purposes of Section 401(a) of the Code. 

                             (b)        
Each Company Party and all ERISA Affiliates have performed and complied in all
material respects with all of their respective obligations under or with respect
to the Benefit Plans, and each Benefit Plan complies and has been administered
and operated in compliance in all material respects in accordance with its terms
and with all Applicable Laws, including but not limited to the Code and ERISA.
Each Benefit Plan intended to be qualified under Section 401 of the Code has received a determination
letter or, if a prototype plan, an opinion letter upon which the Benefit Plan is
entitled to rely issued by the Internal Revenue Service and no event has
occurred which would reasonably be expected to cause any Benefit Plan to become
disqualified for purposes of Section 401(a) of the Code. 

20 

                             (c)        
None of the Benefit Plans is a “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA, and no Company Party nor any ERISA Affiliate have
maintained, been required to contribute to or been required to pay any amount
with respect to a “multiemployer plan” at any time. None of the Benefit Plans is
subject to Title IV of ERISA or to the funding requirements of Section 412 of
the Code or Section 302 of ERISA, and none of the Company Parties or any ERISA
Affiliate have ever had any obligation to or liability for (contingent or
otherwise) with respect to any such Benefit Plan. None of the Company Parties or
any ERISA Affiliate has ever maintained, been required to contribute to or been
required to pay any amount with respect to a multiple employer welfare benefit
arrangement (as defined in Section 3(40)(A) of ERISA). 

                             (d)        
Each Benefit Plan which is a nonqualified deferred compensation plan within the
meaning of Section 409A of the Code has been administered, operated and
maintained in all respects according to the requirements of Section 409A of the
Code, and no Company Party has been required to withhold or pay any Taxes as a
result of a failure to comply with Section 409A of the Code. None of Company
Parties has any obligation to make a “gross-up” or similar payment in respect of
any Taxes that may become payable under Section 409A of the Code. 

                             (e)        
All contributions and premiums (including all employer contributions and
employee salary reduction contributions) that are due with respect to any
Benefit Plan have been made within the time periods prescribed by Applicable Law
or by the terms of such Benefit Plan or any agreement relating thereto to the
respective Benefit Plan, and all contributions, liabilities or expenses of any
Benefit Plan (including workers’ compensation) for any period ending on or
before the Effective Date which are not yet due shall have been paid or accrued
on the relevant balance sheet in accordance with GAAP on or prior to the
Effective Date. 

                             (f)        
Except for health care continuation requirements under Section 4980B of the Code
and Part 6 of Subtitle I of ERISA (“COBRA”) or applicable state
law, no Benefit Plan provides for, and no written or oral agreements have been
entered into promising or guaranteeing, the continuation of medical, dental,
vision, life or disability insurance coverage for any current or former
employees of any Company Party or any ERISA Affiliate or their beneficiaries and
dependents for any period of time beyond the termination of employment. All
group health plans of the Company Parties have been operated in compliance in
all respects with the applicable requirements of COBRA and any applicable state
statutes mandating health insurance continuation coverage for employees. Each
Company Party and each Benefit Plan that is a health plan has complied with the
Patient Protection and Affordable Care Act. 

                             (g)        
All required reports, Tax Returns, documents and plan descriptions of the
Benefit Plans have been timely filed with the Internal Revenue Service, the U.S.
Department of Labor and/or, as appropriate, provided to participants in the
Benefit Plans.

21 

There are no pending claims, lawsuits or actions relating to
any Benefit Plan (other than ordinary course claims for benefits) and, to the
Seller’s Knowledge, none are threatened.

                             (h)        
The consummation of the transactions contemplated by this Agreement will not
accelerate the time of vesting or payment, or increase the amount, of
compensation to any employee, officer, former employee or former officer of any
Company Party. No Benefit Plans or other contracts or arrangements provide for
payments that would be triggered by the consummation of the transactions
contemplated by this Agreement that would subject any person to excise tax under
Section 4999 of the Code, and no Company Party has made any payments, is
obligated to make any payments and is not a party to any agreement that under
any circumstances could obligate it to make any payments that will not be
deductible under Section 280G of the Code (without regard to the exceptions set
forth in Sections 280G(b)(4) and 280G(b)(5)(A)(ii) of the Code). 

                             (i)        
No Lien exists with respect to any of the assets of any Company Party or any
ERISA Affiliate which were imposed pursuant to the terms of the Code or ERISA.

                             (j)        
None of the execution and delivery of this Agreement, the performance by any
party of its obligations hereunder or the consummation of the transactions
(alone or in conjunction with any other event) will (i) entitle any employee or
other individual providing services to any Company Party to any compensation or
benefit or (ii) result in any termination, breach or violation of, or default
under, or limit the sponsoring Company Party’s right to amend, modify or
terminate any Benefit Plan. No Company Party or any ERISA Affiliate has
announced any intention, made any amendment or binding commitment, or given any
written or oral notice providing that any Company Party (i) will create
additional Benefit Plans covering the employees of Company Party, (ii) will
increase benefits promised or provided pursuant to any Benefit Plan, or (iii)
will not exercise after the Effective Date any right or power it may have to
terminate, suspend or amend any Benefit Plan. 

                             (k)        
Each individual who performs services for any Company Party is properly
classified as an employee or an independent contractor and each employee of any
Company Party is properly classified as nonexempt or exempt. 

             4.16      
Labor Relations. Except as set forth on Schedule 4.16, each
Company Party is in compliance in all material respects with all Applicable Laws
and Governmental Orders respecting employment and employment practices, terms
and conditions of employment, wages and hours, and is not engaged in any unfair
labor or unlawful employment practice. Except as set forth on Schedule
4.16, there is no: (a) discrimination charge pending before the Equal
Employment Opportunity Commission (the “EEOC”) or any EEOC
recognized state “referral agency” or threatened against or involving or
affecting such Company Party; (b) unfair labor practice charge or complaint
against Seller pending before the National Labor Relations Board (the
“NLRB”) or threatened against or involving or affecting such
Company Party; (c) labor strike, dispute, slowdown or stoppage actually pending
or threatened against or involving or affecting such Company Party and no NLRB
representation question exists respecting any of their respective Business
Employees; (d) grievance or arbitration proceeding pending and no written claim
therefor exists; and (e) collective bargaining agreement that is binding on such
Company Party. Within the preceding five (5) years, no Company Party has
implemented any “plant closing” or “mass layoff” of employees that would
reasonably be expected to require notification under the WARN Act or any similar
state or local Law, no such “plant closing” or “mass layoff” shall be
implemented before the Effective Date without advance notification to and
approval of Buyer, and there has been no “employment loss” as defined by the
WARN Act within the ninety (90) days prior to the Effective Date.

22 

             4.17      
Real Properties and Related Matters. Schedule 4.17 sets forth a
correct and complete list of all of the real property leased (the “Leased
Real Property”) by any Company Party as of the date of this Agreement, and
Schedule 4.17 also identifies each lease agreement to which each Leased
Real Property is subject and to which any Company Party is a party, including
each amendment thereto (collectively, the “Real Property Leases”).
No Company Party owns any real property and no real property is used in
connection with the Business other than the Leased Real Property. All of the
rental and other payments payable under each Real Property Lease by any Company
Party are current, no notice of default has been given under such Real Property
Lease either by the landlord or by the tenant thereunder, and no event has
occurred which, with the lapse of time or the giving of notice or both, would
constitute a default thereunder. 

            
4.18       Proprietary Rights.

                             (a)        
Schedule 4.18(a) sets forth all of the Proprietary Rights and the
Licensed IP necessary for the operation of the Business as it is currently
conducted. Each Company Party owns all right, title and interest in and to the
Proprietary Rights set forth on Schedule 4.18(a), free and clear
of all Liens (except for Permitted Liens), and have the right to use all of the
Licensed IP set forth on Schedule 4.18(a) as it is currently used in the
Business. The Company Parties’ rights in the Proprietary Rights are valid,
subsisting and enforceable. 

                             (b)        
No loss or expiration of any Company Party’s Proprietary Rights has occurred
prior to the Closing, and no loss or expiration of any such Proprietary Rights
has been threatened. 

                             (c)        
Except as set forth on Schedule 4.18(c), (i) there have been no written
claims made against any Company Party asserting the invalidity, misuse or
unenforceability of any of its Proprietary Rights or Licensed IP, (ii) such
Company Party has not received any written notices of any infringement or
misappropriation by, or conflict with, any third party with respect to any
Proprietary Rights or Licensed IP (including any demand or request that such
Company Party license any rights from a third party), (iii) the conduct of the
Business has not infringed, misappropriated or conflicted with and does not
infringe, misappropriate or conflict with any proprietary rights of other
Persons, and (iv) no Person has infringed upon or is currently infringing upon
any Proprietary Rights of any Company Party. The consummation of the
Contemplated Transactions shall have no adverse effect on the right, title or
interest in and to or use of the Proprietary Rights or Licensed IP and all of
such Proprietary Rights and Licensed IP shall be owned or available for use by
Buyer on substantially identical terms and conditions immediately after the
Closing. 

             4.19      
Brokers, Finders and Investment Bankers. Except as set forth on
Schedule 4.19, no Company Party, Seller, nor any of the executive
officers, directors or Affiliates of any Company Party has employed any broker, finder or investment
banker or incurred any Liability for any investment banking fees, financial
advisory fees, brokerage fees or finders’ fees in connection with the
Contemplated Transactions. 

23 

             4.20      
Insurance. Schedule 4.20 sets forth a complete and accurate list
and brief description (in each case specifying the insurer, the amount of
coverage and the type of insurance) of all insurance policies issued in favor of
any Company Party or the Business, or pursuant to which any Company Party is
named insured or otherwise a beneficiary in respect of the Business (the
“Business Insurance Policies”) and all claims pending under the
Business Insurance Policies, all of which have been properly reported to the
insurance carriers and there has been no reservation of rights that has been
issued by any insurance carrier that may jeopardize coverage, except in each
case as set forth on Schedule 4.20. As of the date hereof, each Company
Party is covered by valid and currently effective Business Insurance Policies
issued in favor of such Company Party that are customary and adequate for
companies of similar size in the industry and locales in which such Company
Party operates. All Business Insurance Policies listed in Schedule 4.20
are in full force and effect, all premiums due thereon have been paid and Seller
has complied in all material respects with the provisions of such policies. All
liability policies are on an “occurrence” basis. No Company Party has received
any notice of cancellation or non-renewal or proposed increase in the premiums
payable for coverage under any such Business Insurance Policy. There are no
outstanding surety or performance bonds with respect to the Business.

             4.21       Title
to Properties. Each Company Party has good and valid title to (or in the
case of leased assets, valid and enforceable rights in) all of the tangible
assets used or held for use by such Company Party in connection with the
Business, including all such assets reflected in the Financial Statements or
acquired since December 31, 2013, free and clear of all Liens, except for the
Permitted Liens. 

             4.22       Condition
of Properties. The improvements, machinery, equipment, furniture, fixtures,
inventory and tangible personal property owned, leased or held by any Company
Party for use in the Business are in the aggregate in such condition and repair
as are consistent with and suitable for their present uses, there are no
material defects in any of the assets used in the Business and the properties
are in compliance in all material respects with, and properly permitted under,
all applicable codes and other Laws. 

            
4.23       Transactions with
Affiliates.

                             (a)        
Except as set forth in Schedule 4.23(a), no shareholder, officer,
director or other Affiliate of any Company Party, or any direct or indirect
relative of any such Person, or any entity in which any such Person owns any
beneficial interest (other than a publicly-held corporation whose stock is
traded on a national securities exchange or in the over-the-counter market and
less than 1% of the stock of which is beneficially owned by all of such
Persons), has any interest in (a) any Contract with any Company Party relating
to the Business or otherwise, (b) any loan or Contract for or relating to any
Company Indebtedness or other indebtedness with any Company Party, (c) any
property (real, personal or mixed), tangible or intangible, used or currently
intended to be used in, the business or operations of any Company Party, or (d)
any business or entity that competes with any Company Party. 

24 

                             (b)        
Except for Tom Ludwig, no Business Employee is an immediate family member,
uncle, aunt, nephew, niece or first cousin of Seller. 

             4.24      
Adequacy of Assets. The assets of each Company Party include all tangible
and intangible assets, property and rights useful, held for use, used in or
required for use in the operation of the Business in the manner operated during
the twelve (12) month period preceding the Effective Date, and are sufficient to
conduct the operations of the Business as currently conducted. All right, title
and interest in and to the assets of David Ludwig Properties, LLC that relate to
the Business, including the FSU Assets (defined below) and office equipment that
relate to the Business, have been assigned, transferred and delivered to Company
prior to the Effective Date. For clarity, all real estate owned by David Ludwig
Properties, LLC will remain the property of such entity and not be property of
Company. “FSU Assets” shall mean the agreement(s) between any
Company Party or David Ludwig Properties, LLC and Florida State Unlimited
Realty, Inc., and all rights and business arising out of or relating to such
agreement(s). 

             4.25      
Accounts Receivable and Bad Debts. Schedule 4.25 attached hereto
sets forth a complete and accurate list of all accounts receivable of each
Company Party as of March 31, 2014, which list sets forth the aging of such
accounts receivable. Each account receivable listed on Schedule 4.25 is a
valid and enforceable claim and subject to no set-off or counterclaim (except as
reflected in the Financial Statements or otherwise in the ordinary course of
business), is genuine and subsisting, and shall be collected in the ordinary
course of business within ninety (90) days after the date on which it is due and
payable. 

             4.26       Books
and Records. The books and records of each Company Party and the accounts of
each Company Party reflect in all material respects, the transactions, assets
and Liabilities of each Company Party. No Company Party has engaged in any
material transaction with respect to its Business, maintained any bank account
for its Business, or used any of the funds of such Person in the conduct of its
Businesses, except for transactions, bank accounts and funds which have been and
are reflected in the books and records of such Person. 

             4.27      
Powers of Attorney. No Company Party has granted a power of attorney to
any Person to act or execute documents on behalf of such Company Party. 

             4.28      
Bank Accounts. Schedule 4.28 sets forth each of the bank accounts
of each Company Party and the Business Employees who are authorized signatories
with respect to such accounts. 

             4.29      
No Material Misstatements or Omissions. Neither this Agreement, the
Schedules or Exhibits hereto, nor any certificate or document furnished by any
Company Party pursuant to this Agreement contains or shall contain any untrue
statement of a material fact or omits or shall omit to state any material fact
necessary to make the statements contained herein or therein not misleading.

ARTICLE 5 
REPRESENTATIONS AND WARRANTIES OF SELLER

             Except
as specifically set forth on the Disclosure Schedules, as a material inducement
to Buyer to enter into this Agreement and consummate the Contemplated
Transactions, Seller hereby represents and warrants to Buyer that the statements
contained in this Article 5 are true and correct on the Effective Date. 

25 

             5.1        
Authorization. This Agreement and each agreement, document or instrument
required to be delivered by Seller hereby or in connection herewith has been
duly executed and delivered by Seller and constitutes the valid and binding
agreement of Seller, enforceable against him in accordance with its terms,
subject to applicable bankruptcy, insolvency and other similar Laws affecting
the enforceability of creditor’s rights generally, general equitable principles
and the discretion of the courts in granting equitable remedies. There is no
Action pending or threatened that in any manner challenges or seeks to prevent,
enjoin, alter or delay any of the Contemplated Transactions. To Seller’s
Knowledge, there is no fact, event or circumstance that reasonably could be
expected to give rise to any suit, Action or in the aggregate would have a
Material Adverse Effect upon the consummation of the Contemplated Transactions.

             5.2        
No Violations. Except as set forth in Schedule 5.2 hereto, the
execution, delivery and performance of this Agreement and each agreement,
document or instrument required to be delivered by it hereby or in connection
herewith and the consummation of the Contemplated Transactions do not and shall
not violate or conflict with, constitute a breach of or default under, result in
the loss of any benefit under, or permit the acceleration of any obligation
under, (a) any Contract to which Seller is a party or by which he (or any
respective properties or assets) is subject or bound, (b) any Governmental Order
to which Seller is a party or by which he or any of his respective properties or
assets is bound, or (c) any Law applicable to Seller or any of his respective
assets. Except as set forth on Schedule 5.2, no consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Authority is required in connection with Seller’s execution,
delivery or performance of this Agreement and each agreement, document or
instrument required to be delivered by him hereby or in connection herewith.

             5.3        
Brokers, Finders and Investment Bankers. Except as disclosed in the
Company Disclosure Schedules, Seller has not employed any broker, finder or
investment banker or incurred any Liability for any investment banking fees,
financial advisory fees, brokerage fees or finders’ fees in connection with the
Contemplated Transactions. 

             5.4        
Title to Shares. Seller is the record and beneficial owner of, and has
good and valid title to, the Shares listed on Schedule 4.4 opposite his
name, free and clear of all Liens at Closing, which Shares represent all of the
capital stock or other equity interests of the Company held or beneficially
owned by Seller. Seller has not granted any option or right to purchase Shares
other than to Buyer pursuant to this Agreement. Seller is not a party to or
bound by any agreement, option, warrant, right, contract, call or put that
requires, or upon the passage of time or occurrence of any other event would
require, the payment of money or transfer of any of Shares to anyone other than
Buyer. 

26 

ARTICLE 6 
REPRESENTATIONS AND WARRANTIES OF BUYER

             As
a material inducement to Company and Seller to enter into this Agreement and
consummate the Contemplated Transactions, Buyer hereby represents and warrants
to Seller that the statements contained in this Article 6 are true and correct
on the Effective Date. 

             6.1        
Organization. Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.

             6.2        
Authorization. Buyer has full corporate power and authority to execute
and deliver this Agreement and each agreement, document or instrument required
to be delivered by it hereby or in connection herewith and to perform its
obligations hereunder and thereunder and to consummate the Contemplated
Transactions provided for herein. The execution and delivery of this Agreement
and each agreement, document or instrument required to be delivered by it hereby
or in connection herewith by Buyer and the performance by Buyer of its
obligations hereunder and thereunder and the consummation of the Contemplated
Transactions have been duly and validly authorized by all necessary action on
the part of Buyer. This Agreement and each agreement, document or instrument
required to be delivered by Buyer hereby or in connection herewith have been
when executed at Closing duly and validly executed and delivered by Buyer and
constitutes the legal, valid and binding agreement of Buyer, enforceable against
it in accordance with its terms, subject to applicable bankruptcy, insolvency
and other similar Laws affecting the enforceability of creditor’s rights
generally, general equitable principles and the discretion of the courts in
granting equitable remedies. 

             6.3        
No Violations. The execution, delivery and performance of this Agreement
and each agreement, document or instrument required to be delivered by it hereby
or in connection herewith, the consummation of the Contemplated Transactions and
the fulfillment of and compliance with the terms and conditions of this
Agreement do not and shall not, violate or conflict with (a) any terms or
provisions of Buyer’s organizational documents, (b) any Contract to which Buyer
is a party (or by which it or its properties or assets) is subject to or bound,
(c) any Governmental Order to which Buyer or any of its properties or assets is
bound, or (d) any Law applicable to Buyer or any of its assets, except for such
violations which would not have in the aggregate a material adverse effect on
the ability of Buyer to consummate the Contemplated Transactions. 

             6.4        
Brokers and Finders. No broker, finder or other financial consultant has
acted on Buyer’s behalf in connection with this Agreement or the Contemplated
Transactions in such a way as to create any liability of Seller or the Company.

ARTICLE 7 
CERTAIN COVENANTS AND AGREEMENTS 

             7.1        
Announcements. Each Company Party, Seller and Buyer shall consult with
each other with respect to the timing and content of all announcements regarding
this Agreement or the Contemplated Transactions to the financial community,
Governmental Authorities, employees, customers or the general public and shall
use reasonable efforts to agree upon the text of any such announcement prior to
its release, and no Seller shall not make any such announcement without Buyer’s
express consent to the content thereof.

27 

            
7.2         Tax Matters.

                             (a)        
General. Seller shall be responsible for all Tax liabilities of the
Company Parties for Tax periods, or portions thereof, ending prior on or before
the Effective Date. 

                             (b)        
Filing Responsibility. The following provisions shall govern the
allocation of responsibility and payment of Taxes as between Buyer and Seller
for certain Tax matters following the Effective Date: 

                                            
(i)         Seller shall, or shall cause
the Company to prepare and file, on a timely basis, all Tax Returns that are
required to be filed by the Company Parties (taking account of extensions) prior
to the Effective Date and shall pay all Taxes with respect thereto. 

                                             (ii)        Seller
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company for all periods ending on or prior to the Effective Date
which are required to be filed after the Effective Date, and shall provide each
such Tax Return to Buyer for review, comment and revision at least twenty (20)
days before the date such Tax Return is filed. Such Tax Returns shall be
prepared in a manner consistent with past practice. Seller shall make any
revisions to such Tax Returns as reasonably requested by Buyer prior to filing
such Tax Returns. Notwithstanding anything in this Agreement to the contrary, no
review or deemed review of any Tax Return by Buyer pursuant to this Section
7.2(b) shall affect any Buyer indemnification rights, or any of Seller’s
obligations hereunder. 

                                             (iii)      
Buyer shall prepare or cause to be prepared and file or cause to be filed any
Tax Returns of the Company Parties for Tax periods which begin before the
Effective Date and end after the Effective Date, and shall provide each such Tax
Return to Seller for review and comment at least twenty (20) days before the
date such Tax Return is filed. Such Tax Returns shall be prepared in a manner
consistent with past practice. Notwithstanding anything in this Agreement to the
contrary, no review or deemed review of any Tax Return by Buyer pursuant to this
Section 7.2(b) shall affect any Buyer indemnification rights, or any of Seller’s
obligations hereunder. Seller shall pay to Buyer within fifteen (15) days before
the date on which Taxes are paid with respect to such periods an amount equal to
the portion of such Taxes which relates to the portion of such Tax period ending
on the Effective Date. For purposes of this Section 7.2, in the case of any
Taxes that are imposed on a periodic basis and are payable for a Tax period that
includes (but does not end on) the Effective Date, the portion of such Tax which
relates to the portion of such Tax period ending on the Effective Date shall (x)
in the case of any Taxes other than Taxes based upon or related to income, gains
or receipts, be deemed to be the amount of such Tax for the entire Tax period
multiplied by a fraction the numerator of which is the number of days in the Tax
period ending on the Effective Date and the denominator of which is the number
of days in the entire Tax period, and (y) in the case of any Tax based upon or
related to income, gains or receipts, be deemed equal to the amount which would be payable if the relevant Tax period ended on the
Effective Date. Any credits relating to a Tax period that begins before and ends
after the Effective Date shall be taken into account as though the relevant Tax
period ended on the Effective Date. All determinations necessary to give effect
to the foregoing allocations shall be made in a manner consistent with GAAP. 

28 

                                             (iv)        
In the case of any Tax Return due after the Effective Date that is required to
be signed by Buyer (or any officer or other authorized representative of any
thereof), Seller shall send a copy of such Tax Return to Buyer no later than
forty-five (45) days, in the case of Tax Returns that are filed less frequently
than monthly, and five (5) days, in the case of all other Tax Returns, prior to
the date on which such Tax Return is due and, subject to Buyer’s review,
comments and revisions, Buyer shall sign or cause to be signed by the relevant
appropriate Person, as applicable, such Tax Return and send such signed Tax
Return back to Seller no later than seven (7) days prior to the date on which
such Tax Return is due, in the case of Tax Returns that are filed less
frequently than monthly, and no later than the earlier of (A) two (2) days prior
to the date on which such Tax Return is due and (B) five (5) days after receipt
of such Tax Return by Buyer, in the case of all other Tax Returns. 

                             (c)        
Tax Proceedings. If, subsequent to the Effective Date, a party to this
Agreement shall receive notice of a Tax proceeding with respect to Taxes the
payment of which is the responsibility of the other party to this Agreement or
for which the other party to this Agreement would have an indemnification
obligation under Section 7.2(e) hereof, the party receiving such notice shall
promptly notify the other party in writing of such Tax proceeding, provided that
the failure of such party to give such notice to the other party shall not
relieve the party responsible for the Tax of such party’s indemnification
obligations under Section 7.2 hereof, except to the extent that party to be
indemnified under Section 7.2(e) hereof can demonstrate actual loss and
prejudice as a result of such failure. With respect to any Tax proceeding for
which: (i) Seller acknowledges in writing that Seller is liable under Section
7.2(e) for all Losses relating thereto and (ii) Buyer reasonably believes that
Seller shall indemnify Buyer for all such Losses, Seller shall be entitled to
control, in good faith, all proceedings taken in connection with such Tax
proceeding with counsel satisfactory to Buyer; provided, however,
that (x) Seller shall promptly notify Buyer in writing of his intention to
control such Tax proceeding, (y) in the case of a Tax proceeding relating to
Taxes of the Company Parties for a Tax period beginning before and ending after
the Effective Date, Seller and Buyer shall jointly control all proceedings taken
in connection with any such Tax proceeding, and (z) if any Tax proceeding could
reasonably be expected to have an adverse effect on Buyer, the Company Parties,
or any of their Affiliates in any Tax period beginning after the Effective Date,
the Tax proceeding shall not be settled or resolved without Buyer’s consent,
which consent shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, if notice is given to Seller of the commencement of any Tax
proceeding and Seller does not, within fifteen (15) days after Buyer’s notice is
given, give notice to Buyer of his election to assume the defense thereof (and
in connection therewith, acknowledge in writing Seller’s indemnification
obligations hereunder), Seller shall be bound by any determination made in such
Tax proceeding or any compromise or settlement thereof effected by Buyer. Buyer
and the Company Parties shall use their reasonable efforts to provide Seller
with such assistance as may be reasonably requested by Seller in connection with
a Tax proceeding controlled solely or jointly by Seller. 

29 

                             (d)        
Transfer and Similar Taxes. All real property transfer taxes, other
transfer, documentary, sales, use, registration, stamp and similar Taxes and
fees (including any penalties and interest) incurred in connection with the
Contemplated Transactions (collectively, “Transfer Taxes”) shall
be borne solely by Seller. Seller, in the case of Transfer Taxes and
corresponding Tax Returns due prior to the Effective Date, and Buyer, in the
case of corresponding Tax Returns due on or after the Effective Date, shall
cause the Company Parties to remit payment for such Transfer Taxes and duly and
timely file such Tax Returns, and Seller shall cooperate in (i) determining the
amount of Transfer Taxes, (ii) providing all requisite exemption certificates
and (iii) preparing and timely filing any and all required Tax Returns for or
with respect to such Transfer Taxes with any and all appropriate Taxing
Authorities. 

                            
(e)         Tax Indemnification.

                                             (i)        
Seller shall indemnify Buyer for Taxes: (1) attributable to Tax periods (or
portions thereof) ending on or before the Effective Date; and (2) without
duplication arising from breach of representations or warranties set forth in
Section 4.13 hereof, and (3) pursuant to Section 7.2(d) . Seller’s
indemnification obligations under this Section 7.2(e) are referred to herein as
the “Seller’s Tax Indemnity”. 

                                             (ii)        
Buyer shall indemnify Seller for Taxes attributable to Tax periods (or portions
thereof) ending after the Effective Date. Seller’s indemnification obligations
under this Section 7.2(d)(ii) are referred to herein as the “Buyer’s Tax
Indemnity”. 

                                             (iii)        
For purposes of this Section 7.2(e) and the calculation of any indemnity payable
or amount recoverable under this Agreement, any interest, penalties or additions
to Tax accruing with respect to a liability for Taxes for which a party to this
Agreement is entitled to recover from the another Party to this Agreement shall
be deemed to be attributable to a Tax period with respect to which the a Party
to this Agreement is required to indemnify the other Party to this Agreement.

                             (f)        
Tax Treatment of Indemnity Payments. Seller and Buyer agree to treat any
indemnity payment made pursuant to this Agreement as an adjustment to the
Purchase Price for all Tax purposes, unless otherwise required by Law. 

                             (g)        
Payments. A party to this Agreement may by written notice to another
party to this Agreement make a claim for indemnification or recovery under this
Section 7.2 and shall include in a notice of any claim for indemnification
pursuant to this Section 7.2 a calculation of the amount of the requested
indemnity or recovery payment. Within ten (10) days after the indemnity or
recovery calculation has been resolved, the party to this Agreement liable for
such taxes shall pay the indemnified party the recovery or indemnification
amount determined to be due. 

                             (h)        
Access and Assistance. Buyer, each Company Party, Seller and their
Affiliates shall provide each other with such assistance as may reasonably be
requested by any of them in connection with the preparation of any Tax Return,
any audit or other examination by any Taxing Authority, any judicial or
administrative proceedings relating to liability for Taxes, or any other claim
arising under this Agreement, and each shall retain and provide the others with any records or information that may be relevant to
any such Tax Return, audit or examination, proceeding or claim. Such assistance
shall include making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder and shall include providing copies of any relevant Tax Returns and
supporting work schedules which assistance shall be provided without charge
except for reimbursement of reasonable out-of-pocket expenses.

30 

                             (i)        
Refunds. All refunds for Taxes for Tax periods ending on or prior to the
Effective Date shall be the property of Seller and any such refunds shall be
paid to Seller by the Company promptly upon receipt; provided, however, Seller
shall not be entitled to any refund, or portion thereof, if such refund, or
portion thereof, is the result of the carryback of any operating losses, net
operating losses, capital losses, Tax credits or similar items arising in a Tax
period ending on or after the Effective Date. To the extent any refund from one
jurisdiction is treated as income to another jurisdiction, any Tax owed to such
other jurisdiction on account of such refund shall reduce the amount paid to
Seller under this Section 7.2(i) .

             7.3        
Further Assurances. From time to time after the Closing, without further
consideration, each Company Party and Seller, on the one hand, and Buyer, on the
other hand, at their own respective expense, shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be reasonably necessary or appropriate to effectuate, carry out and
comply with the terms of this Agreement and the Contemplated Transactions. 

             7.4        
Filings and Notifications; Cooperation. Within the applicable time period
prescribed by Legal Requirements, Buyer shall, and shall cause its affiliates
to, make all filings and notifications required by applicable Law to be made by
them in connection with the Contemplated Transactions. Seller shall cooperate
with Buyer as necessary in connection with such filings and notifications. Buyer
shall, and shall cause its affiliates to, cooperate with Seller, any Company
Party, or their affiliates (a) with respect to all filings and notifications
that Seller, any Company Party, or their affiliates shall be required by
applicable Law to make in connection with the Contemplated Transactions and (b)
in obtaining any necessary consents under any Contract. 

             7.5        
Buyer’s Benefit Plans. At Closing, Buyer shall provide employees of the
Company Parties the opportunity to participate in all employee health and
welfare benefit plans, and practices maintained by Buyer for its employees
generally in accordance with the terms of such plans and practices as in effect
from time to time. After Closing, Buyer and Seller will cooperate to review the
benefit plans provided by Buyer for its employees and the employees of the
Company Parties and consider potential changes to and improvements in such
benefits plans. Employees of the Company Parties shall receive credit for their
pre-Closing tenure with the Company Parties for purposes of determining the
benefits to which they are entitled under Buyer’s benefit plans. Employees of
the Company Parties shall receive credit for their pre-Closing tenure with the
Company Parties for purposes of determining the benefits to which they are
entitled under Buyer’s benefit plans. 

31 

             7.6        
No Material Change in Business of Company Parties. Until such time as
Buyer has satisfied its obligations under Section 2.4 of this Agreement, Buyer
agrees that Buyer will not materially alter the business of the Company Parties
without the written consent of the Seller. 

ARTICLE 8 
CONDITIONS 

             8.1        
Conditions to Obligations of Seller. The obligations of Seller to
consummate the Contemplated Transactions shall be subject to the fulfillment at
or prior to the Closing of each of the following conditions (unless waived in
writing by Seller in his sole discretion): 

                             (a)         Closing Deliveries. Buyer
shall deliver (or cause the delivery of) each of the following deliverables on
or before the Effective Date: 

                                             (i)        
the Purchase Price to be paid in accordance with Section 2.2; and 

                                           
(ii)         a certificate of Buyer
certifying to the incumbency of the officers of Buyer executing this Agreement
and any other documents being executed in connection with the consummation of
the Contemplated Transactions and attaching all requisite resolutions of Buyer’s
governing body approving the execution and delivery of this Agreement and the
consummation of the Contemplated Transactions. 

             8.2        
Conditions to Obligations of Buyer. The obligations of Buyer to effect
this Agreement and Contemplated Transactions shall be subject to the fulfillment
at or prior to the Closing of each of the following conditions (unless waived by
Buyer in writing in its sole discretion): 

                            
(a)         Closing Deliveries.
The Company Parties and Seller shall deliver (or cause the delivery of) each of
the following deliverables: 

                                            
(i)         Lien Releases. Payoff
letters, releases, UCC-3 termination statements and Lien discharges and any
other documents reasonably requested by Buyer reflecting the satisfaction in
full of any Liens filed against any Company Party (other than the Permitted
Liens), each in a form reasonably acceptable to Buyer; and 

                                            
(ii)         Consents. All
consents, authorizations, orders and approvals of (or filings or registrations
with) any governmental commission, board or other regulatory body (domestic or
foreign) required to be obtained by any Company Party in connection with the
execution, delivery and performance of this Agreement shall have been obtained
or made. All consents required from third parties that are listed on Schedule
8.2(a) attached hereto in order for the Company and Seller to consummate the
Contemplated Transactions shall have been obtained and the Company shall have
provided Buyer with reasonable evidence of such consent. 

                             (b)        
Other Notices. All notices, reports and other filings required to be made
prior to the Closing by the parties hereto with any Person in connection with
the execution and delivery of this Agreement and the consummation of the
Contemplated Transactions shall have been made or obtained in form and substance
reasonably satisfactory to Buyer. 

32 

                             (c)        
Company Indebtedness Repaid; All Liens Released. The Company shall have
paid in full all Company Indebtedness in accordance with the instructions of the
applicable lenders and provided evidence thereof to Buyer. All Liens pertaining
to the Business shall be released of record and there shall be no Liens in
respect of the assets of any Company Party except Permitted Liens. 

                             (d)        
Material Adverse Effect. No Material Adverse Effect shall have occurred,
and no events, circumstances, facts, conditions or developments shall exist that
reasonably could be expected to result in a Material Adverse Effect. 

                             (e)        
Resignations. The Company Parties shall have delivered, or cause to be
delivered, to Buyer the resignations of all of the officers and directors of
each Company Party, such resignations to be effective as of the Closing.

                             (f)        
Termination of the Company’s Benefit Plans. Unless directed otherwise by
Buyer, (i) the Company Parties shall have adopted resolutions providing that no
additional contributions shall be made to or with respect to any Benefit Plan
maintained, sponsored or contributed to by any Company Party that is intended to
qualify under Section 401(a) of the Code (“Company Retirement
Plan”) after the day immediately preceding the Effective Date, and that
the Company’s participation and sponsorship of Company Retirement Plan shall be
terminated effective on the day immediately preceding the Effective Date; (ii)
the sponsorship of the Company Retirement Plan, together with all liabilities
and obligations with respect thereto, shall be assumed by Ludwig Farmstead
Creamery effective the day immediately preceding the Effective Date; and (iii)
the Company Parties shall have taken all other action required or advisable to
so terminate the Company’s participation in and sponsorship of the Company
Retirement Plan. The Company Parties and/or Seller, as applicable, shall allow
Buyer to review such resolutions prior to their adoption and shall cooperate
with Buyer to make any changes to such resolutions reasonably requested by
Buyer. 

                             (g)        
Minute Books and Stock Record Books. The Company Parties shall have
delivered to Buyer their respective original minute books and stock record
books. 

                             (h)        
Assignments. The Company shall provide fully executed assignments or
other agreements evidencing that David Ludwig Properties, LLC has contributed
all assets held by it, and relating to the Business, to the Company, including
the FSU Assets.

                             (i)        
Lease Agreement. The Company shall provide a fully executed lease
agreement with David Ludwig Properties, LLC, for the premises at 10 Sunset Hills
Professional Center, Edwardsville, Illinois 62025 in a form substantially
similar to Exhibit A attached hereto and incorporated herein by reference
(“Lease Agreement”). 

                             (j)        
Employment Agreement. The Company shall provide a fully executed
employment agreement for each of the Key Employees in a form substantially
similar to Exhibit B attached hereto and incorporated herein by reference
(“Employment Agreement”). 

33 

ARTICLE 9 
INDEMNIFICATION 

            
9.1         Indemnification by
Seller. 

                             (a)        
Seller hereby agrees to indemnify, defend and hold harmless, the following
“Buyer Indemnified Parties”, (y) Company Parties; and (z) Buyer,
its Affiliates and each of their respective (both present and future) officers,
directors, employees, shareholders, partners, managers, members, agents,
representatives and the successors and assigns of each, from and against and in
respect of and to reimburse and pay the Buyer Indemnified Parties as incurred
with respect to, any and all claims, demands, or suits (by any Person), losses,
deficiencies, lost profits, diminutions in value, damages, Liabilities
(including consequential, incidental, special and punitive damages),
obligations, payments, penalties, fines, costs and expenses (including, the
costs and expenses of any and all actions, suits, proceedings, assessments,
judgments, settlements, compromises, fines and interest relating thereto,
including attorneys’ fees and disbursements and costs of investigation in
connection therewith) (collectively, “Losses”) assessed, suffered,
incurred or sustained by or against any Buyer Indemnified Party by reason of,
arising out of, relating to, or in connection with (i) any inaccuracy in or
breach of any representation or warranty by the Company or Seller set forth
herein, or in any Exhibit, certificate or schedule contemplated hereby, (ii) any
breach by the Company (prior to Closing), or Seller, of any covenant of the
Company or Seller hereunder or under the Seller Documents or any other document
to be executed by any of them in connection herewith, (iii) all Liabilities of
any Company Party relating to the operation of the Business prior to the
acquisition by Buyer of the Shares, and (iv) as required by Section 7.2(e) .

                             (b)        
Notice of Claim; Right to Defend. As soon as reasonably practicable,
Buyer shall give to Seller written notice of any claim, Action, suit, demand or
event which Buyer believes shall give rise to a claim for indemnification under
Section 9.1 hereunder; provided, however, that the failure of Buyer to give such
written notice as soon as reasonably practicable shall not affect the Liability
of Seller hereunder, except to the extent that the rights of Seller to defend
himself or to cure or mitigate the Losses are actually prejudiced thereby.
Thereafter, Buyer shall furnish to Seller, in reasonable detail, such
information as it may have with respect to such Action or other event, including
copies of any summons, complaint or other pleading which may have been served
upon any Buyer Indemnified Party or any written claim, demand, invoice, billing
or other document evidencing or asserting the same. Provided Seller, within ten
(10) days after receipt of such written notice from Buyer, shall acknowledge in
writing to Buyer Seller’s assumption of full responsibility for defense and
indemnification with respect to such claim, action, suit or proceeding, Seller
shall have the right to assume defense of such claim, action, suit or
proceedings through counsel selected by Seller and reasonably satisfactory to
Buyer at their expense, and to contest or compromise such claim, action, suit or
proceeding. Upon such assumption of defense by Seller, Buyer shall cooperate
with Seller in Seller’s conduct of such defense to the extent reasonably
requested by Seller and at Seller’s expense and, so long as Seller is vigorously
defending such claim, action, suit or proceeding, the Buyer Indemnified Parties
shall not settle or compromise the same. Notwithstanding the foregoing, without
the prior written consent of Buyer, Seller shall not be entitled to settle any
claim, action, suit or proceedings the defense of which has been assumed by
Seller if (i) the Losses to Buyer Indemnified Parties are not fully covered by
Seller provided herein, (ii) such settlement could reasonably be expected to
have a Material Adverse Effect or impose any material condition or limitation on
the business, operations, prospects or condition (financial or otherwise) of
Buyer or the Business, or (iii) such settlement involves a criminal matter.
Notwithstanding the third sentence of this Section 9.1(b), Buyer may, by notice
to Seller, assume its exclusive right to defend, compromise or settle any claim,
Action, suit or proceedings at Seller’s sole expense if (x) Seller is a Person
against whom the claim is made and Buyer determines in good faith that joint
representation would be inappropriate, (y) Seller fails to provide reasonable
assurance to Buyer of his financial capacity to defend such claim and provide
indemnification with respect to such claim or Buyer reasonably determines that
Seller is not vigorously defending such claim, or (z) if Buyer reasonably
determines that a claim may adversely affect it, any other Buyer Indemnified
Party or any of their Affiliates other than as a result of monetary damages for
which it would be entitled to indemnification under this Agreement. 

34 

            
9.2         Indemnification by
Buyer.

                             (a)        
Buyer agrees to indemnify, defend and hold harmless Seller, Key Employees and
Seller’s heirs and permitted assigns (collectively “Seller
Indemnified Parties”) against and in respect of any
and all Losses suffered or incurred by any such party by reason of, arising out
of, relating to, or in connection with (i) any breach by Buyer of any
representation and warranty of Buyer set forth herein; (ii) any breach by Buyer
of any covenant of Buyer hereunder or under any other document to be executed by
Buyer in connection herewith; and (iii) as required by Section 7.2(e)(ii) . 

                             (b)        
Notice of Claim; Right to Defend. As soon as reasonably practical, Seller
shall give Buyer prompt written notice of any claim, suit or demand which Seller
reasonably believes will give rise to a claim for indemnification under Section
9.2; provided, however, that the failure of Seller to give such written notice
as soon as reasonably practical shall not affect the liability of Buyer
hereunder, except to the extent that the rights of Buyer to defend itself or to
cure or mitigate the damages are actually prejudiced thereby. Thereafter, Seller
shall furnish to Buyer, in reasonable detail, such information as they may have
with respect to such Action or other event, including copies of any summons,
complaint or other pleading which may have been served upon the Seller
Indemnified Party or any written claim, demand, invoice, billing or other
document evidencing or asserting the same. Seller shall designate in writing all
information and documents that they furnish to Buyer pursuant to this Section
9.2(b) as being with respect to a claim, action, suit or proceeding under this
Section 9.2(b) . Provided Buyer, within ten (10) days after receipt of such
written notice from Seller, shall acknowledge in writing to Seller Buyer’s
assumption of responsibility for defense and indemnification with respect to
such claim, action, suit or proceeding, Buyer shall have the right to assume
defense of such claim, action, suit or proceeding through counsel reasonably
selected by Buyer at Buyer’s expense, and to contest or compromise such claim,
action, suit or proceeding; provided that Buyer shall regularly inform Seller of
the status of such claim, action, suit or proceeding and provide Seller the
reasonable opportunity to participate in the defense or settlement of such
claim, action, suit or proceeding. Upon such assumption of defense by Buyer, the
Seller Indemnified Parties shall cooperate with Buyer in Buyer’s conduct of such
defense to the extent reasonably requested by Buyer and at Buyer’s expense and,
so long as Buyer is defending such claim, action, suit or proceeding, the Seller Indemnified Parties shall not settle or compromise the same.
Notwithstanding the foregoing, Sellers may, by notice to Buyer, assumes its
exclusive right to defend, compromise or settle any claim, action, suit or
proceedings if Buyer is also a Person against whom the claim is made and Sellers
determine in good faith that joint representation would be inappropriate.

35 

            
9.3         Limitations on
Indemnification.

                             (a)        
Notwithstanding anything contained herein to the contrary, the obligations of
indemnification pursuant to clause (i) in Section 9.1(a) and clause (i) in
Section 9.2(a) of this Agreement shall be limited as follows: 

            
(i)         no Buyer Indemnified Party
shall be entitled to indemnification pursuant to clause (i) in Section 9.1(a)
hereof unless and until the aggregate dollar amount of all such claims shall
have exceeded $20,000, and after such amount has been exceeded, the Buyer
Indemnified Parties shall be indemnified for all Losses back to the first
dollar; and 

            
(ii)         no Seller Indemnified Party
shall be entitled to indemnification pursuant to clause (i) in Section 9.2(a)
hereof unless and until the aggregate dollar amount of all such claims shall
have exceeded $20,000, and after such amount has been exceeded, the Seller
Indemnified Parties shall be indemnified for all Losses back to the first
dollar. 

             
(iii)       the maximum aggregate liability of
either party for indemnification claims made pursuant to clause (i) in Section
9.1(a) and clause (i) in Section 9.2(a) shall each be limited to: 

                            
(1)         Five million dollars
($5,000,000), except that in no event shall Seller be liable for amounts in
excess of the aggregate amount actually already paid and the amounts which will
be paid to Seller pursuant to Section 2.4 of this Agreement, if the indemnifying
party acknowledges that it is, or a court of competent jurisdiction determines,
that it is responsible for the indemnification claim; or 

                            
(2)         The aggregate amount
actually already paid to Seller pursuant to Section 2.4 of this Agreement at
such time as notice of the claim is brought to Seller’s attention in the manner
provided in Section 9.2(b) above, if a court of competent jurisdiction
determines that the indemnifying party is not responsible for the
indemnification claim. 

                             (b)        
No claim pursuant to Section 9.1 and Section 9.2 may be asserted under this
Agreement unless either (i) the party making the claim gives the party against
whom the claim is to be made notice of such claim before the end of the
applicable survival period under Section 9.4 or (ii) the party against whom the
claim would be made has knowledge of the facts which are the basis of the claim
before the end of the applicable survival period under Section 9.4. 

36 

                             (c)        
The limitations on indemnification set forth in this Section 9.3 shall not be
applicable to any claim based upon fraud or intentional misrepresentation. 

             9.4        
Survival. The representations and warranties of the parties as set forth
in this Agreement shall survive the Closing for four (4) years following the
Effective Date, and any claim based upon fraud or intentional misrepresentation
shall survive the Closing indefinitely without limitation. 

             9.5        
Right of Offset. Buyer shall have the right to offset any Losses of Buyer
Indemnified Parties under this Agreement against any amount owing by a Buyer
Indemnified Party to Seller hereunder or the Seller Documents. Neither the
exercise of nor the failure to exercise such right of setoff will constitute an
election of remedies or limit Buyer in any manner in the enforcement of any
other remedies that may be available to it. 

ARTICLE 10 
MISCELLANEOUS PROVISIONS 

             10.1    
 Notices. Unless otherwise provided herein, any notice, approval or
disapproval, request, instruction, other document or communication to be given
hereunder by any party to the other parties must be in writing and shall be
deemed given (a) if by transmission by facsimile or hand delivery, when
delivered (provided that such communications are concurrently sent by mail in
accordance with sub-clause (b) or (c) below); (b) if mailed via the official
governmental mail system, five (5) days after mailing, provided said notice is
sent first class, postage pre-paid, via certified or registered mail, with a
return receipt requested; or (c) if mailed by an internationally recognized
overnight express mail service, two (2) days after deposit therewith prepaid.
All notices shall be addressed to the parties at the respective addresses as
follows: 

	 	To the Company or Seller: 	 
	 	  	  
	 	 	David Ludwig 
	 	  	10 Sunset Hills Professional
      Center 
	 	  	Edwardsville, IL 62025 
	 	  	  
	 	with a copy to: 	  
	 	  	  
	 	  	Byron Carlson Petri & Kalb,
      LLC 
	 	  	c/o Christopher Byron 
	 	  	411 St. Louis Street 
	 	  	Edwardsville, IL 62025 
	 	  	  
	 	To Buyer: 	Heritage Global, Inc. 
	 	  	1 Toronto Street, Suite 700

	 	  	Toronto, Ontario M5C 2V6 
	 	  	Attention: Allan Silber
  

37 

	 	with a copy to:	 
	 	 	  
	 	 	Harwell Howard Hyne Gabbert &
      Manner, P.C. 
	 	 	333 Commerce Street, Suite 1500
    
	 	 	Nashville, TN 37201 
	 	 	Facsimile: 615-251-1056 
	 	 	Attention: Mark Manner
  

or to such other representative or at such other address of a
party as such party hereto may furnish to the other parties in writing in
accordance with this Section 10.1. 

             10.2     
Exhibits and Schedules to this Agreement. All Exhibits and Schedules
hereto, or documents expressly incorporated into this Agreement, are hereby
incorporated into this Agreement and are hereby made a part hereof as if set out
in full in this Agreement. 

             10.3    
 Assignment; Successors in Interest. No assignment or transfer by
Buyer, Seller or the Company of their respective rights and obligations
hereunder shall be made except with the prior written consent of the other
parties hereto, except that without the consent of Seller or the Company, Buyer
may (i) collaterally assign its rights hereunder to its lender or its
Affiliate’s lender or lenders or (ii) assign its rights and obligations
hereunder to any of its Affiliates, or (iii) assign its rights and obligations
hereunder in connection with any sale of all or substantially all of the assets
of Buyer or its Subsidiaries (or such Affiliate), or a transfer of voting
control of Buyer or its Subsidiaries (or such Affiliate), including by way of
merger. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their permitted successors and assigns, and any reference
to a party hereto shall also be a reference to a permitted successor or assign.
Any assignment or transfer in violation of this Agreement will be void. 

             10.4    
 Controlling Law; Integration. This Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Illinois without reference to Illinois’s choice of law rules. This Agreement
supersedes all negotiations, agreements and understandings among the parties
with respect to the subject matter hereof. This Agreement and each other
agreement dated the date hereof or the Effective Date between Buyer, Seller, and
the Company, constitute the entire agreement among the parties hereto with
respect to the subject matter hereof.

             10.5     
Amendment; Waiver. This Agreement may not be amended, restated, modified,
supplemented or waived except by written agreement of Buyer and Seller. No
failure or delay by any party hereto in exercising any right, power or privilege
hereunder (and no course of dealing between or among any of the parties) shall
operate as a waiver of any such right, power or privilege. No waiver of any
default on any one occasion shall constitute a waiver of any subsequent or other
default. No single or partial exercise of any such right, power or privilege
shall preclude the further or full exercise thereof. 

             10.6     
Severability. Any provision set forth in this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the
extent permitted by Law, the parties hereto waive any provision of Law that
renders any such provision prohibited or unenforceable in any respect. 

38 

             10.7    
 Counterparts. This Agreement may be executed in two (2) or more
counterparts (and the same may be delivered by means of facsimile or PDF file),
each of which shall be deemed an original, and it shall not be necessary in
making proof of this Agreement or the terms hereof to produce or account for
more than one of such counterparts. 

             10.8    
 No Third-Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person,
firm or corporation other than the parties hereto, and their successors or
assigns, any rights, remedies, obligations or Liabilities under or by reason of
this Agreement or result in such Person, firm or corporation being deemed a
third-party beneficiary of this Agreement, except that the provisions of Article
9 may be enforced by any Person who is entitled to indemnification or insurance
coverage thereunder. 

            
10.9      JURISDICTION AND FORUM; WAIVER OF JURY
TRIAL.

                             (a)        
THE PARTIES HERETO AGREE THAT THE EXCLUSIVE FORUM AND VENUE FOR ANY DISPUTES
BETWEEN ANY OF THE PARTIES HERETO ARISING OUT OF THIS AGREEMENT SHALL BE ANY
STATE OR FEDERAL COURT IN THE STATE OF ILLINOIS. THE FOREGOING SHALL NOT LIMIT
THE RIGHTS OF ANY PARTY HERETO TO OBTAIN EXECUTION OF JUDGMENT IN ANY OTHER
JURISDICTION. THE PARTIES HERETO FURTHER AGREE, TO THE EXTENT PERMITTED BY LAW,
THAT FINAL AND UNAPPEALABLE JUDGMENT AGAINST ANY OF THEM IN ANY ACTION OR
PROCEEDING CONTEMPLATED ABOVE SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT,
A CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE
FACT AND AMOUNT OF SUCH JUDGMENT. 

                             (b)        
EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY
HAVE TO VENUE, INCLUDING, WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH FORUM,
IN ANY OF SUCH COURTS. IN ADDITION, EACH OF THE PARTIES CONSENTS TO THE SERVICE
OF PROCESS BY PERSONAL SERVICE OR ANY MANNER IN WHICH NOTICES MAY BE DELIVERED
HEREUNDER IN ACCORDANCE WITH SECTION 10.1 OF THIS AGREEMENT. 

                             (c)        
EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE CONTEMPLATED TRANSACTIONS. 

39 

             10.10    
 Interpretation. As all parties have participated in the drafting of
this Agreement, any ambiguity shall not be construed against any party as the
drafter. 

             10.11    
 Specific Performance and Other Remedies. Seller and the Company
each acknowledge that the performance of Seller’s and the Company’s obligations
under this Agreement and to consummate the Contemplated Transactions are
special, unique and of extraordinary character, and that, in the event that
Seller or the Company breaches, threatens to breach or fails or refuses to
perform any of its obligations under this Agreement, irreparable injury to Buyer
shall result. Seller and the Company each agree, therefore, that in the event
that any of them breaches, threatens to breach or fails or refuses to perform
any of its obligations under this Agreement, Buyer shall be entitled to, in
addition to any remedies at Law under this Agreement for damages or other
equitable relief, specific performance of such covenant or agreement hereunder,
including injunctive relief without the necessity of posting a bond. 

             10.12    
 Expenses. Except as otherwise expressly provided in this Agreement,
each of Buyer, on the one hand, and Seller (for himself and the Company), on the
other hand, shall pay their respective costs and expenses incurred in connection
with this Agreement and the Contemplated Transactions, including fees and
expenses of their own respective financial advisors, accountants and counsel.
Notwithstanding anything in this Agreement to the contrary, Buyer and Seller
shall pay, equally, all costs arising out of or related to the performance of an
audit of the Company Party’s financial statements as required to satisfy Buyer’s
SEC reporting obligations; provided that Seller shall not be obligated to pay an
amount exceeding twelve thousand five hundred dollars ($12,500) and Seller shall
only be required to pay such amount in the event that the transactions
contemplated by this Agreement take place at Closing.

40 

             IN
WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement to
be duly executed, as of the date first above written. 

BUYER: 

HERITAGE GLOBAL, INC. 

	 	By: 	/s/Allan Silber 
	 	Name: 	Allan Silber 
	 	Title: 	President 

[Buyer Signature Page to Stock Purchase Agreement] 

       
     IN WITNESS WHEREOF, the parties hereto have caused
this Stock Purchase Agreement to be duly executed, as of the date first above
written. 

COMPANY: 

NATIONAL LOAN EXCHANGE, INC.

	 	By: 	/s/David Ludwig 
	 	Name: 	David Ludwig 
	 	Title: 	President 

SELLER: 

	 	/s/David Ludwig 
	 	David Ludwig 

[Seller Signature Page to Stock Purchase Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}]]