UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 1994
---------------------
ARKANSAS BEST CORPORATION
- - -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-19969 71-0673405
- - ------------------------- ------------------------- ----------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation or
organization)
1000 South 21st Street
Fort Smith, Arkansas 72901
(501) 785-6000
- - -----------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
the registrant's principal executive offices)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
(a) On September 30, 1994 Arkansas Best Corporation (the "Company")
consummated the purchase of all outstanding stock of Clipper Exxpress
Company ("Clipper"), Agricultural Express of America, Inc. ("AXXA") and
Agile Freight System, Inc. ("Agile") (collectively the "Clipper Group")
pursuant to a stock purchase agreement entered into on August 18, 1994.
The stock was acquired from the following shareholders:
Clipper Exxpress Company:
Percentage
Shareholder Shares Owned Ownership
----------- -------------- -------------
Merle Chambers 4,036 74.5475%
The Evelyn Chambers
Revocable Trust No. 1 295 5.4488%
Andy Sze 1,083 20.0037%
------- ----------
5,414 100.0000%
Agricultural Express of America, Inc.:
Percentage
Shareholder Shares Owned Ownership
----------- -------------- -------------
Merle Chambers 950 80.0000%
Andy Sze 238 20.0000%
------- ----------
1,188 100.0000%
Agile Freight Systems, Inc.:
Percentage
Shareholder Shares Owned Ownership
----------- -------------- -------------
Merle Chambers 800 80.0000%
Andy Sze 200 20.0000%
------- ----------
1,100 100.0000%
Clipper is a non-asset based intermodal marketing and freight logistics
company. AXXA provides temperature-controlled intermodal services and
Agile provides expedited truckload services.
The Company's total purchase price for the stock is $60 million in cash,
subject to certain closing audit adjustments. The amount was determined
based on the Company's assessment of the value of the Clipper Group and
on negotiations with the sellers.
On September 30, 1994, the Company paid an initial payment of
$54 million to the Clipper Group shareholders from cash on hand and
funds provided under its existing lines of credit with Societe Generale,
as Agent, NationsBank of Texas, as Co-Agent, and certain other banks.
The final payment which is due on May 15, 1995 will be funded from cash
and/or funds provided under its existing lines of credit.
<PAGE>
(b) The Company acquired the stock of Clipper, AXXA and Agile and therefore
indirectly acquired their assets. The Clipper Group companies use the
assets in their transportation and logistics services. The Company will
continue such use of the assets.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The Company is unable to provide the required financial statements with
the filing of the Form 8-K and will file the required financial
statements under cover of Form 8-K/A as soon as practicable, but not
later than 60 days after the filing of this Form 8-K.
(b) Pro forma financial information.
The Company is unable to provide the required pro forma financial
information with the filing of the Form 8-K and will file the required
pro forma financial information under cover of Form 8-K/A as soon as
practicable, but not later than 60 days after the filing of this
Form 8-K.
(c) Exhibits.
Exhibit 10 - Stock Purchase Agreement dated August 18, 1994 by and
among Arkansas Best Corporation and the Shareholders of
Clipper Exxpress Company, Agile Freight System, Inc. and
Agricultural Express of America, Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
ARKANSAS BEST CORPORATION
(Registrant)
Date: October 13, 1994 /s/ Donald L. Neal
------------------- ------------------------------------
Donald L. Neal - Senior Vice
President - Chief Financial Officer,
and Principal Accounting Officer
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
- - --------- -------- --------------
10 Stock Purchase Agreement dated August 18, 1994 by -
and among Arkansas Best Corporation and the
Shareholders of Clipper Exxpress Company, Agile
Freight System, Inc. and Agricultural Express of
America, Inc.
<PAGE>
STOCK PURCHASE AGREEMENT
Dated August 18, 1994
by and among
ARKANSAS BEST CORPORATION
and
THE SHAREHOLDERS OF
CLIPPER EXXPRESS COMPANY,
AGILE FREIGHT SYSTEM, INC.
and
AGRICULTURAL EXPRESS OF AMERICA, INC.
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions 2
SECTION 2. Transfer of Shares and Payment of
Purchase Price 5
2.1 Shares To Be Transferred by Shareholders 5
2.2 Amount of Purchase Price 5
2.3 Payment of Purchase Price 6
2.4 Purchase Price Adjustment 6
SECTION 3. Representations and Warranties of the
Shareholders 9
3.1 Good Standing 9
3.2 Certificates of Incorporation; By-Laws;
Minute Books 10
3.3 Authorization - No Liens 11
3.4 Authorized Capitalization 12
3.5 Subsidiaries; Investments; Affiliate
Notes 12
3.6 Financial Statements 13
3.7 Records and Books of Account 14
3.8 Liabilities 14
3.9 Title to Assets; Liens and Encumbrances 15
3.10 Leased Premises 15
3.11 Trademarks, Service Marks, Trade Names,
Patents and Copyrights 16
3.12 Contracts 17
3.13 Purchase and Sales Commitments and
Orders; Principal Customers 20
3.14 Labor Relations; Employees 20
3.15 Legal Proceedings 21
3.16 Orders, Decrees, Etc. 22
3.17 Compliance With Law; Permits and
Licenses 22
3.18 Changes Since Balance Sheet Date; No
Material Adverse Change 24
3.19 No Change 26
3.20 Accounts Receivable 26
3.21 Capital Projects and Expenditures 27
3.22 Employee Benefits 27
3.23 Governmental Approvals 31
3.24 Tax Matters 31
3.25 Insurance Coverage 34
3.26 Representations and Warranties 34
<PAGE>
Page
SECTION 4. Representations and Warranties of Buyer 35
4.1 Good Standing 35
4.2 Authorization 35
SECTION 5. Conduct Prior to the Closing 36
5.1 Investigation by Buyer 36
5.2 Ongoing Operations 37
5.3 Conduct of Business 37
5.4 Consents 40
5.5 Plans, Leases and Contracts 40
5.6 Public Announcements 40
SECTION 6. Conditions of Buyer's Obligations to
Close 41
6.1 Agreements and Conditions 41
6.2 Representations and Warranties 41
6.3 Loss, Damage or Destruction 41
6.4 No Legal Proceeding 42
6.5 Deliveries 42
6.6 HSR Act 42
6.7 Legal Opinion 42
SECTION 7. Conditions of the Shareholders'
Obligations to Close 43
7.1 Agreements and Conditions 43
7.2 Representations and Warranties 43
7.3 Deliveries 43
SECTION 8. Deliveries of the Shareholders and Buyer 43
8.1 Stock Certificates 44
8.2 Corporate Records 44
8.3 Resignations 44
8.4 Consents 44
8.5 Possession of Assets 44
8.6 Other Deliveries 44
SECTION 9. Deliveries of Buyer on the Closing Date 44
9.1 Payments 45
9.2 Secretary's Certificate 45
SECTION 10. Additional Covenants 45
10.1 Cooperation 45
10.2 Further Assurances of Shareholders 45
10.3 Further Assurances of Buyer 46
10.4 Code Section 338(h)(10) Election 47
10.5 Non-Competition Covenants 48
10.6 Agile Closing 50
<PAGE>
Page
SECTION 11. Indemnification 51
11.1 Indemnification by Shareholders 51
11.2 Indemnification by Buyer 52
11.3 Procedures for Third Party
Indemnification 53
11.4 Limitations on Indemnification 54
11.5 Holdback 54
11.6 Insurance; Double Recovery 56
SECTION 12. Survival of Representations; Effect of
Certificates 57
SECTION 13. Brokerage Indemnity 57
SECTION 14. Notices 58
SECTION 15. Termination 59
SECTION 16. Miscellaneous. 61
16.1 Entire Agreement 61
16.2 Taxes 62
16.3 Governing Law 62
16.4 Representation by Counsel 62
16.5 Benefit of Parties; Assignment 63
16.6 Pronouns 63
16.7 Headings 64
16.8 Arbitration 64
16.9 Expenses 66
<PAGE>
AGREEMENT dated as of August 18, 1994 by and among
ARKANSAS BEST CORPORATION, a Delaware corporation ("Buyer"),
and MERLE CHAMBERS ("Chambers"), THE EVELYN CHAMBERS REVOCABLE
TRUST NO. 1 ("Chambers Trust"), and ANDY HOK FAN SZE ("Sze")
(Chambers, the Chambers Trust and Sze are referred to herein
collectively as the "Shareholders").
W I T N E S S E T H:
WHEREAS, Chambers, the Chambers Trust and Sze own all
of the issued and outstanding capital stock of Clipper
Exxpress Company, a Delaware corporation ("Clipper Exxpress"),
and Chambers and Sze own all of the issued and outstanding
capital stock of Agile Freight System, Inc., a Delaware
corporation ("Agile") and Agriculture Express of America,
Inc., a Delaware corporation ("AXXA") (Clipper Exxpress, Agile
and AXXA are referred to herein collectively as the "Clipper
Group"), and
WHEREAS, Buyer desires to purchase from the
Shareholders and the Shareholders desire to sell to Buyer, on
the terms and conditions set forth herein, all of the issued
and outstanding shares of capital stock of the Clipper Group.
NOW, THEREFORE, in consideration of the mutual
covenants contained herein and for other good and valuable
consideration set forth herein, the parties hereto agree as
follows:
<PAGE>
SECTION 1. Certain Definitions. For purposes of
this Agreement, the following terms shall have the respective
meanings set forth below:
"Actions" mean any claims, actions, suits,
proceedings and investigations, whether at law, in equity or
before any court, arbitrator, arbitration panel or
Governmental Authority.
"Affiliate" of a party means any Person that,
directly or indirectly, controls, is controlled by or is under
common control with such party.
"Balance Sheets" has the meaning specified in
paragraph 3.6 below.
"Balance Sheet Date means June 30, 1994.
"Closing" means the closing of the transactions
contemplated hereby, which shall take place at the offices of
Holme Roberts & Owen , 1700 Lincoln Street, Suite 4100,
Denver, Colorado 80203, on the Closing Date commencing at
10:00 A.M., or at such other time or place as the parties may
agree upon in writing and shall be effective as of the close
of business on the Closing Date.
"Closing Date" means September 30, 1994 or such other
date as the parties may agree upon in writing.
"Code" means the Internal Revenue Code of 1986, as
amended.
<PAGE>
"Contracts" mean all contracts, agreements,
indentures, licenses, leases, commitments, plans,
arrangements, sales orders and purchase orders of every kind,
whether written or oral.
"Damages" mean losses, liabilities, obligations,
penalties, costs, damages, claims and expenses (including
reasonable costs of investigation and attorneys' fees and
disbursements).
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
"ERISA Affiliate" means each member of the Clipper
Group and each corporation, partnership, or other trade or
business, whether or not incorporated, which is or has been
treated as a single employer or controlled group member with
any member of the Clipper Group pursuant to Code Section 414
or ERISA Section 4001.
"GAAP" means generally accepted United States
accounting principles.
"Governmental Authority" means any agency,
instrumentality, department, commission, court, tribunal or
board of any government, whether foreign or domestic and
whether national, Federal, state, provincial or local.
"Laws" mean laws, rules, regulations, codes, orders,
ordinances, judgments, injunctions, decrees and policies.
<PAGE>
"Liabilities" mean debts, liabilities, claims,
obligations, duties and responsibilities of any kind and
description, whether absolute or contingent, monetary or non-
monetary, direct or indirect, known or unknown or matured or
unmatured, or of any other nature.
"Lien" means any security interest, lien, mortgage,
claim, charge, pledge, restriction, equitable interest or
encumbrance of any nature.
"Person" means any natural person, corporation,
business trust, joint venture, association, company, firm,
partnership or other entity or government or Governmental
Authority.
Proprietary Right" means any trade name, trademark,
trade secret, know-how, service mark, patent or copyright and
any application for any of the foregoing.
"Returns" mean all returns, declarations, reports,
forms, estimates, information returns and statements required
to be filed with or supplied to any Governmental Authority in
connection with any Taxes.
"Shares" means all of the issued and outstanding
shares of capital stock of each company in the Clipper Group.
"Taxes" mean all taxes, charges, fees, levies,
customs, duties or other assessments, including, without
limitation, income, gross receipts, excise, real and personal
property, sales, transfer, license, payroll and franchise
<PAGE>
taxes imposed by any Governmental Authority and shall include
any interest, penalties or additions to tax attributable to
any of the foregoing.
SECTION 2. Transfer of Shares and Payment of
Purchase Price.
2.1 Shares To Be Transferred by Shareholders.
Based upon and subject to the terms, agreements, warranties,
representations and conditions of this Agreement, each of the
Shareholders hereby agrees to sell, convey, transfer, assign
and deliver to Buyer on the Closing Date, and Buyer hereby
agrees to buy and accept on the Closing date, all of the
Shares held by such Shareholder.
2.2 Amount of Purchase Price. The total
consideration (the "Purchase Price") to be paid by Buyer for
the Shares shall be $60,000,000, (plus or minus any purchase
price adjustment to be determined as provided in paragraph
2.4). For purposes of the Closing, the aggregate Purchase
Price shall be allocated to the stock of each company in the
Clipper Group as follows: 71.77 percent to the capital stock
of Clipper Exxpress; 4.30 percent to the capital stock of
Agile and 23.93 percent to the capital stock of AXXA. The
Purchase Price shall be allocated among the Shareholders as
set forth on Schedule 2.2. After completion of the Closing
Balance Sheet as described in paragraph 2.4 (including any
<PAGE>
final adjustments thereof), the allocation of the aggregate
Purchase Price to the stock of each company in the Clipper
Group shall be adjusted to reflect the proportion of net
assets of each company in the Clipper Group to the aggregate
net assets of all companies in the Clipper Group as of the
date of the Closing Balance Sheet. Chambers and the Chambers
Trust shall take all steps appropriate to reallocate the
Purchase Price between them to reflect such final allocation
and will notify Buyer in writing of such reallocation. The
Buyer shall have no responsibility for any such reallocation.
2.3 Payment of Purchase Price. On the Closing
Date, and subject to paragraph 11.5, Buyer shall pay to each
of the Shareholders her, his or its proportionate share of the
Purchase Price by means of a wire transfer of immediately
available funds to an account number and depository designated
by such Shareholder at least three business days prior to the
Closing Date.
2.4 Purchase Price Adjustment. Schedule 2.4 hereto
sets out the projected combined balance sheet (including
shareholders' equity) for the Clipper Group for September 30,
1994 (the "Projected Balance Sheet"), which the Shareholders
represent has been prepared on a basis consistent with the
Balance Sheets referred to in paragraph 3.6. Promptly
following the Closing Date (but in any event no later than 30
days after the Closing Date) the Clipper Group shall
<PAGE>
prepare a balance sheet (including shareholders' equity) for
the Clipper Group at September 30, 1994 (the "Closing Balance
Sheet") in accordance with the same GAAP principles as the
Clipper Group applied in the preparation of the Projected
Balance Sheet and the Balance Sheets except as may be required
to reflect normal year-end adjustments, reserves and accruals
to each balance sheet account that under GAAP would be made as
of December 31 but that will instead be made as of September
30 to reflect the short year ending September 30, 1994 (the
"Closing Balance Sheet Adjustments"). Ernst & Young shall
audit the Closing Balance Sheet and make any adjustments it
considers appropriate, consistent with the provisions of the
preceding sentence. The Closing Balance Sheet with such
adjustments, if any, shall be given to Sze and Chambers. The
Shareholders shall have a period of 30 days after receipt of
the Closing Balance Sheet to give to Buyer a notice (an
"Objection Notice") specifying in reasonable detail any
objections they may have to the Closing Balance Sheet. If an
Objection Notice is not given by the Shareholders within such
30-day period, then the Closing Balance Sheet shall be
accepted as final, binding and conclusive on the parties
hereto. If an Objection Notice is given by the Shareholders
within such 30-day period, the Shareholders and Buyer shall
attempt to reconcile such items as are in dispute. If the
Shareholders and Buyer are unable to reconcile all such items
within 30 days after the date on which the Objection Notice is
<PAGE>
given, then such items as remain in dispute shall be
determined in accordance with the principles set forth in this
paragraph 2.4 by a representative of a firm of independent
public accountants designated by a representative of the
Shareholders and a representative of Buyer. The determination
of the items in dispute shall be final, binding and conclusive
on the parties hereto. The fees and expenses of Ernst & Young
shall be paid by Buyer. The fees and expenses of the
designated accounting firm mentioned above shall be shared
equally by the Shareholders and the Buyer. In the event that
the shareholders' equity for the Clipper Group set forth in
the Closing Balance Sheet, after deducting the distribution
permitted under the last sentence of this paragraph 2.4, is
greater than $10,767,000, the Buyer shall pay to the
Shareholders the amount of such excess, in the proportion that
each Shareholder's share of the Purchase Price was to the
total Purchase Price. In the event that the shareholders'
equity for the Clipper Group set forth in the Closing Balance
Sheet, after deducting the distribution permitted under the
last sentence of this paragraph 2.4, is less than $10,767,000,
the Shareholders shall pay to the Buyer the amount of such
shortfall, in the proportion that each Shareholder's share of
the Purchase Price was to the total Purchase Price. In any
event, the Shareholders shall receive distributions from the
Clipper Group for tax payments equal to 45 percent of combined
<PAGE>
income of the Clipper Group (other than income attributable to
or arising from the transaction contemplated by this
Agreement, including the filing of an election under Sections
338(g) and 338(h)(10) of the Code with respect to the purchase
and sale of the Shares) from January 1, 1994, to and including
the Closing Date.
SECTION 3. Representations and Warranties of the
Shareholders. Chambers and Sze hereby jointly and severally
warrant and represent to and agree with Buyer as follows, and
the Chambers Trust hereby warrants and represents to and
agrees with Buyer only with respect to paragraphs 3.3 and 3.4
below as follows:
3.1 Good Standing. Clipper Exxpress, Agile and
AXXA are corporations duly organized, validly existing and in
good standing under the laws of Delaware, have full power and
authority to own, lease and operate their respective
properties and assets and to conduct their respective
businesses as now being conducted, and are duly qualified or
licensed to do business as foreign corporations, and are in
good standing, in all jurisdictions where the character of the
properties each owns, leases or operates, or the conduct of
their respective businesses, requires such qualification or
licensing, other than in such jurisdictions where the failure
so to qualify would subject the Clipper Group, taken as a
<PAGE>
whole, to a material liability. As used in this Agreement,
any reference to any event, change or effect being material
with respect to any entity means an event, change or effect
materially related to the condition (financial or otherwise),
businesses, prospects of the businesses as currently
conducted, or operations of such entity; and any reference to
any event, change or effect having a material adverse effect
means an event, change or effect that materially and adversely
affects the condition (financial or otherwise), businesses,
prospects of the businesses as currently conducted, or
operations of that entity. The jurisdictions in which each
company in the Clipper Group is qualified or licensed to do
business are set forth on Schedule 3.1.
3.2 Certificates of Incorporation; By-Laws; Minute
Books. True and complete copies of the Certificates of
Incorporation and By-Laws, as amended to and including the
date hereof, of Clipper Exxpress, Agile and AXXA have been
delivered to Buyer. The minute books, stock books and stock
transfer records of each such company, true and complete
copies of which have been made available to Buyer at the
headquarters of Clipper Exxpress, contain true and complete
minutes and records of all issuances and transfers of capital
stock of each such company and of all minutes and records of
all meetings, consents, proceedings and other actions of the
shareholders, board of directors and committees of the board
<PAGE>
of directors of each such company since the date of
incorporation of each such company.
3.3 Authorization - No Liens. Each Shareholder
represents and warrants separately as to herself, himself or
itself that this Agreement constitutes the valid and binding
obligation of such Shareholder, enforceable against her, him
or it in accordance with its terms. Except as set forth on
Schedule 3.3 hereto, no consent of any lender, trustee or
other Person is required for such Shareholder to enter into
and deliver this Agreement or to consummate the transactions
contemplated hereby, nor does any Contract, mortgage or other
instrument to which such Shareholder or any company in the
Clipper Group is a party or by which such Shareholder or any
company in the Clipper Group is bound or affecting any of her,
his or its respective properties conflict with or restrict the
execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby. Each Shareholder
warrants and represents with respect to the Shares held by
her, him or it that (i) such Shares are owned of record and
beneficially by such Shareholder and are not subject to any
Lien, or to any restriction on their transfer, except such as
are set forth on Schedule 3.3 and which shall be released on
or prior to the Closing Date and (ii) upon delivery at the
Closing, Buyer shall have good and marketable title to such
Shares, free and clear of any Lien or restriction on transfer.
<PAGE>
3.4 Authorized Capitalization. The authorized
capital stock of Clipper Exxpress consists solely of 10,000
shares of common stock, $.01 par value per share, of which
5,414 shares are issued and outstanding. The authorized
capital stock of Agile consists solely of 10,000 shares of
common stock, $1.00 par value per share, of which 1,000 shares
are issued and outstanding, and the authorized capital stock
of AXXA consists solely of 10,000 shares of common stock,
$1.00 par value per share, of which 1,188 shares are issued
and outstanding. All of the issued and outstanding capital
stock of each such company is validly issued and outstanding,
fully paid and nonassessable, and is owned beneficially and of
record in the aggregate by the Shareholders. There are no
outstanding warrants, options or rights (preemptive or
otherwise) or other securities, plans or agreements which give
the holder or any other Person the right to purchase or
otherwise acquire (whether from any of the companies in the
Clipper Group or any of the Shareholders or an Affiliate of
any of the Shareholders) any shares of capital stock of any
company in the Clipper Group or any securities convertible
into, exchangeable or exercisable for shares of such capital
stock or under which any such warrant, option, right or
security may be issued in the future.
3.5 Subsidiaries; Investments; Affiliate Notes. No
company in the Clipper Group has any direct or indirect
<PAGE>
subsidiaries or, except as set forth on Schedule 3.5 hereto,
has made any advances to or investments in, and does not own
any securities of or other interests in, any Person. Schedule
3.5 contains a list of all notes held by any company in the
Clipper Group issued by any Shareholder or any Affiliate of a
Shareholder.
3.6 Financial Statements. Annexed hereto as
Schedule 3.6 are (a) unaudited balance sheets of each of the
companies in the Clipper Group as of the Balance Sheet Date
(the "Balance Sheets"), (b) unaudited financial statements of
each of the companies in the Clipper Group for the six-month
period beginning January 1, 1994 and ended June 30, 1994 and
(c) audited financial statements of each of the companies in
the Clipper Group as of and for the fiscal years ended
December 31 in each of 1990, 1991, 1992 and 1993. The Balance
Sheets and the other financial statements referred to in the
preceding sentence are referred to collectively as the
"Financial Statements." The Financial Statements in each case
are true and complete with respect to each item therein and
have been prepared in accordance with GAAP heretofore adopted
by, and applied consistently with the past practices of, each
of the companies in the Clipper Group and fairly present the
financial condition, results of operations and cash flows of
each of the companies in the Clipper Group as of, or for the
years or period ended on, their respective dates (subject in
<PAGE>
the case of interim financial statements to normal year-end
adjustments). Since the Balance Sheet Date, each of the
companies in the Clipper Group has conducted its business in a
consistent manner without change of policy or procedure
including, without limitation, its practices in connection
with the treatment of revenue recognition, capitalization
policies, reserves and expenses.
3.7 Records and Books of Account. Since January 1,
1990, the records and books of account of each of the
companies in the Clipper Group have been regularly kept and
maintained in conformity with GAAP consistently applied.
3.8 Liabilities. On the Balance Sheet Date, there
were no Liabilities of any company in the Clipper Group that
would have been required by GAAP to be included on the balance
sheet of any company in the Clipper Group (including the notes
thereto) as of such date other than those Liabilities
disclosed or provided for on the Balance Sheets. There are no
other Liabilities of any company in the Clipper Group except
(i) those incurred since the Balance Sheet Date in the
ordinary course of business consistent with past practice and
not in violation of or in conflict with any of the terms,
agreements, warranties, representations and conditions of the
Shareholders contained in this Agreement, (ii) those set forth
in Schedule 3.8 hereto and (iii) those which would not,
individually or in the aggregate, have a material adverse
effect on the Clipper Group, taken as a whole.
<PAGE>
3.9 Title to Assets; Liens and Encumbrances. The
companies in the Clipper Group are the owners of, and have
good and marketable title to, all of the assets, properties
and rights used in or required to be used in the operation of
the businesses of the Clipper Group, free and clear of all
Liens except for the Liens, if any, set forth on the Balance
Sheets or on Schedule 3.9 hereto. The assets, properties and
rights referred to in the preceding sentence include, without
limitation, all assets, properties, rights and business of
each of the companies in the Clipper Group shown or reflected
on the Balance Sheets or acquired by any of such companies
since the Balance Sheet Date except only for (i) cash and (ii)
inventories and other assets sold and receivables collected in
the ordinary course of business consistent with past practice
of the Clipper Group since the Balance Sheet Date. The
companies in the Clipper Group own all of the assets used by
them in the operation and conduct of that business, or
required by them for the normal conduct of their business,
except for those assets leased under leases specifically
identified on Schedule 3.10 hereto.
3.10 Leased Premises. Schedule 3.10 sets forth a
true and complete list of each lease of premises executed by
or binding upon any company in the Clipper Group as lessee,
sub-lessee, tenant or assignee (the "Leased Premises") setting
forth in each case a brief description of the premises covered
<PAGE>
thereby, the rental payable thereunder and the term (including
any extensions available) thereof. Except as set forth on
Schedule 3.10, each such lease is in full force and effect
without any default or breach thereof by any company in the
Clipper Group or any other party thereto. Except as set forth
on Schedule 3.10, no consent of any landlord or any other
party is required under any such lease by reason of or in
connection with the transfer of the Shares to Buyer as
provided for in this Agreement and to keep such lease in full
force and effect after the execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby. True and complete copies of all leases
required to be listed on Schedule 3.10, including all
amendments, addenda, waivers and all other binding documents
affecting the tenant's rights thereunder, have heretofore been
made available to Buyer.
3.11 Trademarks, Service Marks, Trade Names, Patents
and Copyrights. Schedule 3.11 hereto sets forth a true and
complete list of all Proprietary Rights used by any company in
the Clipper Group in the conduct of its business. Each such
Proprietary Right is owned solely by a company in the Clipper
Group and is not subject to any license, royalty arrangement
or dispute. No other Proprietary Rights are used in or are
necessary for the conduct of the Clipper Group's business as
now conducted. Except as described in Schedule 3.11, no claim
<PAGE>
has been asserted or, to the knowledge of Chambers and Sze,
threatened, by any Person with respect to the ownership,
validity, license or use of, or any infringement resulting
from, any of the Proprietary Rights used by the Clipper Group.
As used in this Agreement, the terms "to the knowledge,"
"known to," and other phrases of like substance are to be
broadly construed (i) to include the knowledge of the
Shareholder making the representation and (ii) to represent
that the Shareholder making the representation has caused due
inquiry and investigation to be made into the matter
represented to be true, including due inquiry and
investigation by the senior management of the Clipper Group.
3.12 Contracts. Except for the leases described in
Schedule 3.10 hereto, purchase and sales commitments entered
into in the ordinary course of business consistent with past
practice and except as set forth on Schedule 3.12, the
companies in the Clipper Group are not parties to, or subject
to or bound by, any (i) lease; (ii) royalty, distribution,
agency, territorial or license agreement; (iii) Contract (for
employment or otherwise) with any officer, employee, director
or shareholder (or any Affiliate of any such officer,
employee, director or shareholder) or any professional person
or firm, consultant, independent contractor or advertising
firm or agency; (iv) Contract or collective bargaining
agreement with any labor union or representative of employees;
<PAGE>
(v) Contract guaranteeing the payment or performance of the
obligations of others (vi) Contract pursuant to which
indebtedness may be incurred or is outstanding; (vii)
"employee benefit plan" (as defined in Section 3(3) of ERISA)
or any stock option plan, stock purchase plan or material
fringe benefit plan, agreement, policy or understanding
(whether written or oral, qualified or nonqualified) that
provides benefits, or describes policies or procedures
applicable, to any officer, employee, director, former
officer, former employee or former director (or any dependent
of any of the foregoing) of any entity which is part of the
Clipper Group or any ERISA Affiliate thereof; (viii) Contract
limiting the freedom of any company in the Clipper Group to
engage in any line of business or to compete with, solicit or
hire any Person; (ix) Contract not entered into in the
ordinary course of business which involves $100,000 or more
and is not cancellable without penalty within 90 days; (x) any
joint venture agreement or other Contract with respect to the
operation or management of any entity; or (xi) any other
Contract that involves payments by or to any company in the
Clipper Group at a rate of $50,000 or more per annum.
Schedule 3.12 hereto contains a true and complete description
of the terms and conditions of each Contract to which any
company in the Clipper Group is a party or to which it is
subject or by which it is bound that involves an annualized
<PAGE>
rate of $50,000 or more and which is not in writing. True and
complete copies of all Contracts listed on Schedule 3.12 have
heretofore been made available to Buyer by the Clipper Group.
Except as set forth on Schedule 3.12, no Contract to which any
company in the Clipper Group is a party or to which it is
subject or by which it is bound conflicts with, would be
terminated by, would be breached as a result of, would be
materially modified or changed by, or requires the consent of
any other Person by reason of, the execution and delivery of
this Agreement or the consummation of the transactions
contemplated hereby, other than such Contracts the loss of
which, individually or in the aggregate, would not have a
material adverse effect on the Clipper Group, taken as a
whole, or the loss of which would involve a loss of less than
$50,000 ("Immaterial Contracts"). Each of the Contracts to
which any company in the Clipper Group is a party or to which
it is subject or by which it is bound (including, without
limitation, those set forth on Schedules 3.12 and 3.13 hereto)
is a valid and subsisting Contract of all of the parties
thereto in full force and effect without modification, other
than Immaterial Contracts. The Clipper Group company that is
a party to each contract has performed all obligations
required to be performed by it and is not in default under any
Contract, instrument or other document to which it is a party
or to which it is subject or by which it is bound, and no
<PAGE>
event has occurred thereunder which, with or without the lapse
of time or the giving of notice, or both, would constitute a
default by it thereunder, other than Immaterial Contracts.
3.13 Purchase and Sales Commitments and Orders;
Principal Customers. No company in the Clipper Group has from
the Balance Sheet Date to the date hereof, and will have, from
the date hereof through the Closing Date, entered into any
purchase or sales commitment or order except in the ordinary
course of business consistent with past practice. Schedule
3.13 sets forth by dollar volumes the Clipper Group's ten
largest customers for the years ended December 31, 1992 and
1993 and the six months ended June 30, 1994.
3.14 Labor Relations; Employees. There are no labor
strikes, disputes, slow downs, work stoppages or other labor
troubles or grievances pending or, to either Chambers' or
Sze's knowledge, threatened against or involving the Clipper
Group. No unfair labor practice complaint before the National
Labor Relations Board, no charges pending before the Equal
Employment Opportunity Commission and no complaint, charge or
grievance of any nature before any similar or comparable
Governmental Authority, in any case relating to any company in
the Clipper Group or the conduct of its business, is pending
or, to the knowledge of Chambers or Sze, threatened. No
company in the Clipper Group has received notice, nor has any
knowledge, of the intent of any Governmental Authority
<PAGE>
responsible for the enforcement of labor or employment laws to
conduct any investigation of or relating to the Clipper Group
or the conduct of its business. To the knowledge of Chambers
and Sze, no officer or key employee of any company in the
Clipper Group has any plans to terminate his or her employment
with that company. Schedule 3.14 is a true and correct list
of all employees of the Clipper Group by employer and by job
classification as of June 30, 1994. The owner/operators of
the trucking companies with which the Clipper Group contracts
are not deemed to be employees of the Clipper Group for
Federal or state tax purposes.
3.15 Legal Proceedings. Except as set forth on
Schedule 3.15A hereto, there are no Actions (whether or not
purportedly on behalf of any company in the Clipper Group)
pending or, to the knowledge of Chambers or Sze, threatened
against or affecting any company in the Clipper Group or any
of its properties, rights or business. Except as set forth on
Schedule 3.15B hereto, no Action involving negligence or
strict liability has ever been instituted or, to the knowledge
of Chambers or Sze, threatened against any company in the
Clipper Group. No company within the Clipper Group is in
default with respect to any order, writ, injunction or decree
of any Governmental Authority. None of the Actions referred
to on Schedule 3.15A or 3.15B hereto, individually or in the
<PAGE>
aggregate, will have a material adverse effect on the Clipper
Group, taken as a whole.
3.16 Orders, Decrees, Etc. There are no orders,
decrees, injunctions, rulings, publications, decisions,
directives, consents, pronouncements or regulations of any
court or any Governmental Authority issued against, or binding
on, the Clipper Group which do or may affect, limit or control
the Clipper Group's method or manner of doing business.
3.17 Compliance With Law; Permits and Licenses.
(a) The Clipper Group has complied and is in
compliance with all Laws of any Governmental Authority
applicable to the Clipper Group, its assets or property or its
operations, including, without limitation, Laws relating to
zoning, building codes, licensing, permits, antitrust,
occupational safety and health, environmental protection and
conservation, water or air pollution, toxic and hazardous
waste and substances control, consumer product safety, product
liability, hiring, wages, hours, employee benefit plans and
programs, collective bargaining and withholding and social
security taxes, other than any failure to comply that,
individually or in the aggregate, will not result in any
material liability or have a material adverse effect on the
Clipper Group, taken as whole.
(b) The Clipper Group presently holds, and will
hold at the Closing Date, all the permits, licenses and
<PAGE>
franchises which are necessary for or material to its current
use, occupancy or operation of its assets or properties or the
conduct of its business; and no notice of violation of any
applicable zoning regulations, ordinance or other similar Law
binding on the Clipper Group with respect to its assets,
properties or business has been received.
(c) Other than as set forth on Schedule 3.17
hereto, none of the members of the Clipper Group has violated
or is alleged to have violated, or is in violation of, any
Environmental Law, or has released, treated, stored, disposed
of or transported any Hazardous Substance in violation of any
Environmental Law. There are no Hazardous Substances located
at, in, on, within or under the surface of any of the Clipper
Group members' assets, properties or facilities in material
violation of applicable Environmental Laws. Other than as set
forth on Schedule 3.17 hereto, neither the Shareholders, nor
any member of the Clipper Group, has received, or is aware of,
any requests for information, notice of claim, demand,
lawsuit, action or other notification from any Governmental
Authority or any third party that they may be potentially
responsible for any threatened or actual release of Hazardous
Substances, or violation of or noncompliance with any
Environmental Law, and none of the members of the Clipper
Group or the Shareholders is subject to any agreement,
consent, decree, administrative order, notice or enforcement
<PAGE>
action brought under any Environmental Laws. For purposes of
this Section 3.17(c), "Environmental Laws" means any foreign,
Federal, state, or local law, rule, regulation, ordinance,
program, permit, guidance, order, consent, decree or notice of
violation pertaining to the protection of natural resources,
the environment and the health and safety of employees and the
general public; and "Hazardous Substances" means any oil,
petroleum product, asbestos, polychlorinated biphenyls,
flammable substances, explosives, radioactive materials,
hazardous wastes, hazardous substances, toxic wastes or
substances or any other wastes, materials or pollutants
defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances" or words of similar import under any
Environmental Law.
3.18 Changes Since Balance Sheet Date; No Material
Adverse Change. Except as set forth on Schedule 3.18 hereto,
since the Balance Sheet Date the Clipper Group has not, and
prior to the Closing the Clipper Group will not have, (i)
incurred any Liability, except current liabilities in the
ordinary course of business consistent with past practice and
Liabilities incurred under Contracts entered into in the
ordinary course of business consistent with past practice;
(ii) discharged or satisfied any Lien or paid any Liability,
<PAGE>
other than current liabilities shown on the Balance Sheets and
current liabilities incurred since the Balance Sheet Date in
the ordinary course of business consistent with past practice;
(iii) sold or transferred any material assets or written off
any receivables, except for (A) the transfers of assets
contemplated by paragraph 5.3 hereof and (B) the collection of
receivables in the ordinary course of business; (iv)
mortgaged, pledged or subjected to any other Lien any of its
assets or properties, other than Liens reflected on the
Balance Sheets; (v) suffered any losses or waived any rights
of substantial value; (vi) granted any bonuses or commissions
or increased the compensation payable to any of its employees,
directors or officers or increased the aggregate payment of
any fees except for customary bonuses and regular salary
increases made in accordance with the Clipper Groups' past
practices as summarized on Schedule 3.18 or in accordance with
the benefit plans described in Schedule 3.22; (vii) made any
loans to any individuals, firms, corporations or other
entities; (viii) declared, made, set aside or paid any
dividend, distribution, or payment on, or any purchase or
redemption of, any shares of any class of its capital stock,
or any commitment therefor (other than as described on
Schedule 3.18); (ix) made any material change (except to make
the Closing Balance Sheet Adjustments) in any method of
accounting (for book or tax purposes) or auditing practice; or
<PAGE>
(x) entered into any transaction not in the ordinary course of
business or agreed (whether or not in writing) to do any of
the foregoing. From the Balance Sheet Date through the
Closing Date, the business of the Clipper Group has been and
will have been operated only in the regular and ordinary
course consistent with past practice. Since the Balance Sheet
Date there has not been a material adverse change in the
condition (financial or otherwise), businesses, prospects of
the businesses as currently conducted, or operations of the
Clipper Group, taken as a whole.
3.19 No Change. Since the Balance Sheet Date, there
has not been any damage, destruction or loss, whether or not
covered by insurance, that, individually or in the aggregate,
has or will have a material adverse effect on the Clipper
Group, taken as a whole.
3.20 Accounts Receivable. Schedule 3.20, which has
previously been provided to the Buyer, sets forth a complete
and accurate listing and aging of the accounts receivable of
the Clipper Group as of June 30, 1994. All of the accounts
receivable of the Clipper Group are actual and bona fide
receivables representing enforceable obligations for the total
dollar amount thereof shown on the books of the Clipper Group
which resulted from the ordinary course of the business of the
Clipper Group. Such receivables (net of the reserve for
doubtful accounts shown on the Balance Sheets) will be
<PAGE>
collected in full in accordance with their terms without being
subject to any recoupments, set-offs or counterclaims.
3.21 Capital Projects and Expenditures. All capital
projects and capital expenditures (including any leases
capitalized in accordance with GAAP) committed for or
undertaken by the Clipper Group and not fully paid for on the
date hereof, as well as the terms of any and all financing
arranged in connection therewith and details for payments, if
any, made with respect thereto, are set forth on Schedule 3.21
hereto. Except as set forth on such Schedule 3.21, from the
Balance Sheet Date to the date hereof, the Clipper Group has
not made any additional expenditures or additional commitments
for capital expenditures.
3.22 Employee Benefits.
(a) Except for the plans of the Clipper Group
set forth on Schedule 3.22 hereto (the "Plans"), no member of
the Clipper Group or any of its ERISA Affiliates maintains or
contributes to or has any liability with respect to any
"employee benefit plan" as that term is defined in Section
3(3) of ERISA, or any other bonus, incentive, compensation,
profit sharing, stock, severance, retirement, health, life,
disability, group insurance, vacation, holiday, fringe
benefit, employment, stock option, stock purchase, stock
appreciation right, supplemental unemployment, layoff, or
consulting plan, agreement, policy or understanding (whether
<PAGE>
written or oral, qualified or nonqualified, currently
effective or terminated). True and complete copies of all the
Plan documents and summary plan descriptions have been
furnished to Buyer (along with all related trust agreements,
insurance contracts or other funding agreements which
implement each Plan, and all other documents, records or other
materials related thereto reasonably requested by Buyer).
(b) With respect to each Plan, the
requirements of ERISA, the Code (including, without limitation
and Part 6 of Subtitle B of Title I of ERISA and Sections
105(h) and 4980B of the Code) and all other applicable laws
have been fulfilled in all respects and copies of all filings
with the Internal Revenue Service and the Department of Labor
or other applicable Governmental Authority for the three most
recent plan years for the Plans have been furnished to Buyer.
The Clipper Group has applied to the Internal Revenue Service
for a determination letter for the 401(k) plan. Except as
described in Schedule 3.22(b), no written or oral
representations have been made to any employee or former
employee of any member of the Clipper Group promising or
guaranteeing any employer payment or funding for the
continuation of medical, dental, life or disability coverage
for any period of time beyond the end of the current plan year
(except to the extent of coverage required under Section 4980B
of the Code).
<PAGE>
(c) Except with respect to March Transport
Company, neither any member of the Clipper Group nor any ERISA
Affiliate has ever (i) maintained or contributed to any plan
subject to Section 412 of the Code and Section 302 of ERISA or
(ii) contributed to any "multiemployer plan," as such term is
defined in Section 3(37) of ERISA, and neither any member of
the Clipper Group nor any ERISA Affiliate has effected either
a "complete withdrawal" or a "partial withdrawal," as those
terms are defined in Sections 4203 and 4205, respectively, of
ERISA, from any such multiemployer plan.
(d) With respect to March Transport Company,
any Liabilities ever assumed or incurred by March Transport
Company in connection with any of the types of plans referred
to in paragraph 3.22(c) have been completely satisfied, and no
member of the Clipper Group is subject to any Liability as a
result thereof. The Shareholders have provided Buyer with
copies of the final settlement and release documents relating
to such Liabilities.
(e) Except as set forth on Schedule 3.22
hereto, at the Balance Sheet Date there were, at the date
hereof there are, and on the Closing Date there will be, no
bonus, profit sharing, incentives, commissions or other
compensation of any kind with respect to work done prior to
the Balance Sheet Date, the date hereof or the Closing Date,
respectively, due to or expected by present or former
<PAGE>
employees of any member of the Clipper Group not paid prior to
such date or, with respect to compensation for work done prior
to the Balance Sheet Date, not fully accrued on the Balance
Sheets.
(f) Each Plan that is an "employee pension
benefit plan" (as defined in Section 3(2) of ERISA) meets the
requirements of a "qualified plan" under Section 401(a) of the
Code in form and in operation, and such Plan, and each trust
(if any) forming a part thereof, has received a favorable
determination letter, or a favorable determination letter has
been applied for, from the Internal Revenue Service as to the
qualification under the Code of such Plan and the tax-exempt
status of such related trust, and nothing has occurred since
the date of such determination letter, or request therefor,
that could reasonably be expected to adversely affect the
qualification of such Plan or the tax-exempt status of such
related trust.
(g) There are no unfunded liabilities existing
under any Plan, and each Plan could be terminated as of the
Closing Date with no liability to Buyer, any member of the
Clipper Group, any ERISA Affiliate or any Person that is under
common control, or is treated as a single employer, with Buyer
under Section 414 of the Code or ERISA Section 4001.
(h) With respect to each Plan (i) there have
been no non-exempt prohibited transactions as defined in
<PAGE>
Section 406 of ERISA or Section 4975 of the Code, (ii) no
fiduciary (as defined in Section 3(21) of ERISA) has liability
for breaching of fiduciary duty or any other failure to act or
comply in connection with the administration or investment of
assets in such Plan, and (iii) no actions, investigations,
suits or claims with respect to the assets thereof (other than
routine claims for benefits) are pending or, to the knowledge
of Chambers and Sze, threatened, and Chambers and Sze have no
knowledge of any facts that would give rise to or could
reasonably be expected to give rise to any such actions, suits
or claims.
3.23 Governmental Approvals. No governmental
authorization, approval, order, license, permit, franchise or
consent and no registration, declaration or filing by the
Clipper Group or the Shareholders with any Governmental
Authority is required in connection with the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby except for (a) the filing of
a premerger notification report under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and (b) the transfer of operating authority and permits issued
by the Interstate Commerce Commission to Agile.
3.24 Tax Matters.
(a) The Clipper Group (collectively, the
"Taxpayers") has duly and timely filed all Returns required to
<PAGE>
be filed by it. No member of the Clipper Group currently is
the beneficiary of any extension of time within which to file
any Return. No claim has ever been made by an authority in a
jurisdiction where any member of the Clipper Group does not
file Returns that it is or may be subject to taxation by that
jurisdiction. All Returns filed by the Taxpayers were correct
and complete in all respects. The Taxpayers have paid in full
all Taxes (whether or not shown on a Return) required to be
paid by the Taxpayers before such payment became delinquent.
The Clipper Group has made adequate provision in the Financial
Statements, in conformity with GAAP, for the payment of all
accrued Taxes not yet payable as of the respective dates of
such Financial Statements. All Taxes that the Taxpayers have
been required to collect or withhold have been duly collected
or withheld and, to the extent required when due, have been or
will be duly and timely paid to the proper taxing authority.
(b) Each company in the Clipper Group has
elected to be an S Corporation and such election has been
effective from its inception or 1984, whichever is later.
There are no audits, inquiries, investigations or examinations
relating to any of the Taxpayer's Returns pending or
threatened, and there are no claims which have been or may be
asserted relating to any of the Taxpayer's Returns filed for
any year which if determined adversely would result in the
assertion by any Governmental Authority of any Tax deficiency
<PAGE>
against the Taxpayers. There have been no waivers or
extensions of statutes of limitations with respect to Taxes by
the Taxpayers, or any agreements to extend the time with
respect to a Tax assessment or deficiency.
(c) The Clipper Group is not a party to any
tax-sharing Contract or similar arrangement with any Person.
The Taxpayers have not made a disclosure on a Return pursuant
to Code Section 6662(d)(2)(B)(ii) and the Regulations
thereunder.
(d) The Taxpayers have withheld and 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.
(e) No member of the Clipper Group has ever
been a member of an affiliated group filing consolidated
Federal income tax Returns, or has any liability for Taxes of
any other person under Treasury Regulation section 1.1502-6
(or any similar provision of state, local or foreign law), as
a transferee or successor, by contract, or otherwise.
(f) No member of the Clipper Group has filed a
consent under Code Section 341(f) concerning collapsible
corporations.
(g) No member of the Clipper Group is
obligated to make any payments or is a party to any agreement
that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Section 280G.
<PAGE>
3.25 Insurance Coverage. The members of the Clipper
Group maintain policies of insurance (including, without
limitation, insurance required by Governmental Authorities,
general public liability insurance, auto liability insurance
and workers' compensation insurance) issued by insurers of
recognized responsibility insuring the members of the Clipper
Group and their respective assets and businesses against such
losses and risks, and in such amounts, as are customary for
corporations engaged in the same or similar businesses and
similarly situated, and none of such losses or risks are self-
or co-insured by the members of the Clipper Group (except with
respect to customary deductibles and retainages). Schedule
3.25 hereto describes each insurance policy (specifying the
insured, the insurer, the amount of coverage, the type of
insurance, the policy number, the expiration date, the annual
premium, and any pending claims thereunder) maintained by the
members of the Clipper Group. None of the members of the
Clipper Group is in default in any material respect with
respect to any provisions contained in any such insurance
policy or has failed to give any notice or present any
presently existing material claims under any such insurance
policy in due and timely fashion.
3.26 Representations and Warranties. The
representations and warranties of the Shareholders contained
in this Agreement, or otherwise made in writing in connection
with the transactions contemplated hereby, will be true and
correct on and as of the Closing Date with the same force and
effect as though such representations and warranties had been
made on and as of the Closing Date.
SECTION 4. Representations and Warranties of Buyer.
Buyer warrants and represents to and agrees with the
Shareholders as follows:
4.1 Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the
laws of Delaware.
4.2 Authorization. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of
Directors of Buyer, and all other corporate action of Buyer,
including all authorizations and ratifications, necessary to
authorize the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
taken. This Agreement constitutes a binding obligation of
Buyer, enforceable against Buyer in accordance with its terms.
No consent of any lender, trustee or security holder of Buyer
of other Person is required for Buyer to enter into and
deliver this Agreement and to consummate the transactions
contemplated hereby.
<PAGE>
SECTION 5. Conduct Prior to the Closing.
5.1 Investigation by Buyer. Buyer may, prior to
the Closing Date, through its own representatives (including
its counsel, accountants and consultants) make such
investigations of the properties and operations of the Clipper
Group and such audit of the financial condition of the Clipper
Group as it deems necessary or advisable in connection with
the transactions contemplated hereby, including, without
limitation, any investigation enabling it to familiarize
itself with such properties, operations and financial
condition. The Shareholders shall permit Buyer and its
authorized representatives to have, after the date hereof,
reasonable access to the premises during normal business hours
and to all books and records of the Clipper Group; and Buyer
shall have the right to make copies thereof and excerpts
therefrom. The Shareholders shall furnish Buyer with such
financial and operating data and other information with
respect to the Clipper Group as Buyer may from time to time
reasonably request. The Buyer and its authorized
representatives shall not visit suppliers, customers and
others having business relations with the Clipper Group except
with the written authorization of and participation by the
Clipper Group, which shall not be unreasonably withheld. The
parties hereto agree that the Confidentiality Agreement
between them dated June 28, 1994 shall be incorporated in this
<PAGE>
Agreement and made a part hereof for all purposes. In
addition to the restrictions contained in such agreement, the
Buyer agrees that it will not solicit or induce any person who
is employed by by the Clipper Group to discontinue his or her
employment with the Clipper Group, for a period of one year
from the date of this Agreement.
5.2 Ongoing Operations. The Shareholders agree
that, from the date hereof to the Closing, the Clipper Group
shall use all reasonable efforts to preserve its business
organization intact and preserve for Buyer the present
relationship between the Clipper Group on the one hand and its
suppliers, employees, customers and others having business
relations with it on the other.
5.3 Conduct of Business. The Shareholders agree
that from the date hereof until the Closing:
(a) The Clipper Group shall conduct its
business in the ordinary and usual course, shall not, without
the prior written consent of Buyer, purchase, sell, lease,
encumber or otherwise dispose of any assets except consistent
with past practice or make any change in its business,
operations or the manner of conducting its business; and
(b) Each member of the Clipper Group will not,
without the prior written consent of Buyer,
(i) change its charter, by-laws or
other governing instruments;
<PAGE>
(ii) borrow or agree to borrow any funds
or guarantee or agree to guarantee the obligations of others,
except in the ordinary and usual course of its business;
(iii) make any capital expenditure or
commit itself to make any capital expenditure except in the
ordinary and usual course of business or less than $10,000;
(iv) increase the rate of salary of any
employee other than in accordance with the Clipper Group's
past practices as summarized on Schedule 3.18;
(v) enter into, amend or modify any
Contract or incur any Liability other than in the ordinary
course of business and consistent with its existing policies;
(vi) dispose of, permit to lapse or
otherwise fail to preserve any of its Proprietary Rights or
other similar rights, dispose of or permit to lapse any
license, permit or other form of authorization, or dispose of
or disclose to any person, other than an authorized
representative of Buyer, any customer list, trade secret,
formula, process or know-how;
(vii) make any material change in any
method of accounting or accounting practice or in the
application of such method of accounting or accounting
practices except as may be required to make the Closing
Balance Sheet Adjustments;
(ix) pay, loan or advance any amount to
or in respect of, or sell, transfer or lease any assets
(whether real, personal or mixed, tangible or intangible) to,
or enter into any agreement, arrangement or transaction with,
any of the Shareholders, its officers or directors, any of its
Affiliates or associates or any Person in which it or any of
its officers, directors, Affiliates or associates, has any
direct or indirect interest, except for (a) directors' fees
and compensation to its officers and employees at rates not
exceeding the rates of compensation in effect on the Balance
Sheet Date except for customary bonuses and regular salary
increases made in accordance with the Clipper Group's past
practice as summarized on Schedule 3.18 or in accordance with
the benefit plans described in Schedule 3.22, and (b) advances
made to employees for travel and other business expenses in
reasonable amounts consistent with past practice;
(x) agree, whether in writing or
otherwise, to take any action prohibited in this Section 5.3;
or
(xi) without limiting any of the
foregoing, take or refrain from taking any action the result
of which would render any representation or warranty made to
Buyer in or in connection with this Agreement inaccurate when
deemed made on and as of the Closing Date.
<PAGE>
5.4 Consents. The Shareholders shall use her or
his or its best efforts to obtain in writing, prior to the
Closing, all consents, approvals, waivers, authorizations and
orders (collectively, "Consents") necessary or reasonably
required in order to permit it to effectuate this Agreement
and to consummate the transactions contemplated hereby
(without the loss of any right or privilege of or any cost or
detriment to the Clipper Group). All such Consents will be in
writing and copies thereof will be delivered to Buyer promptly
after the Shareholders' receipt thereof but no later than
immediately prior to Closing.
5.5 Plans, Leases and Contracts. Except in the
ordinary course of business, without the prior written consent
of Buyer, the Shareholders shall not amend or terminate the
Plans nor amend or terminate any lease, Contract or other
agreement listed in Schedules 3.10 or 3.12 and will comply
with and not be in default with respect to the Plan or any
lease, Contract or other agreement listed in said Schedules.
5.6 Public Announcements. The Shareholders and
Buyer agree that they will consult with each other before
issuing any press releases or otherwise making any public
statements with respect to this Agreement or the transactions
contemplated hereby and shall not issue any press release or
make any public statement without the agreement of the other
party, except as may be required by law or the rules of the
NASDAQ-National Market System.
<PAGE>
SECTION 6. Conditions of Buyer's Obligations to
Close. The obligations of Buyer under this Agreement are, at
the option of Buyer, subject to the conditions set forth
below, which conditions may be waived by Buyer without
releasing or waiving any of its rights hereunder.
6.1 Agreements and Conditions. On or before the
Closing Date, the Shareholders shall have complied with and
duly performed all agreements and conditions on their part to
be complied with an performed pursuant to or in connection
with this Agreement on or before the Closing Date.
6.2 Representations and Warranties. The
representations and warranties of the Shareholders contained
in this Agreement, or otherwise made in writing in connection
with the transactions contemplated hereby, shall be true and
correct on and as of the Closing Date with the same force and
effect as though such representations and warranties had been
made on and as of the Closing Date.
6.3 Loss, Damage or Destruction. Between the date
hereof and the Closing Date there shall not have been any
loss, damage or destruction to or of any of the assets,
property or business of the Clipper Group in excess of
$500,000 whether individually or in the aggregate, whether or
not covered by insurance, nor shall the assets, properties and
business of the Clipper Group have been adversely affected in
any way as a result of any fire, accident, or other casualty,
<PAGE>
war, civil strife, riot or act of God or the public enemy in a
manner that would have a material adverse effect on the
Clipper Group, taken as a whole.
6.4 No Legal Proceeding. No Action shall have been
instituted or threatened to restrain or prohibit the
acquisition by Buyer, or the conveyance by Shareholders, of
the Shares, and on the Closing Date there will be no Actions
pending or threatened against or affecting the Shareholders or
the Clipper Group which involve a demand for any judgment or
liability, whether or not covered by insurance, and which may
result in any material adverse change in the Clipper Group,
taken as a whole.
6.5 Deliveries. Buyer shall have received the
deliveries to be made by the Shareholders pursuant to Section
8.
6.6 HSR Act. The waiting period under the HSR Act
shall have been terminated or expired.
6.7 Legal Opinion. Buyer shall have received a
favorable opinion of Holme Roberts & Owen LLC, dated the
Closing Date and in form and substance reasonably satisfactory
to Buyer, with respect to the matters referred to in
paragraphs 3.1 (except the next to last sentence), 3.3, 3.4,
3.15 (to their knowledge and except the last sentence) and
3.23.
<PAGE>
SECTION 7. Conditions of the Shareholders'
Obligations to Close. The obligations of the Shareholders
under this Agreement are, at the option of the Shareholders,
subject to the following express conditions, which conditions
may be waived by the Shareholders without releasing or waiving
any of their rights hereunder.
7.1 Agreements and Conditions. On or before the
Closing Date, Buyer shall have complied with and duly
performed all of the agreements and conditions on its part
required to be complied with or performed pursuant to this
Agreement on or before the Closing Date.
7.2 Representations and Warranties. The
representations and warranties of Buyer contained in this
Agreement shall be true and correct on and as of the Closing
Date with the same force and effect as though such
representations and warranties and had been made on and as of
the Closing Date.
7.3 Deliveries. The Shareholders shall have
received the deliveries to be made by Buyer pursuant to
Section 8.
SECTION 8. Deliveries of the Shareholders and Buyer.
The Shareholders agree on the Closing Date to deliver to Buyer
the following:
<PAGE>
8.1 Stock Certificates. Certificates representing
all of the Shares being purchased by Buyer hereunder, duly
endorsed in blank for transfer or with appropriate stock
powers duly executed in blank, with signatures appropriately
guaranteed, by the Shareholders. Immediately thereafter, the
Shareholders shall cause each member of the Clipper Group to
transfer on its books and records the aforesaid stock
certificates and to issue and deliver to Buyer, in exchange
for said stock certificates, stock certificates registered in
the name of Buyer representing the Shares.
8.2 Corporate Records. The stock books, minute
books and corporate seal of the Clipper Group.
8.3 Resignations. Written resignations of each of
the Clipper Group's directors.
8.4 Consents. All consents required in connection
with the execution and delivery of this Agreement and the
transactions contemplated hereby.
8.5 Possession of Assets. Possession of the assets
and properties of the Clipper Group.
8.6 Other Deliveries. Such other documents or
instruments as Buyer or its counsel may reasonably request.
SECTION 9. Deliveries of Buyer on the Closing Date.
Buyer agrees on the Closing Date to deliver to the
Shareholders the following:
<PAGE>
9.1 Payments. The Purchase Price to be delivered
pursuant to paragraph 2.2 hereof and the payment specified in
paragraph 10.5.
9.2 Secretary's Certificate. A certificate of the
Secretary or an Assistant Secretary of Buyer setting forth a
copy of the resolutions adopted by the Board of Directors of
Buyer authorizing and approving the execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 10. Additional Covenants.
10.1 Cooperation. The Shareholders will cooperate
with Buyer, and the Shareholders will use all reasonable
efforts to have the officers, directors and other employees of
the Clipper Group cooperate with Buyer, at Buyer's request and
expense, after the Closing, in endeavoring to effect the
collection of accounts and notes receivable owing to the
Clipper Group at the Closing Date and in furnishing
information, evidence, testimony and other assistance in
connection with any actions, proceedings, arrangements or
disputes involving the Shareholders and the Clipper Group and
based upon Contracts or acts of the Clipper Group which were
in effect or occurred on or prior to the Closing.
10.2 Further Assurances of Shareholders. The
Shareholders agree at any time and from time to time after the
<PAGE>
Closing, upon the request of Buyer, to do, execute,
acknowledge and deliver, or to cause to be done, executed,
acknowledged and delivered, all such further acts,
assignments, transfers, powers of attorney and assurances as
may be required for the better assigning, transferring,
conveying, and confirming to Buyer, or to its successors and
assigns, of the Shares and to carry out the terms and
conditions of this Agreement.
10.3 Further Assurances of Buyer. Buyer and the
Shareholders shall cooperate fully, as and to the extent
reasonably requested by the other party, in connection with
any audit, litigation or other Action, or the preparation of
Returns (including the Returns of a Shareholder) with respect
to Taxes or other matters relating to the period prior to the
Closing Date. Such cooperation shall include the retention
and (upon the other party's reasonable request) the provision
of records and information, including work papers of the
Clipper Group and the Clipper Group's independent auditors,
but excluding records and information that are protected by
recognized professional privilege, related to tax periods on
or prior to the Closing Date, which are reasonably relevant to
any such audit, litigation or other Action, or any Returns
(including any Returns of a Shareholder), and making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided
<PAGE>
hereunder. Buyer and the Shareholders agree (i) to retain all
books and records with respect to Tax matters pertinent to the
Clipper Group relating to any period (or portion thereof)
prior to the Closing, and (ii) to give the other party
reasonable written notice prior to destroying or discarding
any such books and records and, if the other party so
requests, Buyer and the Shareholders, as the case may be,
shall allow the other party to take possession of such books
and records. Buyer also agrees that it shall, or shall cause
the Clipper Group to, pay all bonuses to employees of the
Clipper Group that are accrued on the Closing Balance Sheet
(and that are of the types and in aggregate amounts not
exceeding those previously disclosed to Buyer) at such time as
shall be agreed upon by the Shareholders and Buyer, but in no
event later than December 14, 1994.
10.4 Code Section 338(h)(10) Election. At Buyer's
option, the Shareholders will join with Buyer in making an
election under Code Sections 338(g) and 338(h)(10) (and any
corresponding elections under state, local or foreign tax law)
(collectively, a "Section 338(h)(10) Election") with respect
to the purchase and sale of the stock of each member of the
Clipper Group. In connection therewith, the Shareholders
shall cooperate in executing and filing all returns, reports,
documents or elections required to be executed and filed. The
Shareholders and Buyer will mutually agree upon the allocation
<PAGE>
of the Purchase Price to the assets of the members of the
Clipper Group. The Shareholders will pay any Tax attributable
to the making of the Section 338(h)(10) Election and will
indemnify Buyer and the members of the Clipper Group against
any adverse consequences arising out of any failure to pay
such Tax. The Shareholders will also pay any state, local or
foreign Tax (and indemnify the Buyer and the members of the
Clipper Group against any adverse consequences arising out of
any failure to pay such Tax) attributable to or which results
from the Section 338(h)(10) Election where the state, local or
foreign Tax jurisdiction (i) does not provide or recognize a
Section 338(h)(10) Election or (ii) does not apply its
provisions corresponding to Section 338(h)(10) of the Code to
the purchase and sale of the members of the Clipper Group (for
example because such corporations file separate Returns in
such jurisdiction).
10.5 Non-Competition Covenants. The Shareholders
covenant for themselves and their Affiliates that for a period
of five years from and after the Closing Date, neither they
nor any of their Affiliates shall engage, directly or
indirectly (whether as owner, partner, stockholder (other than
a holder of less than 5% of the shares of a public company),
joint venturer, manager, investor, advisor, consultant or
otherwise), in the business of freight transportation or
freight forwarding in North America except as an employee of
<PAGE>
the Buyer or any Affiliate of the Buyer, or such other manner
as the Buyer shall consent to in writing. The Shareholders
further covenant for themselves and their Affiliates that for
a period of five years from and after the Closing Date,
neither they nor any of their Affiliates shall directly or
indirectly induce or solicit, or directly or indirectly aid or
assist any other Person to induce or solicit, any person who
is (or within the prior twelve months had been) an employee,
salesman, agent, consultant, distributor, representative,
advisor, customer or supplier of the companies in the Clipper
Group (or their successors) to terminate that person's
employment or business relations with the companies in the
Clipper Group (or their successors). If any provision of this
covenant is deemed invalid in whole or in part, it shall be
curtailed, whether as to time, geographical area, scope of
activity or otherwise, as and to the extent required for its
validity under applicable law and, as so curtailed, shall be
enforceable. The Shareholders acknowledge that this paragraph
10.5 and the Shareholders' and their Affiliates' obligations
hereunder are a material inducement and condition to Buyer's
entering into this Agreement. As additional consideration for
the non-competition agreement of Sze in this paragraph, the
Buyer shall pay to Sze, on the Closing Date and by means of a
wire transfer of immediately available funds to the account
number and depository designated by Sze pursuant to paragraph
<PAGE>
2.3, the sum of $1,000,000. In the event of a breach or
threatened breach of this paragraph, Buyer shall be entitled
to an injunction restraining such breach; however, nothing
herein shall be construed as prohibiting Buyer from pursuing
any remedy available to Buyer as a result of such breach or
threatened breach.
10.6 Agile Closing. If on the Closing Date the
transfer of operating authority and permits issued by the
Interstate Commerce Commission to Agile has not been completed
so that the transfer of stock in Agile to Buyer may not be
consummated, the Buyer and the Shareholders agree that they
shall complete the other transactions described in this
Agreement on the Closing Date and shall cooperate to complete
the transfer of such operating authority and permits as soon
as possible, and shall complete the sale of stock of Agile to
the Buyer as soon as possible after completion of such
transfer. Pending such transfer, the portion of the Purchase
Price allocated to the stock of Agile under paragraph 2.2
shall be retained by the Buyer and the stock of Agile shall be
retained by the Shareholders. Notwithstanding these
provisions, the Buyer and the Shareholders shall take any
reasonable steps, on the advice of counsel and consistent with
law, to transfer management authority and the economic benefit
of Agile to the Buyer while the transfer of such operating
authority and permits are being processed. If such transfer
is not completed after all efforts to complete such transfer,
including any available appeals to the Interstate Commerce
Commission or the courts, have been exhausted, then the Buyer
and the Shareholders shall take all steps necessary or
appropriate to transfer the assets and business of Agile to
the Buyer or an Affiliate of Buyer for a purchase price equal
to the portion of the aggregate Purchase Price allocated to
the stock of Agile.
SECTION 11. Indemnification.
11.1 Indemnification by Shareholders. (a) The
Shareholders each agree, jointly and severally, to indemnify
Buyer and every Affiliate of Buyer against and hold them
harmless from any and all Damages that Buyer or any Affiliate
of Buyer may sustain at any time by reason of: (i) any
Liability for Federal income taxes (A) relating to any taxable
period (or any portion thereof) prior to the Closing Date, or
(b) imposed by reason of the transfer of the Shares provided
for by this Agreement, (ii) the breach or inaccuracy (or
alleged breach or inaccuracy) of, or failure to comply with
(or alleged failure to comply with), or the existence (or
alleged existence) of any facts resulting in the inaccuracy
(or alleged inaccuracy) of, any of the warranties or
representations contained in paragraphs 3.3, 3.4, 3.22(d) and
3.24 hereof or (iii) Actions relating to the matters referred
to in Schedule 11.1. As used in this Agreement, the terms
<PAGE>
"alleged breach or inaccuracy," "alleged failure to comply
with," "alleged existence," or "alleged inaccuracy" shall only
apply to allegations by parties other than the Buyer or its
Affiliates as to such matters.
(b) The Shareholders each further agree,
jointly and severally, to indemnify Buyer and any Affiliate of
Buyer against and hold them harmless from any and all Damages
that Buyer or any Affiliate of Buyer may sustain by reason of
the breach or inaccuracy (or alleged breach or inaccuracy) of,
any of the warranties or representations contained in
paragraphs 3.14, 3.17(c) and 3.22(a), (b), (c), (e), (f), (g)
and (h) hereof, of which Buyer has given the Shareholders
written notice on or before the third anniversary of the
Closing Date. The Shareholders' indemnification obligations
under this paragraph 11.1(b), however, are subject to the
limitations referred to in paragraph 11.4 hereof.
11.2 Indemnification by Buyer. Buyer agrees to
indemnify and hold the Shareholders and every Affiliate of the
Shareholders harmless from and against any and all Damages
which the Shareholders or any Affiliate of the Shareholders
may sustain at any time by reason of the breach or inaccuracy
(or alleged breach or inaccuracy) of or failure to comply with
(or alleged failure to comply with) any warranties,
representations, conditions, covenants or agreements of Buyer
contained in this Agreement or in any agreement, certificate
<PAGE>
or document delivered pursuant to or in connection with this
Agreement or arising out of the closing of the transactions
contemplated hereby.
11.3 Procedures for Third Party Indemnification. In
those instances in which a third party claim is asserted
against any party hereto, or any party hereto is made a party
defendant in any third party action or proceeding, and such
claim, action or proceeding involves a matter which is the
subject of this indemnification, then such party (an
"Indemnified Party") shall give written notice to the other
party hereto (the "Indemnifying Party") of such claim, action
or proceeding, and such Indemnifying Party shall have the
right to join in the defense of said claim, action or
proceeding at such Indemnifying Party's cost and expense and,
if the Indemnifying Party agrees in writing to be bound by and
to promptly pay the full amount of any final judgment from
which no further appeal may be taken and if the Indemnified
Party is reasonably assured of the Indemnifying Party's
ability to satisfy such agreement, then at the option of the
Indemnifying Party, such Indemnifying Party may take over the
defense of such claim, action or proceeding, except that, in
such case, the Indemnified Party shall have the right to join
in the defense of said claim, action or proceeding at its own
cost and expense.
<PAGE>
11.4 Limitations on Indemnification.
Notwithstanding paragraph 11.1(b) of this Agreement, the
Shareholders shall not be required to indemnify Buyer or
Buyer's Affiliates with respect to Damages arising from
breaches or inaccuracies (or alleged breaches or inaccuracies)
of or failure to comply with (or alleged failure to comply
with), or the existence (or alleged existence) of facts
resulting in the inaccuracy (or alleged inaccuracy) of the
warranties or representations contained in paragraphs 3.14,
3.17(c) and 3.22 (except subparagraph (d) of paragraph 3.22,
which is not so limited) hereof, or with respect to Damages
arising from the reclassification of independent contractors
or their employees as employees of any Company in the Clipper
Group, unless and until the aggregate amount of all such
Damages exceeds $500,000, at which time the Shareholders shall
be obligated to indemnify Buyer and Buyer's Affiliates with
respect to 50% of all such Damages exceeding $500,000.
11.5 Holdback. In addition to any other rights the
Buyer has under this paragraph 11 or elsewhere in this
Agreement to indemnification or recoupment, and
notwithstanding the limitations on indemnification set out in
paragraph 11.4, the Shareholders and Buyer agree that Buyer is
entitled to retain $6,000,000 as a holdback (the "Holdback
Amount") to secure Buyer against any and all Damages that
Buyer or any Affiliate of Buyer may sustain as a result or
<PAGE>
consequence of (i) breaches or inaccuracies (or alleged
breaches or inaccuracies)of, or failure to comply with (or
alleged failure to comply with), or the existence (or alleged
existence) of any facts resulting in the inaccuracy (or
alleged inaccuracy) of, any of the warranties,
representations, conditions, covenants or agreements of the
Shareholders hereunder, or (ii) any Action relating to the
matters referred to in Schedule 11.1, subject to the
limitations and restrictions set forth in the remainder of
this paragraph 11.5. Buyer agrees to give prompt written
notice to the Shareholders upon the occurrence of any Damages
or the assertion of any claim or the commencement of any
action or proceeding with respect to which Damages may
reasonably be expected to occur and, to the extent applicable,
to otherwise comply with the procedures set forth in paragraph
11.3 hereof, but in any case Buyer shall give such notice on
or before May 1, 1995. On May 15, 1995, Buyer shall release
that amount of the Holdback Amount to the Shareholders (in the
same allocations in which the Purchase Price was finally
allocated under paragraph 2.2) that has not been previously
applied to recompense Buyer for any Damages so sustained;
provided, however, that if Buyer has notified the Shareholders
on or prior to May 1, 1995 of any Damages sustained (or
Damages that Buyer concludes are likely to be sustained) or
the assertion of any claim or the commencement of any action
<PAGE>
or proceeding with respect to which Damages may reasonably be
expected to occur, Buyer may retain an amount that, based on
the good faith estimate of Buyer of the potential amount of
such Damages, would be adequate to recompense Buyer if such
Damages were incurred. When any such Damages are paid,
payment is provided for or the claim is otherwise resolved,
any remaining portion of the Holdback Amount still held by
Buyer in respect of such Damages or claim shall be released
promptly to the Shareholders. Any portion of the Holdback
Amount that is paid to the Shareholders under this paragraph
11.5 shall be paid with interest at an annual rate equal to
the rate on treasury bills maturing closest to the first
anniversary of the Closing Date as published in the Wall
Street Journal (Rocky Mountain Edition) on the Closing Date
or, if not published on such date, on the first preceding date
on which such rate was published.
11.6 Insurance; Double Recovery. In determining the
amount of Damages against which an indemnifying party shall
indemnify an indemnified party or retain holdback amounts
pursuant to paragraph 11.5, the amount of any available
insurance coverage or proceeds (less any deductibles or other
amounts that reduce the amount payable to the insured) shall
be taken into account. The parties mutually intend that no
double recovery be effected as a consequence of the
application of the indemnification or holdback provisions set
forth in this section 11.
<PAGE>
SECTION 12. Survival of Representations; Effect of
Certificates.
The parties hereto agree that all representations and
warranties of the Shareholders other than those contained in
paragraphs 3.3, 3.4, 3.14, 3.17(c), 3.22 and 3.24 hereof shall
expire and be of no further force and effect after May 1, 1995
and that all other representations, warranties, covenants,
conditions and agreements contained herein or in any
instrument or other document delivered pursuant to this
Agreement or in connection with the transactions contemplated
hereby shall survive the consummation of the transactions
contemplated hereby. The representations and warranties of
the Shareholders contained in paragraphs 3.14, 3.17(c) and
3.22 (except subparagraph (d) of paragraph 3.22, which shall
survive the consummation of the transactions contemplated
hereby) hereof shall expire and be of no further force or
effect on the third anniversary of the Closing Date.
SECTION 13. Brokerage Indemnity. Buyer, on the one
hand, and the Shareholders, on the other hand, each represents
to the other that no broker or finder has been involved with
any of the transactions relating to this Agreement except
Alex. Brown & Sons Incorporated. The parties agree that the
Shareholders have the sole responsibility for any fees due to
Alex. Brown & Sons Incorporated in connection with the
<PAGE>
transactions contemplated by this Agreement. Except as
provided in the preceding sentence, in the event of a claim by
any broker or finder that such broker or finder represented or
was retained by the Shareholders, on the one hand, or Buyer,
on the other hand, in connection herewith, the Shareholders or
Buyer, as the case may be, agree to indemnify and hold the
other harmless from and against any and all loss, liability,
cost, damage, claim and expense, including, without
limitation, attorneys' fees and disbursements, which may be
incurred in connection with such claim.
SECTION 14. Notices. All notices, requests, demands
and other communications provided for by this Agreement shall
be in writing and shall be deemed to have been given when hand
delivered, when received if sent by telecopier or by same day
or overnight recognized commercial courier service or three
business days after being mailed in any general or branch
office of the United States Postal Service, enclosed in a
registered or certified postpaid envelope, addressed to the
address of the parties stated below or to such changed address
as such party may have fixed by notice:
To the Shareholders:
Andy Sze
c/o Clipper Exxpress Company
15700 West 103rd Street
Lemont, Illinois 60439
<PAGE>
Merle Chambers and
The Evelyn Chambers Revocable Trust No. 1
c/o Axem Resources Incorporated
1675 Broadway, Suite 1700
Denver, Colorado 80202
- copy to -
Holme Roberts & Owen LLC
1700 Lincoln, Suite 4100
Denver, Colorado 80203
Attention: James E. Bye, Esq.
Telecopier: (303) 866-0200
To Buyer:
Arkansas Best Corporation
Corporate Center
1000 South 21st Street
Fort Smith, Arkansas 72901
Attention: Corporate Secretary
Telecopier: (501) 785-6124
- copy to -
Hughes & Luce, L.L.P.
1717 Main Street, Suite 2800
Dallas, Texas 75201
Attention: Alan J. Bogdanow
Telecopier: (214) 939-6100
provided, that any notice of change of address shall be
effective only upon receipt.
SECTION 15. Termination.
15.1 This Agreement may be terminated at any time
prior to the Closing by any of the following:
(a) By mutual written agreement of Buyer and
the Shareholders;
<PAGE>
(b) By either Buyer or the Shareholders, if
the Closing has not occurred by December 31, 1994 upon written
notice by such terminating party, provided that at the time
such notice is given a material breach of this Agreement by
such terminating party shall not be the reason for the
Closing's failure to occur;
(c) Subject to the provisions of paragraph
15.2, by Buyer, by written notice to the Shareholders, if
there has been a material violation or breach of any of the
Shareholders' covenants or agreements made herein or in
connection herewith or if any representation or warranty of
the Shareholders made herein or in connection herewith proves
to be materially inaccurate or misleading with respect to the
Clipper Group, taken as a whole; or
(d) Subject to the provisions of paragraph
15.2, by the Shareholders, by written notice to Buyer, if
there has been a material violation or breach of any of
Buyer's covenants or agreements made herein or in connection
herewith or if any representation or warranty of Buyer made
herein or in connection herewith proves to be materially
inaccurate or misleading.
15.2 If this Agreement is terminated as provided in
paragraph 15.1, then this Agreement shall forthwith become
void and there shall be no liability or obligation on the part
of any party hereto (or any of their respective officers,
<PAGE>
directors or employees) except as provided in paragraphs 5.1,
5.6, 12, 13, 16.8 and 16.9, and except that if Buyer
terminates this Agreement pursuant to paragraph 15.1(c) or the
Shareholders terminate this Agreement pursuant to paragraph
15.1(d), the non-terminating party shall remain liable for any
breach hereof.
SECTION 16. Miscellaneous.
16.1 Entire Agreement. This Agreement, including
the Schedules hereto, sets forth the entire agreement and
understanding among the parties and merges and supersedes all
prior discussions, agreements and understandings of every kind
and nature among them as to the subject matter hereof, and no
party shall be bound by any condition, definition, warranty or
representation other than as expressly provided for in this
Agreement or as may be on a date on or subsequent to the date
hereof duly set forth in writing signed by each party which is
to be bound thereby. Unless otherwise expressly defined,
terms defined in the Agreement shall have the same meanings
when used in any Schedule and terms defined in any Schedule
shall have the same meanings when used in the Agreement or in
any other Schedule. This Agreement (including the Schedules
hereto) shall not be changed, modified or amended except by a
writing signed by each party to be charged and this Agreement
may not be discharged except by performance in accordance with
its terms or by a writing signed by each party to be charged.
<PAGE>
16.2 Taxes. Any Taxes in the nature of a sales or
transfer tax, and any stock transfer tax, payable on the sale
or transfer of the Shares or the consummation of any other
transaction contemplated hereby shall be paid by the
Shareholders.
16.3 Governing Law.
THIS AGREEMENT AND ITS VALIDITY, CONSTRUCTION
AND PERFORMANCE SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS
OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAW.
16.4 Representation by Counsel. Each party hereto
represents and agrees with the other that it has been
represented by independent counsel of its own choosing; it has
had the full right and opportunity to consult with its
respective attorneys and other advisors and has availed itself
of this right and opportunity; its authorized officers have
carefully read and fully understand this Agreement in its
entirety and have had it fully explained to them by such
party's counsel; it is fully aware of the contents hereof and
the meaning, intent and legal effect thereof; and its
authorized officer is competent to execute this Agreement and
has executed this Agreement free from coercion, duress or
undue influence. Each party and its counsel cooperated in the
drafting and preparation of this Agreement and the documents
<PAGE>
referred to herein. Accordingly, any rule of law or any legal
decision that would require interpretation of any ambiguities
in this Agreement against the party that drafted it is of no
application and is hereby expressly waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties and this Agreement.
16.5 Benefit of Parties; Assignment. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, legal
representatives and permitted assigns. The Agreement may not
be assigned by the Shareholders except with the prior written
consent of Buyer. Buyer may (at any time prior to the
Closing), in its sole discretion, assign, in whole or in part,
its rights and obligations pursuant to this Agreement to one
or more of its wholly-owned Subsidiaries. If Buyer assigns
its interests, Buyer will guarantee the obligations of any
such assignee under this Agreement (such guarantee to be in
form and substance reasonably satisfactory to Shareholders).
Buyer's "wholly-owned Subsidiaries" include Subsidiaries which
may be organized subsequent to the date hereof. Nothing
herein contained shall confer or is intended to confer on any
third party or entity which is not a party to this Agreement
any rights under this Agreement.
16.6 Pronouns. Whenever the context requires, the
use in this Agreement of a pronoun of any gender shall be
<PAGE>
deemed to refer also to any other gender, the use of the
singular shall be deemed to refer also to the plural and the
use of the plural shall be deemed to refer also to the
singular.
16.7 Headings. The headings in the sections,
paragraphs and Schedules of this Agreement are inserted for
convenience of reference only and shall not constitute a part
hereof. The words "herein," "hereof," "hereto" and
"hereunder," and other words of similar import refer to this
Agreement as a whole and not to any particular provision of
this Agreement.
16.8 Arbitration.
(a) All claims, disputes and controversies
arising out of or relating to this Agreement or the
performance, breach, validity, interpretation, application or
enforcement hereof, including any claims for equitable relief
or claims based on contract, tort, statute or any alleged
breach, default or misrepresentation in connection with any of
the provisions hereof, shall be resolved by binding
arbitration. A party may initiate arbitration by sending
written notice of its intention to arbitrate to the other
party and to the American Arbitration Association ("AAA")
office located in Chicago, Illinois (the "Arbitration
Notice"). The Arbitration Notice will contain a description
of the dispute and the remedy sought. The arbitration will be
<PAGE>
conducted at the offices of the AAA in Chicago, Illinois
before an independent and impartial arbitrator who is selected
by mutual agreement, or, in the absence of such agreement,
before three independent and impartial arbitrators, of whom
the Buyer will appoint one and the Shareholders will appoint
one, with the third being chosen by the two arbitrators
appointed by the parties. In no event may the demand for
arbitration be made after the date when the institution of a
legal or equitable proceeding based on such claim, dispute or
other matter in question would be barred by the applicable
statute of limitations.
(b) The arbitration and any discovery
conducted in connection therewith will be conducted in
accordance with the Commercial Rules of arbitration and
procedures established by AAA in effect at the time of the
arbitration, including without limitation the expedited
procedures set forth therein (the "AAA Rules"). The
arbitrators will deliver their decision in writing, together
with a summary of the reasons for their decision, including
appropriate citations to legal authority. The decision of the
arbitrators will be final and binding on all parties and their
successors and permitted assignees. The judgment upon the
award rendered by the arbitrators may be entered by any court
having jurisdiction thereof.
<PAGE>
(c) The panel of arbitrators shall be selected
no later than 45 days after the date of the Arbitration
Notice. The arbitration hearing shall commence no later than
three months after the panel of arbitrators is selected. The
arbitrators shall render their decision no later than 30 days
after the close of the hearing, in accordance with AAA Rules.
(d) The arbitrators' fees and costs will
conform to the then current AAA fee schedule and will be borne
equally by the parties.
16.9 Expenses. The parties hereto shall pay all of
their own expenses relating to the transactions contemplated
by this Agreement, including, without limitation, the fees and
expenses of their respective counsel, accountants and
financial advisors. Notwithstanding the foregoing, the
Clipper Group shall not have paid, pay or be obligated to pay
in excess of $50,000 for expenses (including without
limitation legal and accounting expenses and expenses of
financial advisors) incurred, either directly or indirectly,
in connection with this Agreement and the transactions
contemplated hereby. Any and all such expenses in excess of
$50,000 shall be paid by the Shareholders.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed on the day and year first
written above.
ARKANSAS BEST CORPORATION
By: /s/ Robert A. Young III
------------------------------
Title
<PAGE>
SHAREHOLDERS:
/s/ Merle Chambers
---------------------------------
Merle Chambers
/s/ Andy Hok Fan Sze
---------------------------------
Andy Hok Fan Sze
THE EVELYN CHAMBERS REVOCABLE
TRUST NO. 1
By: /s/ Merle C. Chambers
------------------------------
Trustee
