AMENDED AND RESTATED STOCK PURCHASE AGREEMENT

Exhibit 10.2

EXECUTION VERSION

 

AMENDED AND RESTATED

STOCK PURCHASE AGREEMENT

by and among

SUMMIT VIEW, INC.,

JERRY JOE JACOBSON

and

GENESEE & WYOMING INC.

Dated as of September 10, 2008

 

TABLE OF CONTENTS

 

 

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STOCK PURCHASE AGREEMENT

AMENDED AND RESTATED STOCK PURCHASE AGREEMENT, dated as of September 10 , 2008 (this “ Agreement ”), by and among Summit View, Inc., an Ohio corporation (“ Summit View ”), Jerry Joe Jacobson, the owner of all of the issued and outstanding shares of Summit View (the “ Seller ”), and Genesee & Wyoming Inc., a Delaware corporation (the “ Buyer ”).

WITNESSETH :

WHEREAS, the Seller owns all of the issued and outstanding shares of common stock, without par value, of Summit View;

WHEREAS, Summit View is engaged in the railroad business through its ownership of all of the issued and outstanding shares of The Aliquippa & Ohio River Railroad Co., an Ohio corporation; The Columbus and Ohio River Rail Road Company, an Ohio corporation; The Mahoning Valley Railway Company, an Ohio corporation; Ohio and Pennsylvania Railroad Company, an Ohio corporation; Ohio Central Railroad, Inc., an Ohio corporation; The Pittsburgh & Ohio Central Railroad Company, an Ohio corporation; Ohio Southern Railroad, Inc., an Ohio corporation; Youngstown & Austintown Railroad, Inc., an Ohio corporation; The Youngstown Belt Railroad Company, an Ohio corporation; and The Warren & Trumbull Railroad Company, an Ohio corporation; and the outstanding interests of Phoenix Logistics, Ltd. (the “ Acquired Entities ”);

WHEREAS, Summit View and the Acquired Entities (together, the “ Subject Companies ”) are engaged in the business of operating short line railroads (the “ Business ”);

WHEREAS, prior to the Closing, the Subject Companies will transfer the Excluded Assets to the Seller or a designee thereof;

WHEREAS, Summit View owns all of the issued and outstanding shares of or membership interests in Byesville Scenic Trails, LLC and Air Partners N155A Company (the “ Excluded Entities ”);

WHEREAS, prior to the Closing, Summit View will transfer ownership of the Excluded Entities to the Seller or a designee thereof; and

WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, all of the issued and outstanding shares of Summit View (but excluding all of the issued and outstanding shares of or membership interest in the Excluded Entities), all in accordance with and subject to the terms and conditions set forth in this Agreement;

WHEREAS, the Buyer and the Seller and Summit View have entered into that certain Stock Purchase Agreement, dated as of August 4, 2008 (the “ Original Stock Purchase Agreement ”), to record and confirm the obligations undertaken by them with respect and relating to the acquisition of all issued and outstanding shares of Summit View (but excluding all of the

issued and outstanding shares of or membership interest in the Excluded Entities), which are owned by the Seller; and

WHEREAS, the Purchaser and Sellers and Summit View desire to amend and restate, in its entirety, the Original Stock Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements hereinafter contained, the parties hereby agree as follows:

ARTICLE 1.  DEFINITIONS .

As used in this Agreement, the following terms shall have the following meanings:

“AAR” shall mean the Association of American Railroads;

“Action” shall mean any claim, action, suit, proceeding, labor dispute, investigation or audit by or before any court, tribunal or other Governmental Entity or arbitral body;

“Affiliate” shall mean any Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with another Person with the term “control” meaning, for this purpose, the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities or partnership, membership or other ownership interests, or by contract or otherwise;

“Acquired Entities” — See Recitals hereto;

“Agreement” – See Preamble hereto;

“Balance Sheet” shall mean the consolidated balance sheet of Summit View as of August 31, 2008 as set forth in Section 1.1(a) of the Disclosure Schedule;

“Basket Amount” — See Section 7.2(a)(v);

“Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banks in New York, New York, are closed generally;

“Business” — See Recitals hereto;

“Buyer” — See Preamble hereto;

“Buyer Indemnitees” — See Section 7.2(a);

“Buyer Material Adverse Effect” — See Section 4.1;

“Closing” — See Section 2.2;

“Closing Date” — See Section 2.2;

 

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“Closing Payment Amount” — See Section 2.1(c);

“Closing Working Capital Report” — See Section 2.3(a);

“Closing Working Capital Statement” — See Section 2.3(a);

“COBRA” — See Section 3.18(i);

“Code” shall mean the Internal Revenue Code of 1986, as amended;

“Company Marks” — See Section 5.5;

“Confidential Information” shall include information, both written and oral, relating to trade secrets, and confidential and proprietary information relating to technical data, products, services, finances, business plans, marketing plans, legal affairs, suppliers, customers, prospects, opportunities, contracts, assets and other information that has commercial value, but shall not include information which (i) can be demonstrated in writing was already known by the recipient when received; (ii) is or after the date of this Agreement becomes obtainable from other sources other than pursuant to a violation of Law or breach of any Contract; (iii) is required to be disclosed to a Governmental Entity; (iv) can be demonstrated in writing that it was independently developed by the receiving Person; (v) is required to be disclosed by Law or pursuant to the rules of any securities exchange having jurisdiction over the disclosing Person; or (vi) is disclosed pursuant to a written waiver from the non-disclosing Person of the confidentiality requirements of Section 12.14;

“Contracts” shall mean all contracts and agreements, including but not limited to, Leases, Equipment and Machinery leases, indentures, mortgages, instruments, partnership or joint venture agreements, guaranties, license agreements, maintenance contracts, service contracts, employment, commission and consulting agreements, collective bargaining agreements, suretyship contracts, letters of credit, reimbursement agreements, distribution agreements, contracts or commitments limiting or restraining the Subject Companies from engaging or competing in any lines of business or with any Person, documents granting the power of attorney with respect to the affairs of the Subject Companies, options to purchase any assets or property rights, trackage rights agreements, haulage agreements, interchange agreements, joint facility agreements, switching agreements, marketing agreements, rate and allowance agreements, division agreements, and other similar arrangements, undertakings, commitments or understandings, including any renewal or amendment thereto;

“Employees” shall mean all employees of the Subject Companies that are employed by the Subject Companies following the Closing;

“Environmental Claim” means any claim, action, demand, or notice by or on behalf of, any Governmental Entity or Person alleging liability or potential liability under, or a violation of, any Environmental Law, or liability or potential liability arising out of the Release or presence of or exposure to any Materials of Environmental Concern;

“Environmental Laws” shall mean any and all Laws regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human

 

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health, or natural resource damages, including Laws relating to the use, handling, generation, transportation, presence or Release of, or exposure to, Materials of Environmental Concern;

“Environmental Permits” shall mean any and all permits, licenses, approvals, registrations, notifications, exemptions and any other authorization pursuant to or required under any Environmental Law;

“Environmental Report” shall mean any report, study, assessment, audit or other similar document that addresses any environmental or health issue, including any issue of actual or potential noncompliance with, actual or potential liability under or cost arising out of, or actual or potential impact on business in connection with, any Environmental Law or any proposed or anticipated change in or addition to Environmental Law, that may affect any of the Subject Companies;

“Equipment and Machinery” shall mean all the material equipment, machinery, furniture, fixtures and improvements, tooling, spare parts, supplies and vehicles (including all locomotives, cars, tractors, trailers, vans and all other transportation rolling stock) owned, leased or used (except third-party locomotives and rolling stock used pursuant to AAR interchange rules) by the Subject Companies;

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder;

“ERISA Affiliate” — See Section 3.18(b);

“Escrow Agent” — See Section 2.1(d);

“Escrow Agreement” — See Section 2.1(d);

“Escrow Fund” — See Section 2.1(d);

“Excluded Assets” shall mean those assets of the Subject Companies set forth on Section 1.1(b) of the Disclosure Schedule.

“Excluded Entities” — See Recitals hereto;

“Excluded Liabilities” — See Section 2.7;

“Existing Policies” — See Section 3.20;

“FELA Claims” shall mean claims made under the Federal Employers Liability Act, as amended from time to time. A FELA Claim shall be considered “made” upon the earliest to occur of the following: (i) the claimant’s employer has received or prepared a written report (including, in the case of an alleged occupational injury, a questionnaire) of the claim or of the incident from which the claim arises; or (ii) the claimant’s employer has received written notice of the claim from the claimant or the claimant’s attorney; or (iii) an action, claim or suit asserting the claim has been filed and properly served on the claimant’s employer. For the purposes of this definition (i) the term “written report” shall include reports which are electronically prepared

 

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or transmitted and (ii) the term “employer” shall include the employer currently responsible under the Federal Employers Liability Act for the claim or cause of action being asserted and such employer’s attorney;

“Financial Statements” — See Section 3.7;

“FRA” shall mean the U.S. Federal Railroad Administration;

“GAAP” shall mean U.S. generally accepted accounting principles as in effect from time to time;

“Governmental Entity” shall mean any national, federal, state, provincial, local or international governmental or public body, court, agency or regulatory authority or commission, or other governmental authority or instrumentality;

“Governmental Order” shall mean any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity;

“Holdback Amount” — See Section 2.1(d);

“Independent Accounting Firm” — See Section 2.3(a);

“Indebtedness” shall mean, with respect to any Person, without duplication: (i) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, including accrued interest and any costs associated with prepaying such debt which includes any borrowings made for purposes of making any Severance and Bonus Payments; (ii) the principal of and premium (if any) in respect of all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, including accrued interest; (iii) all obligations of such Person upon which interest charges are customarily paid; (iv) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person; (v) all obligations of such Person issued or assumed as the deferred purchase price of property or services; (vi) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed by such Person; (vii) all guarantees by such Person of Indebtedness of others; (viii) all capital lease obligations of such Person; (ix) all obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements or other interest or exchange rate hedging arrangements; (x) all obligations of such Person as an account party to reimburse any bank or any other Person in respect of letters of credit and bankers’ acceptances; and (xi) any obligation arising with respect to any transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute liability on the balance sheet and, in addition to the foregoing, with respect to the Subject Companies, all obligations of the Subject Companies in respect of Severance and Bonus Payments. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or member;

“Indemnification Escrow Amount” — See Section 2.1(d);

 

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“Indemnified Party” — See Section 7.1;

“Indemnifying Party” — See Section 7.1;

“Intellectual Property” shall mean all of the following owned or licensed by the Subject Companies, as licensee or licensor, or used exclusively in the Subject Companies’ business: (i) registered and material unregistered trademarks and service marks and trade names, and all goodwill associated therewith; (ii) patents, patentable inventions and computer programs (including password unprotected interpretive code or source code); (iii) trade secrets; (iv) registered and material unregistered copyrights in all works, including software programs; (v) domain names; (vi) all rights in mask works; (vii) all computer software owned by the Subject Companies; (viii) all rights of the Subject Companies under software licenses; and (ix) all copies of software generally available for purchase by the public pursuant to shrink-wrap licenses in the possession or control of the Subject Companies;

“IP Agreements” shall mean (a) licenses of Intellectual Property by any Subject Company to any third-party, (b) licenses of Intellectual Property by any third-party to any Subject Company, (c) agreements between any Subject Company and any third-party relating to the development or use of Intellectual Property, the development or transmission of data, or the use, modification, framing, linking, advertisement, or other practices with respect to Internet web sites, and (d) consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use, validity or enforceability of the Intellectual Property;

“Law” shall mean any law, statute, ordinance, rule (including common law), regulation, order, writ, judgment, injunction, settlement agreement, guideline, code, decree or other legally enforceable requirement of any Governmental Entity, and includes rules and regulations of any regulatory or self-regulatory authority;

“Leased Real Property” — See Section 3.12(a);

“Lease” and “Leases” — See Section 3.12(a);

“Licensed Intellectual Property” shall mean Intellectual Property licensed to the Seller or any of its Subsidiaries pursuant to the IP Agreements;

“Licenses and Permits” — See Section 3.14;

“Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien (statutory or other), deed of trust, conditional sale agreement, claim, charge, lease, license, easement, restrictive covenant, limitation, restriction, assessment or defect in title that is not a Permitted Lien;

“Listed Intellectual Property” — See Section 3.13(a);

“Losses” — See Section 7.2(a);

“Material Contracts” — See Section 3.17(a)(xvi);

 

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“Materials of Environmental Concern” shall mean any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, hazardous substances, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, molds, pollutants, contaminants, radioactivity and any other materials, substances or wastes of any kind, regulated pursuant to, or that could give rise to, liability under any Environmental Law;

“Material Adverse Effect” — See Section 3.2(a);

“Multiemployer Plans” — See Section 3.18(a);

“Net Working Capital” — See Section 2.5;

“Non-Compete Person” — See Section 5.10;

“Options” — See Section 3.12(d);

“Original Stock Purchase Agreement” — See Recitals hereto;

“Owned Intellectual Property” shall mean Intellectual Property owned by any Subject Company;

“Owned Real Property” — See Section 3.12(a);

“Panhandle Agreement” shall mean the Operating Agreement, dated as of May 17, 2007 between the State of Ohio, the Ohio Rail Development Commission and the Columbus & Ohio River Rail Road Company;

“Panhandle Line” shall mean the Rail Property as defined in the Panhandle Agreement;

“Pension Plan” — See Section 3.18(c);

“Permitted Liens” shall mean: (i) Liens for Taxes not yet due and payable; (ii) Liens imposed by Law and incurred in the ordinary course of business for obligations not yet due to carriers, warehousemen, laborers, materialmen and the like, it being understood that such Liens do not include Liens arising under any applicable Environmental Law; and (iii) Liens in respect of pledges or deposits under workers’ compensation Laws;

“Person” shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, trust, limited liability company, unincorporated organization or Governmental Entity;

“Personal Property” means all furniture, fixtures, Equipment and Machinery and other items of tangible personal property;

“Plans” — See Section 3.18(a);

“Post-Closing Litigation” shall mean any Actions involving the Subject Companies relating to incidents that occur on or after the Closing other than a Tax Claim;

 

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“Post-Signing Returns” — See Section 5.1(b);

“Pre-Closing Tax Period” shall mean any taxable period (or portion of a taxable period) ending on or before the Closing Date;

“Purchase Price” — See Section 2.1(b);

“Rail Facilities” — See Section 3.27;

“Railroad Assets” shall mean all assets, properties and rights (including the Rail Facilities), real and personal, of any of the Subject Companies;

“Real Property” — See Section 3.12(e);

“Regulations” shall mean the Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes;

“Release” shall mean disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and the like into or upon any land or water or air or otherwise entering into the environment;

“Retained Employees” shall mean the employees of the Subject Companies who shall become employees of the Seller or his Affiliates after the Closing whose names are set forth on Section 1.1(c) of the Disclosure Schedule.

“Securities Act” shall mean the United States Securities Act of 1933, as amended, and all rules and regulations of the United States Securities and Exchange Commission promulgated thereunder;

“Seller” — See Preamble hereto;

“Seller Indemnitees” — See Section 7.3;

“Severance and Bonus Payments” shall mean each Severance and Bonus Payment to be paid by a Subject Company to an employee, as described on Schedule A attached hereto.

“Specified Persons” — See Section 3.20;

“STB” — See Section 3.4;

“Subject Companies” — See Recitals hereto;

“Subsidiary” shall mean, as to any Person, any Person of which (i) at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions or (ii) the power to direct or cause the direction of the management and policies of such Person is directly

 

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or indirectly owned or controlled by such Person or by one or more of its respective Subsidiaries or by such Person and any one or more of its respective Subsidiaries;

“Summit View” – See Preamble hereto;

“Tax Claim” — See Section 11.3(a);

“Tax Return” shall mean any report, return, declaration, statement, information return, filing, election, claim for refund or other information, including any schedules or attachments thereto, and any amendments to any of the foregoing required to be supplied in connection with Taxes;

“Taxes” shall mean all United States federal, state, local and foreign taxes, including, without limitation, net income, gross income, gross receipts, production, excise, employment, sales, use, transfer, ad valorem, profits, license, capital stock, capital gains, franchise, severance, stamp, withholding, Social Security, railroad retirement, employment, unemployment, disability, worker’s compensation, payroll, utility, windfall profits, personal property, real property, intangible property, registration, alternative or add-on minimum, estimated and other taxes, customs, duties, governmental fees or like charges of any kind whatsoever, including any interest, penalties, fines, related liabilities or additions thereto; and “Tax” shall mean any one of them;

“Third-Party Claim” — See Section 7.4(a);

ARTICLE 2.  PURCHASE AND SALE OF SHARES OF SUMMIT VIEW .

SECTION 2.1 Purchase Price . Subject to the terms and conditions set forth in this Agreement and in reliance upon the representations and warranties of the Seller set forth below, on the Closing Date:

(a) The Buyer shall purchase from the Seller and the Seller shall sell to the Buyer all of the issued and outstanding shares of Summit View, free and clear of all Liens;

(b) The aggregate purchase price for the shares being sold by the Seller shall be $234,329,473 less Indebtedness as of the Closing, which aggregate amount shall be subject to adjustment after the Closing in the manner set forth in Sections 2.4 and 2.6 below (the “ Purchase Price ”);

(c) Such purchase and sale shall be effected on the Closing Date by the Seller delivering to the Buyer such assignments and other instruments and documents as shall be effective to vest in the Buyer, on the Closing Date, good and marketable title to the Common Stock of Summit View, subject to no Liens other than such as may be created by or on behalf of the Buyer, in exchange for delivery by the Buyer to the Seller of the Purchase Price less the Indemnification Escrow Amount (the “ Closing Payment Amount ”). Payment of the Closing Payment Amount shall be made by wire transfer of immediately available funds to such account as the Seller shall designate in writing to the Buyer at least three days prior to the Closing;

 

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(d) (i) a portion of the Purchase Price equal to $17,500,000 (the “ Indemnification Escrow Amount ”) shall be deposited with a bank (the “ Escrow Agent ”), pursuant to the terms of the Escrow Agreement among the parties hereto and the Escrow Agent (the “ Escrow Agreement ”) substantially in the form attached hereto as Schedule B , which will be available until the thirty month anniversary of the Closing Date for the purposes of securing payment of any post closing adjustments to the Purchase Price pursuant to Sections 2.1 and 2.6 and or indemnity obligations pursuant to Section 7.5 (the “ Escrow Fund ”) and the Seller shall be entitled to, and responsible for the payment of any Taxes imposed on, interest or other income attributable to investments of amounts in the Escrow Fund, and (ii) a portion of the Purchase Price equal to $7,500,000 (the “ Holdback Amount ”) shall be deposited with the Escrow Agent pursuant to the terms of the Escrow Agreement, which shall be retained by the Escrow Agent and released by the Escrow Agent to the Seller or the Buyer, as the case may be, according to the terms of the Escrow Agreement; and

(e) The Buyer shall be entitled to deduct and withhold from any amounts otherwise payable pursuant to this Agreement such amount as the Buyer is required to deduct and withhold with respect to the making of such payment under the Code or any other applicable Tax Law. To the extent that amounts are so withheld, such withheld amounts shall be treated for purposes of this Agreement as having been paid to the Seller.

SECTION 2.2 Closing . Subject to the satisfaction or waiver of the conditions set forth in Articles 8 and 9 hereof, the closing (the “ Closing ”) for the consummation of the transactions contemplated by this Agreement shall take place at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, New York 10022 at 10:00 a.m. on the fifth Business Day following the satisfaction or waiver of the conditions set forth in Articles 8 and 9 , or at such other place and time as may be mutually agreed to by the parties hereto (the “ Closing Date ”).

SECTION 2.3 Post-Closing Determination . (a) Within 60 calendar days after the Closing Date, the Buyer shall deliver to the Seller a statement of the Net Working Capital (the “ Closing Working Capital Statement ”). During the preparation of the Closing Working Capital Statement by the Buyer and the period of any dispute with respect to the application of this Section 2.3 , the Seller shall cooperate with the Buyer to the extent reasonably requested by the Buyer to prepare the Closing Working Capital Statement or to investigate the basis for any dispute. The Closing Working Capital Statement shall be examined by the Seller, and the Seller shall, not later than 30 calendar days after receipt of the Closing Working Capital Statement, render a report thereon (the “ Closing Working Capital Report ”). During the preparation of the Closing Working Capital Report and the period of any dispute with respect thereto, the Buyer shall provide the Seller with reasonable access during normal business hours to the books, records (including work papers, schedules, memoranda and other documents) and employees of the Subject Companies. The Closing Working Capital Report shall list those items, if any, from the Closing Working Capital Statement to which the Seller takes exception and explain the Seller’s proposed adjustment. If the Seller fails to deliver to the Buyer a Closing Working Capital Report within 30 calendar days following receipt of the Closing Working Capital Statement, the Seller shall be deemed to have accepted the Closing Working Capital Statement for the purposes of any adjustment to the Purchase Price under Section 2.4 and 2.6 . If the Buyer does not give the Seller notice, within 30 calendar days following receipt of the

 

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Closing Working Capital Report, of objections to the Closing Working Capital Report, the Buyer shall be deemed to have accepted the determination of the Net Working Capital as determined by the Seller in the Closing Working Capital Report for the purposes of any adjustment to the Purchase Price under Section 2.4 and 2.6 . If the Buyer gives the Seller notice of objections to the Closing Working Capital Report, and if in good faith the Seller and the Buyer are unable, within 15 calendar days after receipt by the Seller of the notice from the Buyer of such objections, to resolve the disputed exceptions, such disputed exceptions will be referred to Deloitte & Touche LLP or another firm of independent certified public accountants (“ Independent Accounting Firm ”) mutually acceptable to the Seller and the Buyer. The Buyer and the Seller shall cooperate with the Independent Accounting Firm to the extent reasonably requested by the Independent Accounting Firm to prepare a written report. The Independent Accounting Firm shall, within 30 calendar days following its selection, deliver to the Seller and the Buyer a written report determining such disputed exceptions, and its determinations will be conclusive and binding upon the parties hereto for the purposes of any adjustment to the Purchase Price under Section 2.4 and 2.6 . The fees and disbursements of the Independent Accounting Firm acting under this Section 2.3 shall be shared equally by the Buyer and the Seller.

(b) The Buyer agrees that following the Closing, it will not take any action, and the Seller agrees that prior to the Closing it will not take any action, with respect to the accounting, books, records, policies and procedures of any Subject Company that would obstruct or prevent the preparation of the Closing Working Capital Statement, the Closing Working Capital Report or the report of the Independent Accounting Firm as provided in this Section 2.3 .

SECTION 2.4 Post-Closing Net-Working Capital Adjustment .

(a) If the Net Working Capital is less than $329,473, the Seller shall, within three calendar days following the final determination, pursuant to Section 2.3 , of the Net Working Capital, and based upon such final determination, pay to the Buyer an amount equal to such deficiency.

(b) If the Net Working Capital is more than the $329,473, the Buyer shall, within three calendar days following the final determination, pursuant to Section 2.3 , of the Net Working Capital, and based upon such final determination, pay to the Seller an amount equal to such excess.

(c) Any payment to the Buyer under this Section 2.4 shall be made by wire transfer of immediately available funds to such account as the Buyer shall designate in writing to the Seller. Any payment to the Seller under this Section 2.4 shall be made in the manner set forth in Section 2.1 .

SECTION 2.5 Net Working Capital . For purposes of this Article 2 , “ Net Working Capital ” means the amount equal to the current assets, less the current liabilities (excluding the current portion of long-term debt), of the Subject Companies (on a consolidated basis) each determined (i) as of the close of business on the day immediately preceding the Closing Date, and (ii) in accordance with GAAP in preparing the Subject Companies’ consolidated net working capital as of August 31, 2008 as set forth on Section 2.5 of the

 

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Disclosure Schedule and consistent with the accounting principles, procedures, policies and methods used in preparing the Financial Statements; provided that, for the avoidance of doubt, current liabilities shall include liabilities for Taxes of (i) the Subject Companies, including any Taxes imposed on the Subject Companies with respect to the Excluded Assets or the operations of the Excluded Entities or the transfer of the Excluded Entities or the Excluded Assets to another Subject Company or the Seller, and (ii) the Excluded Entities but only to the extent that the Taxes of an Excluded Entity are required to be reflected on a Tax Return of a Subject Company. For the avoidance of doubt, current liabilities shall not include any amounts owed or owing as Severance and Bonus Payments, which such payments the Seller agrees to make prior to the Closing Date.

SECTION 2.6 [Intentionally Omitted] .

SECTION 2.7 Excluded Liabilities . Notwithstanding anything contained in this Agreement to the contrary, (i) any and all payables of the Subject Companies owed to the Seller or any of their Affiliates and (ii) any liability under or relating to any Plan as a result of the execution of this Agreement shareholder approval of this Agreement or the transactions contemplated by this Agreement, including any bonuses listed on Section 3.18(a ) of the Disclosure Schedule (collectively, the “ Excluded Liabilities ”), shall not be liabilities of the Subject Companies at or after the Closing.

ARTICLE 3.  REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SUMMIT VIEW .

The Seller and Summit View hereby jointly and severally represent and warrant to the Buyer, as of the date hereof and as of the Closing Date or, if a representation or warranty is made as of a specific date, as of such date, subject to such information as is disclosed in the Disclosure Schedule, as follows:

SECTION 3.1 The Seller . (a)  Authority of the Seller . The Seller has the requisite authority to enter into this Agreement, to consummate the transactions contemplated hereby and to carry out his obligations hereunder. This Agreement has been duly executed and delivered by the Seller and, assuming the due authorization, execution and delivery of this Agreement by the Buyer, this Agreement constitutes the valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganizations, moratorium or other similar Laws now or hereafter in effect relating to or affecting creditors’ rights generally and subject to the limitations imposed by general equitable principals (regardless whether such enforceability is considered in a proceeding at law or in equity. The failure of the spouse of the Seller to be a party or signatory to this Agreement shall not (i) prevent the Seller from performing the Seller’s obligations and consummating the transactions contemplated hereunder or (ii) prevent this Agreement from constituting the legal, valid and binding obligation of the Seller in accordance with its terms.

(b) Ownership of Shares . The Seller owns of record all issued and outstanding shares of Summit View, beneficially and with good and valid title, free and clear of all Liens. Other than the shares of Summit View, the Seller owns no interest in the Subject

 

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Companies. Upon consummation of the Closing, the Buyer will own good and valid title to all the interests in the Subject Companies. Other than this Agreement, the Seller is not bound by any Contract restricting its right to transfer the shares of Summit View.

SECTION 3.2 Corporate Organization, Authority and Qualification of the Subject Companies . (a) Each of the Subject Companies is a corporation, duly organized, validly existing and in good standing under the Laws of the state of Ohio and has all requisite power and authority to own, operate or lease the assets or properties now owned or leased by it, and to conduct its business as now conducted, and is duly licensed or qualified to do business as a foreign entity and is in good standing in each jurisdiction in which the character of the properties and assets owned or leased by it or the nature of the business conducted by it makes such licensing or qualification necessary or desirable, except that the failure to be so licensed or qualified and in good standing would not, individually or in the aggregate, either (i) have or reasonably be expected to have a material adverse effect on the business, operations, assets or condition (financial or otherwise), results of operations or prospects of the Subject Companies taken as a whole, or (ii) materially impair the ability of the Seller or Summit View to perform any of their obligations under, and to consummate the transactions contemplated by, this Agreement or any other related agreements (either of such effects, a “ Material Adverse Effect ”). All corporate actions taken by the Subject Companies have been duly authorized, and none of the Subject Companies have taken any action that in any respect conflicts with, constitutes a default under, or results in a violation of, any provision of its Certificate of Incorporation and By-Laws (or similar organizational documents).

(b) Section 3.2(b) of the Disclosure Schedule sets forth a true and complete list of the Subject Companies, listing for each Subject Company its name, type of entity, the jurisdiction and date of its incorporation or organization, its authorized capital stock, partnership capital or equivalent, the number and type of its issued and outstanding shares of capital stock, partnership interests or similar ownership interests and the current ownership of such shares, partnership interests or similar ownership interests. Copies of the Certificate of Incorporation and By-laws, and certificates of formation (or comparable organizational documents, as applicable) of the Subject Companies, with all amendments thereto to the date hereof, have been furnished to the Buyer or its representatives, and such copies are accurate and complete.

(c) Other than the Acquired Entities and the Excluded Entities, there are no other corporations, partnerships, joint ventures, associations or other entities in which Summit View owns, of record or beneficially, any direct or indirect equity interest or any right (contingent or otherwise) to acquire the same, except as set forth in Section 3.2(c) of the Disclosure Schedule. Other than the Acquired Entities and the Excluded Entities and except as set forth in Section 3.2(c) of the Disclosure Schedule, neither Summit View nor any Acquired Entity is a member of (nor is any part of the Business conducted through) any partnership nor is Summit View or any Acquired Entity a participant in any joint venture or similar arrangement.

SECTION 3.3 No Conflict or Violation; Authority and Validity . (a) The execution, delivery and performance by the Seller and Summit View of this Agreement and the transactions contemplated hereby do not and will not (i) violate or conflict with any provision of the Certificate of Incorporation or By-laws (or comparable organizational documents, as applicable) of any of the Subject Companies, (ii) violate any order, judgment or decree of any

 

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Governmental Entity applicable to any of the Subject Companies or any of their respective Railroad Assets or businesses, or (iii) except as set forth on Section 3.3(a) of the Disclosure Schedule, violate, conflict with or result in a breach of or constitute (with or without due notice or lapse of time or both) a default, require consent under, or give to others any rights of termination, amendment, suspension, revocation or cancellation of, or result in the creation or imposition of any Lien upon any of the Railroad Assets, properties or rights of any of the Subject Companies under any Contract to which any of the Subject Companies is a party or by which any of them are bound or to which any of their respective Railroad Assets is subject, or result in the acceleration of any Indebtedness created thereunder or give rise to a right thereunder to require any payment to be made by any of the Subject Companies.

(b) There is no pending Action or, to the knowledge of the Seller (after having conducted reasonable inquiry), threatened Action before any Governmental Entity by or against the Seller or any Subject Company relating to (i) the Seller’s ownership of the shares of Summit View, (ii) the Subject Companies or (iii) any actual or potential bankruptcy or insolvency of the Seller or any Subject Company.

SECTION 3.4 Consents and Approvals . Except as set forth on Section 3.4 of the Disclosure Schedule, the execution, delivery and performance of this Agreement by the Seller or the consummation of the transactions contemplated hereby by the Seller do not and will not require any consent, waiver, approval, license, authorization or permit of, or order of, action by, filing with or notification to, any Governmental Entity or Person, except for any consents or waivers required to be obtained from the Surface Transportation Board (the “ STB ”).

SECTION 3.5 Capital Stock and Related Matters . (a) The authorized capital stock of Summit View consists of 750 shares of common stock, having no par value per share, of which 100 shares are issued and outstanding. Summit View has no shares of common stock that are held as treasury stock. Summit View has no Subsidiaries other than the Acquired Entities and Excluded Entities;

(b) Section 3.5(b) of the Disclosure Schedule sets forth, for each Acquired Entity, (i) the authorized, issued and outstanding capital stock of each Acquired Entity, (ii) the names of the owners of the capital stock and (iii) the amount of capital stock held by each owner of capital stock; and

(c) All of the issued and outstanding capital stock of each Subject Company is owned, beneficially and of record, by the Seller or a Subject Company, free and clear of any Liens other than such as may be created by or on behalf of the Buyer, and has been duly authorized and validly issued and is fully paid, nonassessable and was not issued in violation of any preemptive rights, rights of first refusal or any similar rights. There are no outstanding obligations, warrants, options or other rights to subscribe for or purchase from any Subject Company, or other contracts or commitments providing for the issuance of or granting any Person the right to acquire shares of any class of capital stock of any Subject Company, or any securities or other instruments convertible into or exchangeable or exercisable for shares of any class of capital stock of any Subject Company, and no Subject Company is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire, or to register under the Securities Act, any shares of its capital stock. There are no proxies, voting agreements,

 

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stockholder agreements or other agreements with respect to the voting or transfer of any shares of capital stock of any of the Subject Companies. At Closing, the Buyer shall have good and valid title to all of the capital stock of each Subject Company, free and clear of any Liens, and the Subject Companies shall have good and valid title to all of the capital stock, membership interests and partnership interests of their respective Subsidiaries, free and clear of any Liens, other than such as may be created by or on behalf of the Buyer.

SECTION 3.6 Indebtedness . Except as set forth on Section 3.6 of the Disclosure Schedule, none of the Subject Companies has any Indebtedness.

SECTION 3.7 Financial Statements . The Seller has heretofore furnished to the Buyer copies of (a) the Balance Sheet, together with the related unaudited consolidated statements of income, capital and retained earnings and cash flows for the period ended August 31, 2008 and (b) the audited consolidated balance sheets, together with the related statements of income, capital and cash flows for the years ended December 31, 2005, December 31, 2006 and December 31, 2007 of Summit View and its Subsidiaries, together with the report thereon of GBQ Partners LLC (all the financial statements referred to in clauses (a) and (b) being hereinafter collectively referred to as the “ Financial Statements ”). Except as set forth on Section 3.7 of the Disclosure Schedule, the Financial Statements (i) were prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby (except that the unaudited interim Financial Statements do not include footnotes) and (ii) present fairly the financial position, results of operations and changes in the financial position of the Subject Companies as of such dates and for the periods then ended (subject, in the case of the unaudited interim Financial Statements, to normal year-end audit adjustments consistent with prior periods). The Subject Companies have designed and maintain a system of internal controls over financial reporting sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and there are no significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting that would reasonably be expected to have a material adverse effect upon such Subject Company’s ability to record, process, summarize and report financial information.

SECTION 3.8 Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions .

(a) Except as set forth on Section 3.8(a) of the Disclosure Schedule, since December 31, 2007, the Subject Companies have not suffered any effects, changes, events or developments which have had or would reasonably be expected to have a Material Adverse Effect;

(b) Since December 31, 2007, the Subject Companies have (and, in the case of Section 3.8(b)(xx) , the Excluded Entities) operated and conducted their respective businesses in the ordinary course of business consistent with past practice and, except as set forth on Section 3.8(b) of the Disclosure Schedule, have not:

 

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(i) incurred any obligation, liability (whether absolute, accrued, contingent or otherwise) or Indebtedness in excess of $250,000 in the aggregate or involving in any case annual expenditures in excess of $100,000;

(ii) made any loan to, or guaranteed any Indebtedness of, or otherwise incurred any Indebtedness on behalf of, any Person;

(iii) written down or written up (or failed to write down or write up in accordance with GAAP consistent with past practice) the value of any inventories or receivables or revalued any of the Railroad Assets or rights other than in the ordinary course of business consistent with past practice and in accordance with GAAP;

(iv) amended, terminated, cancelled or compromised any material claims of the Seller (to the extent related to the Business) or any Subject Company or waived any other rights of substantial value to the Seller (to the extent related to the Business) or any Subject Company;

(v) sold transferred, leased, subleased, licensed or otherwise disposed of any Railroad Assets, real, personal or mixed (including leasehold interests and intangible property), other than the sale of assets in the ordinary course of business consistent with past practice and not in excess of $250,000;

(vi) failed to discharge or satisfy any Lien or pay or satisfy any obligation or liability (whether absolute, accrued, contingent or otherwise), other than liabilities being contested in good faith and for which adequate reserves have been provided;

(vii) mortgaged, pledged or subjected to any Lien any of their respective Railroad Assets or rights;

(viii) sold or transferred any of their respective assets or cancelled any debts or claims or waived any rights;

(ix) disposed of any Intellectual Property;

(x) (A) allowed any Permit or Environmental Permit that was issued to or relates to the Subject Company or otherwise relates to the Business to lapse or terminate or (B) failed to renew any insurance policy, Permit or Environmental Permit that is scheduled to terminate or expire within 45 calendar days of the Closing;

(xi) entered into any transaction material to their respective businesses or amended, modified or consented to the termination of any material Contract or any Subject Company’s rights thereunder;

(xii) amended or restated the Certificate of Incorporation or By-Laws (or other organizational documents) of any Subject Company;

(xiii) granted any increase, or announced any increase, in the compensation or benefits of, or loaned or advanced any money or other property to, their

 

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respective present or former directors, officers or employees, including any increase or change pursuant to any Plan, or established or increased or promised to increase any benefits under any Plan, in either case except as required by Law or any collective bargaining agreement;

(xiv) entered into any employment or severance agreement, arrangement or transaction with any of their respective present or former directors, officers, employees or stockholders (or with any relative, beneficiary, spouse or Affiliate of such Persons);

(xv) incurred any obligation or liability for the payment of severance benefits;

(xvi) declared, paid or set aside for payment any dividend or other distribution in respect of shares of their respective capital stock or other securities (whether in cash, securities or other property) to the holders of capital stock of any Subject Company or otherwise, or redeemed, purchased or otherwise acquired, directly or indirectly, any shares of their respective capital stock or other securities, or agreed to do so;

(xvii) terminated, discontinued, closed or disposed of any facility or other business operation or laid off any employees (other than layoffs of less than 50 employees in any six-month period in the ordinary course of business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)(4) of the Regulations or announced or planned any such action or program for the future;

(xviii) established, adopted, entered into, amended or terminated any Plans, except to the extent that any such amendments are required by Law, are necessary to preserve the tax-qualified status of any Plan or do not result in an increase in benefits for their respective present or former directors, officers or employees;

(xix) granted, amended, modified, extended or terminated any operating agreement, trackage rights agreement, haulage agreement, power-run-through agreement, switching agreement, marketing agreement, joint facilities agreement or other agreement with carriers materially affecting the operations on, or marketing of traffic to, from or over, the Rail Facilities;

(xx) changed any financial or accounting policy or practice, made, changed or revoked any Tax election or method of Tax accounting, filed any amended Tax Return, agreed to an extension or waiver of the statute of limitations with respect to the assessment or determination of Taxes, surrendered any right to claim a Tax refund, entered into any closing agreement with respect to Taxes or settled or compromised any Tax liability;

(xxi) made any purchase, or issued any sales orders or otherwise agreed to make purchases involving exchanges in excess of $250,000, or additions to property, plant or equipment used in its operations other than ordinary repairs and maintenance;

(xxii) failed to maintain each Subject Company’s plant, property and equipment in good repair and operating condition, ordinary wear and tear excepted;

 

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(xxiii) suffered any casualty loss or damage with respect to any of the assets or properties which in the aggregate have a replacement cost of more than $250,000, whether or not such loss or damage shall have been covered by insurance;

(xxiv) granted any equity or equity-based awards; or

(xxv) entered into any agreement to take any action prohibited by clauses (i) through (xxv) or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights or commitments with respect to any of the actions specified in this Section 3.8 ).

SECTION 3.9 Tax Matters . Except as set forth on Section 3.9 of the Disclosure Schedule, (i) all Tax Returns required by applicable Law to be filed by or with respect to a Subject Company or an Excluded Entity have been or will be timely filed, and the Subject Companies and the Excluded Entities have or will have timely paid all Taxes due and payable, whether or not shown as due on such Tax Returns; (ii) all such Tax Returns are true, correct and complete in all material respects; (iii) there are no outstanding agreements, waivers or arrangements extending the statutory period of limitation applicable to any claim for, or the period for the collection or assessment of, Taxes due from or with respect to a Subject Company or an Excluded Entity for any taxable period; (iv) there is no action, suit, proceeding, investigation, audit or claim now pending or, to the knowledge of the Seller, threatened or contemplated, against, or with respect to, any Subject Company or an Excluded Entity in respect of any Tax or assessment, or with respect to any Tax Return, nor is there any claim for additional Tax or assessment asserted by any Tax authority; (v) any liability of the Subject Companies and the Excluded Entities for Taxes that are not yet due and payable with respect to any Pre-Closing Tax Period have been provided for on the latest balance sheet included in the Financial Statements; (vi) none of the assets, properties or rights of the Subject Companies are “tax-exempt use property” within the meaning of Section 168(h) of the Code; (vii) none of the assets, properties or rights of the Subject Companies include any lease made pursuant to former Section 168(f)(8) of the Internal Revenue Code of 1954; (viii) there is no Lien affecting any of the assets, properties or rights of the Subject Companies that arose in connection with any failure or alleged failure to pay any Tax other than Permitted Liens; (ix) the Seller is not a “foreign person” within the meaning of Section 1445 of the Code; (x) none of the Subject Companies nor any of the Excluded Entities (A) has been a member of an affiliated group filing a consolidated, combined or unitary federal, state, local or foreign income Tax Return (other than a group the common parent of which is Summit View) or (B) has any liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law) or as a transferee or successor, by contract or otherwise; (xi) all Taxes required to be withheld, collected or deposited by or with respect to the Subject Companies or Excluded Entities have been or will be timely withheld, collected or deposited, as the case may be, and, to the extent required, have been or will be paid to the relevant Tax authority; (xii) none of the Subject Companies is a party to, is bound by or has any obligation under any Tax sharing or Tax indemnification agreement or similar contract or arrangement or any agreement that obligates it to make any payment computed by reference to the Taxes, taxable income or taxable losses of any other Person; (xiii) no closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or foreign Law) has been entered into by or with respect to any of the Subject Companies, (xiv) none of the Subject Companies has been either a “distributing

 

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corporation” or a “controlled corporation” in a distribution in which the parties to such distribution treated the distribution as one to which Section 355 of the Code is applicable, (xv) none of the Subject Companies will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (A) change in method of accounting for a taxable period ending on or prior to the Effective Time, (B) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law), (C) installment sale or open transaction disposition made on or prior to the Effective Time or (D) prepaid amount received on or prior to the Closing Date; (xvi) none of the Subject Companies or Excluded Entities has engaged in any transaction that has given rise to a disclosure obligation as a “listed transaction” under Section 6011 of the Code and the Treasury regulations promulgated thereunder (or any similar provision of state, local or foreign Law); (xvii) no written notice of a claim of pending investigation has been received from any state, local or foreign jurisdiction with which a Subject Company or Excluded Entity currently does not file Tax Returns, alleging that the Subject Company or Excluded Entity has a duty to file Tax Returns and pay Taxes or is otherwise subject to the taxing authority of such jurisdiction; (xviii) the Seller has provided correct and complete copies of (A) all material Tax Returns filed by the Subject Companies for Tax years ending in 2005 and thereafter and (B) all material ruling requests, private letter rulings, notices of proposed deficiencies, closing agreements, settlement agreements and similar documents sent to or received by a Subject Company relating to Taxes; and (xix) since its inception, Phoenix Logistics, Ltd. has been treated as an entity that is disregarded as separate from its owner for U.S. federal income tax purposes (and, to the extent applicable, state and local income tax purposes).

SECTION 3.10 Absence of Undisclosed Liabilities . Except as and to the extent set forth in the Balance Sheet or on Section 3.10 of the Disclosure Schedule, none of the Subject Companies has any Indebtedness or liabilities, except for liabilities as shall have been incurred or accrued in the ordinary course of business since March 31, 2008 and which, in the aggregate, are not material to the Subject Companies. Except as set forth on the Balance Sheet, none of the Subject Companies is directly or indirectly liable upon or with respect to (by discount, repurchase agreement or otherwise), or obliged in any other way to provide funds in respect of, or to guarantee or assume, any Indebtedness of any Person.

SECTION 3.11 Owned Real Property .

(a) Section 3.11(a) of the Disclosure Schedule sets forth a list, which is complete and accurate, of the real property (including the fee title holder and a general description of the uses for such real property) owned by the Subject Companies (the “ Owned Real Property ”). One of the Subject Companies has good and marketable title to the Owned Real Property and, except for Permitted Liens, the Owned Real Property is free and clear of any Liens.

(b) None of the Seller or any Subject Company has knowledge of or received any written notice of, any pending or contemplated rezoning, eminent domain or condemnation proceeding affecting the Owned Real Property.

 

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(c) One of the Subject Companies is in peaceful and undisturbed possession of each parcel of Real Property, and neither the Seller nor any Subject Company has received written notice of any uncured violation of any contractual or legal restrictions that preclude or restrict the ability to use the Real Property for the purposes for which it is currently being used. The Owned Real Property and the buildings are in good operating condition and repair and have been reasonably maintained consistent with standards generally followed in the railroad industry in the United States. Except as set forth on Section 3.11(c) of the Disclosure Schedule, none of the Subject Companies have leased any parcel or any portion of any parcel of Owned Real Property to any other Person and no other Person has any rights to the use, occupancy or enjoyment thereof pursuant to any lease, sublease, license, occupancy or other agreement to which any of the Subject Companies is a party, nor have any of the Subject Companies assigned their interest under any lease listed on Section 3.11(a) of the Disclosure Schedule to any third-party.

(d) Except as set forth on Section 3.11(d) of the Disclosure Schedule, neither the Seller nor any of the Subject Companies have received written notice that any of the improvements on the Real Property or any of the current uses and conditions thereof violate any applicable deed restrictions or other applicable covenants, restrictions, agreements, existing site plan approvals, zoning or subdivision regulations or urban redevelopment plans as modified by any duly issued variances.

(e) To the knowledge of the Seller, all improvements on any Real Property are wholly within the lot or boundary limits of such Real Property and do not encroach on any adjoining premises and there are no encroachments on any Real Property or any easement or property right or benefit appurtenant thereto by any improvements located on any adjoining premises.

SECTION 3.12 Leased Real Properties; Sufficiency .

(a) Section 3.12(a) of the Disclosure Schedule sets forth a list of all leases, subleases, licenses and occupancy agreements, together with all amendments and supplements thereto (including the name of the lessor and lessee), with respect to all real properties in which any of the Subject Companies has a leasehold interest, whether as lessor or lessee (each, a “ Lease ” and collectively, the “ Leases ”; the property covered by Leases under which the Subject Company is a lessee is referred to herein as the “ Leased Real Property ”).

(b) Each Lease is in full force and effect and no Lease has been modified or amended except pursuant to an amendment referred to on Section 3.12(a) of the Disclosure Schedule. None of the Subject Companies nor, to the knowledge of the Seller, any other party to a Lease has given to the other party written notice of, or has made a claim with respect to, any breach or default. None of the Subject Companies is in default under any Lease and, to the knowledge of the Seller, no other party to a Lease is in default. There are no events which with the passage of time or the giving of notice or both would constitute a default by any of the Subject Companies or, to the knowledge of the Seller, by any other party to such Lease.

(c) The rental amount set forth in each lease of the Leased Real Property is the actual rental amount being paid, and except for lease amendments or rent side letters which

 

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have been provided to the Buyer, there are no separate agreements or understandings with respect to the same.

(d) Neither the Seller nor the Subject Companies have waived, or taken any action or failed to take any action which would nullify or void the full right to exercise, any unexpired option, right of first offer or right of first refusal contained in any such lease or sublease, including any such option or right pertaining to purchase, expansion, renewal, extension or relocation (collectively, “ Options ”) contained in the leases pertaining to the Leased Real Property on the terms and conditions contained therein.

(e) The Owned Real Property and the Leased Real Property taken together represent all of the real property used in the Business (the “ Real Property ”).

SECTION 3.13 Intellectual Property . (a)  Section 3.13(a ) of the Disclosure Schedule sets forth a complete and correct list of the Intellectual Property (the “ Listed Intellectual Property ”) filed by, used or issued or registered to any of the Subject Companies in connection with their businesses. Each Subject Company owns or has a valid and enforceable license or otherwise has the right to use all Intellectual Property used in the Business as currently conducted and, to the knowledge of the Seller, such use does not violate or conflict with the rights of any third party. Except as set forth on Section 3.13(a) of the Disclosure Schedule, to the knowledge of the Seller, all Listed Intellectual Property is owned by one of the Subject Companies, free and clear of all Liens. There has not been communicated to the Seller the threat of any claim that the holder of such Listed Intellectual Property is in violation or infringement of any Intellectual Property right of any third-party, or challenging any of the Subject Companies’ ownership or use of, or the validity or enforceability of, any of the Listed Intellectual Property.

(b) Section 3.13(b) of the Disclosure Schedule sets forth a complete list of all material licenses, sublicenses and other agreements in which any of the Subject Companies or any sublicensee of any of the Subject Companies has granted to any Person the right to use the Listed Intellectual Property. Except as set forth on Section 3.13(b) of the Disclosure Schedule, none of the Subject Companies is under any obligation to pay royalties or other payments in connection with any material license, sublicense or other agreement, nor is any Subject Company restricted from assigning its rights under any sublicense or agreement respecting the Listed Intellectual Property, nor will any of the Subject Companies otherwise be, as a result of the Seller’s execution and delivery of this Agreement, in breach of any material license, sublicense or other agreement relating to the Listed Intellectual Property.

SECTION 3.14 Licenses and Permits . The Subject Companies hold all licenses, permits, variances, certifications, exemptions, franchises, authorizations and approvals (the “ Licenses and Permits ”) of all Governmental Entities necessary to own, lease or operate their respective properties and to permit the continued lawful conduct of their businesses in the manner now conducted. The operations of the Subject Companies are being conducted in a manner that complies with the terms or conditions of the Licenses and Permits. The consummation of the transactions contemplated by this Agreement will not result in the cancellation, modification, termination or suspension of any License or Permit.

 

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SECTION 3.15 Compliance with Law . The Seller (to the extent related to the Business) and each of the Subject Companies have complied with and are in compliance in all material respects with all Laws and are not in violation of any applicable Governmental Order, writ, or any statute, ordinance, rule or regulation of any Governmental Entity and the Seller and the Subject Companies have each conducted and continue to conduct the Business in accordance in all material respects with all Laws and Governmental Orders applicable to the Seller or any Subject Company or any of their properties or assets, including the Railroad Assets, or the Business

SECTION 3.16 Litigation . Except as set forth on Section 3.16 of the Disclosure Schedule (which, with respect to each Action set forth therein, sets forth the parties, nature of the proceeding, date and method commenced, amoun